The Concept of StockWave™
1. Take all the data you can get hold of, wherever you can get it
Use the internet, teletext, historical price, news and financial data. Everything potentially contains important information, so leave nothing out, and take data from wherever you can find it.
2. Use the best data analysis algorithms available
Do not try to make sense of all this raw data yourself — you will be drowning in a sea of confusion; to avoid severe information overload, instead use the best data analysis and filtering algorithms to extract, clarify, classify, fuse and ultimately predict price move probabilities from all of the collected data. To do this, use the strongest, best-of-breed algorithms gathered from the domain of hard science; i.e., AI, signal processing, maths, statistics and theoretical physics. Forget about the traditional folklore of technical non-analysis.
Do your analysis using multiple, independent methods; corroborate these. If they are in agreement, only then should you rely on them. But once so, rely on them you should — forget about your intuition and your hunches, especially your emotions and most certainly, tips from the so-called experts. Think in terms of probabilities regarding market moves. Remember that exact prediction is impossible. Adjust emotionally to this idea.
3. Use the best trades available
Use the full range of trading possibilities to wring the maximum potential from your analysis — simply buying stock can incur a lot of charges which will eat into your profit. Explore, for example, contracts for difference (CFDs), spread betting, options trading. Use online brokers to get the best prices. Build composite trades which reflect your own appetite for risk, i.e., hedge or leverage.
4. Eradicate complexity wherever you find it
Trading is far too difficult, confusing and complicated. Eliminate all obstacles wherever they are found. Allow the user to do his business from an attractive, intuitive user interface, provide him with the right amount of tutorial material, all expressed in a straightforward manner; explain the jargon; answer the common questions.
Reduce sophisticated, active trading to 5 easy stages:
- Get the data
- Analyze it
- Play the odds, when in your favour
- Make your trade
- Pocket your profit
Avoid anything at all which makes life more complicated than this.
5. Present an overall conclusion as the probability of payoff
For any trade you can make, of whatever complexity, you can simply read from a graph the chance of achieving a given return. What you can lose and what you can make are made explicit.
6. Include everything relevant; exclude everything irrelevant
Less is more; we could have thrown everything in, but we didn't — everything was considered, but frankly, much of the common idiom founds in other software, we could not fathom the practical benefit of, and so they were left out. We make no apologies for this, and respectfully refuse to include anything which we find deficient. Bear with us; in the end you will see the value of our way.
A warning about "Technical (non-)Analysis"
Our algorithms are drawn from hard science, and nothing at all to do with the usual chartist rubbish. We give you probabilistic predictions — so remember, behind the line, is behind the time.