Disliked{quote} You are a hopeless case. You clearly can't trade and can't prove you do but seem to have a chip on your shoulder for anyone that can trade. The pic you have in your profile about fundamental analysis says it all. Only a retard will dismiss the primary speculative driver in the market he is trading. I bet your charts look like an xmas tree all bling bling. Petty it doesn't help you be more successful at it.Ignored
Trading Myths and Some Forex Math
Thanks a lot for all your discussions ... Now, since I'm back from my FF holidays, I'd like to continue and show my personal interpretation of the relation between price and volume.
There are many traders out there incorporating volumes and volume-based approaches in their day-to-day trading. Others claim that the FX volume isn't real volume (i.e. money/contracts traded) and thus the analysis of FX volume would be useless. Indeed, imho FX volume isn't real volume. But it is highly correlated to real volume.
However, I like to view FX volume as a measure of market activity. In the forex market the volume counter goes 1 up whenever a price change (may it be 1 tick or a jump by 5 ticks) happens. Thus, it reflects the frequency of price changes and thus the activity/speed by which orders are processed in the FX market. However, FX volume depends on the quality of the data feed your broker supplies. Some brokers update their price feeds rarly while others update almost all price changes immediately.
Now let's consider how the volume figures may look like under particular market situation. Let's assume that we are in an up trend. Thus, there will be more price breakouts to the up than to the down side. If the trend is strong then price will hardly "retrace", i.e. there will be hardly any down ticks. When this trend now comes to an end the number of people willing to sell increases. Thus, the number of down ticks may increase, too. Thus, the tick volume will increase since the number of down ticks increases and may generate a "resistance" for the buyers in the market. And as a consequence the overall FX volume will increase, too.
Thus, one scenario could be to assume that candles with a higher tick volume (higher than "average") may indicate a resistance. We therefore could try to identify candles with a higher tick volume. A lot of people do this by checking out if one candle's tick volume is above the moving average of former candlesticks. However, since they use the MA they will see 50 % of the candles having a higher volume than the average candlestick.
Moreover, the volume is also influenced by the candlestick morphotype itself. For instance, if you take a hammer-like candlestick and compare it's volume with an almost completely bullish/bearish candlestick (marbuzo) of the same range, you'll find that hammers tend to contain higher volumes.
This observation let me develop the concept of the prize path: I asked myself how price usually creates a candlestick. The answer was quite simple:
Price usually (in > 75 % of all candles) from the open to the wick associated with the open, then to the opposite wick and finally closes. Thus, (based on this parsimonious view) we can say that prices within the wick are hit at least twice during the lifetime of a candlestick while the prices within the body are hit at least once in the same time):
prize path = 2 * (high - low) - abs(open - close)
Since every price changes (every tick) adds to the number of the FX tick volume, we can now compare the tick volume itself to the price path for each and every candle and see how well they correlate. If the correlation is high enough (i.e. the points defined by the prize path and the tick volume lie on a straight line) we may use this formula in order to determine during which candles an extraordinarily high tick activity happened (erratic price action, thus that prices within the wicks and/or the body have been revisited multiple times). This relationship is shown for multiple TFs in the image below (my data seem to have been a bit buggy for the H4 and D1, thus the bifurcation):
The next step could be the determination of threshold lines (parallel to the regression line) that indicate the highest (e.g.) 5 % activities and the lowest (e.g.) 5 % activities.
PS: As alway, this is all my personal interpretation and personal theories. I don't recommend to trade using this data alone. However, I hope that it may help anyone to incorporate/further develop it in her/his trading.
There are many traders out there incorporating volumes and volume-based approaches in their day-to-day trading. Others claim that the FX volume isn't real volume (i.e. money/contracts traded) and thus the analysis of FX volume would be useless. Indeed, imho FX volume isn't real volume. But it is highly correlated to real volume.
However, I like to view FX volume as a measure of market activity. In the forex market the volume counter goes 1 up whenever a price change (may it be 1 tick or a jump by 5 ticks) happens. Thus, it reflects the frequency of price changes and thus the activity/speed by which orders are processed in the FX market. However, FX volume depends on the quality of the data feed your broker supplies. Some brokers update their price feeds rarly while others update almost all price changes immediately.
Now let's consider how the volume figures may look like under particular market situation. Let's assume that we are in an up trend. Thus, there will be more price breakouts to the up than to the down side. If the trend is strong then price will hardly "retrace", i.e. there will be hardly any down ticks. When this trend now comes to an end the number of people willing to sell increases. Thus, the number of down ticks may increase, too. Thus, the tick volume will increase since the number of down ticks increases and may generate a "resistance" for the buyers in the market. And as a consequence the overall FX volume will increase, too.
Thus, one scenario could be to assume that candles with a higher tick volume (higher than "average") may indicate a resistance. We therefore could try to identify candles with a higher tick volume. A lot of people do this by checking out if one candle's tick volume is above the moving average of former candlesticks. However, since they use the MA they will see 50 % of the candles having a higher volume than the average candlestick.
Moreover, the volume is also influenced by the candlestick morphotype itself. For instance, if you take a hammer-like candlestick and compare it's volume with an almost completely bullish/bearish candlestick (marbuzo) of the same range, you'll find that hammers tend to contain higher volumes.
This observation let me develop the concept of the prize path: I asked myself how price usually creates a candlestick. The answer was quite simple:
Price usually (in > 75 % of all candles) from the open to the wick associated with the open, then to the opposite wick and finally closes. Thus, (based on this parsimonious view) we can say that prices within the wick are hit at least twice during the lifetime of a candlestick while the prices within the body are hit at least once in the same time):
prize path = 2 * (high - low) - abs(open - close)
Since every price changes (every tick) adds to the number of the FX tick volume, we can now compare the tick volume itself to the price path for each and every candle and see how well they correlate. If the correlation is high enough (i.e. the points defined by the prize path and the tick volume lie on a straight line) we may use this formula in order to determine during which candles an extraordinarily high tick activity happened (erratic price action, thus that prices within the wicks and/or the body have been revisited multiple times). This relationship is shown for multiple TFs in the image below (my data seem to have been a bit buggy for the H4 and D1, thus the bifurcation):
The next step could be the determination of threshold lines (parallel to the regression line) that indicate the highest (e.g.) 5 % activities and the lowest (e.g.) 5 % activities.
PS: As alway, this is all my personal interpretation and personal theories. I don't recommend to trade using this data alone. However, I hope that it may help anyone to incorporate/further develop it in her/his trading.
Another myth:
In many trading videos or threads (@FF, too) you can see/read suggestions to use multiple indicators in order to complement your analysis. However, this can be only useful if the indicators (for given settings) are unique and don't show identical signals all of the time. A while ago I wondered why so many technical indicators have been developed. After a while I started to understand how these indicators are calculated and that they widely show identical signals for similar settings.
For instance, look at the image below:
In the price panel I added a Donchian channel with a calculation period of 60, a simple moving average as well as the ZigZag indicator.
The Donchian channel is built by taking for each candlestick the highest and lowest price over a lookback period. Let's call this High-Low-difference the range. This range can be used as a measure of volatility of the market. However, the mid-range (shown as mid Donchian band) may be interpreted as the "average" price over the lookback period. If you compare this mid range with a common simple moving average (SMA, period 60), you can clearly see that both lines are somehow related: The SMA moves around the mid Donchian band and the turning points of the SMA and the mid range are almost always identical.
Now a question: How would our chart look like if we would flatten then upper and lower Donchian bands?
The answer is simple: If we normalize the price in regards to the upper/lower Donchian band (show the relative position of the price within the Donchian channel) we would just end up with a common stochastic indicator (I haven't drawn this in the image above in order to keep it simple). The value of the common stochastic oscillator just shows the relative position of the close price within the Donchian channel.
The common stochastic oscillator is calculated as
If we would calculate the stochastic as
So, we've seen that the high and low stochastics are highly related to the common stochastic oscillator (which uses the current candle's close price for its calculation). Now let me tell you that the ZigZag indicator is basically a combined high/low stochastic indicator and thus highly related to the common stochastic indicator, too. Whenever the current candle's high is the highest in the lookback period (high stochastic reading of 100), the ZigZag indicator will print an up leg. If later on another reading of 100 is generated before the low stochastic prints 0, this leg is repainted. The same is true for 0 readings of the low stochastic indicator. The 1st indicator panel shows all repainted and permanent legs for the ZigZag(60,0,0).
I hope the above discussed relations between the Donchian channel, stochastic indicator, moving averages, and ZigZags gave you a small impression on how similar many indicators are. Well, you can of course use multiple indicators in order to complement your analysis. However, please make sure first that you use settings that generate "different" results to the other indicators ...
Every indicator is unique:
Use multiple indicators to complement with each other
In many trading videos or threads (@FF, too) you can see/read suggestions to use multiple indicators in order to complement your analysis. However, this can be only useful if the indicators (for given settings) are unique and don't show identical signals all of the time. A while ago I wondered why so many technical indicators have been developed. After a while I started to understand how these indicators are calculated and that they widely show identical signals for similar settings.
For instance, look at the image below:
In the price panel I added a Donchian channel with a calculation period of 60, a simple moving average as well as the ZigZag indicator.
The Donchian channel is built by taking for each candlestick the highest and lowest price over a lookback period. Let's call this High-Low-difference the range. This range can be used as a measure of volatility of the market. However, the mid-range (shown as mid Donchian band) may be interpreted as the "average" price over the lookback period. If you compare this mid range with a common simple moving average (SMA, period 60), you can clearly see that both lines are somehow related: The SMA moves around the mid Donchian band and the turning points of the SMA and the mid range are almost always identical.
Now a question: How would our chart look like if we would flatten then upper and lower Donchian bands?
The answer is simple: If we normalize the price in regards to the upper/lower Donchian band (show the relative position of the price within the Donchian channel) we would just end up with a common stochastic indicator (I haven't drawn this in the image above in order to keep it simple). The value of the common stochastic oscillator just shows the relative position of the close price within the Donchian channel.
The common stochastic oscillator is calculated as
common stochastic = 100 % * (close[i] - lowest) / (highest - lowest),
with highest = highest high within lookback period and lowest = lowest low within lookback period.If we would calculate the stochastic as
high stochastic = 100 % * (high[i] - lowest) / (highest - lowest)
orlow stochastic = 100 % * (low[i] - lowest) / (highest - lowest)
we would obtain an indicator with a very high correlation to the common stochastic indicator. Whenever the current candle's high would be the highest within the calculation period the high stochastic would return 100, if the current candle's low would be the lowest low within the lookback period the low stochastic would return 0. The high and low stochastics are shown in the 2nd indicator panel in the attached image.So, we've seen that the high and low stochastics are highly related to the common stochastic oscillator (which uses the current candle's close price for its calculation). Now let me tell you that the ZigZag indicator is basically a combined high/low stochastic indicator and thus highly related to the common stochastic indicator, too. Whenever the current candle's high is the highest in the lookback period (high stochastic reading of 100), the ZigZag indicator will print an up leg. If later on another reading of 100 is generated before the low stochastic prints 0, this leg is repainted. The same is true for 0 readings of the low stochastic indicator. The 1st indicator panel shows all repainted and permanent legs for the ZigZag(60,0,0).
I hope the above discussed relations between the Donchian channel, stochastic indicator, moving averages, and ZigZags gave you a small impression on how similar many indicators are. Well, you can of course use multiple indicators in order to complement your analysis. However, please make sure first that you use settings that generate "different" results to the other indicators ...
- #227
- Sep 24, 2018 4:43pm Sep 24, 2018 4:43pm
- Joined Jun 2006 | Status: Adios! | 3,377 Posts
Staying in my lane...
Keep Your Eyes Healthy 
I've been sitting in front of the trading screen for 18 years now. And I have been using the computer since 1996.
At 38, I have perfect 20/20 vision and can still see/read fonts further than 20ft.
This is no accident and it takes work. You need to exercise your eyes.
This only applies if you had/have healthy perfect eye sight since you're a child.
If you have deformity and certain eye conditions, this doesn't apply to you. No amount of exercise is going to fix your eyes.
1. SCREENS
Minimum Full HD 1080p 60-100hz (and not smaller)
Size 32inch (and not smaller)
Long story short; anything smaller than the above stats provided has lots of flickering, refresh rates, contrast issues that will strain your eyes.
When using your trading screen:
1. Use dark or black colors for the background and not white.
2. Dim the Brightness (yes Dim it!) There should be no white, your white should be pale faded grey to dirty white. The artificial light from your screen will strain your eyes.
3. If you are going to use bigger than 32inch screen, you need to be at least 1.5m away (It's all got to do with you natural distance balance of your eye sight/muscles. And Vice versa, anything smaller than 32inch strains the eye muscles... Don't have time to explain the screen size distance ratios.
These are a MUST regarding your screens if you want to keep your eyesight healthy.
2. EYE EXERCISES
1. Take a speed reading course as it's one major component is on "How to relax you eye muscles"
It's a body awareness exercise, you should feel and know how strenuous you are exerting your eyes. And each time you exert too much, you must relax your eye muscles.
I've strained my eyes for 2 years back in 1999, 2000 and 2001. Computer screen weren't up to par back in those days. But after straining my eyes, I educated myself in looking after them. After that, I've been reading in the shade and low light all these years and in front of the computer with no eye sight issues.
2. Perform daily eye exercise: Eye movements and Vision/Sight distance focusing
Close your eyes and move your eyes: up up down down left left right right circle around clockwise and then reverse (do this 5x)
Grab any business card, hold it out with your right hand/arm stretch. Cover left eye with left palm. with your right eye focus on 1 letter... and then slowly bring it closer to your right eye as you focus on the letter... And then slowly extend it out while still keeping focus (do this 5x). Repeat with the other eye.
3. Everyday practice reading far away sign boards, bus stops, parking signs, etc.... pin up letters on a pin board and read them far away.
Your eye muscles is like your vocal chords, you can stretch and strengthen them. Instead of tensing them, you are suppose to relax them. When you see a blurry letter, you will tense your muscle to try and focus >>> WRONG!... When you see a blurry letter, take a deep breath and relax. Focus your attention on the tension on your eyes and relax them. Your shoulders and other body parts will tense up, relax them. The blurry-ness will clear up slowly the more you follow these exercise everyday.
3. OVERALL HEALTH
Your blood vessel require good nutrition diet and exercise.
If you don't look after your overall healthy, you will have bad eyesight, despite not reading for long hours nor being in front of a computer.
=======
There are plenty of eye programs (free) to correct and keep your eyes healthy >>> Google it!!!
... Hear from someone who bursted some significant blood vessels in eye staring at charts all day. It can do permanent DAMAGE TO YOUR EYESIGHT IN THE LONG RUN
I've been sitting in front of the trading screen for 18 years now. And I have been using the computer since 1996.
At 38, I have perfect 20/20 vision and can still see/read fonts further than 20ft.
This is no accident and it takes work. You need to exercise your eyes.
This only applies if you had/have healthy perfect eye sight since you're a child.
If you have deformity and certain eye conditions, this doesn't apply to you. No amount of exercise is going to fix your eyes.
1. SCREENS
Minimum Full HD 1080p 60-100hz (and not smaller)
Size 32inch (and not smaller)
Long story short; anything smaller than the above stats provided has lots of flickering, refresh rates, contrast issues that will strain your eyes.
When using your trading screen:
1. Use dark or black colors for the background and not white.
2. Dim the Brightness (yes Dim it!) There should be no white, your white should be pale faded grey to dirty white. The artificial light from your screen will strain your eyes.
3. If you are going to use bigger than 32inch screen, you need to be at least 1.5m away (It's all got to do with you natural distance balance of your eye sight/muscles. And Vice versa, anything smaller than 32inch strains the eye muscles... Don't have time to explain the screen size distance ratios.
These are a MUST regarding your screens if you want to keep your eyesight healthy.
2. EYE EXERCISES
1. Take a speed reading course as it's one major component is on "How to relax you eye muscles"
It's a body awareness exercise, you should feel and know how strenuous you are exerting your eyes. And each time you exert too much, you must relax your eye muscles.
I've strained my eyes for 2 years back in 1999, 2000 and 2001. Computer screen weren't up to par back in those days. But after straining my eyes, I educated myself in looking after them. After that, I've been reading in the shade and low light all these years and in front of the computer with no eye sight issues.
2. Perform daily eye exercise: Eye movements and Vision/Sight distance focusing
Close your eyes and move your eyes: up up down down left left right right circle around clockwise and then reverse (do this 5x)
Grab any business card, hold it out with your right hand/arm stretch. Cover left eye with left palm. with your right eye focus on 1 letter... and then slowly bring it closer to your right eye as you focus on the letter... And then slowly extend it out while still keeping focus (do this 5x). Repeat with the other eye.
3. Everyday practice reading far away sign boards, bus stops, parking signs, etc.... pin up letters on a pin board and read them far away.
Your eye muscles is like your vocal chords, you can stretch and strengthen them. Instead of tensing them, you are suppose to relax them. When you see a blurry letter, you will tense your muscle to try and focus >>> WRONG!... When you see a blurry letter, take a deep breath and relax. Focus your attention on the tension on your eyes and relax them. Your shoulders and other body parts will tense up, relax them. The blurry-ness will clear up slowly the more you follow these exercise everyday.
3. OVERALL HEALTH
Your blood vessel require good nutrition diet and exercise.
If you don't look after your overall healthy, you will have bad eyesight, despite not reading for long hours nor being in front of a computer.
=======
There are plenty of eye programs (free) to correct and keep your eyes healthy >>> Google it!!!
I'm Flabbergasted!!! 
I'm flabbergasted!!!
nah I'm just kidding
See, why can't people be more like you, you expressed your opinion and I respect that.
These Trolls attack me personally and when I retaliate (because they personally attacked me first), they cry foul and say that I'm abusive.
===========
Anyways...
There is good and bad, black and white, negative and positive, male and female, night and day....
The universe seems to have opposite extremes.
And in between are the varying degree of shades.
On one end you have a solid >>> then soft >>> them mushy >>> then liquid >>> then vapor >>> then gas >>> then air.
Like gravity, the other extreme of gravity is or zero gravity.... Black holes and anti matter blah blah blah.
Tell me, what is the opposite of Law of Large Numbers???
Because I don't deny the law of large numbers.
But I do know the opposite of it....
If you don't know the opposite of the law of large numbers.
It's like you lecturing me about gravity and you don't know aerodynamics.
No amount of debate/discussion about a flying machine if you gonna keep presenting gravity as your argument.
In this case, arguing for the law of large numbers (which is true) and concluding "false" whilst you lacking information.
I'm flabbergasted at the audacity to tell me I'm wrong...
Good day Sir! (joking)
There was some false theory with...
nah I'm just kidding
See, why can't people be more like you, you expressed your opinion and I respect that.
These Trolls attack me personally and when I retaliate (because they personally attacked me first), they cry foul and say that I'm abusive.
===========
Anyways...
There is good and bad, black and white, negative and positive, male and female, night and day....
The universe seems to have opposite extremes.
And in between are the varying degree of shades.
On one end you have a solid >>> then soft >>> them mushy >>> then liquid >>> then vapor >>> then gas >>> then air.
Like gravity, the other extreme of gravity is or zero gravity.... Black holes and anti matter blah blah blah.
Tell me, what is the opposite of Law of Large Numbers???
Because I don't deny the law of large numbers.
But I do know the opposite of it....
If you don't know the opposite of the law of large numbers.
It's like you lecturing me about gravity and you don't know aerodynamics.
No amount of debate/discussion about a flying machine if you gonna keep presenting gravity as your argument.
In this case, arguing for the law of large numbers (which is true) and concluding "false" whilst you lacking information.
I'm flabbergasted at the audacity to tell me I'm wrong...
Good day Sir!
(joking) - #232
- Edited Sep 27, 2018 11:16am Sep 26, 2018 11:48am | Edited Sep 27, 2018 11:16am
- Joined Jul 2011 | Status: Trader | 1,035 Posts
Keep Your Eyes Healthy
I'm Flabbergasted!!!
- #235
- Edited 4:13pm Sep 26, 2018 3:51pm | Edited 4:13pm
Tell me, what is the opposite of Law of Large Numbers???
Since the laws in general state that the sample mean (the unbiased estimate of the average) converges towards the population mean with increasing N, the opposite to the Law of Large Numbers would mean that the average outcome can deviate strongly from the expectation (the population mean which is the true estimate of the average) for small numbers N.
However, I think your more simple answer would be something like ... Pure randomness.
Nevertheless, the chances are high that the sample mean will resemble the population mean in the long run (with a big sample size). Thus, if your strategy should have an outcome of 60 % correct calls but with 10 trades you just got 20 %, then ON AVERAGE you should see a number closer to the 60 % if you make 100 trades ...
- #236
- Sep 26, 2018 4:40pm Sep 26, 2018 4:40pm
- Joined Dec 2015 | Status: Suuka Maadik | 3,630 Posts
{quote} something like ... Pure randomness.
How do you get to the pure randomness outcome and how time affects it exactly?
I am sure, like 100% already, whatever your answer is, you are missing something quite big (about time).
The goal of any magician is to make you look at the wrong direction, while the "magic", which is no magic at all, in a first place, happens outside your eye sight. The Manipulation, that looks like "magic" happens outside your straight eye sight.
You can watch some documentaries on YouTube about how "magic" works. Same is with charts. There is zero randomness in price moving app. If it was random outcome, randomly, the forex market would go broke, at any or some point in time. There would be no markets any longer.
How and when the price app times it, is completely different, from what the candles are showing us.
When there is a crime, there are footprints left. Price app cannot time it unnoticeably. To make the "magic" work, we have to look at the candles/TFs/ext. Everything there is 50/50. Time, however, varies from 55/45 to 67/33. While everything on the chart is still 50/50. But there is a trend? Could it be because of the time?
Maadik Hugiis. IQ 69.
{quote} AC, where is time in your randomness formula?
BTW - I haven't said that markets are random or not. I know that there are indications for both points of views and I even stated it in my 2nd post that we just assume (for this post) that markets are random.I'm quite sure that any connection between price and time my brain could think about atm wouldn't be the correct/your answer. Maybe you could enlighten us and show what you mean?!?
- #238
- Sep 26, 2018 5:26pm Sep 26, 2018 5:26pm
- Joined Dec 2015 | Status: Suuka Maadik | 3,630 Posts
{quote} Yay - another riddle
Unfortunately, I cannot enlighten you, cause I am a fool myself and there is absolutely nothing you could learn from a fool like me...
Anyways, thanks for the honest answer.
Maadik Hugiis. IQ 69.
{quote} Ah, you are like a wet soap in the bathroom - very hard to catch!
But I'm sure I could learn a lot from you - let's start with this very good question from IenDzi ... You know how you can pm me
- #240
- Sep 26, 2018 6:50pm Sep 26, 2018 6:50pm
- Joined Jun 2006 | Status: Adios! | 3,377 Posts
Staying in my lane...