Signal generation

The signal generation is fairly complex.

1. It is based basically on an upgrade of the volatility system of Wilder with digital filters.

We will use also some indicators based on the chaos theory.

2. We are going to use the fractal dimension index (and the exponent of HURST) in order to measure the probability of the trend continuation. And the variation of the exponent of HURST. The idea is that every algorythm for the estimations of this exponent cannot give a precise estimate at any local point. So we are going to be interested at his sudden change for a break - out. This is part of some day trading strategies that will not be covered here.

3. We are using the Lyapunov exponent in order to estimate how chaotic the time series are.
It may be curious but the latest experiments showed that the EUR/USD is not chaotic at the 30 m. time frame (-2 )in fact it has a negative Lyapunov exponent. And that is very curious, that means that we can make predictions and we have to. The system is predictable. But the system looses the equilibrium from time to time.