Enhancement to Signal

SPX-da-am-20160707-225903-914E63B3-ECBB-4429-AD03-03EE136D4636-3500-24Please note, this is just a part of a larger chart and it shows three indicators calculated by the A model. As the set has been trained, results are perfect. Last 8 bars are excluded from training and are guesses of the model bots. The image was produced few minutes ago.

We have the Target, the Stop and the Signal: Target points to trend exhaustion (cyan dots), Stop places the stoploss (yellow circles).

I introduced a modification to the Signal indicator. The original Signal marked the extremes with a triangle, either red (tops) or green (bottoms). Just the extreme. (And this, I believe, was the origin of many false signals).

Now, for any day marked as a top or a bottom, the day before and the day after are marked as well, with different values.

The behaviour of the indicator is as follow: the appearence of a first triangle must be considered as a warning. A second triangle is to be taken in consideration for position opening. I always consider that execution will be placed the next day, at opening, following the market and serching for a favorable entry point.  (Personally, I often look at hourly CFD rates of S&P500 to trigger easy exit or entry point).

For sure, the triangles may now be in overnumber and I will monitor that they do not invade the screen, but I feel interesting pushing the limit of the system to be as much confortable as possible. Now we should have a possible warning 2 days before the event and 1 day before the top or the bottom, plus a recurring confirmation of the flowing move, and I think it will make easier trading decisions.

For prudence, I always invite to check reciprocal confirmation from the various indicators before operating.

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