📊High Risk Zones + Added Risk Signals
Last updated
Last updated
High risk zones and added risk signals are an tool essential when using 'Market Segment Shifts'. By running a risk assessment on top of the 'Market Segment Shifts', users can:
Judge level of risk with high risk zones for entering positions upon shifts as they occur.
Manage risk with added risk signals throughout a segment and gain potential trim/exit points.
For information on segment shifts refer to Market Segment Shifts
To get our high risk zones, we measure the difference in the longest and middle period regression lines which are used in the 'Market Segment Shifts' algorithm when a shift occurs on either of the two periods.
Since shifts that occur at or near crossovers of the regression lines yield the highest probability of return, by plotting a box at the range of the two regressions when shifts occur, the bigger the range of the box, the higher risk it poses to take a trade at that shift, and theoretically the weaker the shift is.
Tiny high risk zones mean the risk is lower to enter a trade in the direction of the signal.
Added risk signals are derived from a modified market segment shifts analysis in order to deem possible retracements within an overall segment.
These give the user an added level of knowledge and protection while potentially in a trade during a greater move, providing the quickest structured reaction to the market without creating unreadable noise.
High Risk Zones
Plotted blue boxes are high risk zones for bullish segments
Plotted yellow boxes are high risk zones for bearish segments
Boxes will plot for the longest period and middle period shifts
Added Risk Signals
Plotted dark blue diamonds mean risk just increased for a bullish segment
Plotted dark orange diamonds mean risk just increased for a bearish segment
'X' Signal
When no segment is detected an 'X' will plot yellow for no bearish segment and blue for no bullish segment.
For a small 'x' this means no segment was detected for the middle length period.
For a large 'X' this means no segment was detected for the longest length period.
