BERNOULLI V3 Trading Guide

The Bernoulli V3 is a complex multi-layered oscillator that utilizes advanced entropy measurements and moving average techniques to identify deeply embedded trends, exhaustion points, and divergences. It translates mathematical probabilities into actionable market signals using distinct color mappings and divergence detection logic.

What does the indicator show?

• Histogram Bars (Green/Red/Gray): Represent the primary trend bias and strength. Green indicates a solid bullish stance, Red implies a strong bearish stance, and Gray suggests a neutral or transitional phase.
• Scarlet & Salat Bars: Deep red (Scarlet) and vibrant green (Salat) bars highlight extreme states where divergence and extreme momentum coincide, heavily suggesting potential trend exhaustion or strong continuation.
• Triangle Markers (Red/Green): Sharp, immediate signals pointing out sudden shifts or extreme momentum conditions that qualify for an immediate heads-up on the chart.
• Divergence Lines: Automatically draws "BULL" and "BEAR" divergence lines on the oscillator when corresponding price action diverges from the indicator's momentum, along with divergence percentages.
• Price/Volume Bands: Optional bands showing structural thresholds based on the mathematical calculations.

Key Settings

• Entropy Length & Averaging Length: The core lookback periods used to calculate the entropy and the comparative baselines for momentum.
• Measurement Type: Switch between different mathematical approaches like Value, SMA, Momentum, Contribution, or Elher_smoother.
• ADX-DI Length & Percent Rank Limit: Tune the severity and sensitivity of internal trend filtering mechanisms.
• Include Source & Include Volume: Determine what raw data feeds the entropy calculation.

How to use Strategy Parameters (Condition Source)

Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.

1. Bar Color & Streak Analysis

Track the presence and duration of extreme momentum bars.

• scarletStreak — The number of consecutive Scarlet bars.
• scarletToGreenOrGray — Triggers when a Scarlet streak is broken by a regular Green or Gray bar.
• salatStreak — The number of consecutive Salat bars.
• salatToRedOrGray — Triggers when a Salat streak is broken.

Strategy Example: If you are looking to enter a short position after an extreme bullish run exhausts, use scarletToGreenOrGray is true to catch the immediate shift in momentum.

2. Triangle Signals

Direct entry or exit triggers based on mathematical extremes.

• redTriStreak — Measures consecutive red triangle occurrences.
• redTriEnded — Signal triggered when a red triangle pattern stops updating.
• greenTriStreak — Measures consecutive green triangle occurrences.
• greenTriEnded — Signal triggered when a green triangle pattern stops updating.

Strategy Example: You could build a trend-following logic using greenTriStreak > 1 as a confirmation of sustained bullish pressure before entering Long.

3. Volume Filter

An auxiliary volume filter based on OBV and ADX calculations.

• obvAdx — Represents the DI difference. Above 0 implies a bullish volume filter; below 0 implies a bearish volume filter.

Strategy Example: Only allow Long entries when obvAdx > 0 to ensure buying volume aligns with price movement.