Smart Market Bias [PhenLabs]

📊 Smart Market Bias Indicator (SMBI)
Version: PineScript™ v6

Description
The Smart Market Bias Indicator (SMBI) is an advanced technical analysis tool that combines multiple statistical approaches to determine market direction and strength. It utilizes complexity analysis, information theory (Kullback Leibler divergence), and traditional technical indicators to provide a comprehensive market bias assessment. The indicator features adaptive parameters based on timeframe and trading style, with real-time visualization through a sophisticated dashboard.

🔧 Components

• Complexity Analysis: Measures price movement patterns and trend strength
  
• KL Divergence: Statistical comparison of price distributions
  
• Technical Overlays: RSI and Bollinger Bands integration
  
• Filter System: Volume and trend validation
  
• Visual Dashboard: Dynamic color-coded display of all components
  
• Simultaneous current timeframe + higher time frame analysis
  

🚨Important Explanation Feature🚨
*By hovering over each individual cell in this comprehensive dashboard, you will get a thorough and in depth explanation of what each cells is showing you

Visualization


HTF Visualization


📌 Usage Guidelines

• Based on your own trading style you should alter the timeframe length that you would like to be analyzing with your dashboard
  
• The longer the term of the position you are planning on entering the higher timeframe you should have your dashboard set to
  

Bias Interpretation:

• Values > 50% indicate bullish bias
  
• Values < 50% indicate bearish bias
  
• Neutral zone: 45-55% suggests consolidation
  

✅ Best Practices:

• Use appropriate timeframe preset for your trading style
  
• Monitor all components for convergence/divergence
  
• Consider filter strength for signal validation
  
• Use color intensity as confidence indicator
  

⚠️ Limitations

• Requires sufficient historical data for accurate calculations
  
• Higher computational complexity on lower timeframes
  
• May lag during extremely volatile conditions
  
• Best performance during regular market hours
  

What Makes This Unique

1. Multi-Component Analysis: Combines complexity theory, statistical analysis, and traditional technical indicators
   
2. Adaptive Parameters: Automatically optimizes settings based on timeframe
   
3. Triple-Layer Filtering: Uses trend, volume, and minimum strength thresholds
   
4. Visual Confidence System: Color intensity indicates signal strength
   
5. Multi-Timeframe Capabilities: Allowing the trader to analyze not only their current time frame but also the higher timeframe bias
   

🔧 How It Works
The indicator processes market data through four main components:

1. Complexity Score (40% weight): Analyzes price returns and pattern complexity
   
2. Kullback Leibler Divergence (30% weight): Compares current and historical price distributions
   
3. RSI Analysis (20% weight): Momentum and oversold/overbought conditions
   
4. Bollinger Band Position (10% weight): Price position relative to volatility
   

Underlying Method

• Maintains rolling windows of price data for multiple calculations
  
• Applies custom normalization using hyperbolic tangent function
  
• Weights component scores based on reliability and importance
  
• Generates final bias percentage with confidence visualization
  

💡 Note: For optimal results, use in conjunction with price action analysis and consider multiple timeframe confirmation. The indicator performs best when all components show alignment.