# Market Entropy Indicator

Trading system based on Shannon entropy to identify market regimes and generate buy/sell signals.

Canonical: https://prismaticalgos.com/compendium/algo/262-market-entropy-indicator
Record ID: 262
Catalog rank: 683 (reading order, not performance)
Snapshot: 2026-10-31 15:46 UTC
Family: Trend Following & Directional (A)
Source: https://www.mql5.com/en/articles/21743
Evidence label (unverified): source_code

## Scope and limitations

These are machine-extracted research records, not verified trading systems. Catalog rank measures specification detail and claimed evidence, not profitability. The catalog extraction pipeline did not independently backtest these records. Its separate selected testing ledger does not validate the wider corpus. Rules, labels and parameters can be incomplete or wrong; consult the original source and its reuse terms.

No endorsement, ownership claim or source-code reuse permission is implied.

## Extraction warnings

No automated warnings recorded; this is not validation.

## Recorded profile

- symbols: any
- timeframes: any
- sessions: any
- market_regime: trending|chaotic

## Indicators

- Entropy: {}; applied to: close
- Smoothed Entropy: {}; applied to: close
- Entropy Momentum: {}; applied to: close
- Fast Entropy: {}; applied to: close
- Slow Entropy: {}; applied to: close
- Divergence: {}; applied to: close
- Compression/Decompression: {}; applied to: close

## Recorded long-entry rules

- Fast Entropy crosses above Slow Entropy
- Entropy rises from below 0.30 into the 0.35–0.45 range
- Momentum turns positive

## Recorded short-entry rules

- Fast Entropy crosses below Slow Entropy
- Entropy breaks above 0.55 heading toward chaotic territory
- Momentum turns negative

## Recorded exit rules

- none specified

## Recorded filters

- none specified

## Risk controls

- Stop loss: none specified
- Take profit: none specified
- Position sizing: none specified