📊High Risk Zones + Added Risk Signals

Video Guide


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:

  1. Judge level of risk with high risk zones for entering positions upon shifts as they occur.

  2. Manage risk with added risk signals throughout a segment and gain potential trim/exit points.

High Risk Zones:

  • 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

  • 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.

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