Basic Analysis

The basic analysis technique of StockWave™ is to produce a probabilistic prediction for the share price and from here go on to construct optimised trading strategies using derivatives.

This probabilistic prediction is shown as a set of contours on the stock chart which represent the probabilities for the share price to remain within their boundaries.

The simplest example of this type of predictive analysis is our basic random walk algorithm — this models the share price as a noise process having no time correlations. This is also known as a Monte Carlo simulation.