Trading Cube Help

The Trading Cube is a visualization tool developed by L.A. Little that provides the trader and investor with a snapshot view of the qualified trend for a stock, it's sector and the general market that it trades in. It visually displays the trend for nine charts (the stock, the sector, and the general market all of which are examined across three time frames).

Timing and the Neoclassical Trading Model

The hardest problem in trading is timing. How long will a trend persist? When is the best entry point? Exit point?

One of the key motivations for creating the Neoclassical model was to—at least partially—answer the question of time and make it an integral part of the trading model.

How so?

Consider the Mean-Time-to-Failure (MTTF) of a trend. It’s shown on the Trading Cube. On the surface, it is divided into timeframes. Consider the row where SOXX is the instrument (highlighted).

On a short-term timeframe (first column), the trend is bullish. Notice the number underneath it—49.1%. That is the cumulative MTTF of the trend. If you click on it, you get the Cumulative MTTF Projections for that instrument.

Here are the current MTTF projections for SOXX.

What this tells you is that you should expect the trend to remain as is (bullish) for another two weeks, on average. That is useful information. Yes, it can transition prior to that or even later than that, but it gives you an expected timeframe.

Further analysis could be done on different instrument and different timeframes.

Here's a short video describing the power of the cube!