Entry Signal Analyzer

Entry signals are a key component of any trading strategy. During the day to day research of new ideas, traders routinely need to take new entry ideas and evaluate whether the signal provides an edge and if it makes sense to invest more time and energy developing the entry into a full trading strategy or move on to other ideas.

The name of the game is to be quick about it - quickly evaluate ideas, discard the ones that show little promise, further pursue the ones that do.

The Entry Signal Analyzer (ESA for short) is a tool whose purpose is to analyze potential strength of existing signals. For example: say that I have a study that fires a signal on the chart when some condition happens. The signal appears on the chart as a subgraph in the from of an arrow. I’ve received this study from a 3rd party vendor and am thinking of incorporating this signal into one of my strategies. Taking the ESA, I can hook up this existing signal and within minutes start to get an idea of how this signal performs under different conditions.

Entry Signal Analyzer will help inform and answer some of the following questions

• Does this entry signal have an edge?
• How long does this edge last? For how many bars? How many hour, minutes or seconds?
• Once a signal fires, how far does the market tend to move in the direction of the signal? This can often be used in designing profit targets
• Once a signal fires, how far does the market tend to move against the direction of the signal? This can often be used to inform on stop placement