Alongside market risks, time pressure, expectations and emotions also influence your decisions. An unstructured analysis can leave you exposed to these four pitfalls:

• Confirmation bias. You favor information that supports your existing view and give too little weight to evidence against it. This tendency is called confirmation bias.
• Recency bias. Recent events can influence your assessment more than the evidence warrants. A single losing or winning day can distort your view of the longer-term picture.
• Information overload. Multiple sources are useful only if you can put them in context. Conflicting or duplicated information can make decisions harder.
• Inconsistency. If you use different criteria every day, your assessments become difficult to compare.

A consistent routine can help you notice these biases. Review the same criteria, actively look for opposing evidence and record your assessment. This does not automatically eliminate thinking errors. Read more about how emotions influence your decisions in our article on trading psychology.

Market Radar does not tell you whether to go long or short today. It combines different market data into an overall assessment. Its focus is the U.S. stock market, including the S&P 500, its market breadth and U.S. volatility data. Individual stocks and other equity markets can behave differently.

Check the displayed data timestamp before interpreting the results. The indicators update at different intervals; this overview is not a real-time guide to your next entry. The time you need for the analysis depends on your experience and the questions you still need to resolve.

Market Radar combines fifteen indicators in four groups, bringing together different perspectives on the market. Some of these measures are related, so fifteen indicators do not provide fifteen independent confirmations.

The fifteen indicators sit in four groups:

• Volatility — including expected price fluctuations. One example is the VIXThe VIX derives the market’s expected volatility over the next 30 days from prices of options on the S&P 500.. It measures expected fluctuations over the next 30 days, not price direction.
• Trend — which way the market is moving and how broad the move is.
• Fundamentals — the dashboard’s name for the group covering seasonality, sentiment, bonds, the U.S. dollar, financing conditions and the yield curve. It is not an assessment of financial statements or company valuations.
• Futures curve — this group evaluates the VIX futures term structure. It shows current prices for different maturities and provides context on the volatility market. It does not predict where stock prices will be in the future.

Each indicator is assigned to one of seven signal-light states. Volatility and Trend each account for 30 percent of the overall score; Fundamentals and the Futures curve each account for 20 percent. Together, they form Market Radar. Read the overall score alongside the displayed classification, which ranges from strongly bearish through neutral to strongly bullish. These are assessments within this model, not probabilities of prices rising or falling. Oliver Sparing explains how individual indicators work, from volatilityVolatility describes how much the price of a market or security fluctuates over a given period. to the futures curveIf the prices of the different futures months are plotted one after another, starting with the contract that expires next, the result is the futures curve, also called the term structure curve., in this German-language podcast episode.

Three practical points:

• Start with the overall reading. Check the data timestamp, overall score and classification. Compare them with previous days, then examine the individual groups. The score alone does not justify a trade.
• Look for clusters. Several similar readings may indicate a broader change. But check whether the indicators measure similar data. A single conflicting reading is not automatically meaningless, and several red readings do not prove that prices will fall.
• An addition, not a replacement. Combine the market overview with your trading strategy. Entries, exits and position sizing need their own rules. The signal-light color does not determine your risk budget.

Record your assessment regularly and compare it later with what actually happened. Also note when the model did not fit your market or strategy. This helps you evaluate how useful the routine is for your decisions. Learn more about our approach in the Swing Trading programme (in German).