TradingIQ - Nova IQ

28. Okt.

Introducing "Nova IQ" by TradingIQ
Nova IQ is an exclusive Trading IQ algorithm designed for extended price move scalping. It spots overextended micro price moves and bets against them. In this way, Nova IQ functions similarly to a reversion strategy.

Nova IQ analyzes historical and real-time price data to construct a dynamic trading system adaptable to various asset and timeframe combinations.

Philosophy of Nova IQ

Nova IQ integrates AI with the concept of central-value reversion scalping. On lower timeframes, prices may overextend for small periods of time - which Nova IQ looks to bet against. In this sense, Nova IQ scalps against small, extended price moves on lower timeframes.

Nova IQ is designed to work straight out of the box. In fact, its simplicity requires just one user setting, making it incredibly straightforward to manage.



Use HTF (used to apply a higher timeframe trade filter) is the only setting that controls how Nova IQ works.

Traders don’t have to spend hours adjusting settings and trying to find what works best - Nova IQ handles this on its own.

Key Features of Nova IQ

Self-Learning Market Scalping

• Employs AI and IQ Technology to scalp micro price overextensions.
  

AI-Generated Trading Signals

• Provides scalping signals derived from self-learning algorithms.
  

Comprehensive Trading System

• Offers clear entry and exit labels.
  

Performance Tracking

• Records and presents trading performance data, easily accessible for user analysis.
  

Higher Timeframe Filter

• Allows users to implement a higher timeframe trading filter.
  

Long and Short Trading Capabilities

• Supports both long and short positions to trade various market conditions.
  

Nova Oscillator (NOSC)

• The Nova IQ Oscillator (NOSC) is an exclusive self-learning oscillator developed by Trading IQ. Using IQ Technology, the NOSC functions as an all-in-one oscillator for evaluating price overextensions.

Nova Bands (NBANDS)

• The Nova Bands (NBANDS) are based on a proprietary calculation and serve as a custom two-layer smoothing filter that uses exponential decay. These bands adaptively smooth prices to identify potential trend retracement opportunities.
  

How It Works

Nova IQ operates on a simple heuristic: scalp long during micro downside overextensions and short during micro upside overextensions.

What constitutes an "overextension" is defined by IQ Technology, TradingIQ's proprietary AI algorithm. For Nova IQ, this algorithm evaluates the typical extent of micro overextensions before a reversal occurs. By learning from these patterns, Nova IQ adapts to identify and trade future overextensions in a consistent manner.

In essence, Nova IQ learns from price movements within scalping timeframes to pinpoint price areas for capitalizing on the reversal of an overextension.

As a trading system, Nova IQ enters all positions using market orders at the bar’s close. Each trade is exited with a profit-taking limit order and a stop-loss order. Thanks to its self-learning capability, Nova IQ determines the most suitable profit target and stop-loss levels, eliminating the need for the user to adjust any settings.


What classifies as a tradable overextension?

For Nova IQ, tradable overextensions are not manually set but are learned by the system. Nova IQ utilizes NOSC to identify and classify micro overextensions. By analyzing multiple variations of NOSC, along with its consistency in signaling overextensions and its tendency to remain in extreme zones, Nova IQ dynamically adjusts NOSC to determine what constitutes overextension territory for the indicator.

When NOSC reaches the downside overextension zone, long trades become eligible for entry. Conversely, when NOSC reaches the upside overextension zone, short trades become eligible for entry.



The image above illustrates NOSC and explains the corresponding overextension zones

• The blue lower line represents the Downside Overextension Zone.
  
• The red upper line represents the Upside Overextension Zone.
  
• Any area between the two deviation points is not considered a tradable price overextension.
  

When either of the overextension zones are breached, Nova IQ will get to work at determining a trade opportunity.



The image above shows a long position being entered after the Downside Overextension Zone was reached.

• The blue line on the price scale shows the AI-calculated profit target for the scalp position. The redline shows the AI-calculated stop loss for the scalp position.
  
• Blue arrows indicate that the strategy entered a long position at the highlighted price level.
  
• Yellow arrows indicate a position was closed.
  

You can also hover over the trade labels to get more information about the trade—such as the entry price and exit price.



The image above depicts a short position being entered after the Upside Overextension Zone was breached.

• The blue line on the price scale shows the AI-calculated profit target for the scalp position. The redline shows the AI-calculated stop loss for the scalp position.
  
• Red arrows indicate that the strategy entered a short position at the highlighted price level.
  
• Yellow arrows indicate that NOVA IQ exited a position.
  

• Long Entry: Blue Arrow
  
• Short Entry: Red Arrow
  
• Closed Trade: Yellow Arrow
  

Nova Bands

The Nova Bands (NBANDS) are based on a proprietary calculation and serve as a custom two-layer smoothing filter that uses exponential decay and cosine factors.

These bands adaptively smooth the price to identify potential trend retracement opportunities.



The image above illustrates how to interpret NBANDS. While NOSC focuses on identifying micro overextensions, NBANDS is designed to capture larger price overextensions. As a result, the two indicators complement each other well and can be effectively used together to identify a broader range of price overextensions in the market.

While the Nova Bands are not part of the core heuristic and do not use IQ technology, they provide valuable insights for discretionary traders looking to refine their strategies.

Use HTF (Use Higher Timeframe) Setting

Nova IQ has only one setting that controls its functionality.

“Use HTF” controls whether the AI uses a higher timeframe trading filter. This setting can be true or false. If true, the trader must select the higher timeframe to implement.

No Higher TF Filter

Nova IQ operates with standard aggression when the higher timeframe setting is turned off. In this mode, it exclusively learns from the price data of the current chart, allowing it to trade more aggressively without the influence of a higher timeframe filter.

Higher TF Filter

Nova IQ demonstrates reduced aggression when the "Use HTF" (Higher Timeframe) setting is enabled. In this mode, Nova IQ learns from both the current chart's data and the selected higher timeframe data, factoring in the higher timeframe trend when seeking scalping opportunities. As a result, trading opportunities only arise when both the higher timeframe and the chart's timeframe simultaneously display overextensions, making this mode more selective in its entries.

In this mode, Nova IQ calculates NOSC on the higher timeframe, learns from the corresponding price data, and applies the same rules to NOSC as it does for the current chart's timeframe. This ensures that Nova IQ consistently evaluates overextensions across both timeframes, maintaining its trading logic while incorporating higher timeframe insights.

AI Direction

The AI Direction setting controls the trade direction Nova IQ is allowed to take.

• “Trade Longs” allows for long trades.
  
• “Trade Shorts” allows for short trades.
  

Verifying Nova IQ’s Effectiveness

Nova IQ automatically tracks its performance and displays the profit factor for the long strategy and the short strategy it uses. This information can be found in a table located in the top-right corner of your chart showing the long strategy profit factor and the short strategy profit factor.



The image above shows the long strategy profit factor and the short strategy profit factor for Nova IQ.

• A profit factor greater than 1 indicates a strategy profitably traded historical price data.
  
• A profit factor less than 1 indicates a strategy unprofitably traded historical price data.
  
• A profit factor equal to 1 indicates a strategy did not lose or gain money when trading historical price data.
  

Using Nova IQ

While Nova IQ is a full-fledged trading system with entries and exits - it was designed for the manual trader to take its trading signals and analysis indications to greater heights, offering numerous applications beyond its built-in trading system.

The hallmark feature of Nova IQ is its to ignore noise and only generate signals during tradable overextensions.

The best way to identify overextensions with Nova IQ is with NOSC.

NOSC is naturally adept at identifying micro overextensions. While it can be interpreted in a manner similar to traditional oscillators like RSI or Stochastic, NOSC’s underlying calculation and self-learning capabilities make it significantly more advanced and useful than conventional oscillators.

Additionally, manual traders can benefit from using NBANDS. Although NBANDS aren't a core component of Nova IQ's guiding heuristic, they can be valuable for manual trading. Prices rarely extend beyond these bands, and it's uncommon for prices to consistently trade outside of them.

NBANDS do not incorporate IQ Technology; however, when combined with NOSC, traders can identify strong double-confluence opportunities.

2. Nov.

Versionshinweise

Version -- 1.1

Added minimum profit/stop feature

4. Nov.

Versionshinweise

Version -- 1.11

Updated Library Structure

vor 3 Tagen

Versionshinweise

Version -- 1.12

Updated Library Structure

vor 10 Stunden

Versionshinweise

Version -- 1.2

Added label size option for trading labels