Tradable Forecast Horizon

Here I want to address the question why we do not support many sources of datafeed for real time streaming.

For a start, I would like to remind that the main focus of Timing Solution software is a projection line and its verification.

The important question here is what is the trustable interval for this projection line, can we forecast one year ahead or one month ahead etc. This interval is called Forecast Horizon. It is a period within which we can trust our projection line. I believe that the minimal forecast horizon is several days, not several hours, as an example. This is my personal opinion based on my experience combined with the opinion of some traders. I asked them what they think about that, and they all confirmed my opinion regarding a forecast horizon. Mostly they point at the interval of one week (and longer), i.e. it is preferable to build models that forecast one week ahead and more.

This is what Larry Williams says about day trading in one of his rules for traders:

            Don’t day trade it’s a losers game as profits come from trend and trend comes from time. Day traders have no time to catch nice trends

There are two reasons why it is impossible (IMHO) to build a forecast with a shorter forecast horizon:

1) There are many fundamental/occasional/non predictable factors that can affect a short term forecast (like some Tweet of some very well known person, or some unexpected report, etc. etc.)  When we work with a longer forecast horizon, these factors do not affect a trend much.

2) A short term forecast is a territory of  institutional fast trading robots. It means that any possibility to forecast on this interval is immediately killed by them. This is a battle field of big guys that leaves to us a burned out land.

It does not mean that traders cannot make a profit on a shorter forecast horizon. It means that analytical/verified/formal tools do not work here. Also no doubts, the trades on that short forecast horizon are much more risky.

One week horizon means that we do not need to download one minute chart, 15 minutes bar chart is enough to make a forecast for several days ahead. For this purpose we can even download hourly chart. For these charts, we do not need real time feeding. This is why in Timing Solution we provide a good module that allows to download practically all text/Excel files. A special expert system recognizes the data format of these files automatically, so Timing Solution reads practically any data files, and practically any data feed has a possibility to export their data into text/Excel file. For those who need a datafeed we provide  a possibility to stream data from eSignal service only. More about this subject you may find here: http://www.timingsolution.com/TS/DF/

This is the main difference between a forecasting software (like Timing Solution) and Technical Analysis software that helps to handle your trades. More about this is explained here:

http://www.timingsolution.com/TS/Articles/science_of_forecast/index.htm

So, if you need a real time streaming software, better use some other programs, there are a lot of them. Remember, if you would like to build a successful trading system for intraday data, you are entering a very specific area of fast trading (high frequency trading HFT). Timing Solution is oriented to prediction techniques in areas where a prediction is possible.

Georgian Bay shores, Ontario, Canada

August 12, 2018