LTPI Global Liquidity | JeffreyTimmermans

Long-Term Probability Indicator (LTPI)

The "Long-Term Probability Indicator (LTPI)" on a generic liquidity ticker is a custom-built analytical tool designed to evaluate market conditions over a long-term horizon, with a strong focus on global liquidity trends. By combining six carefully selected input signals into a single probability score, this indicator helps traders and analysts identify prevailing long-term market states: Bullish, Bearish, or Neutral.

Where short-term systems/timeframes react quickly to price fluctuations, LTPI smooths out noise and focuses on the bigger picture, allowing for informed strategic decision-making rather than short-term speculation.

Key Features

Multi-Input Aggregation:

• Uses six independent inputs, each based on long-term liquidity and macro-related data, to generate a composite market probability score.
  

Long-Term Focus:

• Prioritizes medium-to-long-term trends, ignoring smaller fluctuations that often mislead traders in volatile markets.
  

Simplified Market States:

Classifies the global market into three primary states:

• Bullish: Favorable liquidity and conditions for long-term risk-taking.
  
• Bearish: Tightening liquidity and conditions that require caution.
  
• Neutral: Transitional phases or uncertain conditions.
  

Background Coloring:

• Visual cues on the chart help identify which regime is active at a glance.
  

Global Liquidity Perspective:

• Designed for use on a generic liquidity ticker, based on M2 money supply, to track macroeconomic liquidity flows and risk appetite.
  

Dashboard Display:

• A compact on-screen table summarizes all six inputs, their states, and the resulting LTPI score.
  

Dynamic Alerts:

• Real-time alerts signal when the LTPI shifts from one regime to another.
  

Inputs & Settings

LTPI Inputs:

• Input Sources (6): Each input is a carefully chosen trend following indicator.
  
• Weighting: Each input contributes equally to the final score.
  

Score Calculation:

• Bullish = +1
  
• Bearish = -1
  
• Neutral = 0
  

Color Settings:

• Strong Bullish: Bright Green
  
• Weak Bullish: Light Green
  
• Neutral: Gray/Orange
  
• Weak Bearish: Light Red
  
• Strong Bearish: Bright Red
  

(Colors can be customized.)

Calculation Process

Collect Data:

• Six long-term inputs are evaluated at each bar.
  

Scoring:

• Each input’s state contributes +1 (bullish), -1 (bearish), or around 0 (neutral).
  

Aggregate Probability:

• The LTPI Score is calculated as the sum of all six scores divided by 6, resulting in a value between -1 and +1.
  

Market Classification:

• Score > 0.1: Bullish regime
  
• Score < -0.1: Bearish regime
  
• -0.1 ≤ Score ≤ 0.1: Neutral
  

Background Coloring:

• Background colors are applied to highlight the current regime.
  

How to Use LTPI

Strategic Positioning:

• Bullish: Favor holding or adding to long-term positions.
  
• Bearish: Reduce risk, protect capital.
  
• Neutral: Wait for confirmation before making significant moves.
  

Confirmation Tool:

• LTPI works best when combined with shorter-term indicators like MTPI or trend-following tools to confirm alignment across multiple timeframes.
  

Dynamic Alerts:

• Bullish Regime Entry: When the LTPI Score crosses above 0.1.
  
• Bearish Regime Entry: When the LTPI Score crosses below -0.1.
  
• Neutral Zone: When the score moves back between -0.1 and 0.1.
  

These alerts help identify significant macro-driven shifts in market conditions.

Conclusion

The Long-Term Probability Indicator (LTPI) is an advanced, liquidity-focused tool for identifying macro-driven market phases. By consolidating six inputs into a single probability score and presenting the results visually, LTPI helps long-term investors and analysts stay aligned with global liquidity trends and avoid being distracted by short-term volatility.