FinGraphs is like a Market GPS. It allows you to position yourself in seconds over multiple investment horizons. It’s like looking at a map, the Long term left hand charts are highways, the medium middle charts are main roads and the short term right hand charts are secondary roads.
Reading a FinGraphs’ 3D chart is like reading a map, it shouldn’t require much technical expertise, just a bit of practice: HistoView will enable you to Backtest your strategy and train your skills in 3 different time frequencies. Please be reminded that there is no guarantee that past configurations will replicate themselves in the exact same way in the future.
FinGraphs' Indicators Are Dynamically Calculated
FinGraphs main indicators (envelopes and risk index) are dynamically calculated, hence they change over time. They are meant to show the best representation of trend, target and risk at any given time (not their historical progression).
Every time a new point appears, it replaces the oldest point in the previous envelope calculation. Hence, FinGraphs’ envelopes will consistently be recalculated. These recalculations will be applied to all the historical data points in the chart (envelopes are dynamic). Envelopes width and their relative position will change over time to best assess the Trend’s potential direction, Market Stress (contact between both envelopes) and possible Target estimates at any given time (Envelopes gradually adjust to each situation).
The Risk Index is a bounded oscillator. Its calculation is hence dependent on the level achieved by previous Risk Index readings (a relative to the past, not an absolute concept). Hence the position of FinGraphs's Risk Index will evolve over time as it gradually integrates new Risk Index readings and dismisses the older ones which have left the chart.
Consistency Over Time
Since its launch in 2012, apart from a handful of minor bug corrections, FinGraphs’ indications (i.e. Potential Trend, Possible Target zones, Envelopes and Risk Index) have been held constant. FinGraphs current algorithms are the basis for all charts presented in the HistoView functionality. FinGraphs cannot exclude making changes in its algorithms in the future ("Practice makes perfect"), it will however issue an explanation for any significant updates it may release (none planned in the near future).