Multi-Timeframe Background Coloring System

INTRODUCTION

This documentation describes the comprehensive background coloring system implemented for the Mandelbrot Fractal Dimension (MFD) indicator. The system analyzes market complexity across four timeframes (5-day, 10-day, 20-day, and 50-day) to provide traders with actionable visual signals about market regime, transitions, and structural changes.

The background coloring system operates in four distinct modes, each designed for specific trading objectives:

• Multi-Timeframe: Consensus-based regime identification
• Primary (20-day): Comprehensive alignment and divergence detection
• Transition Zones: High-probability trading opportunities
• Regime Shift: Early warning system for structural market changes

FRACTAL DIMENSION THEORY

The Mandelbrot Fractal Dimension (D) measures the information density and path complexity of price movements. It quantifies how much a price path fills the space between its starting and ending points:

• D ≈ 1.0: Strong trending behavior (minimal complexity, high predictability)
• D ≈ 1.5: Random walk behavior (maximum complexity, no structure)
• D > 1.5: Mean-reverting behavior (high complexity, bounded movement)

CALCULATION METHODOLOGY

Core Formula