Technical Deep Dive FAQ
Core System Concepts
Section titled “Core System Concepts”What is a Signal Provider?
A Signal Provider is a specialised indicator that analyses market data to generate continuous, normalised “strength” signals, which range from -1 (strong sell) to +1 (strong buy). Instead of binary buy/sell flags, they provide a nuanced measure of conviction.
Key characteristics:
- Processes price data (OHLCV).
- Outputs a continuous signal strength value.
- Forms the foundational layer of the GYTS analysis pipeline.
Example: WaveTrend 4D is our primary Signal Provider.
What is a Market Regime?
A market regime is a distinct state of market behaviour. Our system primarily identifies two major regimes, which require different trading approaches:
- Trending: Characterised by persistent directional movement and momentum. Strategies should favour trend-following.
- Ranging (or Cyclic): Characterised by sideways price action and mean-reversion. Strategies should favour capturing oscillations.
Identifying the correct regime is crucial for adapting your strategy and improving trade probability.
What is Signal Aggregation (Flux Composer)?
Signal Aggregation is the process of combining multiple, often conflicting, signal streams into a single, unified analytical output. Our Flux Composer component is the engine for this process.
It uses sophisticated techniques like temporal decay and weighted confluence to distill wisdom from the noise of many inputs.
What is an Execution Engine (Order Orchestrator)?
An Execution Engine bridges the gap between analysis and action. It takes the refined signals from the Flux Composer and the context from the Market Regime Detector to manage trade entries, exits, and risk.
The Order Orchestrator is our primary execution engine, designed for backtesting complex strategies and automating them via webhooks.
System Architecture
Section titled “System Architecture”How do the components connect?
The GYTS Suite is designed as a modular pipeline, where data flows logically from one component to the next.
- Signal Providers (e.g., WaveTrend 4D) generate raw strength signals.
- Flux Composer subscribes to these signals, aggregates them, and outputs a final, composite signal.
- Market Regime Detector runs in parallel, providing context about the market’s state.
- Order Orchestrator receives the final signal from Flux Composer and the context from the Regime Detector to make trade execution decisions.
This layered architecture ensures a clear separation of concerns, from raw signal generation to final trade execution.
Can I use my own custom indicators?
Yes. The GYTS architecture is open. As long as your custom Pine Script indicator outputs signals using the specified GYTS data format, it can be seamlessly integrated into the Flux Composer.
This allows you to combine our proprietary analysis techniques, like GDM and QMC, with your own unique trading edge.
Mathematical Foundations
Section titled “Mathematical Foundations”WaveTrend 4D: Multi-Dimensional Momentum
WaveTrend 4D is our primary signal provider. It enhances classic momentum analysis by incorporating several advanced mathematical concepts.
Four-Dimensional Analysis: It analyses the market through four simultaneous frequency lenses, inspired by Ehlers’ work, to capture different aspects of market movement:
- Fast (0.75x multiplier): Catches sharp turns and initial momentum.
- Normal (1.5x multiplier): Provides a baseline reading of the trend.
- Slow (3.0x multiplier): Confirms established trends.
- Lethargic (5.0x multiplier): Identifies long-term, major market moves.
GDM (Gradient Divergence Measure): GDM is a sophisticated method that quantifies the strength of a divergence, going far beyond simple visual inspection. It computes a score based on six orthogonal components: Price Divergence, Momentum Shift, Amplitude Ratio, Time Decay, Slope Differential, and Volume Confirmation.
QMC (Quantile Median Crosses): QMC is a statistical method that identifies trend exhaustion points by using integral calculus. It measures how far and for how long an oscillator has stretched into statistically extreme territory (e.g., the top 90th percentile of its historical values), signaling a high-probability reversal.
Flux Composer: The Art of Confluence
The Flux Composer combines multiple signal streams into a single, actionable output using one of four selectable confluence mechanisms.
- GYTSynthesis (Pro only): A proprietary weighted geometric mean that balances signal strength against discrimination, providing a nuanced and robust output.
- Amplitude Compression: A stochastic-style normalisation that prevents signal overflow when many providers are active, ensuring the output always remains within the
[-1, 1]range. - Trigonometric Smoothing: A sine-weighted averaging method that creates a naturally oscillating output, effective at reducing whipsaws in choppy markets.
- Maximum Consensus: The most conservative method, which requires all signals to agree, resulting in the highest-confidence trade signals.
Dual-Layer Filtering (Pro only): The Pro version allows you to designate some signal providers as a “Filter Flux.” A trade signal is only generated if both the main “Signal Flux” and the “Filter Flux” agree, reducing false positives by adding a second layer of validation.
Market Regime Detector: Context is Everything
The Pro Market Regime Detector uses a consensus of five orthogonal (mathematically independent) methods to determine the market’s state.
- DCA (Dominant Cycle Average): Compares price to a cycle-based moving average.
- Volatility Channels: Uses ATR-based bands to identify trend breakouts.
- High-Pass Filter Differential: Isolates and measures cycle strength.
- Frequency Domain Analysis: Uses FFT to find dominant frequencies.
- Phase-Locked Adaptive: Tracks market phase shifts with self-calibrating thresholds.
By combining these diverse methods, the detector provides a highly robust and reliable assessment of the market regime, which is then fed into other components to enable adaptive strategies.
Advanced Methodologies
Section titled “Advanced Methodologies”Zero-Lag Filtering & The Ultimate Smoother
Traditional moving averages introduce lag, which can delay signals. We employ zero-lag filtering techniques, most notably in our open-source Ultimate Smoother.
This indicator uses advanced signal processing to smooth price data without incurring the typical delay. It achieves this by mathematically compensating for the filter’s inherent lag, resulting in a smoother that is both responsive to recent price changes and effective at noise reduction.
Statistical Validation with YaeBot
A core tenet of our philosophy is empirical validation. YaeBot, our Discord analytics companion, provides powerful tools for this, including Bootstrap Validation.
The Bootstrap process works as follows:
- Takes an original set of trade results.
- Resamples the trades with replacement thousands of times to create new synthetic equity curves.
- Calculates performance metrics for each synthetic run.
- Builds a probability distribution of the possible outcomes.
This tells you whether your strategy’s success was due to skill or luck and provides confidence intervals for future performance, helping you avoid strategies that are overfitted to historical data.
Temporal Decay Mathematics
A signal’s relevance diminishes over time. We model this with temporal decay functions, which systematically reduce a signal’s influence as it ages.
We use various decay models depending on the context:
- Exponential (
e^(-λ × age)): For fast-moving markets where old information becomes irrelevant quickly. - Linear (
1 - age/maxAge): For stable markets with more persistent trends. - Hyperbolic (
1 / (1 + α × age)): An adaptive model that balances initial impact with a long tail.
This ensures that the system is always responding to the most relevant market information.