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QuantSchool: Forecast parameters: signal, target, probability, risk

Core Forecast Components

Every QuantWave forecast contains four essential parameters that provide complete trade scenarios:

Parameter	Purpose	Values/Range	How to Use
Signal	Recommended trading direction	BUY / SELL / HOLD	Determines position direction
Target	Expected price destination	Specific price level with % gain	Profit-taking reference
Probability	Likelihood of reaching target	50-95% (Low/Medium/High)	Position sizing factor
Risk	Potential downside exposure	Low/Medium/High with stop level	Risk management guide

Detailed Parameter Explanation

1. Signal (Directional Bias)

• BUY: Expecting upward price movement
  • Best for long positions
  • Typically appears in uptrends
• SELL: Expecting downward price movement
  • Best for short positions
  • Typically appears in downtrends
• HOLD: Neutral/no clear edge
  • Suggests waiting for better setup

2. Target (Price Objective)

• Always includes:
  • Specific price level
  • Percentage gain from entry
• Calculated using:
  • Support/resistance levels
  • Fibonacci extensions
  • Wave measurements

3. Probability (Confidence Level)

• Low (50-65%): Higher risk trades
  • Smaller position recommended
• Medium (66-79%): Balanced opportunities
  • Normal position size
• High (80%+): Highest conviction
  • Can consider larger positions

4. Risk (Downside Potential)

• Low Risk: Tight stop-loss, high reward/ratio
• Medium Risk: Balanced risk/reward
• High Risk: Wider stops, speculative
• Always includes:
  • Stop-loss price
  • Maximum acceptable loss %

Parameter Interdependence

These parameters work together:

• High probability + Low risk = Best opportunities
• Medium probability + Medium risk = Standard trades
• Low probability + High risk = Avoid or smallest size

Practical Usage Example

Forecast: "BUY TSLA $180.50, Target $198.55 (+10%), Probability 72% (Medium), Risk Medium (Stop $174.25 -3.5%)"

Interpretation:

• Enter long position near $180.50
• Target 10% gain at $198.55
• 72% chance of success - normal position
• 3.5% max risk with stop at $174.25

Understanding these four parameters allows traders to properly evaluate and act on QuantWave forecasts while maintaining disciplined risk management.