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QuantSchool: Validating forecasts within your system

The Forecast Verification Process

Systematic validation ensures QuantWave forecasts align with your trading methodology before execution.

Key Validation Steps

1. Technical Alignment Check

• Confirm price action matches forecast direction
• Verify support/resistance levels
• Check volume and momentum indicators

2. Fundamental Consistency

• Earnings dates and events calendar
• Sector/industry trends
• Macroeconomic environment

3. System Compatibility

Your System Component	Forecast Match Check
Timeframe	Matches your trading horizon
Risk Parameters	Fits your position sizing rules
Asset Class	Within your approved universe

QuantWave Validation Tools

1. Backtesting Module

• Test forecast logic on historical data
• Compare against your strategy results
• Identify optimal entry/exit tweaks

2. Live Simulation Mode

• Paper trade forecasts for 2-4 weeks
• Track hit rate and risk/reward
• Adjust parameters before live trading

Validation Framework

The 5-Point Checklist

1. Direction: Confirms your analysis
2. Probability: Meets your minimum threshold
3. Risk/Reward: Matches your ratio requirements
4. Liquidity: Sufficient for your size
5. Correlation: Complements existing positions

Performance Tracking

• Maintain validation journal
• Tag trades by validation score
• Review accuracy monthly
• Adjust criteria quarterly

Common Validation Errors

• Ignoring conflicting technicals
• Overriding high-probability signals
• Validating selectively (confirmation bias)
• Skipping paper trading phase

Rigorous validation transforms QuantWave forecasts from generic signals into personalized high-probability setups. By systematically verifying each forecast against your trading system's requirements, you maintain consistency while leveraging quantitative edge.