How Our Signals Are Generated
Our Multi-Factor Trading Signals combine five weighted components into one direction per pair. Two more — volatility and correlations — are read alongside them but carry no weight in the score: they are context, not votes. Every weight below is applied to the factors that actually have a reading, then renormalised, so a factor with nothing to say abstains instead of pulling the result toward the middle:
- Sentiment Analysis (15%): Retail positioning, read contrarian: a crowded side usually sits on the wrong side of a move. Its weight grows with how one-sided the positioning is — nothing at all below 60/40, where positioning is just noise, rising to full weight at 90/10
- Currency Strength (15%): Measures the relative strength or weakness of individual currencies against their counterparts across multiple timeframes
- Pattern Recognition (15%): Detects candlestick and structure patterns on H1, H4 and D1 from real candles. Each pattern type carries the historical success rate published for that formation, and its weight fades as the pattern ages — a daily engulfing from last week is not evidence about today
- Support & Resistance (20%): Identifies key price levels where significant buying or selling pressure has historically emerged
- High Probability Zones (25%): Scores the analysis levels nearest to price by how much confluence they actually carry — a Fibonacci retracement of the 30-day range, a matching pattern formed within a quarter of the pair's daily ATR of the level, a round number, and how many distinct times the level was tested. Which side a zone sits on is decided by the current price, not by the list it came from
These are the starting weights (they add up to 0.90 and are renormalised over the factors that actually vote). A factor's share rises when its own confidence is high and when it agrees with the dominant direction, and falls when its reading is weak — so the share applied to each signal is the one shown on its card, and it can sit well above or below the figure listed here.
Read alongside, with no weight in the score:
- Volatility: the pair's current ATR regime. It sets the volatility chip on each card — how much this market is moving, which is a separate question from how solid the signal is
- Correlations: Pearson on 30 days of daily returns. Used to flag when a strongly correlated pair is pointing the other way
Each factor is scored on a −1 to +1 scale with its own confidence rating, and factors that agree with the dominant direction get a small boost. The final direction is the weighted average of the factors that had something to say; the confidence rating reflects how many of them agreed, how strong the result is, and whether any single reading is carrying it alone.
How to Use These Signals
Signal Components
- Bias: The directional tendency (Bullish, Neutral, or Bearish) based on the weighted aggregate of all factors
- Confidence: How readable the result is (High, Medium, or Low): agreement among the factors that actually voted, how much of the panel expressed a view, and how strong the weighted result is
- Strength: The intensity of the signal (0-100%) indicating how compelling the evidence is across all factors
- Volatility: The pair's current ATR regime, from Low to Very high — how much this market is moving. Use it for position sizing; it says nothing about how good the signal is
Trading Implementation
- Focus on high and medium confidence signals that align with your trading style and risk tolerance
- Adjust position sizing based on the volatility chip (smaller positions when the pair is moving more)
- Consider the signal explanation to understand which factors are driving the signal
- Use the Market Overview to assess broader market conditions before taking individual positions
- Always complement these signals with your own technical and fundamental analysis
Important: Even high confidence signals do not guarantee future price movement. A signal is an aggregation of current technical readings — not a probability and not a prediction with a measured track record. Always manage risk appropriately and use proper stop-loss placement. Consider these signals as valuable inputs to your trading decisions rather than automatic trade instructions.
