Trading by the Process of Elimination

When I started creating and testing long and short trading signals, I discovered a whole class of signals that hadn't occurred to me previously. They're trading indicators generated by a process of exclusion or elimination: if long signals A, B, and C are NOT present, then by default a short signal is generated. What may not be immediately obvious when looking at a forex chart is that the absence of certain indicators can be just as important as their presence.

In some cases, the absence of some signals can amplify an opposing signal -- for example, here's the syntax of one Excel formula I've created that triggers a signal only if one long indicator is present while three short indicators are absent: =IF(AND(W572=1,Z572=0,Y572=0,K572=0), where 1 is a long signal and 0 is the absence of a short signal.

I could give a bunch of other examples, but you probably get the idea. So if you ever set out to design your own trading system, remember that you when you create a long signal, its absence may also be a short signal, and vice versa. Who knows how many pips this could add to your trades!