Trade opportunities are created by the markets reaction to new information from economic events. When Magnitude of Surprise is greater, the trade opportunity is likely to be greater as well.
Note: If you are not yet familiar with our Magnitude Of Surprise indicator please click on it and make sure you understand that before continuing.
Now in-app you can see only the best trade ideas that would have been profitable in similar scenarios in the past. We present the trade ideas entirely including profit target and stop loss.
BetterTrader's machine learning has found that three years is the optimal time-frame for back-testing.
How long after the event release are Trade Ideas performance optimized?
The system is built so real people can profit from trading, not for Algo-Trading-Quants that generally make their money within the first ten seconds after the release.
That is why when we calculate historical data for Trade Ideas we skip the first minute after the event release, to get a clean perspective not tainted by the “noise” of the Algo-Trading-Quants.
How long does it take for the markets to absorb new information?
BetterTrader's Artificial Intelligence has concluded that in general it takes up to 90 minutes for the market to absorb new information.
We analyse and compare the history for ninety minutes beginning from one minute after the event. That is also the time-frame within which the Trade Ideas are expected to profit.
It is important to note that not all economic events are created equal. Thus there are events where we have a great surprise with no good statistics for the market to trade on.
For example a significant GDP surprise may not generate a good trade idea, it could generate a lot of volatility but without statistical significance - it is not good enough for us as traders.
Trade Ideas are here in order to differentiate between events that only create volatility and real profit opportunities.
All of our trade ideas are based on the market data at the same time this economic event occurred in the past.
More specifically on historical data for the same economic event with the same degree of Magnitude Of Surprise.