Adaptive Weight Optimization in Technical Analysis: A Modern Approach with LLMs
· 33 min read
The Problem
Technical analysis has long relied on combining multiple indicators to generate trading signals. The challenge lies not in which indicators to use - these are well established - but in how to weight their importance dynamically as market conditions change. Traditional fixed-weight systems often fail when market regimes shift, leading to:
- False signals during regime transitions
- Delayed adaptation to new market conditions
- Over-optimization for specific market states
- Poor performance in unexpected market conditions