2)h is a value you use to identify prices that have yet to fulfill condition (1)
3)(2) does not affect nature of price. only the kind of information you receive
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Disliked{quote} 1)Prices are 97ish % recurrent, full stop. 2)h is a value you use to identify prices that have yet to fulfill condition (1) 3)(2) does not affect nature of price. only the kind of information you receiveIgnored
DislikedHi, I borrow smallcat's image found here: http://www.forexfactory.com/showthre...83#post7814283. At his image, the recurrent zone is the rest of Hi/Lo - tz, the tz is at the end (low) of candle . But if i saw Eurusdd's image, the recurrent zone is a little different, it is still in Hi/Lo area, but in other side of price direction, the tz is below it. Seeing the image of Eurusdd, the transient zone is not at the end (high) of candle, where we can see a star with yellow circle there. a) Seeing Eurusdd's image, the tz is not at...Ignored
Disliked{quote} I found the original explanations in the Similarity thread given by eurusdd. The original propositions and deductions state that with the proper h value, 97% of prices are recurrent. It does NOT say that if your h value is correct, that 97% of potentially transient bars are recurrent. To answer your other question, yes, trading purely transient zones will result in you always trading against the current trend. You will need additional tools/extrapolations from the propositions to trade in sync with...Ignored
Disliked{quote} Hi mate, regarding your red text above, does he really say prices, and not bars? I think most of us are basing our h values on bars.Ignored
DislikedNow if you get the h right for a given time frame and at the current price p, the previous bars never hit p, then probability is on your side for a hit within the next h bars because the probability that p is h-transient is very low. If your h is right, this probability should be about 3%. That is 97% of the time, at least one of the next h bars should hit p. This works in theory and in practice for any stochastic process similar to the ones that govern currency prices!!! Very important: If your h is correct, then the height of...Ignored
Disliked{quote} What some of you don't realize when looking at that picture is that its not accurate. Eurusdd also mentioned he just "borrowed" it to give a visual of what he is talking about. When have you a forming zone, by assuming it is transient, it allows you to work with the hypothesis that prices above and below that zone is recurent. RRRRRRRRRRRRRRRR LTZLTZLTZ????????? RRRRRRRRRRRRRRRR With this in mind consider how price can possibly moveIgnored
Disliked{quote} {quote} It's possible that I misinterpreted it but it sounds like he's saying that the 97/3 rule only works if h is right, and p is referring to a set of prices, not bars. Thus, if a bar is partially transient and partially recurrent, I call it a transient bar. So if your h value is for example 3, then there are transient bars (and also transient prices) in a LOT of areas, way more than 3%. Not sure if that answers your question or notIgnored
Disliked{quote} No I don't think so. I mentioned it a few post earlier. Price is 97% recurrent. h is what you use to filter out the 3% via your indicator. If your h value is small then of course you will see a lot of false positives. The optimal h is a value you use to filter down the data such that it returns only 3% of the values as positive. 97/3 is the nature of price, h is the value you use to identify this values correctly. To phrase in yet another way, price remains 97/3. If you set your h to something not optimal then you are looking at data that...Ignored
Disliked{quote} No I don't think so. I mentioned it a few post earlier. Price is 97% recurrent. h is what you use to filter out the 3% via your indicator. If your h value is small then of course you will see a lot of false positives. The optimal h is a value you use to filter down the data such that it returns only 3% of the values as positive. 97/3 is the nature of price, h is the value you use to identify this values correctly. To phrase in yet another way, price remains 97/3. If you set your h to something not optimal then you are looking at data that...Ignored
Disliked{quote} Thanks mate for this good post. I just think, it must be exactly 97/3 %, or it can be have some tolerance, may be like : 96.5/3.5 , 97.1/2.99, 96.85/3.15, etc. If yes, then it must be a "tolerance" value for this . Hm , it becomes more complex. Now it is not only h & k, but there is new variable "tolerance" .....Ignored
Disliked{quote} Sorry, how do you know price is truly 97/3? I thought h was the metric used to determine price transience/recurrence, and 97/3 was a "goal" and not a "fact".Ignored
Disliked{quote} If you set your h to something not optimal then you are looking at data that tells you price is say 65/35 while the true nature of price remains unchanged at 97/3. Good luck.Ignored
Disliked{quote} If nature of price is 97/3 why looking for H? Better to buy or sell randomly than looking for a H that reduce your probabilties...Ignored
Disliked{quote} LOL that has crossed my mind. If you don't like to use H to get you 97/3, you can use K instead.Ignored
Disliked{quote} {quote} Lets agree for now that price is indeed 97/3, then your hypothesis is correct. In fact given that condition, all you need to do is just randomly pick any price value of X on your chart and you have a 97% working probability that price will return to your chosen value of X at some point in time. But do you really think the above premise can really be traded? If you cannot get past this point I am afraid the discussion will have to end here.Ignored
Disliked{quote} {quote} Lets agree for now that price is indeed 97/3, then your hypothesis is correct. In fact given that condition, all you need to do is just randomly pick any price value of X on your chart and you have a 97% working probability that price will return to your chosen value of X at some point in time. But do you really think the above premise can really be traded? If you cannot get past this point I am afraid the discussion will have to end here.Ignored