The Ultimate Trend

The most important thing you can do as a trader is to establish how much it's trending, how much kinetic and potential energy it has. Of course a market always has various cross-currents of trends, but every market also has a true trend that stands out from the other trends. If you can establish the degree of this trend, or in other words how much this trend can be relied upon, you have in your possession the most important piece of information about that market that you can have.

The Ultimate Trend, or OTX, does that. The OTX is a revolutionary new way to establish how much trendiness a market has at this time. It is self-adjusting, but that quality arises out of the equations themselves and is not arbitrarily determined. (Perfect non-arbitriness, of course, is a goal that can be approached but never achieved, so it would be most accurate to say that The OTX is a lot more non-arbitrary than not.)

And what it does is establish, with the highest probability, the degree of trend in the market, and measures it. Knowing that, you know the most fundamental thing you need to know about a market.

Just in the last few days another breakthrough has been achieved. As we looked at the amazing OTX over the last few months, Pat and Jim kept saying to themselves, "Boy, wouldn't it be cool if the OTX could be bounded, that it could somehow be made to scale between 0 and 100?" But we couldn't solve it. Jim tried a number of algorithmic approaches, with no luck. But now lady luck has smiled and we have in our possession a relatively non-arbitrary bounded pure trend indicator, which we've named the BTX (Bounded Trend Index).

Just for openers, this means that searches and sorts can be done on a wide universe of markets to identify those that are trending in a certain desirable way. Additionally, the BTX is quite fantastic at identifying tops and bottoms in markets. It has charactistic "signatures" that show when a trend is beginning and also when a trend is ending. It's accuracy in this regard seems to be about 80%, and with "near-calls" approaching 90%. We're amazed.

in fact, we have moved our primary attention from the OTX to the BTX, because it contains the information of the OTX plus the great advantage of being in bounded form. Thus we're now referring to The Ultimate Trend as the Bounded Trend Index, or BTX.