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Higher Edge within a Single Candlestick

  • #1,961
  • Dec 20, 2017 2:49am Dec 20, 2017 2:49am
Quoting R3ta
{quote} Ninjatrader, if you want to dive into scalping I suggest to try it out. In my years of trading I still have to find a better platform for charting.
Thanks man. I am limited to US brokers and just a few offshore brokers who accept US traders.

I am already scalping CP style and my demo account has influx'd with micro and nano pips. All kidding aside, the edge is definitely there to give a lead indication from 30 seconds to 90 seconds. "You take what you get and get out" type deal.

Quoting R3ta
{quote} Ninjatrader, if you want to dive into scalping I suggest you to try it out. In my years of trading I still have to find a better platform for charting on <1m TF.
Also/not sure if you have seen this image. It explains pretty much everything in a comprehensive manner (with still some questions but atleast it lays out a good blueprint

https://www.forexfactory.com/attachm...9&d=1513155858
Staying in my lane...
  • #1,962
  • Dec 22, 2017 10:47am Dec 22, 2017 10:47am
Quoting VEEFX
{quote} Thanks man. I am limited to US brokers and just a few offshore brokers who accept US traders. I am already scalping CP style and my demo account has influx'd with micro and nano pips. All kidding aside, the edge is definitely there to give a lead indication from 30 seconds to 90 seconds. "You take what you get and get out" type deal. {quote}
You can use FXCM free datafeed to run charts with NT, and then use your preferred broker for placing orders. I often use multiple platforms for different purposes.

Quoting VEEFX
All kidding aside, the edge is definitely there to give a lead indication from 30 seconds to 90 seconds. "You take what you get and get out" type deal. {quote}
The edge is in the fractal nature of the market, coupled with the real world characteristics of how price behave at it's basic structure. Movements on higher timeframes are very similar in nature to the ones you can encounter on lower timeframes and even 1-sec charts (fractal nature); but at the same time a tick chart can highlight every "basic" price movement that usually are overlooked when trading on timeframes above 1 minute.

By analyzing price behaviour on such basic scale you'll realize there's a distinct occurence of what I call "price impulses": small but steady price movements (usually 5-20 pips) that occurs when price tend to deviate from a reference point, which can be fixed or floating like a 24h moving average, during high liquidity intervals. These quick and steady movements constitute low risk opportunities (high probability and low exposure) and are what ultimately higher candlesticks and major trends are "made of" (for the most part) so it can be true that there's a "higher edge within a single candlestick".

Quoting VEEFX
Also/not sure if you have seen this image. It explains pretty much everything in a comprehensive manner (with still some questions but atleast it lays out a good blueprint https://www.forexfactory.com/attachm...9&d=1513155858
I've seen that image and it ultimately shows how CP trades. The indicator itself is some sort of over-layered MA oscillators with different time periods to represent different timeframes and different oscillator's levels to highlight momentum conditions for each oscillator. I don't know exactly what parameters CP is using but if you look at my chart from the previous page you can see I use a similar process; in that example three different envelopes to filter out only the current most probable trend direction and an oscillator to pull the trigger (same as CP).

If you apply the right filter conditions, what is left out are only the most "deviant" or "extreme" price movements, I guess this is what CP cryptically referred when talking about dimensions.

The problem with trading on such smaller TF are many and it would take a bit to explain it all, first of all finding a good alchemy of filters to remove all the choppy movements, fake breakouts, weak movements. If you're interested I can explain in details, but in that case I promise I will try to be as clear as possible.
  • #1,963
  • Dec 22, 2017 11:04am Dec 22, 2017 11:04am
Quoting R3ta
{quote} You can use FXCM free datafeed to run charts with NT, and then use your preferred broker for placing orders. I often use multiple platforms for different purposes. {quote} The edge is in the fractal nature of the market, coupled with the real world characteristics of how price behave at it's basic structure. Movements on higher timeframes are very similar in nature to the ones you can encounter on lower timeframes and even 1-sec charts (fractal nature); but at the same time a tick chart can highlight every "basic" price movement that usually...
Good explaination R3. Please continue. I am in agreement with everything you are saying and experiencing these past few days to looking at tick charts in mt4. I have noticed frequency to be a challenge as one could take every impulse and still make a pip or 2. The beauty of tick charts is you KNOW when you are wrong to get out.... with a strong dose of discipline which is key. I also cannot get a handle on putting 1-2 pip hard stop loss in an active market like london. it's incredible if CP really does what he claims. Only HFT algo is feasible to trade this style and he is doing this for 16 yrs is an astronomical achievement. Take a look at RPARM's post on this thread. the edge of 0.3 pips vvia HFD is very much proven concept just by watching one londen session. The gravy is in CP's discretionary exits imo. I will also add that CP seeks to have edge in early warning of under 30 seconds maybe 60 seconds max. if you are late, the signal is no longer valid BUT it still appears to be a valid trade tricking us (or me). I will also say this with high certainty. Once can simply trade naked tick charts (perhaps with one MA) without these fancy indicators

Quoting VEEFX
{quote} Good explaination R3. Please continue. I am in agreement with everything you are saying and experiencing these past few days to looking at tick charts in mt4. I have noticed frequency to be a challenge as one could take every impulse and still make a pip or 2. The beauty of tick charts is you KNOW when you are wrong to get out.... with a strong dose of discipline which is key. I also cannot get a handle on putting 1-2 pip hard stop loss in an active market like london. it's incredible if CP really does what he claims. Only HFT algo is feasible...
EDIT: To add further and I am seeing this in all timeframes. The SECRET is not in the setups. The Secret is in the duration and scale of any setup or any indicator or any price action or any news or any instrument or any market. It's in understanding the "life cycle" which has a definite start and end. It might be possible to predict when this life cycle event could start but impossible to predict for how long and it's intended scale (or range in pips if you will). Start = reaction/impulse. How long=forcer/momentum How far=deep understanding of price behavour.
Staying in my lane...
  • #1,964
  • Dec 22, 2017 12:16pm Dec 22, 2017 12:16pm
Quoting R3ta
If you're interested I can explain in details, but in that case I promise I will try to be as clear as possible.

I would also be very interested in your findings
  • #1,965
  • Dec 23, 2017 7:03am Dec 23, 2017 7:03am
CP method, not difficult to understand, use longer timeframe as filter and lower timeframe as entry, for exit, to be safe can use only lower timeframe signal to exit. since every reversal grow from smallest tf.

The fact that he keep mentioning trade with the trend already give a big clue, since the other trading style of fading momentum require a trader to know when exactly the momentum stop after he entered, there is no indicator that can predict that, it takes predictive thinking in order to trade that style, so it certainly isn't CP style considered he use his indicator to calculate.

The fact that he is trading from the smallest increment price move already indicate that he trade trend, reversal, retracement, from a trader on a higher timeframe perspective.

Alright he also mention, he trading style lose its effectiveness on higher timeframe, well for this I have a different opinion, but I can understand why he think that way, the rationale behind this is the smallest tf capture the slightest move of the price, so if someone really have orders to work on, a slightest move have more chance to continue if the orders are really real. However, it doesn't mean that a big move on higher tf won't result in a similar move after a pause at a later time, it all depends.

Well, how far the longer timeframe filter one want to use will depend, but I suspect anything on 1h is enough, calculate the standard deviation of price move from 1h, 30m, 15m, 5m, 1m, and tick, all those commonly used timeframe, once all signal reach a certain standard deviation, enter. Since he applied longer tf, sharp price spike that immediately reverse will not cause longer tf to move, thus avoiding fake out.

But still there is a problem, once position is entered even all timeframe signal have confluence, there is no guarantee that price will not reverse, this is why a trader have to cut loss fast based on the signal of smallest timeframe, since longer timeframe signal is lagging.

Of course he can also compare signal of different currency pair together so he is more certain about a current momentum move, that is basically what I think he is doing, am glad to hear everyone insights.

Regards
  • #1,966
  • Dec 23, 2017 7:27am Dec 23, 2017 7:27am
Quoting R3ta
{quote} If you're interested I can explain in details, but in that case I promise I will try to be as clear as possible.
I am interested too. Is it possible to get this edge programmatically, or you must see it on the chart?
  • #1,967
  • Dec 23, 2017 9:12am Dec 23, 2017 9:12am
Quoting VEEFX
{quote} The SECRET is not in the setups. The Secret is in the duration and scale of any setup or any indicator or any price action or any news or any instrument or any market. It's in understanding the "life cycle" which has a definite start and end. It might be possible to predict when this life cycle event could start but impossible to predict for how long and it's intended scale (or range in pips if you will). Start = reaction/impulse. How long=forcer/momentum How far=deep understanding of price behavour.
You hit the nail!

I'm also trying to learn more about this problem. How to predict price ranges, what is the relationship between time, price, volatility..?
Price/time series modeling is very complicated stuff. Especially for people who are not professionals with math.

IMHO, one of the most valuable and simple tools is sqrt(t). With this simple formula we can do some very interesting experiments.

For example we can calculate the average expected range for any point in time. Then we compare the result with the current range and based on this we can also make estimation of the likelihood for correction or expansion with any length. (10% 20% 50%, 100%...).
  • #1,968
  • Dec 23, 2017 2:56pm Dec 23, 2017 2:56pm
Quoting alphaomega
{quote} You hit the nail! I'm also trying to learn more about this problem. How to predict price ranges, what is the relationship between time, price, volatility..? Price/time series modeling is very complicated stuff. Especially for people who are not professionals with math. IMHO, one of the most valuable and simple tools is sqrt(t). With this simple formula we can do some very interesting experiments. For example we can calculate the average expected range for any point in time. Then we compare the result with the current range and based on this...
Does it really need to be estimated though ?
CP stated that his system is based on the fact that markets are chaotic. He dosent need to predict anything because he could even trade random data.
The truth is hidden from you
  • #1,969
  • Dec 23, 2017 3:58pm Dec 23, 2017 3:58pm
Quoting MaxenshteinD
{quote} Does it really need to be estimated though ? CP stated that his system is based on the fact that markets are chaotic. He dosent need to predict anything because he could even trade random data.
Yes, you have to estimate the volatility and the range. Otherwise how do you manage the risks? How do you set targets?

I don't know how CP or the others trade, but I know one thing for sure - you cannot beat random walk! Especially when you add transaction costs on top.
It's always negative sum game.

Now the real question - is Forex random walk? The answer is NO! Or more precisely it's only partially random.
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  • #1,970
  • Dec 23, 2017 5:49pm Dec 23, 2017 5:49pm
Quoting alphaomega
{quote} Now the real question - is Forex random walk? The answer is NO! Or more precisely it's only partially random. {image}
Of course it's at most partially random. One cannot actually assume that something involving human emotion and insurmountable sums of money -- can actually be 100% random... that's silly.

One can't assume that every pip of price movement is controlled either... sounds no more than the preaching of a fanatical believer of a religion called MarketMakerism to me..
  • #1,971
  • Dec 24, 2017 3:41am Dec 24, 2017 3:41am
Quoting Branflakes
{quote} Of course it's at most partially random. One cannot actually assume that something involving human emotion and insurmountable sums of money -- can actually be 100% random... that's silly. One can't assume that every pip of price movement is controlled either... sounds no more than the preaching of a fanatical believer of a religion called MarketMakerism to me..
besides wrong or right assumptions is there any physical evidence (on chart) that market maker's trading is random?
NO MATTER THE SITUATION,NEVER LET YOUR EMOTIONS OVERPOWER YOUR INTELLIGENCE
  • #1,972
  • Dec 24, 2017 9:56am Dec 24, 2017 9:56am
Quoting alphaomega
{quote} You hit the nail! I'm also trying to learn more about this problem. How to predict price ranges, what is the relationship between time, price, volatility..? Price/time series modeling is very complicated stuff. Especially for people who are not professionals with math. IMHO, one of the most valuable and simple tools is sqrt(t). With this simple formula we can do some very interesting experiments. For example we can calculate the average expected range for any point in time. Then we compare the result with the current range and based on this...
It's incredibly hard and that is why i feel so strongly against single chart/TF analysis. There is no "absolute" edge in a single candle or single chart or single timeframe or single pair. If there is such existance, there would be far more FX Billionaires than one or two in the world. There could be an existance of "Relative" edge via MTF or multipair or fundamental+sentiment but anything and everything requires cutting losses short and letting winners run a little bit longer. CP's edge is not in his indicator or secret formula but it is truly in his ability to place tight stops and squeeze as many pip(s) he can get every day. Its a very very tiny edge amplified by his discipline and focus to execute every day! I am pretty sure 99.99% of us will fail even if he shares his entire trading plan. London is fast and GU during London is furious. Try trading 10 lots with 2 pip SL. Many won't survive beyond a week.

Trading is hard. Understanding the market behaviour is Harder but Execution is the hardest. Being a Sniper for 16 years is impossible!
Staying in my lane...
  • #1,973
  • Dec 24, 2017 10:36am Dec 24, 2017 10:36am
Quoting alphaomega
{quote} Yes, you have to estimate the volatility and the range. Otherwise how do you manage the risks? How do you set targets? I don't know how CP or the others trade, but I know one thing for sure - you cannot beat random walk! Especially when you add transaction costs on top. It's always negative sum game. Now the real question - is Forex random walk? The answer is NO! Or more precisely it's only partially random. {image}
Thank you. Merry Christmas.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #1,974
  • Dec 24, 2017 1:58pm Dec 24, 2017 1:58pm
Quoting Trader-Waldo
{quote} besides wrong or right assumptions is there any physical evidence (on chart) that market maker's trading is random?
Market Makers are opportunistic, taking advantage of imbalances between Supply & Demand. There is no one entity powerful enough to control each pip movement of any market. When liquidity is thin, they might mark up or mark down prices, but usually it quickly snaps back. The advantage is that they have the authority to see where orders are, immediately knowing the current sentiment. If given the chance, you would take advantage of this as well

They are obligated to fill orders, but regulation on "HOW" to do so is not quite tight, so they are, for a lack of a better phrase, "self-regulated".



Or I might just be a lunatic and completely insane in the head, oh wells
  • #1,975
  • Dec 24, 2017 2:45pm Dec 24, 2017 2:45pm
Quoting Branflakes
{quote} Market Makers are opportunistic, taking advantage of imbalances between Supply & Demand....If given the chance, you would take advantage of this as well ...
Thank you. MM run their business(trading) and therefore reserve right to do what is best in their interest...nothing suggest and/or I could not recognize random trading.
NO MATTER THE SITUATION,NEVER LET YOUR EMOTIONS OVERPOWER YOUR INTELLIGENCE
  • #1,976
  • Dec 25, 2017 7:34am Dec 25, 2017 7:34am
Quoting alphaomega
{quote} You hit the nail! I'm also trying to learn more about this problem. How to predict price ranges, what is the relationship between time, price, volatility..? Price/time series modeling is very complicated stuff. Especially for people who are not professionals with math. IMHO, one of the most valuable and simple tools is sqrt(t). With this simple formula we can do some very interesting experiments. For example we can calculate the average expected range for any point in time. Then we compare the result with the current range and based on this...
hi, can you give me a tool to mt4 change to black interface? i saw this on a post by you 2015 on this forum, thanks before
  • #1,977
  • Dec 25, 2017 4:55pm Dec 25, 2017 4:55pm
Quoting edaytra
{quote} hi, can you give me a tool to mt4 change to black interface? i saw this on a post by you 2015 on this forum, thanks before
Use the <F9> key. Select black for your background and a lighter color for you foreground. Did that do it for you?
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #1,978
  • Dec 26, 2017 4:20am Dec 26, 2017 4:20am
Quoting TooSlow
{quote} Use the <F9> key. Select black for your background and a lighter color for you foreground. Did that do it for you?
hi, thanks, no...not work, i mean, the color for the frame from mt4, not in the charts....
so the total interface change to black.....
  • #1,979
  • Edited 8:32am Dec 29, 2017 3:12am | Edited 8:32am
Hello, Rparm. I read all your posts in this thread and in your thread "Market constants".
Quoting Rparm
Sometime ago I wanted to know if tick data could be traded, specifically EVERY SINGLE tick that prints in a NEW direction, example: Down, Down, Down, UP <(Buy on this UP tick because price will continue UP with greater likelihood than reverse)
I wanted to know what maximum possible cost one could pay per trade (slippage, commission, and spread) and make profit on average for every time a new tick would print (a tick in a new direction that is). The answer was an approximate 3 points (0.3pips) of cost per trade is the maximum allowable...
I did this test in c# on tick data. I don't know when you exit your trade: I thought 2 options -
1. Down, Down, Down, UP(BUY), UP/Down(Exit). You exit on the next tick whether it is up or down;
2 - Down, Down, Down, UP(BUY), ..., Down(Exit buy and Sell). You exit on opposite direction and open new trade.
So I tested both options.
I get only 0.14p per trade on EURUSD from 2010-2017. Then I go from ticks to pips, and the best I got 1.4p per trade.
Then tried to do the same on GBPUSD, and I got < 0.1p per trade. So I thought something is wrong here. And I found that 70-80% are the most profitable trades in 2010 year on EURUSD. And when tested on EURUSD from 2011-2017 the result was 0-0.1p per trade. So maybe your exit was different that you got so much pips per trade.

Quoting Rparm
I have found 3 Biases, and I am working on the 4th, and I do estimate that there are approximately 6.
Is your Biases are all in different types? For example(what i think the same type is) if you got 1 bias in ticks, does the second bias is in bigger dimension( 2 or 3..10 ticks, even pips)?
Are you getting on every Bias the expectancy per trade > 0p? I thought that daily(1Hour, 1 minute..) range can be a good bias, but I can not get any expectancy from this.
Another Bias could be: In bullish candle, the lower wick is painted before higher wick more then frequently then opposite. In bearish candle it is the same but in opposite order.
Maybe someone did the same test and got similar results like me or Rparm?
IenDzi.
  • #1,980
  • Dec 30, 2017 12:11pm Dec 30, 2017 12:11pm
For better or worse - this topic has become in my eyes, something to follow.

Keep the discussing going guys...and happy New Year!
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