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After the widespread release of electronic trading, automated trading systems have become a significant part of the business intelligence system of any modern financial investment company. An important part of the trades is made completely automatically today by computers using mathematical algorithms. The trading decisions are taken almost instant...
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... we can see in Fig. 2, once the price touched the PSAR level above PPL, the new PASR level will be calculated under the PPL and the current price. This is the moment when the uptrend begins. There are many trading strategies using this point as an entry point, but the PSAR methodology [11] is limited when it is about the exit point. The usual exit point is ...
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... we can see in Fig. 2, the distance between TPB and SLB is variable. We will call this distance as to be a safe trade range (STR), because under SLB a stop loss is touched and for values higher than TPB the price is too high for a new entry. There are intervals where the STR distance is increasing. In this case, we will say that we have a price expansion, ...
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... when the price is making new highs. If the STR is decreasing, we will say we have a price contraction. If we have an uptrend, this is the case when the trend is preparing to reverse or to slow down the price motion. Starting from the analysis of STR we will develop a trading strategy as it is presented in the next section. As it can be seen in Fig. 2, sometimes the price goes higher the TPB levels. For these cases, the second TPB is included using (8) and (11). We will note the second TPB with TP2B. In Fig. 2, the TP2B was plotted using the gold ratio (δ=1.618). This band is used in case of powerful trends to know where to close the trade with good profit, before the price turning ...
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... preparing to reverse or to slow down the price motion. Starting from the analysis of STR we will develop a trading strategy as it is presented in the next section. As it can be seen in Fig. 2, sometimes the price goes higher the TPB levels. For these cases, the second TPB is included using (8) and (11). We will note the second TPB with TP2B. In Fig. 2, the TP2B was plotted using the gold ratio (δ=1.618). This band is used in case of powerful trends to know where to close the trade with good profit, before the price turning ...
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Citations
Capital investment is a sustained activity nowadays. After the worldwide release of the electronic trading systems, automated decision-making investment software is the new trend in financial speculation. A significant part of capital trading is fully computerized today. The buying and selling orders are made and sent automatically, almost in real-time. The price evolution is analyzed by servers using advanced mathematical algorithms. This chapter will present one of these models named Price Probability Predictor. It is a method to build a probability field based on the price history and the real-time price action. The revealed function will generate the current probability of a price growth in the next time intervals. Automated entry and exit signals and market limit conditions will be built using the new indicator, in order to automate the whole investment process. Capital investment results will also be included in the current paper to qualify the presented trading methodology and to compare it with other similar models. In conclusion, it was found that the Price Probability Predictor is a reliable mathematical algorithm that can assist any trading decisions, in both ways, manual or automatic capital investments.
