PQSwingDetector – a proprietary algorithm that provides a trading edge

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What is PQSwingDetector

PQSwingDetector uses real tick data and creates price swings based on a price Noise ( a price difference that we consider irrelevant because it is too small).

The results are giving us clear, 100% data-driven information about this market behavior. This info cannot be perceived by the human brain by just looking at a price chart:

  • how long (in price and time) a price swing usually is
  • how many price swings were created in the period selected (if noise is a relevant value for intraday trading you will get to see the normal behavior of price swings on a normal day – when no wars are staring, no covid etc – just a normal trading day)

How are we using PQSwingDetector

  • check the maximum swing amplitude and create the trading plan accordingly
  • filter the results based on the time of the day, swing duration, and know what to expect when it happens (ex: data clearly show that the price wings on Gold are shorter in duration and longer in amplitude before and after the US trading session starts, compared to the rest of the day)
  • we created a trading strategy for Gold based on the maximum swing amplitude and the following swing (pullback). This strategy is automated and it places trades based on the rules we have set

Bottom line

We, at PropQuant, are strong believers in 100% data-driven trading decisions and this can only be achieved by rigorous market research and automation.

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