Helpful Hint: Remember that Signal Generation settings only affect voted signals (signals on your vote line) and not the actual signals generated by the individual systems in your profile.

Signal Generation

OmniTrader can generate signals in three different ways.  You can have your profiles generate voted signals, as in previous versions of OmniTrader.  You can also modify your profile to use only selected systems to generate your entries, or you can use a combination of the two types of signal generation.  Fore example, if you select "Voting" as your type of signal generation, but then click on the "Entries" box and select a system, the selected system will automatically generate signals to the vote line when it fires, giving your vote line the voted signals as well as the system signals.

System Exits

OmniTrader gives you the ability to exit a trade on the vote line when a selected system fires a signal in the opposite direction.  OmniTrader will still use the exit rules in your trading model, but you can in effect add an exit rule (a system signal firing in the opposite direction) with this feature.

System Confirmation

OmniTrader also provides you with the ability to use systems to confirm signals generated to the vote line.  For example, you could choose to confirm a generated signal with the MV2-C (Two Moving Average Crossover) system.  This means that every time OmniTrader fires a signal to the vote line, it will check to see if the selected system is in agreement with that signal.

Important:  The Signal Confirmation we have just discussed can only be used with systems of same periodicity.  For information on confirmation across periodicity, see below.

System Exit Confirmation

As we mentioned before, the Trading Model is used to exit trades on the vote line.  With this feature in OmniTrader, you can have exits confirmed with systems.  For example, if you have selected MV2-C to confirm your exits, OmniTrader will use the Trading Model tool for exits, but only the exit on the vote line if MV2-C fires a signal in the opposite direction.

Tolerance

The Tolerance setting controls how far OmniTrader will 'look back' to consider a system signal for a vote. For example, let's say you have 6 daily systems that passed the filters in the System Testing process (refer to last week's email for more on System Testing). 3 of the systems fired a short 6 bars earlier. However, 3 other systems fired longs within the tolerated period of 5 bars ago. Since the shorts were fired outside of the tolerated period, they are ignored by OmniTrader and only the long signals are considered for the vote.

Min. Advisor: Every time a signal is generated to the vote line, it is assigned an Advisor Rating. You can read about more about Advisor Ratings and how they are calculated in your Guidebook, but it is basically a shortcut to determine the strength of a signal. The Minimum Advisor setting allows you to set a cut off value so that only the signals with an advisor rating above that value are allowed to make it to the vote line.

Optimize for Each Symbol: The Optimize for Each Symbol box refers to the Advisor Rating. This tells OmniTrader to find the best Minimum Advisor Rating for each symbol in your profile. If you select this option (it is selected by default), it overrides the Minimum Advisor cutoff mentioned earlier.

Timeframe Confirmation: OmniTrader gives you the ability to confirm signals that were generated in one data period with the signals generated in another data period. We will discuss confirming daily signals with weekly signals, but this feature also applies to real time periods as well (5 minute signals with 15 minute signals, for example).

The Timeframe Confirmation options in OmniTrader

• Ignore Daily Sigs w/ Conflicting Weekly Sigs: When selected, OmniTrader will check and see if any of the weekly systems below the vote line fired a signal that is in conflict with a generated daily signal. If so, the signal will be filtered out of the vote line.
• Confirm Daily Sigs w/ Weekly Sigs: This option will only allow daily signals to make it to the vote line if they are confirmed with a signal from one of the weekly systems.
• Ignore Daily Sigs w/ Conflicting Voted Weekly Sigs: With this option, OmniTrader will not allow daily signals to make it to the vote line if there is a conflicting weekly signal. This is a more stringent filter than the first option, as it requires an actual voted signal while the other option only requires that one of the weekly systems be in conflict.
• Confirm Daily Sigs w/ Voted Weekly Sigs: When selected, OmniTrader will check for a weekly voted signal to confirm a daily voted signal. This is more stringent than the second option since it is requiring a voted signal as opposed to Confirm Daily Sigs w/ Weekly Sigs requiring only a weekly system to confirm a daily signal.
  
  If you use any of the timeframe confirmation options discussed, you will see more accurate signals. However, since there is additional filtering taking place, you will see less signals than if you were to not use this feature.
  
  RECOMMENDATION: For very large focus lists (over 1000 symbols) this feature is recommended to save time in your prospecting. However, if you are using a smaller list of stocks, this filter will probably limit too many signals and leave with only a few prospects.

          Important:  The Timeframe Confirmation we have just discussed will use the active systems in The System Testing Window.

This concludes our discussion on the settings to customize a profile in OmniTrader. You may have noticed an additional tab in Signal Generation for Trading Models. This feature is covered in detail in the Help Manual.  

Best of luck with your trades this week! You can email me with questions or concerns at jdrake@nirvsys.com.

Regards,
Jeff Drake
Director of Education
Nirvana Systems

Return to New User Tips