Duxon's Archive

Discussion in 'Journals' started by expiated, Feb 1, 2019.

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    Quote...

    "If I had my druthers, I'd travel the country by private train in a personalized Pullman car. In lieu thereof, here's my idea of an RV, traveling home."

    ~Robert Barnes

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    #761     Mar 30, 2022
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    Last year's monthly high, low and average temperatures in downtown Los Angeles:

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    #762     Mar 30, 2022
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    #763     Apr 1, 2022
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    #764     Apr 1, 2022
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    ScreenHunter_11733 Apr. 01 19.13.jpg
    Updated Numerical Price Prediction (NPP) Explanation
    Copyright © 2022 Fred Duckworth

    Numerical Price Prediction is a unique and innovative day trading system that relies on a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability. The idea is to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting.

    But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; it evaluates the synergy between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance levels, trend lines, and market structure, all in multiple time frames—with the result being a graphical depiction of current conditions that traders can then use to help make precise, well-timed trades.

    The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole.

    I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles.

    Even so, to trade with the clarity and precision I desired required me to carry out an additional step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope(s)—to answer the questions: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day?

    And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance.In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions. It seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system.

    Numerical Price Prediction was developed based on the following five biblical principles:
    1. Test everything and hold fast only to that which proves valid and reliable.
    2. Systems generally operate at peak performance when the interactions between their component parts evidence strong, healthy relationships.
    3. The best plans are usually established in the presence of a multitude of counselors.
    4. Rightly interpreting the signs of the times is an absolute necessity.
    5. Positive outcomes are typically the result of having made good choices.
    To my surprise, applying the principle of "testing everything and holding fast to that which is good" led me to reject many strategies wholeheartedly endorsed by any number of trading gurus, such as Elliott waves, Fibonacci ratios, harmonic patterns, pivot points and the like.

    In effect, I replaced the advice to "keep your eyes on the road" with a mandate to "focus on your destination," a subtle, yet profound, distinction. Obsessing on the former tends to be constraining—dictating one's movements and limiting the parameters within which one is free to operate, often locking people into notions that are not truly worthy of the reverence bestowed upon them.

    But, emphasizing the latter allows folks to be creative and take any route desired, so long as it carries them toward that on which they have resolutely set their gaze.

    So, when strategies involving moving average convergence/divergence (MACD), stochastic oscillators, the relative strength index (RSI), the commodity channel index (CCI), the average directional movement index (ADX) and other indicators failed to live up to their reputations, I had no qualms about discarding them entirely and searching elsewhere for the "signs of the times" which, if interpreted correctly, would result in market forecasts of unusual accuracy.

    As it turned out, I found that the absolute best "atmospheric barometer" for predicting the direction in which an exchange rate might ultimately be headed was nothing more than a simple moving average, with a handful of key moving averages evidencing superior accuracy in this role.

    Nonetheless, there are any number of factors, or "data points" impacting foreign currency exchange rates, with the "Holy Grail" being the ability to unravel the hidden correlations between them. It's a matter of crunching the numbers and doing so in the correct manner, plain and simple.

    And speaking of "correct manner," I think I should probably mention that, though one often hears traders stating "the trend is your friend," from my perspective, it would almost surely be more accurate to say that the trend is merely one of several friends.

    For it seems to me that what would have to be considered at least equally as important as trend is the location of rates within the entirety of a given asset's price distribution.

    So then, though investors often speak of trend lines, I've ceased to think of trends as being represented solely by lines, and have come to conceptualize them as belts as well, with the location of price within the expanse of values constituting the width of these oscillating bands being just as important (when deciding exactly where to enter and exit positions) as the general direction that each "breadth of values" is headed.

    Accordingly, my final decisions on when to buy and when to sell are always made based on the consensus of various input data, sampled in multiple time frames—data which includes baselines, market structure, temporal support/resistance, horizontal support/resistance, price ranges, and reoccurring chart patterns, as stated above.

    It is the consensus opinion of all these various factors that determines what I will decide to do in the final analysis. The moves I make depend on what each of these determinants means in light of all the others and how they all will affect and impact on one another. It is the interpretation of each moving part individually—and of all these assorted components as a whole—that constitutes Numerical Price Prediction.

    Chief among these measures is the 20-minute baseline. Along with the 8-minute measure, this indicator dictates at what point and in which direction positions will be entered and exited at the intraday level. But all measures above these two key moving averages are conceptualized as channels rather than lines—the most important being formed by the typical 45-minute, three-hour, six-hour and 24-hour price ranges. (Another very helpful data point is the three-hour temporal support/resistance level.)

    So then, Numerical Price Prediction is all about interpreting what's happening in the moment based on market generated information, which is to say, technical analysis. (I choose not to put my trust in non-market generated information—meaning fundamental analysis.)

    It comes down to "ruling reason," which for me, is just another way of saying the numbers, or "the math" if you will—the summation of all those correlating data points that are a part of the market generated information.
     
    Last edited: Apr 1, 2022
    #765     Apr 1, 2022
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    A helpful practice to get the "gist" of intraday price flow at a quick glace is to shade or pattern the upper and lower halves of the six-hour price range channel differently, and do the same with respect to the three-hour price range channel as well.

    Accordingly, one would only look to buy while candlesticks paint above the shaded regions, and sell when candlesticks are painting below them.
     
    #766     Apr 6, 2022
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    #767     Apr 12, 2022
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    [​IMG]

    WE ARE MOVING AWAY FROM DIGITAL TRADING — MEET THE NEW QUICK TRADING MODE!

    The decision to move away from digital trading on the Platform has been brewing for a long time. The issue became especially relevant after the introduction of quick trading and analysis of the trading preferences of our traders.

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    SPECIFICS OF DIGITAL TRADING

    In digital trading, orders are calculated and closed only once a minute for all users - at 00 seconds of every minute (for example, 15:30:00). Because of this, the accuracy of the closing time will always be limited to one minute, thus it is not possible to open a trade in digital trading mode with a closing time of, for example, 15:30:35.

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    ADVANTAGES OF QUICK TRADING

    Quick trading on Pocket Option allows you to open orders both for ultra-short timeframes from S5 (the transaction will be closed and calculated 5 seconds after opening), and for any exact time interval set by the trader in the form of hours, minutes and seconds before closing.

    Quick trading gives traders more flexibility in setting the expiration time of a trade order, which directly improves the success of predicting the outcome of a trade. Up to 80% of transactions on the Platform are made in the quick trading mode.

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    QUICK TRADING V2.0

    To replace digital trading, we have prepared a completely new mode that combines all the advantages of digital and quick trading.

    The new quick trading mode allows traders to set the exact server time when a trading order will close. For example, it is now 11:41 am and you want to open a position by the nonfarm news release at 15:30 pm. To do this, switch to the new mode (the button for changing the trading mode under the expiration time) and set the exact time at which the trade will be closed (15:30:10).

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    In other words, now you can specify a specific closing time for your trade — the system will automatically calculate the required timeframe and place your forecast.

    Enabling the "auto time offset" option allows you to automatically renew the closing time by a specified interval in the event that the current timer expires.
     
    #768     Apr 19, 2022
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    Friday | April 29, 2022 | 9:00 AM PST
    At this point, even the 20-minute trend is being conceptualized as a belt rather than a line. The next fastest measure being monitored is the five-minute trend rather than 8 or 8½, but nothing lower/faster than this. Six hours is useful for helping to anticipate the extremes of daily price action (rather than the 24-hour price range, which is so slow as to almost never be relevant/come into play) and the three-hour measures have since fallen by the wayside.
     
    Last edited: Apr 29, 2022
    #769     Apr 29, 2022
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    Sunday | May 1, 2022 | 3:00 PM PST

    So, in the final analysis, I have devised three basic trade setups I will be using in applying the Bias Overlap version of Numerical Price Prediction. I will not describe them in detail, because these are the protocols I will be using to "guarantee" I make money every single day, from this day going forward, which makes them too valuable to disclose publicly—especially if I plan to scale a related enterprise at some point in the future.

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    #770     May 1, 2022