Lempel Ziv Trend Coder [forexobroker]

where p = b0 * 4 + b1 * 2 + b2 (0..7).
3. dominance = max(count) / sum(count). Uniform random = 0.125.
4. Trending regime when dominance >= threshold.
5. Direction bias from up-bar fraction in the same window.

🔶 SIGNAL LOGIC

- Buy: trending AND up-fraction > 0.5 AND close crosses EMA up AND not already long AND cooldown elapsed AND barstate.isconfirmed.
- Sell: trending AND up-fraction < 0.5 AND close crosses EMA down.
- Position-lock state machine.

🔶 INPUTS

- Sign Window (default 40)
- Pullback EMA Length (default 8)
- Min Dominance (default 0.20)
- Cooldown Bars (default 4)
- Visual: dashboard, glow, EMA toggle, buy / sell colors

🔶 ALERTS

LZT Buy, LZT Sell, LZT Any Signal, LZT Trend Start, LZT Chop Start, LZT Very Trendy, LZT Very Choppy, LZT EMA Up, LZT Webhook JSON.

🔶 LIMITATIONS

- 3-bit encoding ignores bar magnitude; a tiny tick contributes the same as a large move.
- "Distinct patterns observed" alone saturates at 8 quickly with N >= 40 bars; dominance is a more discriminative measure but still coarse.
- LZ true complexity is closer to a substring count than a pattern-frequency count; this is a tractable approximation.
- Direction comes from up-fraction, not the LZ measure itself; in true random regimes the direction signal is meaningless and the regime gate correctly mutes signals.