Questions from a new subscriber

A new subscriber posed some questions that may be of general interest. Thank you for asking, here the answers:

  • Are the signals based on what the model thinks will happen after 6 bars/hours or the full 24?
    All the signals, except the bars projected into the future, are reading of the status of the market NOW. 
  • I see that some of your signals have minus signs (-) after them.  What does that indicate?
    All numeric outputs are just numbers without any other hidden meaning. That “-” is probably a typographic error and I will revise the code a.s.a.p.
  • Why does a “+0.800 -” signal mean “open long” sometimes and “reaching bottom” others?  What does the latter mean position-wise?
    Please, get aware that the Signal and the Position indicators are separate and different. They read tops and bottoms in two different ways and should be in accord, but often they are not.
    If you refer to my comments instead, well my comments are just a way to make the reading of the numbers as simple as possible, but that is just my opinion and is worth almost nothing.
  • Why does a “0.000 -” signal sometimes mean “open long”?  The signals tutorial page states that a +1.0 value is required to open a long.
    Same as before, plus a further note: I observed that when good signals for opening positions (either long or short) appears, they are supported by all indicators or at least three out of four. The system is trained to fire an alert and then the signal, so you should have two bars warning before the actual buy/sell action to take place.
  • When you advise us to open a position, should we close it after the first 6 bars/hours or keep it open until the next forecast becomes available?
    First: all bars represent one day in daily charts, no hours. The model is trained to stay in position for as many days as the position is profitable. Better an example: last signal of opening position on daily time frame was on 9/14 opening at 2128. This position, even if with some uncertainty, has been supported by more positive signals (green triangles and rising Stops). I consider the long position in place at the moment, even if yesterday the Position indicator fired a close status. What the system is telling us today is that we may have a Target at 2186, but as the market is moving toward that value, the Target may change (the system is adaptive) and the evolution of the Target is an interesting reading.
  • Does “(close) flat” mean that I should close my open position, or that the market will be flat at the close of the next session (i.e. 24 bars later)?
    The “(close) flat” position means that the model sees the more profitable position in the market as staying out of the market. Again, bars (either past or future) are not hours, are DAYS. 
  • Does the 24th bar always relate to the final hour of the US session (i.e. 3-4pm ET)?  Or, does it depend on what time the forecast was released?
    24th bar in the future is about one trading month ahead (as a trading month hs 21 or 22 days usually)
    I have chosen the number 24 for future bars because it fits well in all three time frames of my forecast: it’s about one month ahead in daily charts, six months in weekly charts and two full years in monthly charts.
  • What’s the best indicator of whether the market will be up or down at the end of the next US session (e.g. the signal, the target, or the 24th bar’s closing value)?
    The projection of next bar is the bar that superimposes on the magenta vertical strip. The magenta strip is “next day” i.e. the day after last historical bar. You will notice that this preview is more precise as high/low than the actual close. Also, as the future is often coming in a bit faster that the forecast can preview, the market has the tendency to anticipate the following bar(s). This is really clear if you look at yesterday’s forecast, where market moved to the target of the second bar. This is typical of impulsive market, while during choppiness it is quite common that market close goes opposite of the forecast.

 

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Sorry, I should have paid more attention to what’s written on the “general information” page. I assumed that having 24 bars on a daily chart would indicate one per hour. I can now see that the number 24 was chosen because there are that many months in two years.

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