📊Market Segment Shifts

Video Guide

Basic:

The Market Segment Shifts algorithm is not a specific buy and sell signal script. Instead it aims to segment out the market into different classes and identify major shifts of these classes being 'bullish outlook' 'bullish' 'bearish outlook' 'bearish'. The reason these are not specific buy and sell signals is because we do not provide profit or stop loss targets. Instead based off the market shifts, well risk adjusted trades are the ideal outcome, where one has the potential for major gains with only minor risk to their capital in any given trade. While ideal entry and exit areas do mostly occur near or at shift points, we do not want the focus to be on taking trades signal to signal, this is not recommended. More so we intend for users to focus heavily on timing an entry or exit given various shifts that may have occurred and given factors of risk. In other words this is NOT a fixed system, instead its dynamic and changes along with the market.

Logic Simplified:

  • The first step in our analysis is to regress the price then perform different periods of averaging giving the various different polynomial regression plots.

  • Next a proprietary analysis of the impact of volume on price action is performed and a bias can be derived.

  • Since these bias/volume control shifts occur very often especially in choppy areas, we perform a proprietary analysis centered around velocity and velocity related metrics. Velocity shifts which confirm bullish or bearish segments following shifts of volume are marked by larger green or red labels.

  • Now with the various forms of analysis being ran, its derived segments of bullish outlook, bearish outlook, bullish, bearish.

Segment shifts explained

  • To get a bullish outlook segment shift (yellow background), first price must be above the specified polynomial regression, velocity and its related metrics must be deemed bearish(red background) by thresholds set in the source code, while volume and its related metrics will have just shifted bullish; this marks a shift to bullish outlook.

  • For this bullish outlook segment to then shift into a standard bullish segment(green label), the price must remain above the specified polynomial regression, velocity and its related metrics must shift bullish(green background with green label), and the segment must still be bullish outlook(yellow background) on the previous candle. This will trigger a bullish segment shift.

  • For a non-standard bullish segment(green background with no label), this will occur when a bullish segment turns to bearish outlook but does not confirm into a bearish segment, instead continuing back into a bullish segment.

  • To get a bearish outlook segment shift(purple background), first price must be below the specified polynomial regression, velocity and its related metrics must be deemed bullish(green background) by thresholds set in the source code, volume and its related metrics must shift bearish; this marks a shift to bearish outlook.

  • For this bearish outlook segment to then shift into a standard bearish segment(big red label), the price must remain below the specified polynomial regression, velocity and its related metrics must shift bearish (red background with red label), and the segment must still be bearish outlook(purple background) on the previous candle. This will trigger a bearish segment shift.

  • For a non-standard bearish segment(red background with no label), this will occur when a bearish segment turns to bullish outlook but does not confirm into a bullish segment, instead continuing back into a bearish segment.

Dual Analysis

  • Please note the different periods of analysis occurring, one for a shorter period and one for a longer period.

  • To identify if a shift is from the short term or the long term analysis, simply look at the regression line of which there are two. The one which is more closely fit to price is the shorter term analysis, hence any signals occurring near this regression line are for the shorter term. Oppositely the regression line which is less fit to price is for the longer term analysis and any signals occurring near here will be for the longer term.

  • In theory the shorter period shifts hold less magnitude than the longer period shifts but are great for things such as the following: exiting, trimming, adding on, pullback detection, starting a position, etc.

Optional Third Analysis

  • By checking the box in settings titled 'Run Third Analysis', a third-shortest period of analysis will be performed.

  • This offers the quickest reaction to short term market movements.

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