Forecaster is the study based on strict parameters, formulas and calculations, which indicate the right price to enter or exit a trade. Forecaster gives a targeted reversal level and, loft and trash target from the last closed price. Forecaster gives price reversal level for a bullish and bearish trend, and it also summarizes if in the current trend there are long buildups or short buildups.
Let us take an example to explain how the forecaster works and helps to make better trading decision. Suppose a stock or commodity closed price/ current price is 100, it can either go up to 110 or come down to 90. So the investor is going to buy at 90 after it comes down or sell at 110 when it goes up.
In this case forecaster would indicate the bullish reversal price (Selling) as 110 and bearish reversal price (buying) as 90 when its current price is 100. These prices are indicated before the event happens or before the fall or rise of prices. This way the trader gets to know the entry and exit points. He would know if shorts are building up or it’s long trend, and decide accordingly.
Forecaster also gives trash and loft targets. Loft targets are the difference between the reversal levels of long market trend and the last closed price or current price of the stock, commodity or future. And trash targets are the difference between the reversal levels of short market trend and the current or last closed price. By loft and trash target you can also determine if the long or short buildup is getting weaker or stronger or is it even. In case it’s even, then it’s a high risk trade.
Let us take the same example as earlier to explain the loft and trash targets of forecaster, to get more insight on the topic. Now suppose the stock or commodity is at 100 and the long reversal is 110 and trash target is 10, and the short reversal level is 90 making the trash target to be 10. After awhile the stock or commodity rallies up to 105, making the loft target come down to 5 as the reversal level is still 110. And the trash target 15 for reversal level of short trend is still the same, 90.
In this case if the forecaster does not give a new reversal target, it would mean that the long trend is getting weaker. The trash target is still 5 and the reversal is near. If the forecaster gives fresh target and indicates a higher reversal level, it would indicate the long is still strong and the stock or commodity is likely to go higher.
The weaker the loft and trash target gets the more volatile it becomes, and is more susceptible to change.
Technical Analysis Software for NSE and MCX India 