Day trading signals generated by Pivot Points Analyzer (PPA) in real-time help you enter the markets closely to its extremes. It is essential, as you can front-run many of those who only use lagging indicators. And it makes opening a profitable position much easier. Both manually and with trading automation.
We are currently finalizing a very important new PPA feature. Now, you can optimize the PPA parameters dynamically, i.e. adjust them to the current markets.
With the optimized parameters, PPA generates more accurate day trading signals.
Such optimization is needed, because the markets don’t always behave the same way. To understand whether if optimization can help, we did the following study.
We ran the same day trading strategy only on Asian trading sessions for one month. The strategy only used the PPA signals to enter and exit the markets. During all the tests, the PPA parameters stayed the same.
We picked Asian session because they are rarely very volatile.
Overall, the test was profitable. We investigated the worst session and could turn it to a profit by only adjusting the PPA parameters for this session.
This adjustment made the signals match the market extremes much better. And trades became profitable.
It is very important to note that the parameters stayed the same during the session!
Why is this important? This means the changes in the markets’ behavior doesn’t happen very fast. Giving us enough time to run optimization to adjust to the change. And also profit from optimized results.
In the first version of the optimizer you run it manually. You can configure the time span you optimize on.
Enhancements planned for the optimizer include running the optimization on the background. This will make it possible to optimize in a rolling fashion. For example, run it every time we got 500 new ticks. Or every time a new PPA signal is fired.