Next Generation Price Levels Tool

Received quite a number of emails asking what kind of secret projects I am working on for the site. Well, it is the same ones I have been working on all along. The most important project is the next generation Emini and Forex price levels tool. It is interesting to discuss what I am up to and why I see that being the disruptive technology in trading.

Being Able to See Multiple Timeframes Price Levels is Just the Start

The Price Level Tools I developed for the site allow traders to see at a glance all the key price levels that are important to traders in all the major timeframes. This highly summarized approach helps traders to see clearly where price actions will likely take place so that they can better plan their trading around these key level.

One of the most important concepts hidden in the price levels tool is the structural behaviour in price movements which I described in STOPD. For traders who are not familiar with STOPD or other auction based price theories, it can be confusing what these price levels are useful for.

Currently the price levels tool only highlights the price clusters across multiple timeframes so that the traders can see quickly where the important price levels are. But it has not solved another pressing issue the traders want to know. In short, all traders want to know if certain price levels will be tagged in the near future and the probability for which it may happen.

The Likely and Unlikely Scenarios to be Unfolded Immediately are not Infinite

Contrary to popular beliefs, once a trading day has started, and that certain things have unfolded, the way a trading day can progress has very limited options. Of course we know that there can be news shock, central bankers interventions or even just a huge institution acting suddenly. Those scenarios are rare and can be handled with proper money management strategies. What we are interested in, is how to deal with the current trading day in normal circumstances.

The reason for which a normal trading day can only unfold in limited number of possible scenarios is quite simple. Notice that many participants have committed to their positions around similar strategic price levels that are pre-determined before the session started. When everyone is looking at the same information and using the same analytical techniques, similar outcomes are unavoidable.

Main Obstacle is the Proper Framework to Represent Prices in a Logical and Deducible Matter

So how do we figure out what price levels are likely to be tagged in the near future when all we have on hand are just whole bunch of numbers? The answer lies in how we represent price levels in a way reflecting the thinking of the players. If we can represent the price levels in a way reflecting the actions made by majority of traders (in terms of total traded volume), we can tell which price levels are being focused on easily.

This is how the whole concept of automating the analysis becoming very difficult. Traders change their strategies all the time. The retail traders often chase the next best strategies. We need something that continue to affect the way traders think so that we can produce consistent results over time.

Disruptive Trading Technology

For day trading purpose, up to the moment of decision making, all we want to know is whether a particular price levels is more likely to be tagged before another one in the opposite direction. The rest of the issues like money management and chart development up to that point in time, seasoned traders can handle proficiently already. This extra bit of statistical bias is all a good trader need to make better trading decisions that is not possible before.

Even if you have very good memory with decades of trading experience dealing with all kinds of trading environment, you may still make the mistake of identifying the odds incorrectly. With the technology I am developing, the statistical bias will be crunched up in real-time so that there is no more guess work.

I have spent decades in research on trading technologies, I am all excited with the possibilities of this project. It is something that can change day trading forever.

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