Technical Analysis Methodology
Transparency is the core of our platform. We do not rely on black-box signals or third-party opinions. Instead, we process raw market data through a rigorous, multi-stage algorithmic engine.This comprehensive guide details all technical indicators used in our market analysis & prediction platform. Each indicator is thoroughly explained with calculation methods, interpretation guidelines, and practical applications.
Note: All indicators are calculated in real-time using our proprietary algorithms and multi-timeframe analysis. The calculations incorporate weighted averages across 6 timeframes (5m, 15m, 1h, 4h, 1d, 1w) with appropriate weight distribution.
1. Trend Consensus Indicator
The Trend Consensus Indicator is a 0-100% metric designed to identify the dominant market direction. A common mistake in trading is focusing on a single timeframe (e.g., the 5-minute chart) while ignoring the bigger picture. Our algorithm solves this by calculating a weighted average across six distinct timeframes.
Timeframe Weighting System
We assign higher importance to longer timeframes because they represent stronger structural trends that are harder to break.
- Daily (1D) - 37%: The primary trend setter. This carries the most weight.
- Weekly (1W) - 30%: The macro context. Keeps us aligned with the long-term cycle.
- 4-Hour (4H) - 20%: The medium-term swing structure.
- 1-Hour (1H) - 7%: Short-term directional bias.
- 15m / 5m - 6%: Immediate momentum and noise filtering.
Calculation Methodology
The indicator uses a weighted scoring system across six components:
- Price Change (50-55% weight): Current price movement relative to previous period with timeframe-specific thresholds
- Volume Confirmation (20% weight): Volume supporting price direction with symmetric confirmation logic
- Momentum Indicators (15-20% weight): RSI (6 & 14), Stochastic %K, Williams %R combined
- MACD Signals (5% weight): MACD histogram and crossover analysis
- Moving Averages (5% weight): Price vs SMAs and EMA alignment
- Fear & Greed Adjustment (10% weight): Market sentiment factor
Interpretation Guidelines
| Percentage Range | Sentiment Classification | Trading Implication |
|---|---|---|
| 80-100% | Extremely Bullish | Strong uptrend, high probability of continuation |
| 70-79% | Strongly Bullish | Clear bullish bias, good for trend following |
| 60-69% | Bullish | Moderate bullish bias with some divergence |
| 55-59% | Slightly Bullish | Mild bullish bias, mixed signals |
| 45-54% | Neutral | Consolidation phase, no clear direction |
| 40-44% | Slightly Bearish | Mild bearish bias, weak momentum |
| 30-39% | Bearish | Moderate bearish bias, downward pressure |
| 20-29% | Strongly Bearish | Clear bearish trend, distribution phase |
| 0-19% | Extremely Bearish | Strong downtrend, capitulation possible |
Important: Trend Consensus should be used in conjunction with Timeframe Alignment for confirmation. Single indicator reliance increases risk of false signals.
2. Timeframe Alignment Indicator
This indicator measures the consistency of market direction across different timeframes (5m through 1w). It determines whether the short-term price action (5m to 1h charts) is in agreement with the long-term structural trend (Daily to Weekly charts). Strong alignment suggests sustainable trends, while mixed alignment indicates potential reversals.
Weight Distribution Across Timeframes
| Timeframe | Weight | Primary Function | Reliability Score |
|---|---|---|---|
| 1 Week (1w) | 30% | Long-term trend direction | High (0.9) |
| 1 Day (1d) | 37% | Primary trend identification | Very High (0.95) |
| 4 Hours (4h) | 20% | Medium-term momentum | High (0.85) |
| 1 Hour (1h) | 7% | Short-term trend signals | Medium (0.7) |
| 15 Minutes (15m) | 3% | Near-term entry signals | Low (0.6) |
| 5 Minutes (5m) | 3% | Immediate price action | Very Low (0.5) |
Alignment Strength Classification
- Strong Alignment (≥80%): All timeframes agree on direction - high confidence trades
- Moderate Alignment (60-79%): Most timeframes agree - good trading opportunities
- Weak Alignment (40-59%): Mixed signals - requires confirmation
- Mixed Alignment (<40%): Contradictory signals - avoid new positions
Smart Sentiment Adjustment: In scenarios where the technical direction is ambiguous (<60% trend dominance), the system integrates the Fear & Greed Index. This allows market sentiment extremes (e.g., Extreme Fear) to tip the bias when price action alone is indecisive.
3. Risk Assessment Indicator
The Concept Risk Assessment is a "Safety-First" metric designed to quantify market danger.It combines quantitative volatility measurements, sentiment extremes, volume anomalies, technical overextensions, support/resistance proximity, and liquidity considerations into a single risk score.
Risk Factor Components
- Volatility Risk (20%): Based on ATR percentage with timeframe-specific thresholds
- Sentiment Risk (15%): Fear & Greed Index extremes and market psychology
- Volume Risk (15%): Abnormal volume patterns and liquidity concerns
- Trend Risk (20%): Overbought/oversold conditions and momentum extremes
- Support/Resistance Risk (15%): Distance to key technical levels
- Liquidity Risk (10%): Market cap and volume-to-market-cap ratios
- MACD Crossover Risk (5%): Signal line crossovers and histogram patterns
Risk Level Interpretation
| Risk Score | Level | Position Sizing |
|---|---|---|
| 0-29 | Very Low Risk | Maximum (100%) |
| 30-39 | Low Risk | Normal (75%) |
| 40-49 | Moderate-Low Risk | Slightly Reduced (65%) |
| 50-59 | Moderate Risk | Reduced (50%) |
| 60-69 | Moderate-High Risk | Significantly Reduced (35%) |
| 70-79 | High Risk | Minimal (20%) |
| 80-100 | Extreme Risk | Avoid New Positions |
Critical: Risk Assessment takes priority over all other indicators. When Risk Score exceeds 70, trading should be avoided regardless of other bullish signals.
5. Volume Sentiment Indicator
Analyzes whether trading volume patterns support or contradict price movements, evaluating both quantity and correlation. A price breakout on low volume is often a trap. We calculate the Volume Ratio by comparing the current volume to the 20-day moving average.
| Scenario | Interpretation | Algorithmic Impact |
|---|---|---|
| Price UP + High Volume | Conviction Buy | Bullish Confirmation |
| Price UP + Low Volume | Weak Rally (Trap) | Bearish Divergence Warning |
| Price DOWN + High Volume | Panic Selling | Strong Bearish Signal |
| Price DOWN + Low Volume | Consolidation | Neutral |
Volume Ratio Interpretation
| Volume Ratio | Classification | Market Implication | Confidence Level |
|---|---|---|---|
| > 3.0 | Extreme Volume | Potential capitulation or climax | Very High |
| 2.0 - 3.0 | Very High Volume | Strong participation, trend confirmation | High |
| 1.5 - 2.0 | High Volume | Above average interest | Medium-High |
| 1.2 - 1.5 | Above Average | Moderate participation | Medium |
| 0.9 - 1.2 | Normal Volume | Standard market activity | Low-Medium |
| 0.7 - 0.9 | Below Average | Reduced participation | Low |
| 0.5 - 0.7 | Low Volume | Weak interest, unreliable moves | Very Low |
| 0.3 - 0.5 | Very Low Volume | Illiquidity, potential manipulation | Extremely Low |
| < 0.3 | Extreme Low Volume | Market dysfunction, avoid trading | No Confidence |