Markov chains and study the possibilities and indicator of the prediction in accordance with theory

Did you hear about Andrei Markov theory, which are a Russian mathematician and whose theory name is Markov chains?

I will not dive too much in the deep mathematical details of this theory, but simply a study of the prospects for the limited number of cases to find out what are the prospects for the emergence of each case in the future.

First you must limit these cases and then calculate the probability of transition from each state to the other case.

Imagine, for example, you want to know whether tomorrow rainy or sunny.

Here we have two cases: sunny and rainy.

Now through information from previous years, for example, to extract the following possibilities:

- If today is sunny, what is the probability that rain tomorrow?

- If today is sunny, what is the likelihood that tomorrow will be sunny as well?

- If today rainy, what is the likelihood that tomorrow will be rainy?

- If today rainy, what is the probability that tomorrow will be sunny?

After knowing these ratios through the information that we have put them in a matrix called a Markov matrix.

Now to see the possibilities of tomorrow is it sunny or rainy we multiply the matrix with itself.

Depending on the value of today is it sunny or rainy; we can see the greatest possibility for tomorrow.

If we want to know the status of the day after tomorrow we multiply the last matrix with itself and also to know the result of the previous day (which is also the most likely) know the possibility of the day after tomorrow and so on.

Of course, as i learned that this theory is applied in world markets, but I looked so much I did not find direct application to them.

I made indicator does this matrix and gives me a greater likelihood of future candle.

The index is still a trial phase will require hard work to continue.

The results of course may vary with different frames which are normal and therefore it must control frames and consider before making the decision to enter.

And it may be the Login is proportionate to the frame.

Indicator shows blue lines for the possibility of the biggest red line for the possibility of the weakest.

The result will always be the candle before the last one, so the last candles must be compatible with the possibility.

You can download the indicator from here: