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Market Alerts

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Market Alerts

 

N-day High/Low

N-day Streak

Unusual Volatility

Moving Average Break

Moving Average Cross

 

Most traders are worried about missing a trading opportunity – who would want to miss a new 52-week low, a 10-day upstreak, or an unusually volatile trading day? So you go to a screener page every morning and see if any of the symbols you are interested in did anything interesting. You stress out if you forgot to check the screener, you refresh the page endlessly in the hope of being the first to act. 

 

Market alerts are aimed at solving this issue by letting you know when an event you’re interested in happens. With this service, you will be able to subscribe to custom technical analysis alerts from a growing list of conditions and get alerted when these conditions are met.

 

You can subscribe to a condition (e.g. new 20-day high) for symbols that interest you, and you will receive an alert each time the condition is met for that symbol. No need to stress out or keep checking your watchlist – if something happens, you’ll be the first to know. 

 

 

 

N-day High/Low

This market alert is triggered when any of the symbols you are subscribed to breaks it’s N-day high or low, depending on your settings. Only trading days are counted – for example, to get a notification for a new month low, you have to specify the window size to 20 days. 

This may indicate an overbought condition in case of a new high, or just a trending market.

 

Technical details

Each hour’s High price is compared to the previous N end-of-day Close price.

 

 

 

N-day Streak

This market alert is triggered when any of the symbols you are subscribed to are falling or rising for N days in a row. Only trading days are counted, so that weekends do not break any streaks. This can indicate trending markets or an overbought/oversold situation, especially when coupled with the N-day high/low alert.

You can utilize it if you believe that a reversal has to follow after a number of days, which would mean you would open a trade against the trend and profit from the reversal. The key here is setting the threshold correctly, which will vary widely depending on the instrument and market conditions. It is also important to keep in mind that when an alert is triggered it does not guarantee that profitability of trade but rather provides a statistical probability of success. 

 

Technical details

This alert runs once a day and checks if the daily return based on end-of-day Close prices is positive/negative for N days in a row.

 

 

 

Unusual Volatility

This market alert is triggered when any of the symbols you are subscribed to are much more volatile than usual. This may indicate a good opportunity to trade, because high volatility means higher returns and more excitement. You need to have a sound strategy in place, though, because high volatility coupled with high leverage can result in much higher losses as well. 

 

Technical details

This alert runs once a day and compares today’s 30-day volatility based on end-of-day returns to all the trading days in the previous year, and it is triggered when volatility is higher than 95% of days in the previous year.

 

 

 

Moving Average Break

This market alert is triggered when any of the symbols you are subscribed to cross their Moving Average line. You specify the size of the moving average window. This can help you detect a change in the trend or unusual price action that might indicate a good trading opportunity.

You have two methods of calculating the moving average to choose from the simple moving average (SMA) or exponential moving average (EMA). EMA has the advantage of giving more weight to recent days as opposed to those further in the past, which means it will react to a change in the trend faster. 

 

Technical details

Moving average is calculated on end-of-day Close prices. 

Formulas:

SMA = (Sum of N last prices) / N

EMA = (End-of-day Close price) * k + (Previous day’s EMA) * (1 – k), where k = 2 / (N +1), N is window size.

Crossover: Close price was lower than Long MA yesterday, but is higher today.

Crossunder: Close price was higher than Long MA yesterday, but is lower today

 

 

 

Moving Average Cross

This market alert is triggered when any of the symbols you are subscribed to have their Moving Average lines cross over each other. You can specify the size of the windows, as well as the MA calculation methods. Just like with our MA break alert, you have two options: Simple Moving Average (SMA) and Exponential Moving Average (EMA). 

This alert allows you to use one of the most famous technical analysis strategies ever – the Golden Cross. It involves plotting the instrument’s 200-day MA versus its 50-day MA and looking for events where they cross. Historically, when the 50-day MA crosses over the 200-day MA, this is an indication of a continuing uptrend and is a good opportunity to go long (buy). Then, when the trend reverses and the 50-day MA crosses under the 200-day MA, this is again an indication of a downtrend, so it makes sense to close your long position or go short (sell). This very simple rule is arguably the most famous technical indicator. And as you should probably know, there is no such thing as a free lunch, which we can see by trying out the Golden Cross on EURUSD Daily data for the last 5 years. While it did catch the big fall in 2014-2015, it generated a bunch of bad signals, which would have practically erased all gains.

 

One of the issues with this strategy is that SMA is pretty slow to react to trend changes – it lags behind quite considerably. One way to deal with this is to use a different method of calculating the moving average, as the exponential moving average. EMA gives more weight to the latest prices, so it is quicker to react, which is especially noticeable with the slow MA.

 

Here’s the same graph with EMA:

 

By using a moving average that is quicker to adapt to the price action, it would have generated a return of 12.7% over the last 5 years on EURUSD. Now, all of these profits would come from the first and last trades, which benefited from strong trends that are visible on the graph. 

In short, this is a viable strategy if you are in a trending market. 

 

But of course, you are not limited by the Golden Cross, you can experiment with a wide range of window sizes, because different instruments may behave very differently, and market conditions change all the time.

 

Technical details

Moving average is calculated on end-of-day Close prices. 

Formulas:

SMA = (Sum of N last prices) / N

EMA =  (End-of-day Close price) * k + (Previous day’s EMA) * (1 – k), where k = 2 / (N +1), N is window size.

 

The very first EMA is initialized as a simple mean over the previous N days.

 

Crossover: Short MA was lower than Long MA yesterday, but is higher today.

Crossunder: Short MA was higher than Long MA yesterday, but is lower today.

Alerts