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HOW TO USE TRADING PRO SIGNALS
How to use intraday charts
Trading Pro computes the intra day forecasts every 15 minutes during market hours, for the main indexes (DJIA, S&P500, S&P100, NASDAQ and NASDAQ100). The Index evolution is shown in real time, and is computed 4 1/2 hours into the future.
The chart displays the evolution of the market index since opening together with the most probable forecast in black.
It is worth noticing that news use to arrive overnight and this can define the first minutes of trading, which in turn define a new market frame. This means that the forecasts (black lines in the graphic) at the beginning of the day should be disregarded. In this chart we have superpose the market prediction (black) with the market (red) from 10:30ET.
The intra day forecasts have not been designed to look for an exact value of the index, but for the sake of describing the pattern of ups and downs. The forecasts are "turning point seekers". They do their best to show tops and bottoms with certain anticipation. It is important to notice that the American Indexes used to be highly correlated between themselves and the forecasts are computed for each index independently of one another, then the correlation of the forecasts can be used as an internal coherence test of the predictor.
These forecasts should be used as a tool to get information about the most likely behavior of the market in the immediate future, always having in mind that the economic framework can change abruptly as news comes in, and that the predictor is not fed by news.
The predictor generates 20 predictions per day, one every 15 minutes. Each prediction contains a dataset, sampled every 5 minutes, starting at the time of the computed prediction, and ending at the end of the day.
The first prediction of the day is generated at market opening 9:30A. The next prediction is at 9:45A, 10:00A, 10:15A, and so on. The last 15 minutes of the market are computed on each new prediction, by the system. As an example lets take a look at the S&P500 May 06, 2005 prediction.
First Prediction
At 9:30A the predictor showed the following chart for the day.
Second Prediction
The second prediction is executed at 9:45A Market opened with a gap to the LONG side. The system computed the new 15 minutes market data, and adjusted the prediction as follows.
Third Prediction
The third prediction of the day is computed at 10:00A. The system added to it’s historical data, the new 15 minutes market data and recomputed the prediction as follows.
Forth Prediction
The forth prediction is computed at 10:15A. The system recomputed the prediction for the rest of the day as follows.
As the system needs more data to adjust the prediction, and generally there are opening gaps that can affect the first predictions of the day, we do not consider the first 3 forecasts.
If we superpose the forth prediction of the day (the black line), with what the market finally did (the red line) the chart would look as follows.
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