"The information displayed on the zone boundary is: {Zone number} {Price} {R ( Probability of reaching this zone)} {S/R (Probability of support/resistance in this zone)} The Zone Probabilities methodology uses the common Floor Tradersâ Pivot Formulas to establish the zone boundaries for the current day."
If you really want to send me a check in the future, please PM for address. PS: Don't leave home for shopping with real money!
Because Zone Pattern Probability Analysis is a method based on statistical projections from historical market data, it is basically completely objective and testable by yourself. That means it can be done for a full-scale backtesting. But I haven't got time to do it by myself yet. Any input from anyone would be appreciated. :eek:
Daily Zone formation: High2=Avg+High1-Low1 High1=(2*Avg)-Low Avg=(High+Low+Close)/3 Low1=(2*Avg)-High Low2=Avg+Low1-High1 These 5 values are the five levels creating a total of six zones. For each of these 6 zones, the price action can be characterized as follows: Zone 6: Strong UP (say 20%) Zone 5: Moderate UP (say 44%) Zone 4: Mildly UP (say 83%) Zone 3: Mildly DOWN (say 79%) Zone 2: Moderate DOWN (say 42%) Zone 1: Strong DOWN (say 20%). One possibility is to adjust position size based on the above %. Probably by now you should be able to figure out what are the remaining stories by yourself already.
Oddtrader, do you have this ebook? Detecting High Profit Day Trades in the Futures Markets: Using Zone Pattern Probability Analysis.
http://www.fibonaccitrader.com/ Search their website. They have a free pdf on jackson zones. I bought the book a while ago. As usual, there was nothing spectacular in it. Why? Because even though a zone may have a 70% chance of not being violated, the closer you get to the zone the greater the probability that the zone will be violated. This is true whenever you hear any statistic about "prices will not violate this zone 70% of the time". Well, if you run the statistics on prices touching in front of the zone you will see that the 70% turns to 30%, as an example....if you get my drift...