Real-time Trade Opportunities Widgets

Using Real-time Trade Opportunities Widgets

Real time trade opportunities Widgets display price conditions which are most relevant to the current price action. These Real-time Trade Opportunities are visible in the dashboard on the left column. Traders can view these price conditions through a series of widgets which are grouped based on desired trading style & strategy. They include the holding period preferred “Trade Period” the type of trading strategy, the type of instrument they prefer to trade, the amount of price move a Trader is seeking, and, or the price level a Trader is comfortable trading to “Price Target”. These Widgets are explained in greater detail below.

All the Real-time Trade Opportunity Widgets automatically poll the current market price of each of the Indices and compare that to the Price Zone that that Indices’ market price is currently at. The widget’s then automatically search the database of Price Conditions for those conditions which may be most relevant to a Trader at the current time. These opportunities are then filtered based upon the varying attributes the trader prefers to view. Some price conditions may overlap or be present in more than one widget. This depends entirely on whether any given price condition has multiple attributes in common. Only Price Conditions with 20 or more occurrences are displayed.

The Real-time Opportunity Widgets are designed to act as high-level signals but should not necessarily be traded on by themselves. Each Price Condition can be further qualified by using Advanced Search. These widgets display probability levels representing the average across a five-year period. In addition, these averages are generally based a broad range of occurrences over that period. However, variations over time in both probability and the number of events, can impact the statistical reliability of these probability levels. For example, a price condition shown on a widget may have a probability of 85% but with say 20 occurrences over five years, and perhaps those occurrences were not mostly recent, and the recent occurrences did not have typical probabilities. In this case, this price condition may not behave in the way it has over the broader five-year period.

There is additional detail available for these widgets by clicking on the price condition. There you will see a breakdown on the price condition probabilities by current year along with the count of occurrences. You will also see a Price Condition Number. This is a unique identifier. Again, we recommend however that before you trade on this information that you further qualify it by using advanced search.

With Advanced Search you will be able to customize your date range if desired and select data that fits within a similar implied volatility level. By utilizing implied volatility as a filter, you can weed out outlier conditions which may be very dissimilar to the current market conditions. For example, in Oct-Dec 2018 and in Mar – May 2020 the market reached very high volatility levels. You can exclude that data by setting an IV range that limits high levels or both high and low levels. You may also want to select a date range that is closer to present day or begins after an event that may skew the data (such as the March 2020 Covid-19 crash.

To have a quick search of this price condition using Advanced Search you can simply input the Price Condition Number and choose the Indice(s). On the results page can you drill down into far more detail on this price condition including a breakdown of the probability levels by year.
You can also use the Advanced Search to set alerts on these conditions. You may find a price condition from a widget that could be traded on at present, but you would prefer a slightly different entry point. For example, one price condition may indicate that if price closes below Zone 1 than it has a high probability of continuing lower through the rest of the week. But another price condition indicates that when price crosses below Zone 1 that it has a very high probability of moving back up and testing Zone 1. So given this information you may want to set an alert for the price level of Zone 1 so that when price touches that level you can trade on it moving lower later in the week.

Each Price Condition Widget shown includes the following fields:

Price Condition No.: Each Price Condition is unique because it represents a specific type of price movement. As such it is given a unique number which is common across each of the indices. This number can be used to conduct a quick search in the Advanced Search.

Indices: S&P 500 (SPY), Nasdaq 100 (QQQ) or Russell 2000 (IWM). Each of the indices have all of the same price conditions, but the probability levels of each price condition in each of the indices will be unique.

Current Price Zone: The Zone that the price is currently inside is identified. Price Zones are identified as Zones 1-7 and each zone is described further in the Knowledge Base definitions.

Category: Price Conditions are grouped into categories. This is for indexing purposes. If you are interested in a particular price condition you can search by the category it is in to find similar variations of this price condition. There are 26 category definitions and each are defined further in the Knowledge Base.

Price Condition Description: This describes the price movement usually with a beginning point and ending point with a prescribed time frame. You can link from the price description to additional details.

Probability Levels: The “normalized” frequency with which this price condition has occurred over the utilized time period. For the widgets the time period is 5 years. Price Condition Probability is normalized to make it comparable to other conditions. For example, a price condition that occurs as expected 90 out of 100 times has a probability of 90% and another price condition that does not occur 90 out of 100 times has a 90% probability of not occurring. While both price conditions may measure the occurrence of the behavior and one may occur 90 times while the other occurs 10 times, we give both a probability of 90% while one positive occurs and the other negatively occurs.

Price Condition Widgets

Highest Probability Conditions Right Now – Identifies up to 25 Price Conditions in the current price zone with the highest probability

Trade Period Widget– Identifies the highest probability price conditions in each of five distinct time periods: Intraday, Day, Multi-Day, Week & Multi-Week. Intraday price conditions describe conditions between opening and closing during a single trading day. Day price conditions describe conditions that begin and end on the open and close on a single trading day. Multi-Day price conditions include conditions that are greater than one trading day but less than five trading days. Week conditions describe conditions that begin on a Monday and close on a Friday of the same week. Multi-Week conditions include only those conditions where price move begins some point in time during the initial week and closes on a subsequent week but no more than on the sixth week when the opening week is counted as week one.

Trade Strategy Widget– Identifies the highest probability price conditions in each of four distinct Trade methods: Scalping, Day Trading, Swing Trading & Trend Trading. Scalping price conditions will overlap with Intraday conditions offered by the Trade Period Widget but will also include other price conditions which may be of shorter duration or have endpoints that are not tied to zone levels. Intraday price conditions are price moves (from one zone to another) whereas scalping conditions look at price levels versus opening price or previous day’s closing price. Day Trading will have a mix of Intraday and one Day price conditions. Swing Trading will generally have a mix of multi-day and full week price conditions. Trend Trading will have multi-week trades but also some week trades that are reversals off the weekly expected move levels (Zones 1 & 7)

Naked Calls & Puts Widget – Identifies the highest probability price conditions for which larger price moves in shorter periods of time are characteristic. These opportunities are typically one week or less in duration.

Credit & Debit Spread Widget - Identifies the highest probability price conditions for which both credit & debit spreads for puts & calls may be beneficial. These conditions may be of various durations with typically smaller price moves but the probabilities of the moves occurring are greater.

Price Move Widget - Identifies the highest probability price conditions by size of the move. The move size is measured by price zone. If a price move does not change its price zone than it has a zero-move value. If a price move price changes up or down by one price zone it is assigned a 1 value for the Widget. Similarly, if the move is 3 price zones up or down it is assigned a 3 value. You can use advanced search to search for moves which may be only down or only up. In the Price Move Widgets, you can select for the highest price conditions in the current Price Zone with Moves of 1-5 Price Zones.

Price Target Widget - Identifies the highest probability price conditions by Price Zone being targeted. Since each price condition has a beginning point and an ending point and these points are most often measured as price zone levels, you can target those price conditions which end at a certain price zone level. This can be done for any price condition whether it is currently in the zone or not. If it is in the zone and is one of the highest probability conditions, it will show up in the Price Target Widget. If it is not currently in play or a lower probability you can search for it using advanced search and set an alert for when it becomes in play.

Other helpful information:
Setting Alert Preferences
Setting Group Alerts
Managing Alerts
QuantDirection Trade Alerts
QuantDirection Platform Demo