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Higher Edge within a Single Candlestick

  • #1,041
  • Oct 5, 2017 4:03am Oct 5, 2017 4:03am
Quoting mzvega
"The smallest time unit between changes in the price of any currency pair is called a single tick, and a sequence of consecutive ticks is referred to as streaming data. During period of heavy trading, there may be as many as three hundred ticks in a single minute. Conversely, during periods of low trading (such as in certain minor currency pairs over the weekend), several hours can elapse between individual ticks. Tick data does not have an open, high, low, or close quote it simply tells the previous price. The OHLC quotes occur only after tick...
So, correct me if i?m wrong, your point is that the tick frequency over a given period in time tells you price direction.
In other words this is momentum; but momentum is not a constant, so it can give clues about direction that are very short living as momentum can vary very fast. A shift in momentum does not mean necessarily a change in direction.
For sure you can trade momentum but it is just a way between many others.
The key is first to understand "the why of things", thereafter you will be able to do whatever you want getting consistent results anyway; what is "the why?" it is the cause: on your charts you can see only the effect, whatever kind of analysis you can point out you are analysing only the effect. Find the cause and understand it, this is the only analysis you need.
  • #1,042
  • Oct 5, 2017 4:05am Oct 5, 2017 4:05am
Quoting AntiCre
{quote} I think most of us haven't thought that it was unbeatable. However, we just used CP's statement and checked it in a scientific way. It is obvious that the method will work if the roulette is biased.
do you really think all the roulette are unbiased ? have you factored in minor defect on the wood or in the bearing etc etc?

try create random function on excel it always form trend its "pseudo random"
Closer To Dream
  • #1,043
  • Oct 5, 2017 4:09am Oct 5, 2017 4:09am
Quoting kprsa
{quote} We just showed that the long sequence of n random steps, if it is to end above the reference line will look like a “up” candlestick with an open value of 0 (ref line), close value of sqrt(2 n /pi) and an expected high value of sqrt( pi n/2)... So I am actually quite convinced it is beatable - it wouldn’t be in case of a doji i.e., if we wouldn’t buy above the line and sell below it. CP is right imho. k
Exactly. I've stated earlier that forex isn't comparable to roulette.

However, the question is what we can do with that info?! We only know that prize will deviate from it's open. But how to trade it? A buy/sell every single time the prize crosses that line and the spread may eat up the profit.

Does the difference between the theoretical candlestick morphology and a recent deviation from it mean anything? I think we've already discussed about the pi-river-forex theory elsewhere @ FF ...
  • #1,044
  • Edited Oct 6, 2017 1:59am Oct 5, 2017 4:18am | Edited Oct 6, 2017 1:59am
Quoting strongtrader
{quote} That's right. Therefore matter is crystalized energy, energy creates matter: so what should you focus on?
I have delved pretty deep into the theory surrounding this rabbit hole before and it is fascinating. The nuts and bolts of it is that it appears that you can continue to strip away the supposed constants of nature and conservation laws until you are left quite literally with 'nothing'....but not the nothing we might assume (being absentia) but the 'nothing' that actually is a something, namely an isotropic homogenous state with no structure at all, The structure and stuff are just broken symmetries or the ultimate illusions.

The only way you get to understand this journey is by understanding the processes involved to arrive at this conclusion. A simple statement of 'what is' actually is the handwaving statement of no substance apart from being a definition. The proof comes in validating the processes necessary to arrive at your outcome.

As you have mentioned before and I am not stating anything new to you S as I am aware of your understanding on these ideas, this is an age old method and not simply a deductive process of science. The rational thinking mind can deduct these conclusions through gedanken experiments alone. Refer to the 'Ship of Theseus' paradox for example. In fact the great theories of physics usually commence as thought experiments alone before they are passed to the mathematician to convert into the theory.

All that is required in most recent fairly well accepted scientific theory backed up by results from the Large Hadron Collider to create the illusion of matter is a particular configuration of a system requiring an observer or measuring device undergoing a particular form of motion and the energy of the vacuum under particular system constraints. The entire arrangement is referred to as a bound configuration state.
  • #1,045
  • Oct 5, 2017 4:19am Oct 5, 2017 4:19am
Quoting AntiCre
{quote} I've stated earlier that forex isn't comparable to roulette.
I was actually referring to the sequence of roulette wheels, sorry for not being explicit: The random walk is imho beatable.
k
  • #1,046
  • Oct 5, 2017 4:20am Oct 5, 2017 4:20am
Quoting Copernicus
{quote} Yep. It was a cracker of a post that looked at the actual process of how a candle is derived from ticks to highlight the shortcoming of the approach of using a visual representation to describe the reality. A lesson for some that simply trade what they see. In the candle there is uncertainty as the description is incomplete as mzvega has already described. The riddle is not in which direction price moves in the candle as all we have at our disposal is the O,H,L,C. The riddle of trading the candle is in how you manage the risk of uncertainty...

.......and this is the "Crucial Point" !!
  • #1,047
  • Oct 5, 2017 4:38am Oct 5, 2017 4:38am
Quoting Copernicus
{quote} I have delved pretty deep into the theory surrounding this rabbit hole before and it is fascinating. The nuts and bolts of it is that it appears that you can continue to strip away the supposed constants of nature and conservation laws until you are left quite literally with 'nothing'....but not the nothing we might assume (being absentia) but the 'nothing' that actually is a something, namely an isotropic homogenous state with no structure at all, The structure and stuff are just broken symmetries or the ultimate illusions. The only way...
Exactly.....
  • #1,048
  • Oct 5, 2017 5:42am Oct 5, 2017 5:42am
Quoting jimsterk
{quote} Hi AntiCre, Actually, the difference does not come from the underlying distribution, but come from the process of generating OHLC. While you use "runif(4)" to create your OHLC, I created a single candlestick by generating psuedo-tick data. So if I change my code "cumsum(rnorm(n_ran))" to "cumsum(runif(n_ran,min=-1,max=1))", I still get 25-50-25. But I also don't know the outcome if I use other distribution. {quote} Good point. As medici said before, I don't think I can find something useful...
I don't understand your proces of generating a candlestick with pseudo-tick data. Either way, there will always be an underlying distribution. It's easy enough to check, simply generate a histogram of your dataset that generated in the candle.

IF the distribution is uniform, THEN IMO it is truely random and unpredictable. And hence unprofitable. Again, this would result in a 33-33-33 candle.

However IF the distribution is different, e.g. a normal distribution THEN this would result in a 25-50-25 candle as you have shown.
However in that case I believe that would give you an edge in trading, e.g.:
In a normal distribution price would tend to drift back to the normal (the middle of the candle).
So trading outliers back to the middle would be a profitable approach. Basically this would be a reversal strategy... bollinger bands would work beautifully in this case!

cheers
  • #1,049
  • Oct 5, 2017 5:56am Oct 5, 2017 5:56am
Someone in this thread made a simple and smart experiment to prove that price movements are not random, nonetheless, even after the proven prove people still discuss about price randomness; the assumption is that whatever is unpredictable is random.
This is one of the many mind issues that unable you to understand until you won't accept that the problem is not price but your mind.
We have a hard desire to control and dominate everything so everytime we face with something that we are not able to understand and control, for us it does not exist or it is random: that is to say that is coming from nothing.
For how I see things this way of thinking is that naive and absurd.
Why we think so? Because for our ego is unconceivable to face with something bigger that is out of our domain; we even believe to be beyond nature and we constantly dare it, albeit nature constantly resumes its control over us, often throughout big disasters. Either when this occurs the resposibility is not on human stupidity but on killer nature, so that our ego is satysfied.
The result is that we learn nothing and go on doing the same things and everything repeats itself.

I'm going to provoke you now but I'm serious; it's not a joke, just strong food for thoughts.
I state that market system, and not only it, is so complex due to its infinite number of variables, that we simply are not able to calculate and control it; our actual maths knowledge is not enough, yet being it a system it is driven by a logic that we can comprehend; once we know the logic behind it we can elaborate a method driven by the same logic to extract an edge from it that will allow us to profit from it.
But, to achieve such a result we need a different way of thinking.

Example: look at the picture below

Attached Image (click to enlarge)
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On the left side is a chart made with what you call "random" data, while on the right side is a chart made with real time price quotes (GBP_USD 1min).
They look almost the same.....why? how can it be possible that "random" data equals to real data?
I state that randomness doesn't exist at all, is just a human illusion to feed its egoic need of control.
The true reality is that nothing is random, neither human behavior; everything is driven by the same scheme.
Would you conceive this point of view, your study and research would change upside down and you wiould begin to walk on the path that will lead you to understand the cause of everything; once you know the cause you can either anticipate the effect and/or manage it.
  • #1,050
  • Edited 6:26am Oct 5, 2017 6:12am | Edited 6:26am
Quoting strongtrader
I state that randomness doesn't exist at all, is just a human illusion to feed its egoic need of control.
That's the way how science works. Thus, if we don't know what causes the unexplainable outcome of an experiment, we call the effect random. However, the concept of randomness is a beautiful thing since we can deal with the unexplainable and unexpectable things. We can attribute a particular behaviour (the distribution) to the phenomenon and thus can study it.

The only question is how one is able or not to detect deterministic behaviour in forex. Since we haven't experienced the same knowledge and non of you "enlightened" persons will ever share a proof, this discussion on randomness or determinism is a dead end.
  • #1,051
  • Oct 5, 2017 6:40am Oct 5, 2017 6:40am
Quoting RondaRousey
{quote} Who has returned 100% year to date on a live account? with at least 200 trades so it was not luck. If not, you are a noob and should not be posting garbage and acting like a "guru"
I won't compare with anyone and I never said that I'm a better trader than you or someone else. You completely misinterpret my point. My way (and I guess the way of most others here) of thinking is a scientific one. And in science I can only believe what has been supported with strong evidence. Show me a post where I stated that it's not possible to predict the market with certainty?! I think it is possible but since I haven't experienced the deterministic behaviour of markets I can't make any use of the statement that markets are fully predictable. I have to stick to what I believe and what I can experience ...

BTW: If markets are completely deterministic it should be possible to be 100 % correct (no loss).
  • #1,052
  • Oct 5, 2017 6:44am Oct 5, 2017 6:44am
Quoting strongtrader
Someone in this thread made a simple and smart experiment to prove that price movements are not random, nonetheless, even after the proven prove people still discuss about price randomness; the assumption is that whatever is unpredictable is random. This is one of the many mind issues that unable you to understand until you won't accept that the problem is not price but your mind. We have a hard desire to control and dominate everything so everytime we face with something that we are not able to understand and control, for us it does not exist or...
"once you know the cause you can either anticipate the effect and/or manage it"

Perhaps there is a cause. But, we don't know what it is.
No cause, therefore no reason, therefore for all intent and purposes moves are random until some evidence proves the contrary.
As a matter of fact, it's more profitable to treat any price move as random and "expect the unexpected".. so if they is a cause -- invariably it's always on hindsight -- then I don't care about it.
  • #1,053
  • Oct 5, 2017 6:53am Oct 5, 2017 6:53am
I think strongtrader may well be referring to our minds as being the cause of everything. We should be looking within, learning more about it and exploring the endless possibilities.
  • #1,054
  • Oct 5, 2017 7:36am Oct 5, 2017 7:36am
Quoting AntiCre
{quote} That's the way how science works. Thus, if we don't know what causes the unexplainable outcome of an experiment, we call the effect random. However, the concept of randomness is a beautiful thing since we can deal with the unexplainable and unexpectable things. We can attribute a particular behaviour (the distribution) to the phenomenon and thus can study it. The only question is how one is able or not to detect deterministic behaviour in forex. Since we haven't experienced the same knowledge and non of you "enlightened" persons will ever...
What if Forex would not have a deterministic behavior?
You will never find anyone sharing on a public forum the core of his knowledge, because this knowledge has costed years of hard work and struggles; only a fool would share all this value with a stranger.

What you can expect to find here is food for thoughts and clues, and already is a lot for those who are smart enough to see the diamonds between the shit; thereafter you have to do your work.
If you want to be spoon feeded find a mentor and pay for his work.

And I can add that even would I share now with you the result of my hard work you won't be able to understand because you do not have yet the right mindset.
It is not a crytic, the same has happened to me in the far past; you know, it is not a matter of proves but intuition.
How do you think that Newton discovered gravity? did he ask for proves before conceiving it?
Did Einstein looked for proves before conceiving his relativity theory?
They uncovered their amazing discoveries using their intuition and believing in their intuitions; then, and only then, they looked for proves.
And how people reacted when they made the announcement of their intuitions? They laughed at them until they were been able to prove even the evidence.
This is the huge difference between great minds and poor minds.

Everybody asks for and pretends this and that doing nothing and for free: don't pretend, be thankful, because you only can receive what you can give.
  • #1,055
  • Oct 5, 2017 7:40am Oct 5, 2017 7:40am
Quoting Mingary
{quote} "once you know the cause you can either anticipate the effect and/or manage it" Perhaps there is a cause. But, we don't know what it is. No cause, therefore no reason, therefore for all intent and purposes moves are random until some evidence proves the contrary. As a matter of fact, it's more profitable to treat any price move as random and "expect the unexpected".. so if they is a cause -- invariably it's always on hindsight -- then I don't care about it.
Indeed you are going no where, aren't you?
How many years have you been trying in vain to succeed in Forex?
Don't you think that maybe the problem is how do you think?

btw it is not an attack, just trying to help you to open your eyes.....peace
  • #1,056
  • Oct 5, 2017 7:43am Oct 5, 2017 7:43am
Quoting Waforex
I think strongtrader may well be referring to our minds as being the cause of everything. We should be looking within, learning more about it and exploring the endless possibilities.
Yes, you got it !
  • #1,057
  • Oct 5, 2017 7:49am Oct 5, 2017 7:49am
Knowing too much, Understanding very little (Part 2)
Quoting kprsa
We just showed that the long sequence of n random steps, if it is to end above the reference line will look like a “up” candlestick with an open value of 0 (ref line), close value of sqrt(2 n /pi) and an expected high value of sqrt( pi n/2)... So I am actually quite convinced it is beatable - it wouldn’t be in case of a doji i.e., if we wouldn’t buy above the line and sell below it. CP is right imho.
Quoting AntiCre
This time you have a > 2 % higher chance of getting black instead of red (P(red) = 0.4769289, P(Zero) = 0.02658463, P(black) = 0.4964865). Even then the average outcome is negative. Even in the case of a 2 % edge CP would have lost in the long run. Mabye he really was lucky and found a roulette table with an even higher edge. However, these cases should be very rare. We are not here to believe everything - we are here to check facts and to draw conclusions.
You can grab 100 scientist to check the facts and they will draw up the wrong conclusion because they don't know what they are doing.
A lot of people know the science... but don't understand it. There's a big difference in "Knowing something" versus "Understanding something".
There were hundreds of scientists who checked the facts and said Einstein was wrong. What facts where they checking?

Anyways...
There are only 2 outcomes (Roulette, Coin tossing or FOREX):
A) Divergence away from the mean
B) Reversion toward the mean
Attached Image (click to enlarge)
Click to Enlarge Name: A or B.png Size: 14 KB

A) Divergence away from the mean is exploitable as X moves away from the mean (or a reference point).
Smart people grabbed their calculators and punched numbers and concluded that I was wrong because Coin tossing and Roulette is Reversion toward the mean, they argued. Law of large numbers states that after given a large sample of coin toss and roulette spins, it will revert back to the mean around 50%. That's why in the long run CrucialPoint will lose and he was simply lucky playing roulette.

B) Reversion toward the mean is exploitable as X is guaranteed to move towards the mean.
Now, if you don't believe the guarantee of moving back toward the mean... then it will go opposite and Diverge away from the mean.
But, Nobody believed Divergence away from the mean and argued towards the mean, but now arguing there is no guarantee reversion towards the mean? SO which is it.... A)divergence away from the mean or B)Reversion toward the mean?
Bloody hell, make up your mind boys and girls!

Attached Image (click to enlarge)
Click to Enlarge Name: A or B 2.png Size: 18 KB

If you are a hardcore roulette player you would have seen those runaway 15-25 consecutive same colors. Personally, I've seen 42 consecutive same colors in a row. Since I was hardcore, my research done in Melbourne Crown Casino is as follow: In every 10 Roulette tables, there will be a 1 table runaway of 12-20 consecutive same colors every 2hrs-3hrs. If you too a hardcore roulette player you would know what I'm talking about.

If you are A) Divergence away from the mean, Congratulations as you exploit the trend and compound your profits. If it is not a runaway and still diverge away from the mean your profits are just much smaller.
But if you are a hardcore B) Reversion towards the mean, Congratulations because now that you have 20 consecutive reds, it is now imbalance and will revert back to the mean. The probability of more blacks is now higher to go back to mean and is exploitable. Now, you can't argue with me and say that "There is no memory" and "it can continue and not revert back". Because if that is your argument, then you changing your mind into A) Divergence away from the mean, which you didn't agree with me in the first place.
Bloody hell, make up your mind boys and girls!

Attached Image (click to enlarge)
Click to Enlarge Name: A or B 3.png Size: 16 KB

Now, some fucktards will present me a different set of Reversion to the mean stats (Which is also correct), but again, any different kind of reversion back to the mean stat you present is still exploitable... because it will revert back to the mean. You profit because, you don't enter unless the imbalances are in your favor. You stay on the sideline. All statistical calculation was to enter every fucking spin, hence the conclusion of no exploitable statistical edge.
Just like in Black Jack, I don't play every hand to count the cards and lose the money until the imbalances occur. I'm on the sideline letting other people bet. I keep my money and when the right time to jump in I enter. I don't lose money counting the cards.

If for some reason now you are convince of exploiting B) reversion towards the mean, don't go gangbusters to the casino because you will lose. Everyone here argues between A or B spouting stupid statistics they don't understand. I'm going to tell you the reality and will spark another debate >>> The reality is that it is a fluctuation between A) and B) whether it is roulette, coin tossing or Forex.
Now, how to exploit the alternating fluctuation between A) and B) is another story. If you guys were struggling to exploit either A or B, well good luck with reality; an alternating one. If you guys pay close attention to my previous posts, I've actually answered that question regarding with the cheetah. Again, that will be another SWAMI/GURU type of argument/debate for those who doesn't want to do any homework in analyzing the Cheetah.

Anyways... Some fun facts:
SYSTEM A) Divergence away from the mean
Trend Following, Break outs, Turtle traders, Donchian channels, momentum, buy high sell low, Accumulations, Buy OB Sell OS, Fibonacci extensions etc...
SYSTEM B) Reversion towards the mean
Ranging, Channels, Contrarian, Counter-trend, swing, buy low sell high, Consolidations, Sell OB Buy OS, Fibonacci retracements etc...

When System A is working, System B is failing and vice versa.
I do have a hybrid system that works in all market conditions.
"You're full of BS CrucialPoint... why do you wear that neon light around your neck, flashing the word: scalper?"

CrucialPoint: because it looks cool
  • #1,058
  • Oct 5, 2017 7:50am Oct 5, 2017 7:50am
Quoting strongtrader
Everybody asks for and pretends this and that doing nothing and for free: don't pretend, be thankful, because you only can receive what you can give.
Sorry, but slowly I believe that most of you can't read. Point me to a statement where I asked for spoon feed or where I said that I don't like what you post/say. This is a forum and thus it should be obvious that people have different opinions ...

To come back to science (yes, I'm a scientist and not an intuitive trader), there is a general principle (Occam's razor/maximum parsimony): Out of two theories the theory with the least (expensive) assumptions is most probably the right one. However, this theory should be testable under certain instances. Since I've never found a theory implying determinism that withstanded my tests I had to stick to the former assumption that prize process is (pseudo) random. Does it mean that prize isn't deterministic? No!
  • #1,059
  • Oct 5, 2017 8:01am Oct 5, 2017 8:01am
Quoting strongtrader
{quote} Indeed you are going no where, aren't you? How many years have you been trying in vain to succeed in Forex? Don't you think that maybe the problem is how do you think? btw it is not an attack, just trying to help you to open your eyes.....peace
Ok. Thanks for your reply, I appreciate it. So, please do tell me what is the right mindset (:
Speaking of intuition, I will give you three leads for a way to think (i.e. the right mindset) that is of the utmost imporance to win this game:

https://en.wikipedia.org/wiki/Cognitive_dissonance
https://en.wikipedia.org/wiki/Pareidolia
https://en.wikipedia.org/wiki/Phlogiston_theory

You can thank me later ..

Now your turn, tell me something.
  • #1,060
  • Oct 5, 2017 8:03am Oct 5, 2017 8:03am
Quoting CrucialPoint
Knowing too much, Understanding very little (Part 2) {quote} {quote} You can grab 100 scientist to check the facts and they will draw up the wrong conclusion because they don't know what they are doing. A lot of people know the science... but don't understand it. There's a big difference in "Knowing something" versus "Understanding something". There were hundreds of scientists who checked the facts and said Einstein was wrong. What facts where they checking? Anyways... There are only 2 outcomes (Roulette, Coin tossing...
.......and that's it!!!

"You're full of BS CrucialPoint... why do you wear that neon light around your neck, flashing the word: scalper?" CrucialPoint: because it looks cool

I love it!!!!
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