NClub Research
| Overview | ARM2 | ARM3 | ARM4 |
| ▼ | ||||
| Research Overview | Relative Minimum Stops | Tradability Index | Candle Predictor | Mechanical Systems | ||||
Tradability Index
We have been experimenting with two new concepts; Tradability Index and Relative Minimum Stops. Our goal - to reach a 100% Mechanical System. The M-1 Profile uses these components to achieve this goal.
Relative minimum stops and Tradability Index shown on MAY
Tradability Index (TI) Filter
Our Nirvana Labs has created a new index which is designed to identify those stocks that have sufficiently smooth movement to be "tradable", using a special method that determines the 'probability of a strong, volatile move'. When a volatile move is probable for a given chart, we just avoid trading it. The chart above shows the output of this filter. Basically, the shaded areas below the line indicate zones that are not tradable. The filter calculates the probability of a volatile zone occurring in the chart, which results in the Tradability Index.
Initial Results for Tradability Index with ARM2
By applying Tradability Index to ARM2, we are seeing the following performance on the S&P 100, over the recent year of data. (note: these reports use the same method for calculating accuracy that we have consistently used for ARM2).
We have never seen accuracies in ARM2 above 90% before. Needless to say, we are tremendously excited about this latest advance in ARM2 Technology.
Relative Minimum Stops (RMS)
The second, related component is the Relative Minimum Stops exit. These stops tend to hold trades longer while providing an optimal initial stop.
Downloads Available for Members.
Both of these components were presented at Bash 2003. Nirvana Club Members can download the components and experiment with them using other techniques. Many members are doing this and reporting their results in the Nirvana Club Forums..
* Accuracy is defined as the direction a chart moves to the next pivot point, or medium term reversal, after the signal is generated. This is the purest way to measure entry signal accuracy, because it specifies accuracy of the signal only (not the trade). For a detailed description of how we measure ARM2 accuracy, please see How Accuracy is Measured.