Education Center

Bear Call Spread (Credit)

A moderately bearish to neutral defined-risk income strategy. You sell a call closer to current price and buy a higher-strike call with the same expiry. You collect net credit up front. Max gain is the credit received, max loss is spread width minus credit, and breakeven is short-call strike plus credit. Best fit when your view is that price should stay below resistance through expiry.

Bull Put Spread (Credit)

A bullish defined-risk income strategy. You sell a put near support and buy a lower-strike put for protection. You receive net credit. Max gain is the credit, max loss is spread width minus credit, and breakeven is short-put strike minus credit. This works best when your base case is sideways-to-up and you want positive theta while controlling downside risk.

Bull Call Spread (Debit)

A defined-risk bullish directional trade. You buy a call and sell a higher-strike call in the same expiry. You pay a net debit, which is also your max loss. Max gain is spread width minus debit. Breakeven is long-call strike plus debit. Useful when you expect upside but want lower cost than a naked long call and are willing to cap potential upside.

Bear Put Spread (Debit)

A defined-risk bearish directional trade. You buy a put and sell a lower-strike put in the same expiry. You pay net debit (max loss). Max gain is spread width minus debit, and breakeven is long-put strike minus debit. Best when you expect controlled downside rather than a crash and want to reduce premium cost versus a standalone long put.

Iron Condor

A neutral, range-bound strategy built from a call credit spread and a put credit spread. You collect net credit and want price to stay between the short strikes. Max profit is the credit received; max loss is wing width minus credit. Strongest in elevated IV with weak directional conviction, where time decay and volatility contraction are likely to help.

Covered Call

An income overlay for investors who already own shares. You sell a call against stock holdings and collect premium. Premium improves downside buffer slightly, but upside is capped at strike plus premium. Best for neutral-to-mildly-bullish outlooks where you are comfortable selling upside in exchange for current income.

Put-Write

A cash-secured short put strategy used to collect premium while waiting for a lower entry in the underlying. You receive credit and are willing to buy shares if assigned. Max gain is premium; downside risk is substantial if stock falls hard. Most appropriate when your bias is bullish-neutral and implied volatility is rich enough to justify assignment risk.

Wheel (Cash-Secured Puts)

A systematic income cycle: sell cash-secured puts until assigned, then sell covered calls on owned shares, and repeat. It performs best on liquid tickers you are comfortable owning through volatility. The edge comes from repeated premium harvesting with disciplined strike selection, not from aggressive directional calls.

Long Puts

A pure bearish convex trade. You pay premium to buy downside exposure with strictly limited loss (the premium paid). Breakeven is strike minus premium. This is useful when you expect a directional downside move and/or volatility expansion. It can decay quickly if price drifts sideways and IV compresses.

Long Straddle

A long-volatility event strategy: buy call and put at the same strike/expiry. You pay total premium up front. Profit requires a large move in either direction beyond break-even bands. Suitable around catalysts when you expect movement magnitude to exceed what options are pricing.

Short Straddle

A short-volatility income strategy: sell call and put at the same strike/expiry. You collect premium and want price to remain near strike into expiry. Risk can be very large on strong directional moves, so this requires strict risk controls and is generally better suited to highly experienced traders in stable conditions.

Calendar Spread

A time-structure strategy that sells a near-term option and buys a longer-dated option at the same strike (same option type). The thesis is that front-month time decay outpaces back-month decay. Best when you expect price to hover near strike in the near term with potential move later, and when term-structure pricing supports the spread.

Fibonacci Retracement

Fibonacci retracement levels are a powerful tool that helps identify potential support and resistance zones based on the Fibonacci sequence. The key levels are 0%, 23.6%, 38.2%, 50%, 61.8%, and 100%. These levels are plotted between significant highs and lows to mark zones where price may find support or face resistance during pullbacks.

The theory behind Fibonacci retracements is rooted in the golden ratio (0.618), which appears frequently in nature and financial markets. When a strong trend reverses, prices typically retrace between 38.2% and 61.8% of the prior move before continuing. Q Signals plots these levels on recent swing highs and lows, then scores bullish when price finds support at a level during a downtrend, and bearish when price faces resistance during an uptrend.

Treat Fibonacci levels as probability zones, not exact predicted prices. Combine them with other indicators like RSI, volume, and moving averages to confirm retracement signals. Higher conviction occurs when multiple indicators align at the same Fibonacci level.

Elliott Wave

Elliott Wave theory describes market movement in recurring 5-3 wave patterns. An impulse wave consists of five waves: three in the direction of the trend (1, 3, 5) and two against it (2, 4). After the impulse, a corrective wave unfolds in three waves (A, B, C) against the prior trend.

Q Signals identifies Elliott Wave structures using price action and Fibonacci relationships. Wave 3 is typically the longest and most powerful. Wave 1 breakouts signal the start of a potential impulse; wave 3 extensions confirm trend strength; wave 5 represents exhaustion if it is shorter than wave 3. Corrections to wave 2, 4, or the entire 5-wave sequence often complete at Fibonacci levels (38.2%, 61.8%).

Elliott Wave is most effective on timeframes with clear trending structure (daily and weekly). Intra-day waves are noisier and harder to validate. Always confirm wave counts with other indicators and market context before acting on them.

Swing Strategy

The swing strategy module combines Simple Moving Average (SMA) crossovers, RSI (Relative Strength Index), and Bollinger Bands to identify short-to-medium-term directional setups. A bullish swing setup occurs when price crosses above the SMA, RSI is above 50, and price is near or above the lower Bollinger Band, signaling potential continuation momentum.

Bearish swings align when price is below the SMA, RSI is below 50, and price is near the upper Bollinger Band, suggesting resistance. The Bollinger Bands (20-period SMA ±2 standard deviations) mark overbought/oversold extremes; price tends to mean-revert when it touches the outer bands.

Swing signals are strongest when all three indicators agree. False signals increase when RSI diverges from price (price makes a higher high but RSI makes a lower high), indicating fading momentum. Use the swing module as a confirmation layer, not a standalone timing tool.

Sentiment & Social Media

Sentiment analysis combines news headline NLP processing and social media mention tracking from Reddit and StockTwits. News sentiment detects hawkish/dovish language (bullish keywords like "surge," "breakthrough"; bearish keywords like "collapse," "risk"). Social sentiment measures post count velocity, bullish/bearish tone split, and mention frequency spikes.

High positive sentiment can indicate strong retail enthusiasm, which often precedes pullbacks when momentum traders exit. Conversely, high negative sentiment during long-term trends can represent capitulation—a potential reversal signal. The key is understanding context: sentiment is most powerful as a contrarian fade during extremes, not as a directional follower.

Be aware that sentiment lags real data and can be manipulated by coordinated social groups. Always cross-check sentiment signals with technical breakdowns or fundamental catalysts. Use sentiment to confirm, not initiate.

Insider & Institutional Ownership

Insider trading (SEC Form 4) and institutional holdings changes (13F filings) reveal smart-money positioning. Insider purchases—especially by executives—signal confidence and often precede price appreciation. Insider sales can be tax-driven but sustained heavy sales may indicate insiders are less bullish on long-term prospects.

Institutional ownership trends matter even more. Large funds adding positions across multiple filings suggest building case; exits could presage downturns. Congressional STOCK Act trades track elected officials' holdings, which sometimes lead retail awareness of regulatory shifts or sector tailwinds.

Insider and institutional signals are slow-moving and best used for longer-term thesis confirmation (weeks to months), not short-term entry/exit timing. An insider buy is strongest when combined with technical breakouts or earnings catalysts.

Supply Chain & Competitor Strength

Supply chain analysis monitors SEC filing relationships to identify companies dependent on stressed suppliers or facing disruptive competitors. A company that relies heavily on a collapsing supplier risks production delays. A competitor gaining market share threatens pricing power and margins.

Competitor relative-strength scoring compares a stock's momentum vs. its peer group. A leader breaking out while peers lag suggests structural advantage. A laggard amid peer strength suggests sector headwinds are picking specific losers. Sector rotation also matters: a strong competitor in a deteriorating sector can still underperform.

Supply chain and competitor signals are best used alongside fundamental catalysts (M&A, new partnerships, quarterly guidance). They identify structural risks or tailwinds, not immediate price moves.

Volume & Multi-Timeframe Analysis

Volume profile analysis examines order flow and on-balance volume (OBV). High volume during uptrends suggests conviction; high volume on downtrends indicates liquidation. OBV accumulation (volume rising on up days, falling on down days) signals insider strength; distribution (volume rising on down days) warns of institutional unloading.

Multi-timeframe analysis ensures daily signals align with weekly trends. A daily breakout is stronger if the weekly chart also shows an established uptrend. A daily bounce in a weekly downtrend is likely a bear-trap. Horizon-based alignment reduces false signals caused by short-term noise conflicting with longer-term structure.

Volume confirms price moves. Rising volume on breakouts suggests institutional participation; declining volume on reversals suggests shorts covering rather than new demand. Always examine volume as a check on price action strength.

Sector Rotation & VIX Regime

Sector rotation tracks momentum shifts across 15 market sectors (Tech, Healthcare, Energy, etc.). During risk-on periods (low VIX, strong GDP), growth sectors (Tech, Semiconductors) lead. During risk-off periods (high VIX, recession concerns), defensive sectors (Utilities, Staples) outperform. A stock breaking out into a trailing sector risks underperformance.

VIX regime classification splits market conditions into four states: Calm (VIX < 12), Elevated (12–20), High (20–30), Extreme (> 30). Calm regimes favor growth; extreme regimes favor defense. Stop-loss width scales with VIX regime to reduce noise-driven exits in extreme volatility while tightening stops in calm conditions.

Sector and VIX signals provide macro context. A strong technical signal in a lagging sector may still struggle. Align individual stock signals with sector and regimes for higher-conviction setups.

Economic Indicators & Fed Policy

Economic indicators (CPI, unemployment, yield curve) and Federal Reserve minutes sentiment drive long-term trend direction. A steepening yield curve (long rates rising faster than short rates) signals economic growth; an inverting curve warns of recession. Strong employment data supports growth narratives; rising jobless claims trigger flight-to-safety demand.

Fed hawks (raising rates, tightening) weigh on growth stocks; Fed doves (cutting rates, stimulating) support equity bulls. Fed minutes language reveals policy trajectory months in advance. Markets often rally in anticipation of rate cuts and fall ahead of rate hikes.

Economic and Fed signals work best on longer timeframes (weeks to months). They establish the regime; technical signals and volume confirm entries within that regime. A bullish technical setup during Fed tightening is riskier than one during easing.

Analyst Ratings & Earnings

Wall Street consensus ratings (Buy, Hold, Sell) and price targets reflect collective professional opinion. A stock with 80% Buy ratings faces higher odds of support on dips; 80% Sell suggests shorts are crowded, risking short squeezes. Price target upside (target price minus current price) reveals expected return potential within analyst forecast windows (usually 12 months).

Analyst recommendation changes (upgrades/downgrades) often trigger sharp moves. Earnings dates are critical inflection points: surprises (beats/misses) can override technical technicals, so avoid holding through earnings if your setup is purely technical without fundamental conviction.

Analyst signals lag retail awareness and can represent consensus that is already priced in. Look for outliers (contrarian analysts) and changes in recommendation direction rather than absolute ratings. Use analyst buy ratings to confirm, not initiate.

Price Trend, Volatility & 52-Week Range

Price trend analysis checks if price is above or below key moving averages (50-day, 200-day). An uptrend is confirmed when price is above the 200-day SMA; downtrends below. Volatility (ATR—Average True Range) marks the stock's true daily price swing distance and is used to compute targets, stops, and hold duration.

52-week range (52w high/low) marks yearly extremes. Price near 52w highs implies strength and reduced downside risk (if on rising volume); price near 52w lows signals weakness or opportunity (if fundamental catalysts suggest recovery). Mean-reversion bias is strongest when price reaches 52w extremes without fundamental deterioration.

These technical metrics are foundational. High volatility stocks need wider stops and larger average targets to achieve attractive risk/reward. Trending markets (price well away from 52w range) suit directional strategies; range-bound markets (price in middle of 52w range) favor mean reversion.

Reinforcement Learning (DQN) Agent

Q Signals includes a Deep Q-Network (DQN) reinforcement learning agent trained on historical signal outcomes. The agent ingests 10 offline-calculated module scores (Fibonacci, Elliott, Swing, etc.) and outputs learned BUY/HOLD/SELL Q-values—essentially probability weights that this combination of signals is likely to succeed.

The agent trains continuously by tracking outcomes: did a BUY signal lead to price appreciation? Did a SELL signal predict decline? The agent's historical win rate feeds back into its decision weight. Early in training (Infant stage, <500 episodes), the agent is exploratory and less reliable. As it learns (Learning→Developing→Experienced, 500→100K+ episodes), its recommendations carry more weight in the composite score.

The RL agent is not a crystal ball. It systematizes patterns the 10-input combination has historically shown in real outcomes. In novel market conditions or after regime shifts, it must re-learn. Do not over-rely on the RL score alone; it is one of 23 votes in the full consensus system.