Trading Signals With Darknet Channels by John Broussard and Jay Kaeppel
I Can See You!
How can patterns not be visible to the naked eye when the chart is in front of you? You’ll be surprised. Here’s a process that identifies such patterns and identifies trading signals.
Technical indicators use past stock data to generate buy and/or sell signals in the stock. Two well-known technical indicators are moving average crossovers and moving average convergence/divergence (MACD). But there is a lag between price action and the buy & sell signals that these indicators generate. Our goal is to use price pat-tern matching to come up with a method that has the potential to generate buy & sell signals with little or no lag. This involves comparing known bullish and bearish patterns against the latest stock data, and as soon as the pattern is recognized, a buy or sell signal will be generated.
In this article, we will detail a process for objectively identifying buying opportunities in tradable securities using a mathematical process that we refer to as Darknet. This process has been dubbed Darknet because it identifies a trade pattern in a bar chart that is hidden from direct view; that is, not visible to the naked eye. This pattern-finding method can be used to identify trading signals for any tradable security or call option on a security.