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Dax - Statistical approach to trading

  • Post #1
  • Quote
  • First Post: Jan 16, 2018 11:39am Jan 16, 2018 11:39am
Hello Traders,
I would like to share here how I approach the markets. I am from Germany, I used to traded for one local prop firm. I mostly scalp futures contracts, but I do trade forex as well, that’s why I am creating this thread. I will share here how I approach Dax, which is now really popular and thanks to the cfd is affordable.
My forex trading is based on simple probabilities, which I will share here with you. I hear all the time that certain set up has higher probability of X %, but retail traders have no idea, what does it mean. I will try to post my trades and the logic behind them. In order to diversify my trading accounts I am undertaking the challenge from ftmo.com. I will also post my excel sheets with calculated studies. For most of you it is going to be super boring, for some, it might be interesting .

How I trade in a nutshell? I am using a ZigZag indicator (programmed for me by my friend) to find impulsive moves, impulsive move is a move which happens just in 27% of time. I have done excessive studies on this subject. I have found that on 1MIN TF are impulsive moves from 25+ points. As soon as impulsive move forms I am waiting for a correction to enter in a direction of the continuation move. The continuation happens in about 70 % of the time. As soon as the correction gets below the mid of the move, I am usually out, because just 19 % of these impulsive moves gets the continuation, but it depends on the situation.

Attached Image (click to enlarge)
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Interesting thread HeinzTrader. Subscribed.
Have you tried applying this to renko charts considering that you are using a zigzag pattern as your foundation?
How consistent are your probability stats? Are these stats taken over a reasonable amount of time with narrow variations? Or wide swings?
Cheers
Quoting HeinzTrader
Hello Traders, I would like to share here how I approach the markets. I am from Germany, I used to traded for one local prop firm. I mostly scalp futures contracts, but I do trade forex as well, that’s why I am creating this thread. I will share here how I approach Dax, which is now really popular and thanks to the cfd is affordable. My forex trading is based on simple probabilities, which I will share here with you. I hear all the time that certain set up has higher probability of X %, but retail traders have no idea, what does it mean. I will...
Your study has some similar points with a study that I'm trying to improve from time to time. I'm FDAX intraday trader that is searching a less stressful and more rational way of trade.
I attach last M15 FDAX chart with blue and red the impulsive candle. When it happens, most of the move have been already done.
So I turn my focus ONLY on black and white candle (excluded DOJI or similar) where there is high chances that market is preparing next move.
I put "change" text above/below those candles. If I will able to better explore those candles I will take from the beginning the new trend.
I hope you'll find some similar points to your approach and help me to improve my analysis.

Attached Image (click to enlarge)
Click to Enlarge Name: M15experiment.png Size: 38 KB
I call upon my father's spirit , watching over me
Hi guys,

thank you for your replies. I will post more on the subject of impulsive moves probably on the weekend. Today I was really busy with trading. It is important to trade the impulsive move with other statistics. The easiest study is probably this one:
Attached Image


I have tested last 500 days and discovered that from 86% is broken high or low of the previous day, which makes it a great target. Once the yH or yL is broken, then the second extreme is a great support because both yH or yL are broken just in 14%. How to use this study?
Attached Image (click to enlarge)
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Today I used another great study. Yesterday we closed near the low of the day, from around 88% when this happen, the next day is broken yLow. So today I was just shorting and made nearly 900 USD. I will talk about this study later.

HT
  • Post #5
  • Quote
  • Edited 5:25am Jan 23, 2018 3:02am | Edited 5:25am
Quoting HeinzTrader
Hi guys, thank you for your replies. I will post more on the subject of impulsive moves probably on the weekend. Today I was really busy with trading. It is important to trade the impulsive move with other statistics. The easiest study is probably this one: {image} I have tested last 500 days and discovered that from 86% is broken high or low of the previous day, which makes it a great target. Once the yH or yL is broken, then the second extreme is a great support because both yH or yL are broken just in 14%. How to use this study? {image} Today...
Hi Heinz,

Just a question.

Which High/Low do you use in your statistics? RTH/Cash High/Low or ETH/Future High/Low?

Regards,
DD
"It's better to be out wishing to be in... than to be in wishing to be out!
In my terminology this is Frequency Distribution and I very much look forward to this continuing.
Hi everyone,
I have no excuses for not writing here, I will be more active. Atleast one post a week. Markets were really volatile, which was really good for my strategy so I concentrated solely on trading .

To Dutchy Daxy
I use the daily range according to the Eurex exchange open and close time. Which is in Germany 08:00-22:00.

Today was a great day to trade. Why? I had a great target = (yL). Yesterday Dax had a range aproximately 178 points and Dax closed in the lower 20 % of the range. 0% = would mean that Dax closed at the absolute low, 100 % would mean that Dax closed at the absolute high.

If you take 1600ish previous days and calculate what you can expect when previous day closed at 20% of its range you get this information:

1) 23% for yH to be broken
2) 74% for yL to be broken = awesome logical target for today´s seasion.
3) 12% for yH and yL to be broken
4) 89% for yH or yL to be broken.

I have accomplished to pass the FTMO challenge in 10 days. Now I am in the verification. wish me luck
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HT
Very interesting, thanks.
I have found that usually there are normally three pushes in a move, so following a continuation should work ~2/3=67% of the time, which agrees with your statistics of 70% of continuation quite well.
Following with interest.
k
Hi Heinz,

Very interesting. Thanks for sharing. I would definitely like to hear more about the continuation trade and if it can be used for other timeframes.

For the 20% closing trade, can we simply flip the statistics if the market closes in the upper 20% of the day's range ie:
Closes in lower 20%:
1) 23% for yH to be broken
2) 74% for yL to be broken = awesome logical target for today´s session.
3) 12% for yH and yL to be broken
4) 89% for yH or yL to be broken.

Closes in upper 20%:
1) 23% for yL to be broken
2) 74% for yH to be broken = awesome logical target for today´s session.
3) 12% for yL and yH to be broken
4) 89% for yL or yH to be broken.

Chewie
Hi Heinz,

Would you also be able to share your ZigZag indicator settings?

Thanks,
Chewie
Hi all,

I want to show you very simple study, but very powerful one. I have already mentioned this study, but I want to give you the whole results. In this study I analysed close location, how it is the close location calculated?

My formula is:
1 – (High – Close)/(High – Low) = Close location.

If a day closes at the top, the close location is 100%
If a day closes at the low, the close location is 0%
If a day closes at the middle of its range, the close location is 50%

Here are results what can you expect for the given close locations.
Attached Image


So what is important from this table?
If the previous day closed at the very high, then the next day you have a great opportunity to target previous day´s high if the current day opens in the range of the previous day. If you do not have long signals, just do not trade short, because in the long term, you will probably lose money.

In general, the probability for breaking yH or yL is really high and once is the yH/yL broken the area around the other extremes becomes the support/resistance. This results are very similar to the previous day study, but this statistics are much more precise.

I want to show you two trades I took today using the Impulsive move strategy. The market was slow so I had just a small positions (profit around 300 bucks) if the market was more active I would have targeted with a part of my position the previous day H or L.
Attached Image (click to enlarge)
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HT
That's great. Many thanks again, Heinz.

Chewie
Quoting Chewie
Hi Heinz, Would you also be able to share your ZigZag indicator settings? Thanks, Chewie
Hello Chewie,

I would love to share the ZigZag indicator settings, but this indicator is not the useless default one in the MT4. My friend gave it to me. I will ask whether I can share it.

HT
  • Post #14
  • Quote
  • Edited 12:52pm Mar 14, 2018 11:15am | Edited 12:52pm
Hi Heinz - its always interesting to see what a serious professional Dax trader has to say. Added your thread to my watch list
Trading Levels with WRBs & Aggressive, Volatile Volume
Thanks Heinz and all contributors. Dax can be very difficult to trade at times - especially during the volatile times which we now seem to be in. So anything that helps stack the odds in a trader's favour is greatly appreciated.

Chewie
thanks op for sharing this wonderful trade idea , however is the zigzag indi can be shared?
Quoting kanusuko200
thanks op for sharing this wonderful trade idea , however is the zigzag indi can be shared?
Firstly I will ask whether it is possible to translate the zigzag indicator to english and I after that I might share it. As I said, this indicator is not mine, it was given to me.
Quoting HeinzTrader
Hi all, I want to show you very simple study, but very powerful one. I have already mentioned this study, but I want to give you the whole results. In this study I analysed close location, how it is the close location calculated? My formula is: 1 – (High – Close)/(High – Low) = Close location. If a day closes at the top, the close location is 100% If a day closes at the low, the close location is 0% If a day closes at the middle of its range, the close location is 50% Here are results what can you expect for the given close locations. {image} So...
Hi HeinzTrader, what if the market hits the H/L first before having any setups ? Will you still continue to trade into that same direction ?
Heinz - I've got more ZZ indicators than I can count in my archive folder, including the one you show in your chart so I don't see what the problem is.
Heinz and just for interest if you look at WAB's Animal Farm thread there is some stuff in there about impulsive moves.
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