Forecasting with h2o5

FLIR2 contains about four relatively simple methods for forecasting future inflections (synthetic trendlines, tau/iota valuation, h2o5, and FLIR1), as well as assorted trading strategies, and methods for determining support/resistance and trends. It's 118 pages plus a large appendix, more than 25,000 simple words, 70 charts and illustrations, is fully printable, includes as appendices one simple tutorial on using spreadsheets and one on using msPaint. It also contains TOS code (thinkorswim) for implementing h2o5 and its histograph. Literally, a 10-year-old could use this stuff.  orangequant.com

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today, i want to talk about one issue using h2o5. no, i'm not going to show how h2o5 is derived- that info is in the FLIR2 eBook. this post mainly helps those who already have the book. but it also shows others how easy it is to use h2o5 (Hudson 2nd-order Oscillator).
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the issue i want to address is accuracy. the longer your trendlines on h2o5, the stronger the inflection might be. the shorter your trendlines on h2o5, the more accurate your forecast. this is a purely mechanical issue- not a data issue or system failure. later, i plan to blog a trig function method to reduce such error and an AUTOMATIC calculator so you won't have to know anything about trigonometry to use it. alright, here's the problem: when drawing a line from Point A to Point B, your mechanical skills are much less important to accuracy if Line AB is very short than if Line AB is very long. in other words, a couple degrees of error on a pair of short intersecting lines hardly makes any difference; but the longer the lines are, the more that error gets magnified. this can result in forecasting the wrong date or time of inflection. here's an example:
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As you can see above, the slight difference in alignment of the dark blue trendline gives you an inflection that will be off by at least one period compared to the other intersect. So you could be off a day, an hour, a week, or a month, depending on your chart's timeframe.  the best remedy for this, since you know the exact values of A,B,C,D, is algebra or trigonometry.  but that's 'way too much for most people.  so, as i said, i'll soon be doing a blog on how to use an automatic calculator to find the exact intersects.  meanwhile, the best solution is consistency in your drawing habits, i.e., always draw right through ABCD or always just above.  then backtest your method--- it should show consistent accuracy, or it should show consistent delay or advance and you would factor that in. 

SPY (S&P 500) Forecasting

Been a long time since last post, huh? Time passes faster than we know.
I plan to start doing some occasional "extra comments" here on my forecasting videos. I've been doing regular SPY forecast videos for some time now, achieving about 85% overall accuracy. I focus on calling INFLECTIONS, rather than price values, though my new FLIR2 system also allows price forecasting (Forward Looking Information Radar). Links are as follows:
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the FLIR2 eBook orangequant.com (very simple methods for forecasting inflections for any stock or forex or commodity, etc.), also has current forecast videos.
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forecasts at youtube (current and past): youtube.com/orangequant (so you can verify by timestamp).
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a recent forecast:

The above is a forecast for SPY for the week of Feb. 8, 2010. A lot of people made a lot of money on this one forecast. FLIR2 is used to forecast inflections days, weeks, months, or just minutes away (yes, i've used it for daytrading too on intraday inflections). I do this SPY forecasting partly as a public service but mainly as a way to promote the FLIR2 eBook. As of this writing, I still offer it at just $18.95, though i'm seriously considering raising it a lot. I might as well blog that issue here and now, just to get it off my chest...

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Back in the day, before the internet came along, you had relatively limited choices when trying to buy the best book in your subject area. You could read reviews in newspapers to help you make up your mind. And, book prices were set by publishers who had a reasonable idea of the value of the book's information. But now, EVERYBODY and their GRANDMOTHER is a publisher, prices often get set according to whim, and you can't possibly read all the reviews that are out there (besides which, the publisher of the review might not be trustworthy). So you often find yourself kind of stuck as to what to buy for your needs.

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Internet eBook publishers are aware of these factors and one other: they know that the higher priced an item is, the greater its "perceived" value. A higher perceived value might translate into more sales, providing that extra something to tip the scales. But there's a limit. A potential customer may say, "Yeah, that eBook's probably worth every penny of that $195.00 pricetag, but I'm not taking a chance to find out." On the other hand, if price is too low, people think the item's not all that good to begin with.

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So, like other publishers, i struggle with these issues too. I call it "finding the middle ground between affordable risk and true value". But i have an edge which other trading eBook publishers either can't or won't use: i do actual forecasts with FLIR2, and that SHOWS true value. just google around for "stock forecast" and you'll see that real forecasting is rare as cabbages on the moon. with FLIR2, i call INFLECTIONS well in advance. nobody else does that. instead, forecasting systems you see out there talk about their success rate, give a lot of testimonials, but somehow none of it is ever actually checkable (that's why i use youtube, as a way for you to see timestamps, or you can just subscribe to the channel and know that way).

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Anyway, i'm at the point where i've proven the value of the FLIR2 eBook and it's time to raise the price because, for one thing, it's driving me nuts and, for another, it's causing people to underestimate its true value. the methods in there are easy to set up- really, a 10-year-old could do this. so now i'm thinking $39.95 or thereabouts.

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okay, that ends my little intro to this new phase of my blog. now you know why i'm here, what i'm doing, and what you can do about it. NEXT BLOG: "Forecasting with h2o5".