The Tri-Spectral Forecast indicator and drawing tool for Tradestation
The Tri-Spectral forecast indicator displays historic seasonal analysis in a rapid and precise manner giving you a simple indication of when a pattern exists
This indicator for Tradestation correctly identifies opportunities where accurate cycles are dominant. Adds a big edge to your market selection tasking
Please visit the product guide above if you require this
Tradestation drawing tool for a different trading platform.
Indroduction and concepts of the Tri-Spectral
Forecast tool for Tradestation
With the traders who cannot think,
they read this product only works with daily charts and just dismiss
it, preferring a fast moving 1 minute chart. How amazingly unwise
can they be?
A shrewd individual knows the importance of
planning ahead, if a cycle is found and is strongly up for a month,
a trader can go in that direction while still using a short term
time frame.
In a typical year of a stock price there are approximately 251 bars of data
and a crypto currencey has 365 bars, the difference is because the
cryptos are trading at the weekends.
When analysising a daily stock or future with this
price forecasting tool for Tradestation the settings
would be 251, 502 and 753 for the settings of Back1, Back2, Back3.
If using it on crypto currencey such as Bitcoin BTC these are set to 365, 730 and 1095
as these product trade through the weekends.
Once these values have been inputted, the next step is to input how
many bars into the future to plot. The chart example below uses 80
bars.
It reads the last years change in percentage from the
current bar number -251 to calculate what happened last year on the
same date going forward 80 bars and plots it into the future.
Delightfully simple in its concept when one observes three
years all projecting in the same direction, one can see there is
possibly a cycle in action on the market.
On the same theme
as above, if the three plots are not going in the same direction and
there is no "Covid crash" or similar in the history then it will demonstrate the lack
of an annual cycle.
To make things even
more clear the date of the last three years analysed are highlighted
in the colour you choose which matches the colour of the projection
lines in the Tradestation plot.
Once TSF is set up you can flick
through your list of markets as shown in the video clip at the
bottom of the page.
Special features of the Tri-Spectral forecast tool for Tradestation
The projection lines are drawn on
the chart in the form
of a multiplicity of trendlines and the amount of "steps" is user adjustable.
The above chart is using 30 steps.
These steps represent the points of price and time that the
trendlines use to be drawn. Steps =1 will draw a single line from the
close of today to the end point X bars into the future.
Steps of 250 will draw a line
between every point and clearly resemble the price action of the
closing prices for each year. (Future must be less than "Back1" to
avoid running over itself)
For clarity it is often helpful to use a sensible value of 20 or 50 steps to make it cleaner
when multiple years are used. (Steps must also be less than Future
to avoid more steps than days)
In character, in manner, in style, in all things, the supreme
excellence is simplicity.
Quote by Henry Longfellow.
-
Steps 10
Steps 40
Steps 100
-
Backbars feature
This is set to 0 by default ( as in the chart below ) which means it looks back from the
last bar of the chart, which is usually todays date.
If you set this to 80 etc it will
examine the data basis of the date 80 bars ago. The purpose of
this is so it can be observed what happened on earlier dates when
looking for cycles.
The chart below of the US Stock LRCX Lam Research taken on 2nd
November 2023 shows a very clear correlation between the three
cycles of the previous three years.
You can clearly estimate
the price target to be the place where they all went at around 750.
You can also assume a stop loss at around 600.
When having
to choose between 50 trades and you filter them with TSF you might
end up with a select few which have the added bonus of a reliable
cycle.
Ignored years feature
In the example above the cyan plot is the most spurious and
was likely caused by "external market conditions" to a greater
degree than the white and green plots.
The ignored years
feature when set to 1 will ignore last years (yellow plot) and set to 2
ignores the white plot and ignored years 3 would ignore the red
plot.
In this screenshot the
steps feature is set to 1 so it only draws the start and the end
points when plotted in Tradestation.
In the below example
Steps = 100
Below is another beautiful example of an annual cycle found by TSF.
All three years from Nov 2nd date show a nice rapid move up
in the chart of Qualcomm below. Screenshot November 2nd 2023
The image below shows a very precise annual cycle which starts
in early March
If you are interested to see how this cycle runs over the next
few of weeks the name of this stock is given via the link in the
email that is sent out after
SIGN UP
The shot below of Gold futures has it future set to 80 and steps set to 100 so the
plot has more detail than the one shown above.
This example is another where there is no evidence of a
confluence of events to base a trade on. The red plot is up, the
white plot is sideways and the yellow plot is down.
Looking
for annual cycles in Gold futures during June leads to the discovery
that there arent any.
All these evidences can be useful to
avoid making bad trading decisions as the chart clearly shows this
time of year can lead to a big drop in Gold or a big rise in Gold,
or a dull sideways non event in Gold.
Some
real and genuine causes of annual cycles in stocks
The directors selling some of their
stocks. This is a very real danger or real opportunity depending on
if the trade is carefully researched in advance.
Company
directors are often not allowed to sell any stock until after the
year end or quarterly results are announced. This is often the exact
same date each year and the news might show excellent results followed by
a brief and large move up, and often within the space of just a few
minutes the price will start selling off very hard with a key type
reversal bar.
This director
selling is often enough to completely reverse an uptrend as they are
big shareholders in the game to make money, likely they will be the
ones who buy back in later at another predictable cycle date.
Seasonal trends
in stocks can be related to the "Christmas rally" where shops have
booming profits in the run up to Christmas, there are seasonal
trends in the form of holidays, weather, temperature or regular
annual events.
Dividend Payments: Dividend-paying companies
typically have specific dates for dividend distributions, which can
impact stock prices around those dates.
Annual Shareholder
Meetings: Companies hold annual shareholder meetings on fixed dates,
which can generate interest and potentially affect stock prices.
Product Launches: The introduction of new products or services
by a company on specific dates can create anticipation and impact
stock performance.
Industry Conferences: Significant industry
conferences or events held annually can drive attention to specific
stocks or sectors during those periods.
Regulatory Filings:
Filing deadlines for regulatory reports, such as 10-K or 10-Q
filings, can create patterns in stock movement as investors react to
the disclosed information.
Index Rebalancing: When stocks are
added or removed from prominent market indices, it can influence
trading activity and stock prices around the rebalancing dates as
institutions have to buy these stocks for pension funds etc, this
method requires care however as being demoted or promoted does not
happen every year.
Options Expiration: Expiration dates for
options contracts can lead to increased trading volume and potential
price movements in the underlying stocks. Seasonal Trends: Some
industries or stocks may have seasonal patterns influenced by
factors like holidays, weather, or specific events.
Economic
Data Releases: Key economic indicators or reports, such as
employment data or GDP figures, released on specific dates can
impact overall market sentiment and individual stock performance.
The beauty of the Tri-Spectral forecast is that it
gives a clear and realistic sense of what to expect for the future,
and this expectation is based on historical data.
Similar to
predicting when the Swifts and Swallows will arrive in the UK after
spending the winter in Africa.
Typically they arrive at their
earliest in late March to early April, but in colder years they can
come as late as the latter part of May or the early part of June.
They are a good example of a repeating cycle which is very
valid and robust, albeit a little varied in their timing.
With careful use this
product
can make an average trader into a better than average
trader as it offers a very simple method of forecasting the future
and filtering trades.
The chart below of Pepsishows three plots going up
in the same direction, then curving over and gradually going into a
minor plunge.
Viewing the similar plots warns us nicely that
small rise is very likely coming followed by a return to the lows,
making it bad for an investor or short seller.
An options
trader with a clever plan could do very well with this set up.
Screenshot dated Nov 2nd 2023
How to add more years
If a second version of this indicator is added with longer
Back1, Back2, Back3 values then it is simple to see six plots or
even nine if you have enough data.
Doing this will add more
crudentials to the validity of the observed results.
When doing this
on stocks the values of 1004 (251 days x 4) 1255 ( 251 x 5) and 1506
can be used.
If using on a crypto currency then you can use 365 x 4
= 1460 for Back1 and 365 x 5 = 1825 for Back 2 and 365 x 6 = 2190
for Back3.
Both of the above concepts are shown in the
screenshot below. Please remember, if you do not wish to see the
dots on the high and low, just change plot 5 and 6 to the background
colour.
This powerful example below clearly shows you at a glance
in a matter of seconds,
that Ashtead group PLC in five out of the six years over the next 130 bars were higher
and only the yellow year of 2018 was down.
This method of
technical analysis speaks a very clear message indeed.
Troubleshooting errors that occur
if incorrect inputs are used.
1.
Bars loaded must be greater than Back3 + Future.
If not enough bars are loaded the indicator will just
show as "calculating" and no plot will appear.
2. If future is
set to a value that is greater than Back1 then the plot for last
year will not be displayed.
3. If future is set to a value that
is greater than Back2 then the plot for last year and the year
before will not be displayed.
4. If future is set to a value
greater than Back3 then no plot will display for any year.
Chart types for the Tri-Spectral
forecast
This product works on daily charts of the types, Line,
Candlesticks, Bars of HLC, OHLC but other types of chart will cause
invalid readings to the plots due to not being one bar per day.
If this product is used on minute or hourly
charts the data will make no sense as it looks back a number of
bars, instead of using the date.
Margin width to the right side of the last price
There is a setting called chart shift ( bars to
right ) in
Tradestation which you can locate as follows. Right click on the chart
background > Format window > X-Time scale > Chart shift.
Set this
value larger until you can see the entire future plot, this will
vary depending on the future setting you have used.
Once it is set
you can select different charts and it will automatically use the
correct same settings.
Please note this varies a lot based on how much zoomed in or out the
chart is and smaller numbers can be used when zoomed out than when
zoomed in.
Annual cycles which are found in
commodities are shown below
Crop Planting and Harvesting: Agricultural commodities such as
corn, wheat, and soybeans have specific planting and harvesting
seasons, which can create cyclical patterns in supply and demand.
Weather Patterns: Weather events, such as hurricanes, droughts,
or seasonal rainfall, can impact commodity prices and create
"fairly" predictable cycles (but not exact as with the Swallows)
OPEC Meetings: For oil and petroleum-related commodities, OPEC
(Organization of the Petroleum Exporting Countries) meetings and
decisions on production quotas can influence prices.
Inventory Reports: Regular reports on inventory levels, such as the
weekly crude oil inventory report in the United States, can affect
commodity prices.
Mining Production Reports: For metals and
minerals, periodic reports on mining production and output can
impact supply and prices.
Seasonal Demand: Certain
commodities, like natural gas for heating or gasoline for summer
travel, experience seasonal fluctuations in demand that can affect
prices.
Global Economic Events: Economic indicators, such as
GDP growth, interest rate decisions, or geopolitical events, can
impact commodity prices worldwide.
Commodity Futures Expiration: Expiration dates of commodity futures
contracts can lead to increased trading activity and potential price
volatility.
Setting up in Tradestation
The set up in Tradestation is somewhat different to the other
platforms and once it is done correctly all that is needed to to run
through all your favourite markets.
--
Video demo - After set up you can just type the symbol you want and look through your markets for cycles - Did you notice the cycle in PFE?
1. Make a new workspace called TSF and
add a daily chart in bars or candles or line. (If you use weekly
then you need to divide the numbers by 5 for stocks or 7 for cryptos
)
2. Plot the TSF
indicator ( You will see the plot on the subgraph 1 and there will
be a panel open for subgraph 2 which is needed, so just make it
small at the bottom.)
3. Add the three TSF paint bar
studies to the same chart.
4. Check all the settings
are identical, the default settings are ideal for most set ups.
5. After plotting
the indicator go to chart properties and set "space to the
right" to be future setting + 5 so you can see the full plot. (
about 100 is fine for the defaults )
6. If you just
want to see the future plot, you can plot the TSF indicator and not
bother with the paint bar studies.
7. Set axis to
linear as it displayed better
8. Go to settings and set
the space to right to 100. ( Or 20 more than the future setting used
)
9. As you can see 100 bars into the future,
theoretically you only need to look once every two months to check
through all the markets. If a pattern is found then you can take
action.
Once it is set up you can flick
through your list of markets as shown in the video clip.
If you
like what you see, feel free to
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About
Precision Trading Systems was founded in 2006
providing high quality indicators and trading systems for a wide range of
markets and levels of experience.
Supporting NinjaTrader, Tradestation. MultiCharts, TradingView,
MetaTrader 4 and MetaTrader 5
Admin notes
Page Created June 15th 2023 -updated
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