In the past, investors examined individual financial charts on a daily basis, in the hopes of finding trades that would lead to profits. This investigation contained little if any statistical validation, since the trading criteria were based on subjective patterns that could not be rigorously defined. For example, Edwards and Magee popularized double top and bottom patterns in 1945, but specified no mathematical conditions for identifying them. To this day, it is not uncommon for financial traders to find different top and bottom patterns when looking at the same chart.
Similarly, traders have drawn trend lines by hand, which leads to debates about when a trend is established and when a trend is broken. Did that slight decline in price that just broke the trend line constitute a sell signal? Consolidation patterns (trading ranges) suffer a similar difficulty. Did the price break out of the trading range enough to give a buy signal? Without rigorous, mechanical rules, a trader must make subjective decisions which can be influenced by fear and greed.
Investigator seeks to eliminate such subjectivity from trading. A trading system in Investigator is strictly defined, using any combination of price actions and indicators. Entry and exit points, trading ranges and trend identification are determined through mathematical testing, not subjective scrutiny.
This industry is characterized by the introduction of numerous trading systems by self-deemed experts. These systems often meet with limited success in practice; are the “experts” increasing their wealth by trading or by selling advice? Investigator has been designed to allow any trading system to be easily tested.
A final consideration: today financial data in great quantities is inexpensively and readily available. Manual inspection of charts is an unnecessarily inefficient way to search for profitable trades. Investigator has automated the search process, and reports entry and exit conditions once you’ve provided the financial data.
By subjecting the tools of technical analysis to rigorous, mechanical validation, Investigator is able to bypass emotional interference in trading, and automate the decision process. This approach might well shake the industry’s perceptions of how technical trading is performed; at the very least it will afford the individual investor advantages previously realized only by large research organizations.
Make sure you read the Investigator success formula section for the best way to use Investigator for your financial success.