| RL Odds Calculators |
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The markets are not (completely) random. Many years of research have confirmed this for us. Our proprietary studies show that prices tend to move up and down randomly, but they do so inside precise price patterns (that we'll call RL Price Matrixes). These Price Matrixes are very specific to each security and may be considered like their own DNA: the genetic code that generates all possible market moves for a security. Retracement Levels is the first and only research firm in the world that has found the way to decode the DNA/Book of Life for any market security, to understand the way a security develops, expand and then retrace according to its own unique historical/statistical retracement patterns. You can think of our claim as the ability to read the footprints of all the market players that have acted on the price of a certain security over time or you can imagine it as the ability to "photograph" how a certain security has retraced up and down through history. No one else in the world offers a service like this, so those using our system have an extraordinary advantage over other market participants. If you are wondering "How do we do it", well, unfortunately we are unable to reveal that. The criteria used to uncover the retracements DNA of each security are strictly proprietary, patent pending and not disclosed to the public. All we can say is that we use a sophisticated algorithmical pattern-matching system to compare a security's current/ongoing retracement with all its past retracements. This allows us to identify with surgical precision the levels at which price reversals may occur and what the chances are that they will occur, enabling you to adeptly place your trades. Let's have a look in detail at the RL Odds Calculator (To Go Long version, in this example) to see its main features. Below you see the Frequency Table: this graph shows the frequency of reversals at certain price levels for a particular retracement down.
Next is the Scaling Table, the core of the RL Trading System: here is where the trader can check the % odds of reversal at each price level and establish how much to bet or how much to liquidate of his profitable positions (profit taking).
Finally, the Reversal Risk Meter, where the trader can see a graphical representation of the rising risk of reversal upon reaching certain price levels.
The RL Odds Calculators comes with a companion, a very useful tool called the "Odds Comparator", a device designed to compare the % odds of reversal at certain retracement levels on multiple time frames -- Hourly/Daily/Weekly/Monthly. The Comparator can be very useful in assessing the overall market direction or in analyzing how the price is moving across different time periods: this information allows traders to position themselves correctly in relation to the next probable direction of the security they trade, and so avoid going counter-trend before a massive medium term reversal takes place. For example, if a certain security shows high odds to reverse LONG on all time periods, such as Daily, Weekly and Monthly (see image below), this indication can save traders a lot of money by preventing them from taking further SHORT positions and alerting them to take profit before the market reversal wipes away their gains.
One important question raised by many of our followers, is the following: do the RL Price Matrixes displayed on the RL Odds Calculators hold up when unforeseen events occur? We have made several tests to examine this issue and our answer is "Yes, our Price Matrixes remain valid even during so called “Black Swan” events". We present below one such a test of our RL Odds Calculators during the crash of the Dow Jones Industrial Average that followed 9/11. The test was run using historical Daily data from 1928 to 9/11/2001. In other words, we simulated our test without hindsight: the odds you see on the chart below are the odds that our RL Odds Calculators would have displayed at the time, without knowing the future, just on the analysis of the data available up till the day before 9/11.
As you can see, even during such an extraordinary and tragic event, the DJI behaved according to the Price Matrix designated by our algorithms for that retracement down: it almost reached the 100% odds level, but did not breach it. Its movements, even during 9/11, were contained inside the designated RL Price Matrix. In fact, if an investor or a trader had taken the LONG trade on the 96% odds, they would have nailed the bottom of the crash and set themselves up for the ensuing rally. Even if they had lacked the courage to go LONG, at least they could have avoided selling their portfolios at the bottom (like unfortunately many did, fearing further downside). If you were one of those traders or investors, the RL Odds Calculators that day would probably have saved you a good part of your investments, as it would have given you good reason to stay in for the upcoming bounce that recovered almost half of the crash losses. So, we feel confident in saying that there are no "Black Swan" events with Retracement Levels, and that our RL Odds Calculators always frame any event inside the right Price Matrix, regardless what happens in the world, and this is another aspect that makes it such an extraordinary and unique trading tool. You can learn how to use the RL Odds Calculators (basic and advanced techniques) in our RL Trading Course. The tool is currently available for these securities (we are currently expanding the list) on Hourly, Daily, Weekly and Monthly Time Periods:
HOURLY E-Mini S&P 500 (ES)
DAILY Corn Pit CBOT (C) DAX Index (DAX) Dow Jones Industrial Average Index (DJI) EURUSD GBPUSD Gold COMEX (GC) Hang Seng Index (HSI) Nasdaq 100 Index (NDX) Oil (CL) PowerShares QQQ Trust (QQQQ) Russell 2000 Index (RUT) S&P 500 Index (SPX) SPDRs (SPY) S&P/TSX Composite Index (TSX) USDCHF USDJPY
WEEKLY Dow Jones Industrial Average Index (DJI) S&P 500 Index (SPX)
MONTHLY Dow Jones Industrial Average Index (DJI) |
