MTPI TOTAL / BTC | JeffreyTimmermans

Medium-Term Probability Indicator (MTPI)

The "Medium-Term Probability Indicator (MTPI)" is a multi-factor model designed to evaluate the medium-term state of a market. By aggregating signals from 20 underlying inputs, it generates a composite score that classifies the market as Bullish, Bearish, or Neutral. This helps traders understand the prevailing market regime and adapt strategies accordingly.

Key Features

• Multi-Input Scoring: Combines up to 20 individual inputs (indicators, conditions, or models) into a single probability-based score.
  
• Composite Market State: Translates raw input signals into three states: Bullish, Bearish, or Neutral.
  
• Dynamic Background Coloring: Uses color-coded background shading to visually separate bullish, bearish, and neutral phases.
  
• MTPI Score: Calculates a final numeric score (ranging from -1 to +1) to quantify the market’s directional bias.
  
• Dashboard Display: Shows all input signals, their individual states, and the aggregated MTPI score at a glance.
  
• Medium-Term Focus: Helps identify prevailing conditions that last from several weeks to several months.
  

Inputs & Settings

MTPI Settings:

• Input Signals (1 to 20): Default: Predefined conditions. Each input evaluates the market from a unique perspective (trend, momentum, volatility, etc.).
  
• Composite Score Calculation: Default weighting is equal across all inputs.
  

Color Settings:

• Bullish: Bright green background
  
• Neutral: Gray/orange background
  
• Bearish: Bright red background
  

These colors can be customized as desired.

Calculation Process

Signal Aggregation:

Each input generates a state:

• 1 to 0.1 = Bullish
  
• 0.1 to -0.1 = Neutral
  
• -0.1 to -1 = Bearish
  

Scoring:

The MTPI aggregates these values and calculates an average score.

Classification:

• Bullish: Score > 0
  
• Bearish: Score < 0
  
• Neutral: Score ≈ 0
  

Visualization:

• Background Coloring: Highlights the dominant phase on the chart.
  
• Dashboard: Displays individual input states, the total MTPI score, and the resulting classification.
  

How to Use the MTPI

Identifying Market Regimes:

• Bullish: Majority of inputs align positively. Favor long positions or trend-following strategies.
  
• Bearish: Majority of inputs align negatively. Favor short positions or defensive strategies.
  
• Neutral: Mixed signals. Caution or range-bound strategies may be preferable.
  

Transition Detection:

• Changes in background color or the MTPI dashboard (score flipping from positive to negative, or vice versa) indicate potential regime shifts.
  

Dynamic Dashboard:

• Score: Displays the net sum of all input signals (normalized).
  
• State: Provides the classification (Bullish, Bearish, Neutral).
  
• Trend: Visual cues for each input showing the current contribution to the MTPI.
  

Conclusion

The Medium-Term Probability Indicator (MTPI) consolidates multiple signals into a single, intuitive visualization that helps traders quickly assess the medium-term market environment. Its combination of a multi-input dashboard, composite scoring, and background coloring makes it a powerful decision-support tool.

This script is developed by Jeffrey Timmermans and is designed to complement other analysis methods.