Successfully predicting price fluctuations is the dream of many traders. The innovative software product Time Freezer for binary options is a tool based on forecasting price movements using Fourier series. Its developer made adjustments to the source code to improve the quality of the final result. This indicator is a real revolutionary solution that has a great future in options trading.
Instructions for installing indicators in MetaTrader 4 :
How does the Time Freezer indicator work?
For an instrument, price movement consists of three interrelated components: wave, noise and trend.
All incoming information is automatically processed, sinusoids with different cycles are drawn, each of them is part of a larger cycle. This method of analysis is unique; it is not yet used in other indicators used for trading binary options.
The use of cycles involves determining the amplitude and period of oscillations, and calculating their parameters. The problem is solved using harmonic (another name is spectral) analysis. Williams Percent Range (or WPR) signals are processed using Fourier series. As a result, forecasts of price values for a certain period of time are offered.
The Queen-Fernandez mathematical algorithm is used to calculate frequencies. It processes all Fourier series components (harmonics) until it completes its assigned task of fitting the specified number of components. Processing is necessary to find mathematical parameters: coefficients, frequencies, shift values. Without them, it is impossible to form a trigonometric model.
The choice of WPR for processing is predetermined by the effectiveness of forecasting with its help trend changes - price reversals at extremes. The oscillator gives the main signal when quotes leave the overbought/oversold area. Since values can be negative in WPR, they are “pushed” to zero before extrapolation.
Zero is an important reference point from which to start making a forecast. By “extending” the indicator readings into the future, you can record the beginning of a reversal until the instrument gives the corresponding signal.
The work of Time Freezer is based on a simple assumption: the more often a pattern coincides in history, the higher the likelihood that it will appear in the future. The algorithm is effective, but the final result is determined by the quality of the input data. One of the main parameters is the forward period or the number of forecast bars.
The expiration time depends on this custom option. The number chosen should be optimal to reflect the rhythm of the market. The quality of the generated forecasts depends on the stationarity of the series.
How to use signals
WPR demonstrates that the price is in the overbought or oversold area. It is better to enter the market after the reversal begins.
If quotes have entered the overbought zone, we expect the price to begin to decline and only then open a deal. The same rule, only in reverse, applies when quotes are in the oversold area.
Graphically displaying future price values on a chart, calculated using Fourier series, will allow you to see the expected turning point in advance.
The higher the probability percentage indicated on the screen, the greater the chances of the forecast being fulfilled.
If you expect only the most accurate forecasts (above 80%), then you will have to miss some successful moments. There is no point in setting the probability percentage below 70 in the settings; the agreement between the “predictions” will deteriorate significantly.
Time Freezer indicator settings
The Fourier Extrapolation of Indicator indicator was originally developed for Forex, but did not gain much popularity. After making some changes, it was adapted for options. The following customizable options have appeared:
ProbabilityLevel - values in the range 0-100 indicate the quality of the forecast (in percentage terms). The higher the indicator, the more accurate the forecast. The number appears in the upper left corner, visually highlighted when a new signal arrives in a different color (blue or red).
Freeze - “freezing” setting. When enabled, after a trading recommendation appears, chart monitoring stops until the expiration time ends. This allows you not to be distracted and keep track of a specific bet.
ShowTime —demonstration of time on the vertical lines of the indicator, highlighted in red on the chart.
ExpirationTime — option expiration time in bars. It can be adjusted by dragging the mouse line directly on the chart. For more flexible settings, it is recommended to use a timeframe one step lower than the set period. Increasing the forward forces the program to analyze a larger array of data.
AlertOn - the appearance of a standard MT4 audio and visual notification about a signal.
Advantages and disadvantages of Time Freezer
Any indicator has its pros and cons, which will have to be taken into account when using the tool.
What's good about Time Freezer:
- understandable even to beginners, easy to use. It is enough to follow his advice, opening trades in the right direction;
- filters data efficiently;
- gives a double signal: using the alert built into MT4, as well as changing the color on the chart.
Flaws:
- the final result directly depends on the initially entered data. Finding the best option takes a lot of time;
- there is no guarantee that the forecast will come true.
Conclusion
The use of innovative mathematical methods in forecasting price values has great promise. The use of spectral analysis to generate trading recommendations and at the same time filter price fluctuations on history allows us to hope for the possibility of developing a new effective approach to analyzing the market situation and highly accurate forecasting in relation to binary options.
Download the Time Freezer indicator
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See also:
Fourier Extrapolator indicator
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