Shezab AlgoLabs – 2-Wave Probability Engine

Overview

The 2-Wave Probability Engine is a probability-driven market structure tool built to help traders interpret trend strength, trend continuation, potential reversal pressure, and chop zones using two clean, smoothed probability waves.

Instead of producing buy/sell signals, this tool provides a context model that allows traders to understand what the market is trying to do at the current moment.

It is designed to be lightweight, non-repainting, and easy to combine with your existing strategy.

How It Works

The engine computes two independent probability waves:

1. Trend Probability Wave (Teal)

Represents the market’s directional momentum and continuation potential.

It incorporates:

Trend velocity (EMA slope & movement)

Pullback health

Distance from trend structure

Opposition pressure (reversal probability influence)

High Trend Probability indicates:

Strong directional structure

Higher likelihood of continuation

Lower likelihood of immediate reversal

Low Trend Probability indicates weakening structure or chop.

2. Reversal Probability Wave (Magenta)

Measures the pressure building against the current trend.

It combines:

Wick pressure against trend

Overextension levels

RSI-based exhaustion

Divergence conditions

High Reversal Probability suggests the trend may be losing strength and is more vulnerable to changing direction.

Chop Zone Detection

When both waves cluster near the mid-range, the engine flags a potential consolidation / no-trade environment.

A subtle dot system highlights:

Trend dots → Trend continuation probability spikes

Reversal dots → High reversal pressure moments

Chop dots → Neutral or low-probability environments

Dashboard (Optional)

A compact probability dashboard summarizes:

Trend reading

Reversal reading

Current action suggestion (“Wait”, “Building Pressure”, “Watch”, etc.)

Zone classification (“Trend”, “Reversal”, “Neutral”, “Chop”)

The dashboard dynamically adapts to both light and dark themes.

How to Use It
Trend Trading Context

High Trend Probability + Low Reversal Probability
→ continuation bias

Reversal Context

Rising Reversal Probability during stretched conditions
→ potential shift or deeper pullback

Chop Context

Both waves compressed
→ low-clarity, avoid forced trades

Signal Interpretation

This script does not generate entry signals.
It provides probabilistic context that improves decision-making for:

Market structure analysis

Trend continuation planning

Timing pullbacks

Avoiding low-quality environments

Inputs

Trend length

Volatility length

RSI length

Range window

Dot system visibility

Dashboard visibility

Background highlights

Non-Repainting

All calculations are performed using non-repainting logic.
Values do not change after the bar closes.

Disclaimer

This tool is designed for informational and educational purposes.
It does not generate buy or sell signals.
Always confirm with price action and risk management.

Credits

Designed and developed by Shezab AlgoLabs.