Introduction

The Clever Markets methodology consists of two components. The first component is the Quant Signal Layer through which we filter subsequent trading strategies. It gives us a broad direction of the markets and pre-selects the right set of tools.

Then we have the Trade Application layer that helps to systematise the decision-making process on a trade-by-trade basis for a human trader.

Use both together to optimise the trading process. Use the quant layer to identify what game to play, use the application layer to understand how to play the game.

Quant Signal Layer

This table summarises how to combine the four core components of our market analysis framework: Regime Index, Trend Forecast States, Extreme Trend Indicators, and Sentiment Poll Data.

Rather than treating each signal in isolation, this methodology layers them to reflect market structure and crowd behaviour. The Regime Index acts as a regime filter, determining whether trend-following or contrarian strategies should be active.

Trend Forecast States and Extreme Trend Indicators help quantify trend strength and exhaustion, while Sentiment Polls capture market psychology and help identify inflection points.

By using this table as a signal matrix, analysts can align model signals with real market conditions, improving both timing and conviction. It’s not about chasing every move, but about acting when multiple independent signals converge. This is where edge compounds.

How to Use the Table

• Start with the Regime Index: Is the market trending or not? This determines whether you should even be looking at trend-following setups or not.
• Add Forecast State: If regime is trending, act on strong Forecast readings (>15). If not, treat strong readings as reversal signals.
• Confirm with Extreme Trend Indicators: These help you gauge whether the trend is stretched too far. If both forecast and slope are at extremes, it’s either a strong continuation (in trending regimes) or a prime fade (in non-trending).
• Layer Sentiment Data: Crowd positioning adds edge. When sentiment aligns with model signals, it reinforces. When sentiment is opposite, it raises flags for reversal.

Trade Application layer

This component of the Clever Markets methodology is purely based on classic technical analysis concepts. The layer consists of three key components, namely market structure, indicators and macro factors. 

These three components help with the trade-by-trade decision making process around trend identification, trade planning and risk management. In this methodology, risk management will not be covered because it is a highly personalised matter that is different from each client.

But if correctly applied, the Clever Markets methodology may also have a positive impact on the risk management component.

• Market structure: This encompasses everything visible on the chart, including price action itself, trendlines, chart patterns, candle patterns, targets and Fibonacci levels.

• Indicators: Indicators are all mathematical tools available. Tools are classified into trend, momentum, volume, volatility and oscillator tools.

• Macro factors: Macro factors mostly refer to shifts in supply and demand, sometimes referred to as ‘fundamentals’.

How to Use the Table

This chart lays out a structured, repeatable approach to building high-quality trade plans grounded in trend logic, price structure, and confirmation signals. See this more of a tick-list for best practices and not a rigid trade plan.

To apply it:

1. Start with Clarity (Step 1 – Define Your Trading Goal)
   Establish your purpose, holding timeframe, strategy type (e.g., mean reversion or swing), and risk framework. This anchors every chart decision to your broader trading intent. This is also closely related to the Quant Signal Layer.
2. Establish Context (Step 2 – Macro Picture)
   Analyse macro drivers such as supply and demand factors as well as market sentiment using the Clever Markets poll. You may also take options data and open interest data into consideration. This step determines whether you trade with or against the market’s fundamental bias.
3. Read the Price (Step 3 – Price Charting)
   Conduct top-down chart reading:
   • Identify trend structure (HH/HL vs. LH/LL).
   • Define key levels, patterns, and price triggers (e.g., breakouts, support zones, fib extensions).
   • Determine direction from higher timeframe; use lower timeframe for entries.
4. Confirm the Signal (Step 4 – Indicator Confirmation)
   Only act when chart and indicator evidence align. Validate your price-based thesis using:
   • Trend tools (e.g., moving averages, regression lines)
   • Momentum and oscillators (e.g., RSI, MACD)
   • Volume and volatility metrics
5. Use the Guidelines for Clarity
   These are the golden rules. They remind you:
   • Chart structure comes first.
   • Indicators confirm, not lead.
   • One signal per category (trend, momentum, volume, volatility) is enough.