Marko Nikolic Investment Research
Marko Nikolic
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Key Features

  • New: includes 4 strategy components (Long Entry LE, Long Exit LX, Short Entry SE, Short Exit SX) for auto-trading, optimization, and back/forward testing.
  • Developed exclusively for TradeStation (9, 9.1, 9.5) and MultiCharts (8.8 and higher)
  • Pandora 3x is technical trader's ultimate oscillator creation kit, enabling generation of price-derived and indicator-derived rate of change of oscillators.
  • Configure up to 3 fully-customizable oscillator curves whose interaction serves as basis for strategy creation.
  • Built-in parameter optimization features (exhaustive and genetic) enable traders to auto-configure best performing settings for any market (stocks, futures, indices, FOREX, CFDs, etc.), time frame, or chart type.
  • Pandora's oscillator rule-building versatility enables traders to trade trend (bullish/bearish, intraday/underlying), scalp price momentum/volatility for quick profits, or do both in the same time.
  • Assign each oscillator interaction a long entry, short entry, long exit, or short exit trigger, and trade signals (automatically or manually) as your conditions are met in real-time.
  • Protect your strategy from volatile price behavior by configuring oscillator crossovers to issue warning alerts as soon as key levels are pierced.
  • Configure individual envelopes to build comprehensive trading systems from scratch or control multiple envelopes at once for quick strategy creation.
  • Customize as few or as many settings as you'd like. Aside from selecting the quantity of oscillators you would like to set-up in strategy, other configurable options include: oscillator type, moving average type, period, overbought/oversold limits, signal generation based on oscillator movement and interaction.
  • Each oscillator can be assigned one of 3 functions based either on price or each other: Relative Strength Index, Stochastic Oscillator, Moving Average (Simple, Exponential, Weighted, and Adaptive).
  • Set-up 2 types of signal-generating line interactions: Oscillator-Horizontal Line Crosses (OHLC) and Oscillator-Oscillator Line Crosses (OOLC).
  • OHLC signals are issued when an oscillator line (1 or more of the 3 available) crosses and closes above or below a specified horizontal line, representing either a vertical midpoint (bullish conditions above; bearish below), overbought level, or oversold level.
  • OOLC signals are issued when individual oscillator lines cross each other. Similar to the oscillator-horizontal line crossover strategy above, a trader selects long and short signal rules based on the interaction and crossing of oscillator lines (crossover from below for long signals, crossover from above for short)
  • Use individual oscillator curves to detect regular and hidden divergences between each other and price action. Price action will often show one direction and one shape or amplitude, while the oscillator will show another or opposite. When that happens, the lines are said to be divergent. Divergence is usually representative of momentum exhaustion or loss of investor interest, which could be a telltale of trend reversal or retracement.
  • Pandora 3x includes 2 modules: Indicator add-on to help you construct and display oscillator lines and ShowMe study for visualizing how your conditions and settings perform in the market. The ShowMe add-on also incorporates all TradeStation/MultiCharts alert options, so you’ll get notified as soon as your conditions are met via any channel you desire.
  • Purchase includes an in-depth operational manual explaining each add-on's features, options, and recommended settings. Includes sample strategies and trading setups.
  • Get a lifetime upgrade license with each purchase of Pandora 3x, including all future enhancements and features. The algorithmic framework is frequently improved and expanded with newly-researched features.
  • Each license includes premium membership to mnikolic.com/forum (user community), providing access to indicator resources, including TradeStation® workspaces, desktops, analysis groups, strategies, and user discussions. Downloadable Pandora 3x content (such as workspaces) is categorized and optimized per market, time frame, and chart type basis.
  • Have a peace of mind by knowing that Pandora 3x, like all other Marko Nikolic Investment Research products, has been thoroughly tested for profitability - in trend-following and scalping scenarios.
  • Install Pandora 3x in seconds via built-in installer.
  • Receive unlimited, lifetime product and technical support, including remote connection.

Summary

Pandora 3x allows you to build up to 3 oscillators in the same window based not just on price action alone, but also derivation of each other. While the first oscillator can be, let’s say, the Relative Strength Index (RSI), the second can also be RSI, but based on (derived from) the first RSI, and not directly price action - think of it as relative strength of relative strength, which translates to velocity of relative strength. Similarly, the third oscillator (also known as the second derivative) is derived from first derivative, providing valuable “leading” information about the underlying market currents. Deriving information in this manner enables traders to create and measure low-lagging, and oftentimes leading, rates of change, which in return can be used to build a trading system oriented around fully configurable line crosses. You have a choice of assigning each oscillator a function of Stochastic Oscillator, Relative Strength Index, or 5 types of Moving Average (including adaptive, simple, exponential, weighted, and triangular).


Primary application

Many market technicians, for example, use just the RSI or Stochastic oscillators or both side by side in their analysis. We know of none that use an RSI, whose calculations are based on a Stochastic oscillator. In other words, you get a unique view into market momentum that other traders don't see, giving you an advantage in strategy creation and early signal execution. With Pandora 3x you get 3 indicators to "layer" and derive in any order you see fit, each with a dozen or so settings, translating into hundreds of original, frequently leading, strategies.

Pandora 3x issues signals based on line interactions, including oscillator-horizontal line (mid-point, overbought level, oversold level) crosses, oscillator-oscillator line crosses.


Oscillator-horizontal line crosses

These signals are issued when an oscillator line (1 or more of the 3 available) crosses and closes above or below a specified horizontal line, representing either a vertical midpoint (bullish conditions above; bearish below), overbought level, or oversold level. You can assign individual or all three horizontal lines to each oscillator, with intention of creating crossover/under rules in regards to either long or short signals. For example, an overbought line crossover can be used to set-up a short signal, an oversold crossover line a long signal, and a midpoint crossover for both (long when crossed from below, short when crossed for above).

Scalping example: SPDR S&P 500 ETF (NYSE: SPY) 5-minute chart - Base is RSI (Period @ 8); Derivative 1 is Simple MA of RSI (Period @ 5); Derivative 2 is Stochastic of Simple MA of RSI (PeriodK/PeriodD/PeriodS @ 200/14/3). Long issued when Derivative 2 crosses under Undervalued limit of 15; Short issued when Derivative 2 crosses over Overvalued limit of 85.


Trend-following example: Facebook Inc. (NASDAQ: FB) daily chart - Base is Stochastic (PeriodK/PeriodD/PeriodS @ 200/3/3); Derivative 1 is Simple MA of Stochastic (Period @ 14); Derivative 2 is RSI of Simple MA of Stochastic (Period @ 14). This example illustrates trading in direction of trend. While Base line (red) is above the 0 Midpoint line and Derivative 2 crosses above the 0 Midpoint line Long position is opened. Position is pyramided by opening additional long trades every time Derivative 2 crosses above the 0 MidPoint line but only as long as Base line remains positive. The moment Base line crosses under 0, we close all long positions. The opposite is done for bearish (short) market. Essentially, the Base line is our trend direction indicator while Derivative 2 is our order trigger.


Intraday trend-following example: Apple Inc. (NASDAQ: AAPL) 15-minute chart - Base is Stochastic (PeriodK/PeriodD/PeriodS @ 500/6/1; not drawn on chart); Derivative 1 is Stochastic of Stochastic (PeriodK/PeriodD/PeriodS @ 34/5/1). Derivative 2 is not used in this strategy. By measuring Stochastic function of a price-derived Stochastic function, we're effectively measuring momentum acceleration. This an always in strategy, going long when Derivative 1 crosses the key "trend bias" level of 50 from below and short when it crosses the same level from above.


Trend-following (bull run) example: SPDR S&P 500 ETF (NYSE: SPY) daily chart - we're only using Derivative 2 oscillator in this strategy setup (Base and Derivative 1 oscillators are set to invisible). The pictured Pandora 3x oscillator is Adaptive Moving Average (MA) of Stochastic Oscillator, which itself is derived from a price-inputted Stochastic Oscillator (Stoch > Stoch > AdMA). In essence this line represents momentum of momentum (its velocity) with adaptive smoothing applied - a function that presents excellent opportunities for trend following. Due to the upside tendency of stocks, we're only interested in buying into bull market. The horizontal line across 20 represents the threshold level relevant to our strategy, with everything above it representing a potential bullish market and everything below it a potential bearish market. We open a long position when Derivative 2 crosses over 20 and close it when it goes under 20. We're on the sidelines during potentially bearish or uncertain markets.


Oscillator-oscillator line crosses

These signals are issued when individual oscillator lines cross each other. Similar to the oscillator-horizontal line crossover strategy above, a trader selects long and short signal rules based on the interaction and crossing of oscillator lines (crossover from below for long signals, crossover from above for short). You can set-up Pandora to consider interaction between any 2 oscillator lines, even using one pair of oscillator lines for long signals and another pair for short signals. This strategy is especially useful if you have a setup where one of the derivative oscillator lines is a moving average (adaptive is recommended) of the prior oscillator line, and you want their interaction to represent a trading system, buying on crossover and selling on crossunder.

Trend-following example: Apple Inc (NASDAQ: AAPL) 60-minute chart - Base is Simple MA (Period @ 35); Derivative 1 is RSI of Simple MA (Period @ 30); Derivative 2 is RSI of RSI of Simple MA (Period @ 150). Long issued when Derivative 1 crosses Derivative 2 from below; Short issued when Derivative 1 crosses Derivative 2 from above.


Trend-following example (with a trailing stop): Bank of America (NYSE: BAC) 60-minute chart - Base is Simple MA (Period @ 15; not drawn on chart since we're not using it in our trading strategy); Derivative 1 is RSI (Period @ 100) of Simple MA; Derivative 2 is RSI (Period @ 150) of RSI of Simple MA. Long signal issued when Derivative 1 (blue line) crosses Derivative 2 (green line) from below; Short signal issued when Derivative 1 crosses Derivative 2 from above. For best results we want to use a trailing stop of $1-1.50.


Secondary application

Divergences – which refers to directional and shape divergence between the price action you see on the main chart, and the oscillator lines. Typically, the two are in sync – price makes a higher high, oscillator makes a higher high etc. However, sometimes the two will contrast. Price action will show one direction and one shape or amplitude, while the oscillator will show another or opposite. When that happens, the lines are said to be divergent. Divergence is usually representative of momentum exhaustion or loss of investor interest, which could be a telltale of things to come. There are 2 types of divergences: Regular and Hidden.


Regular Divergence

  • If Price makes a consecutive higher High, and an oscillator makes a lower High, the price has a higher probability of going down
  • If the price makes a consecutive lower Low, and an oscillator makes a higher Low, the price a higher probability of going up.
The Ford (Daily) example below effectively illustrates regular divergence. Price kept making successive lower lows, while the Pandora 3x oscillator (Simple MA of RSI) kept making successive higher lows. Two months later, price rallied, gaining 30%.


Hidden Divergence

  • If Price makes a lower High, and an oscillator makes a consecutive higher High, the price a higher probability of going down.
  • If Price makes a higher Low, and an oscillator makes a consecutive lower Low, the price a higher probability of going up.
The Ford (5-minute intraday) example below demonstrates bullish hidden divergence. The price made a higher low, while the Pandora 3x oscillator (Simple MA of RSI) made a lower low in the same period. A major rally followed at the next open.


Development Roadmap

We will be adding 4 Strategy add-ons (LE, SE, LX, SX) to Pandora 3x package in Q4 2016, enabling traders to optimize and test different input values as well as automate all signal execution. This and all future features and upgrades are free to subscribed Pandora 3x clients.


Looking For Full Customization?

Pandora 3x's engine is highly versatile and extensible. If you are looking to integrate an existing strategy or other oscillators/add-ons with Pandora, contact us or take a look at our custom development services page.





Disclaimer: Pandora 3x is a trading platform add-on intended for analysis of markets. Its effectiveness is based on your input and experience, and as such, Marko Nikolic Investment Research (formerly Build-A-Signal Software) and Marko Nikolic are not responsible for any losses you may incur as result of using Pandora 3x in your trading endeavors. See full disclaimer.


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