After a choppy Tuesday, stock indices returned to trending. After a pull-back to 10:20am, the index trended up to noon time. Indications for a likely change in direction came at 12:29 and the index is off it's high. The market proceded to downtrend to close close to the day low. Profitable trading going long and then going short. Another example of intraday short-term trend trading. It's nothing new among trading strategies. Identifying the begining of a trend or identifying trend continuation, and identifying change in direction are what was required for this strategy.
I read almost every post on ET. As far as the office I would believe it is more than 12 hours each day as I have gotten through before and after hours at times. As far as being on topic...I must ask that you remain on topic and PM me with questions such as this in the future. I am available much more than 12 hours per day. Thank You for your contribution to the community. ES
Well, this charts shows why the "wicks" have statistical distribution patterns and why "predicting" the next move is not only possible in consistent trading - but a necessary component of long-term success. It shows an indicator that contains all "wicks" (properly called: Vectors) and it shows the hidden nature of "trend" changes before they happen. This indicator (alone) also explains why trading like a rat won't work over the long-term, absent an ability to see around "corners" - otherwise known as market transitions from Bullish, to Horizontal, to Bearish, to Horizontal and back to Bullish.
The chart shows the frequency distribution of HIGH MINUS CLOSE and CLOSE MINUS LOW. If the candle is RED and you are a GREEN RAT, then close minus low is the bottom wick. If the candle is GREEN and you are a GREEN RAT, then close minus low is the candle body PLUS the bottom wick. Note how many times CLOSE MINUS LOW is less than 20. Do you see the "edge"? This is only 10 bars of daily data. But the indicator can be set for hundreds or thousands of bars. Perhaps this will help you understand the reason this method is profitable. ============================================= 1) Price within 20 pips of the CURRENT daily low (ClLo < 20): This is OPPORTUNITY ============================================ PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
Can you expand on your idea? How does it show trading like a rat won't work when the frequency distribution shows 60% or better for THE RAT? Can you show a frequency distribution for your method?
I could - but something tells me that you already know about my idea, no? Trading anything will work at least 50% of the time, in a business where there are only two (2) possible directions to discern. And, that brings up an interesting thought (at least to my mind). 100% of the charts that you show contain 100% positive results for profit. Yet, only 60% of the distribution is positive for profit. Those numbers don't add up in my mind. I don't know - maybe I'm just an overly attentive fool, but 100-60 = 40. Which means that at least 40% of the charts you post, should show (at minimum) that only break-even was achieved, no? Which brings up an even more interesting question for an old mathematician like myself: What is the Density Distribution of the 60%? What you showed here, was the "frequency" of the distribution. Frequency, is not Density. Frequency is merely a ratio of occurrences within the distribution itself. Density, deals with the cyclical nature of the occurrences themselves - the literal "location" of the clustering of results. In other words, does the 40% retain the same density characteristics as the rest of the distribution? If so, then yes you can build a predictive model from such data. If not, then all you can do is make an educated guess. People often times hear the statement that you can be a winner 50% of the time, and still make money trading. Well.... that's only half the truth. The other half of that "truth" is what they never remember to tell you and that is: Only if the density of the losers are proportional in characteristic to the density of the winners. Something they still don't teach in Trading 101, these days (for some odd reason). Bottom line, if your 40% is not clustered according to the above - you can easily produce a negative equity curve from such a trading method - without ever seeing it turn positive and even with a 60% statistical "chance" of being on the right side of the market. A simple EA demonstration would prove my theory. Do you have an EA for this method? Sure, but for the reasons stated above - it would mean absolutely nothing with its counter-part, Density Distribution. BTW - the Density Distribution of my Indicator is built directly into the Indicator itself. So, you can see the Distribution relative to actual price behavior directly in the pic that I provided. In other words, the prove is in the price action that follows, not in the frequency of the numbers output in a window, which are not attached to any quantifiable historical price action. Case in point: Notice the slope of Red Histogram -vs- the slope of the Green Histogram, relative to historical price behavior (or, what people incorrectly call the Trend). You can clearly see that the extremes of the Red Histogram form what I call a "compression slope" as its recent historical values move closer to zero (0). That's the hidden truth about the pivot that's about to hit the market. The steeper the compression slope, the higher the probability for a change of direction in price. No compression slope within my Indicator can retain a zero (0) value for very long - and that is how I am able to accurately predict market behavior, before it happens - regardless of the type of market in play - bull, bear or flat. Statistics are only of value, when they are thoroughly understood.
1) Price within 20 pips of the CURRENT daily low (ClLo < 20): This is OPPORTUNITY ============================================ PLEASE DO NOT PM ME WITH QUESTIONS ABOUT TRADING, INDICATORS, CODING, ETC... Post your questions in the forum. Thank you.
No, I don't recall anything about Delta or those Used I.D.s from the past. I learned Linear Regression and RSI(2) from Lerogee777 and I always give him credit for teaching me those. WildSuper taught me how he uses MACD. Michal Kreslik and I worked on Buy Zone statistics together. Last year someone else asked me a similar question. On another forum, someone asked me to code something they were working on but then they left in a huff...LOL! But my work preceded their appearance. Is this SignalBender, WaveTop, etc...? Wait, just did a google search... StealthTrader, Trader 7... all the same person. I derived the idea by looking a charts each day for years. Price moves up or down. Therefore, analysis of that movement follows. Running statistics in the form of frequency distributions on OPEN to HIGH, OPEN to LOW, LOW to CLOSE and HIGH to CLOSE just makes sense. Not rocket science just simple math.