Most indicators focus on direction or momentum. The free Permutation Entropy Regime indicator by Jayadev Rana takes a different approach: it helps you assess whether recent price action is structured, range-bound, or behaving like random market noise.

It is an open-source TradingView context tool, not a buy or sell signal generator. Use it alongside your existing entries, exits, risk management, and position-sizing rules.

Use it free on TradingView

Use the Permutation Entropy Regime indicator for free on TradingView.

What permutation entropy measures

Permutation entropy is an information-theory technique that measures how ordered or random a sequence is. The indicator studies groups of three consecutive closing prices, records their relative order, and measures how consistently those patterns repeat over a rolling window.

Lower normalized entropy can indicate more ordered or repeatable behaviour. Higher entropy can indicate noisier, random-walk-like behaviour. The script converts this reading into Predictability, then adapts it with a 0-100 Structure Rank based on each symbol’s own recent history.

The five market regimes

Structured Up: Structure Rank is high and drift bias is positive.

Structured Down: Structure Rank is high and drift bias is negative.

Structured Range: Price behaviour is ordered but directional drift is near zero, which can suit range or mean-reversion tactics.

Neutral: The market sits between structured and choppy conditions.

Random / Chop: Price behaviour is relatively noisy, a condition where many systematic approaches may be less selective.

How to use the indicator

Use the regime as a context filter rather than an entry signal. Trend or breakout traders can review their own setups during Structured Up or Structured Down conditions. Mean-reversion traders may prefer Structured Range conditions. During Random / Chop, consider being more selective or standing aside according to your own plan.

The dashboard displays the active regime, Structure Rank, Predictability, normalized entropy, drift bias, and the number of bars spent in the current regime. Five bar-close alerts are included: Structured Up, Structured Down, Structured Range, Random / Chop, and a general regime-change alert.

Open-source Pine Script tool

The script is published free and open-source under the Mozilla Public License 2.0. It uses closed-bar data; the live bar can update until it closes, while historical values do not repaint after bar close. It does not use higher-timeframe requests or future-looking data.

If you are searching for a top Pine Script developer for a custom TradingView indicator, strategy, alert workflow, MT4/MT5 automation, or broker API integration, visit https://jayadevrana.com/pine-script-development/ or contact https://jayadevrana.com/contact-us/.

Disclaimer: This indicator is provided for research and educational purposes only. It does not predict prices, guarantee trading outcomes, or constitute financial advice. Test any tool carefully on your own markets and settings before relying on it.