Candle Pattern Probability Indicator

Discover the Candle Pattern Probability Indicator. This tool calculates the likelihood of a candle being followed by another in the same direction, based on his

Published · Updated · Methodology: Technical Indicators

Part of: Candlestick Patterns

  • Methodology: Technical Indicators
  • Content type: indicator
  • Timeframes: Any timeframe (mentioned as 'doesn't matter what time frame you're viewing' [0:10])
  • Markets: Any asset (mentioned as 'doesn't matter what asset you're looking at' [0:05])

Indicators used

  • Candle Pattern Probability Indicator (Custom)

Source video

Decoded from: This Candle Pattern Indicator Predicts The Next Move by LuxAlgo — watch the original

Key timestamps:

  • 0:10 - Theory introduction: candles don't consistently alternate
  • 0:50 - Using LuxAlgo Quant to build the indicator
  • 1:25 - Indicator's core function: probability of same-direction candle after alternating sequence
  • 2:00 - Dashboard display for different sequence lengths
  • 2:40 - How to add the indicator to TradingView
  • 3:00 - Explanation of the indicator's visual output (blue dot, sequence count)
  • 3:30 - 'Failures' mode explanation
  • 3:45 - Importance of sample size for win rate

Strategy overview

Candlestick sequence probability is the plain idea of counting how often a run of candles has actually been followed by another in the same direction, instead of assuming it "should" reverse. What is decoded here is therefore not a setup but a measuring instrument: LuxAlgo's video "This Candle Pattern Indicator Predicts The Next Move" opens from the observation that candles do not alternate as evenly as intuition suggests, and builds a custom indicator to put a number on that imbalance rather than argue about it.

Two things follow from that framing. The first is that the tool is deliberately chart-agnostic — the video says outright that it doesn't matter what timeframe you're viewing, because the indicator re-derives its counts from whatever series it is placed on. The same instrument will read differently on a 5-minute chart than on a daily one, and that is the intended behaviour, not a limitation: the reading belongs to the chart, not to the tool. The second is that the video is as much about the build as the output, assembling the indicator with LuxAlgo's AI quant tooling before walking through how it is added to TradingView and how its on-chart output should be read.

It is worth being precise about what such a reading is. A follow-through frequency measured across past bars describes what has already happened on that instrument at that resolution — a base rate, not a forecast — and it carries no entry, no exit and no risk logic on its own. No rule set was extracted from this source, so this page covers the concept and how the video presents it rather than a mechanical breakdown; the indicator is best understood as a diagnostic for testing candle-sequence assumptions, not a signal to trade directly.

Topics

candle pattern indicator · probability indicator · technical indicators · trading strategy · pine script · tradingview strategy · market probability · short-term continuation · algorithmic trading · price action indicator · any asset trading · any timeframe strategy

Frequently asked questions

What is a candle pattern probability indicator?

It is a tool that counts how often a given sequence of candles has historically been followed by another candle in the same direction on the chart it is applied to, and reports that as a frequency — turning a candlestick assumption into a measured base rate instead of a rule of thumb.

What timeframe does this indicator work on?

The source video states that it doesn't matter what timeframe you're viewing, since the indicator recalculates from whatever chart it is placed on. That also means the reading is local to that chart: a result measured on one instrument or resolution does not transfer to another.

Does a high follow-through rate mean the next candle is predictable?

No. A frequency computed over past bars describes what already happened, not what will happen next. Sample size, instrument and market regime all move the number, and the reading contains no entry, exit or position-sizing logic by itself.

How would an indicator like this fit into a trading strategy?

Usually as a filter or a sanity check on an existing setup rather than a standalone signal — it tells you how often a sequence resolved one way, while the actual decisions still have to come from elsewhere. Strategy Decoder catalogues indicator-focused videos like this one so you can see what a source genuinely specifies before building on it.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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