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QuantSchool: Analyzing forecast parameters

Decoding the Forecast Components

Each QuantWave forecast contains multiple data points that together create a complete trading scenario when properly interpreted.

Core Parameter Analysis

1. Directional Signals

• BUY/LONG: Bullish expectation with defined entry zone
• SELL/SHORT: Bearish expectation with resistance levels
• HOLD/NEUTRAL: No clear edge or transition period

2. Confidence Metrics

Probability Range	Interpretation	Suggested Action
80-100%	High conviction	Full position size
65-79%	Moderate confidence	Normal position
50-64%	Low confidence	Reduced size or pass

3. Price Targets

• Primary Target: Minimum expected move (80% probability)
• Secondary Target: Extended move (50% probability)
• Invalidation Level: Point that voids the thesis

Advanced Parameter Relationships

Risk/Reward Matrix

• 1:1 = Minimum acceptable ratio
• 1:2 = Standard QuantWave expectation
• 1:3+ = High quality setups

Time/Probability Correlation

• Short-term (1-5 days): Higher probability (70%+)
• Medium-term (1-4 weeks): Moderate probability (60-70%)
• Long-term (1-6 months): Wider probability range (50-65%)

QuantWave Analysis Tools

Tool	Parameter Insight
Scenario Explorer	Visualizes probability distributions
Parameter Backtester	Tests historical accuracy of similar setups
Risk Calculator	Auto-computes position sizes

Practical Analysis Framework

1. Verify probability aligns with risk/reward
2. Check time horizon matches your strategy
3. Confirm sector/asset is in your universe
4. Assess liquidity meets your requirements
5. Review correlation with existing positions

Common Analysis Mistakes

• Focusing only on direction ignoring probability
• Overlooking time horizon mismatches
• Not checking recent parameter accuracy
• Ignoring changing volatility conditions

Parameter Tracking System

• Record forecasted vs. actual outcomes
• Track accuracy by parameter combinations
• Adjust interpretation based on results

Mastering parameter analysis transforms raw forecasts into high-probability trading plans. By understanding how direction, probability, risk and time interact, you can selectively execute only the highest-quality QuantWave signals that match your strategic objectives.