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Where's The Edge?

  • #121
  • Oct 24, 2022 12:29pm Oct 24, 2022 12:29pm
Quoting TonyTepeli
Hi ryuryu. Thanks so much for your like chalk and cheese ideas that are much way tendentious to other traders. Somewhere along the discussion you said edge= math, I am much way believer of math & Physics just like any other, I humbly requesting any substantiate proposition regarding Fibonacci trading tool as one among the controversial ideas you objected. Do you believe in golden ratio Ø=(1+√5)/2 =1.618...... Why in most trends ( down trends & uptrends) this golden ratio in maths tend not to be defied by price action and give nice entry in...
Try and find sometime to study what is left of the pythagoreans, afer pythagoras past his school ran for some years last man standing there before he passed burnt most of the notes however what was salvaged is free to find on the net. Sequence numbers. Did you know pythagoras had an edge too which was energy far powerfull to solve mathamatics in addition Nikola Tesla said the same in one of his last interviews he had an edge and everything is a game. The EDGE is all i hope some people begin to understand this and can be found in most things universal.
  • #122
  • Edited 1:21pm Oct 24, 2022 12:40pm | Edited 1:21pm
Quoting Trig
Did you know pythagoras had an edge too which was energy far powerfull.
Hhh thanks buddy I'll look it up , theoretical and mathematical physics are area of my profession little did i know about pythagoras burnt works.
back to discussion i want to know what is Ryu views regarding Fibonacci and golden ratio.
I live in the future
  • #123
  • Edited 2:36pm Oct 24, 2022 1:44pm | Edited 2:36pm
Great Topic Riskcuit! Hello RickM

**Here is my Edge**

I created an ea that takes into consideration 200 conditions(parameters) using 1 Hour Bar(as an example) across 3 previous months of trading.

Conditions can be anything: patterns, session times, various indicators, SL, Trailing's, various TPs, Sup/Res, Pivots, etc...you name it....These 200 conditions are the most important conditions I trade throughout my 10 years experience in trading.

Every month I optimize these 200 conditions across previous 3 months and pick the best set of inputs. Not all conditions will be used in the inputs for live trading front month as not all conditions were profitable during previous 3 months of optimization.

The Edge: If I achieved the best results during previous 3 months with these inputs, using that momentum during front Live trading month, I am expecting at least 25% of profits of the previous 3 month best inputs.

So my edge is **momentum of the inputs** during previous 3 months going forward 1 month.

It took 3 years to develop ea, it takes 3 days to optimize conditions properly per each instrument traded and I use MT5 Cloud Servers to do it on "every tick".
  • #124
  • Oct 24, 2022 3:00pm Oct 24, 2022 3:00pm
Quoting driven18
Great Topic Riskcuit! Hello RickM **Here is my Edge** I created an ea that takes into consideration 200 conditions(parameters) using 1 Hour Bar(as an example) across 3 previous months of trading. Conditions can be anything: patterns, session times, various indicators, SL, Trailing's, various TPs, Sup/Res, Pivots, etc...you name it....These 200 conditions are the most important conditions I trade throughout my 10 years experience in trading. Every month I optimize these 200 conditions across previous 3 months and pick the best set of inputs....
Finally someone with input (ryuryu and som others, too, thanks). Please all others: please do us a favor and stop posting nonsense, like YOU are the key, thank you. That's so far fetched, no one can make sth. out of it.

Here some profitable strategies: -
-Marketmaker Hunting (to key levels they go always, that means market imbalance in between these levels and you can profit of that in between) - can be used as trend or anti-trend trading.
-Retracement trading (kicking ass of big boys because you have the edge of dropping your whole position in one second (at least most times) - they can't)
-News-Trading always have edges but is difficult to back test. Why has it always an edge? Because of imbalance in market

Ok, I give you one important hint you can start with: You only can win if there is a market imbalance!!! Write that in your head. The reason is simple: If there is no market imbalance you play roulette with the same losing strategy like in a casino (the "0" are the transaction costs).

Thanks @driven18 to confirm my thoughts about that. I do the same and it works. It works because industry is not changing in a month. I'm less focusing on Indi's like you but more on the big boys so I see when they are starting or want to end a trend.

One more frome me: My best CRV (chance-risk-ratio, mathematical proven - that has nothing to do with the R:R ratio (which is most times nonsense because of probability) is about 2:1. That means your account gains 20000 per Year and you lose 10000 per Year.
Commom good strategies produce about 1.5 (gain) : 1 (loss), small market edges around 1.2 : 1 .

Am I already millionaire with all that knowledge? No! Can I make 30% per Year? Yes, easily. Can I make more than 60% per Year? No.

I hope some of you got a bit of an insight of what a trader life means. It is very hard and to be honest I don't recommend it to anyone, do something else! I could already write two doctoral thesis about forex. TWO !
  • #125
  • Oct 24, 2022 3:48pm Oct 24, 2022 3:48pm
Kin amazing intellectual drivel
every Saint has a past. Every Sinner has a Future
  • #126
  • Oct 24, 2022 3:50pm Oct 24, 2022 3:50pm
Quoting JackintheBox
Here some profitable strategies: - -Marketmaker Hunting (to key levels they go always, that means market imbalance in between these levels and you can profit of that in between) - can be used as trend or anti-trend trading. -Retracement trading (kicking ass of big boys because you have the edge of dropping your whole position in one second (at least most times) - they can't) -News-Trading always have edges but is difficult to back test. Why has it always an edge? Because of imbalance in market Ok, I give you one important hint you can...
Well said pal, RickM always talk about this, do traders listen?
Buh thanks for your highlights on this.......
With regards
TonyT
I live in the future
  • #127
  • Oct 24, 2022 4:03pm Oct 24, 2022 4:03pm
Quoting driven18
Great Topic Riskcuit! Hello RickM **Here is my Edge** I created an ea that takes into consideration 200 conditions(parameters) using 1 Hour Bar(as an example) across 3 previous months of trading. Conditions can be anything: patterns, session times, various indicators, SL, Trailing's, various TPs, Sup/Res, Pivots, etc...you name it....These 200 conditions are the most important conditions I trade throughout my 10 years experience in trading. Every month I optimize these 200 conditions across previous 3 months and pick the best set of inputs....
Hi driven18

Where have you been hiding for the last two years.

Interesting concepts using 200 inputs to optimise a EA for current conditions over the last three months, then setting a high benchmark as your goal.

Do you know how many inputs professional Algo traders consider the point where optimisation just turns into curve fitting showing beautiful results in backtesting but actually producing terrible results in actual real live trading?.

The answer 3. Instead professionals will just run 30 - 60 different EA’s in a portfolio and mesh them together that way. One of my good trading buddies called Sharks loved to build very large EA’s as well although not with anywhere near than amount of inputs, he found the issue is always one thing.

They freeze, the coding hits a wall no matter how clever the developer was in writing it.

I would love to see some optimisation tests if you feel like showing them. lol

Cheers Mate
Trading thin liquidity at the boundary of the charts
  • #128
  • Oct 24, 2022 4:32pm Oct 24, 2022 4:32pm
Quoting joyny
{quote} All "math only" based methods rely 100% on patterns statistics. Each algo trader using different patterns for entries/exit conditions. Patterns profitability % fluctuates in longterm. There are 2 kind of patterns: rare (1 entry per year) but highly profitable. And 2nd type are "oscilating".. some period "working" and then "not working". On 2nd case algo trader needs to find when pattern can be used and when stay away of it. Math needed here is not kind of "2+3 =5" but a bit complex. And without coding skills not possible. You need hundreds...
The math or an edge is anything you can measure that has a "stable" difference from what would be expected in a normal distribution.

For example, in a coin toss, we have 2 possible outcomes. This means in a perfectly normal distribution, heads would show as much as tails over time.

If you consistently see that heads come up more than tails over long periods, this is a "stable difference" you can exploit.

The most stable difference in price charts is its kurtosis.

A normal distribution has a value of 3. Prices are way different.

They are still hard to trade though because kurtosis is about the only difference that is actually stable.

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It's also harder to trade because the greater the difference doesn't necessarily mean the easier it is to capture/target with a system.

Quoting RickM
{quote} It doesn't matter if we run 65 EA's on 15 different strategy's, the profits earned never covered the thousands of hours wasted on developing them.
The edge does not lie in signals or indicators, it lies in the distribution and how you position yourself to target differences from normal. This is why data mining EAs doesn't work. The process is built on the premise that indicator settings will work to capture the edge, when they simply can't because of how they work.

If you are using something like fixed SL & TP or indicator entry and exits, they will only work if there is a large skew in the distribution, as this is what powers that kind of edge.

The largest edge observable is excess kurtosis and if you use anything besides a function of price & time to try and capture it, you will always cut your trades before they capture the actual edge in the distribution. This includes all indicator exits and nearly all fixed-take profits if you are trading a low-risk high reward-type strategy.

Quoting BWilliam
The point is the basis from where we draw conclusion whether the perceived idea has any merit or not can be determined in a more objective quantified manner.
Beautifully said! The math is only as good as the premise it's built on!

This is why the 1+2 = 3 comment from someone earlier is meaningless.

I'd argue the math is only good when it uses the premise of "if things are efficient, then they are normal, they there are differences that you consistently observe in a distribution that is different than what would be seen in a normal scenario, you have an edge you can target"

The key is, an edge you can target. A difference in and of itself is not an edge, it just shows you what you need to target/how you need to structure your system.

Quoting JackintheBox
{quote} Please all others: please do us a favor and stop posting nonsense, like YOU are the key, thank you. That's so far fetched, no one can make sth. out of it.
I agree with the sentiment hear and I think the main thing people need to get is, YOU can not save yourself from a negative EV game.

There is nothing you can do to beat roulette, even if you play a perfect game (assuming you will continue to play indefinitely).
ri · skuht
  • #129
  • Oct 24, 2022 5:03pm Oct 24, 2022 5:03pm
Quoting Riskcuit
The math or an edge is anything you can measure that has a "stable" difference from what would be expected in a normal distribution. For example, in a coin toss, we have 2 possible outcomes. This means in a perfectly normal distribution, heads would show as much as tails over time. If you consistently see that heads come up more than tails over long periods, this is a "stable difference" you can exploit. The most stable difference in price charts is its kurtosis. A normal distribution has a value of 3. Prices are way different. They are still hard...
here
  • #130
  • Edited 6:47pm Oct 24, 2022 5:11pm | Edited 6:47pm
Quoting RickM
{quote} Hi driven18 Where have you been hiding for the last two years. Interesting concepts using 200 inputs to optimise a EA for current conditions over the last three months, then setting a high benchmark as your goal. Do you know how many inputs professional Algo traders consider the point where optimisation just turns into curve fitting showing beautiful results in backtesting but actually producing terrible results in actual real live trading?. The answer 3. Instead professionals will just run 30 - 60 different EA’s in a portfolio and mesh...
RickM, how you doing ..I been good, fully vaccinated and living life to the fullest. It was a good month so I decided today to give back to community, "as they say".

Here are my answers in the most simple form - "Show me the Money"

Each trade has a SL of no more then 2.5%, however I let the profits run up to the most significantly optimized logical TP point for the previous 3 months. 200 input parameters were optimized(including Switch boxes in many of them), 120 of the inputs brought at least + 0.3 percent toward the bottom line and those inputs are being traded in October.

First equity line, here is optimized Equity curve with the best results over the months of July 1 - September 30 using 1 lot per 25K, so in this example 4 lots per 100K.

Second equity line are my Live results based on those optimized inputs for present month of October.

I prepared very robust ea(3 years in the making) and have no freezing whatsoever. I use 1000s Cloud Servers from MT5 Cloud Service to test every parameter on "every tick". It is expensive and time consuming but "O" so worth it.(See this month Profit).

Not every month is profitable and I will be OK with 50% per year but I am going for 8% a month, 100% a year.....so far so good.

And just to remind rookies or still not successful traders - It will take you at least 5 years to get to your personal "AHA" moment. If you stick it out and continue your hard and **relentless** work, it WILL happen for you, almost guarantee.

And then, there is psychology of it all while in the trade...that is the edge that is the hardest to obtain.
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  • #131
  • Oct 24, 2022 6:20pm Oct 24, 2022 6:20pm
Quoting Shabs19
{quote}
@TT The CHICKEN was first - Am I right ?

Hi Shabs,
Well I could probably debate on behalf of both, same as many questions,
including the one on this thread
But that's just me

Keep up the good work Shabs, you have shined some light for folks, both here & elsewhere thank you
While I will be very happy to just watch for the answer here now

And once the answer has arrived
of course every trader will then be able to implement the answer and enjoy exactly the same success

(you understand what I mean pal, see ya )
  • #132
  • Oct 24, 2022 6:29pm Oct 24, 2022 6:29pm
Quoting JackintheBox
{quote} Finally someone with input (ryuryu and som others, too, thanks). Please all others: please do us a favor and stop posting nonsense, like YOU are the key, thank you. That's so far fetched, no one can make sth. out of it. Here some profitable strategies: - -Marketmaker Hunting (to key levels they go always, that means market imbalance in between these levels and you can profit of that in between) - can be used as trend or anti-trend trading. -Retracement trading (kicking ass of big boys because you have the edge of dropping your whole position...
Apologies Jack if only one had realised this is your thread, you started it too you must have - looks like this thread is already loosing its true idealism. Edge is not about telling people what or what not they can do, Short but sweet un subscribed good look to all who sail in this merry ship,
  • #133
  • Oct 25, 2022 6:11am Oct 25, 2022 6:11am
Quoting Riskcuit
Where's the Edge? {image} After spending many years lurking on trading forums, looking at hundreds, of systems and strategies, I always have been left wondering, where is the edge? The system looks great. The chart is a work of art for Pete's sake. The ideas and logic behind the entries and exits sound logical, but the edge is never seen. All too often, it's nowhere to be found. Some people argue it's in risking less than you stand to make. But simple math easily debunks the idea that a particular risk:reward ratio alone can give you an edge. Technicians...
This is quite the conversation starter thread. I have a very simple and different logic to most of the above.

To me it's all about exploiting algorithms to benefit from small fluctuations in the markets. Algos work solely on some complex (but not complicated) rules which are based on indicators, perhaps mildly altered by programmers to suit market conditions. From what I've read, and I have researched algos a lot, most big orders are objectivised to get the best price for the clients. Which is why, in my experience, pivots and EMAs work the best as indicators since these are points where big orders are being filled, which were not filled in one go.

If one can put in enough screen time in any given circumstance to understand how the market is moving (and why it's moving differently from yesterday/last week) one can find some sort of an edge. Again, these edges are constantly changing from what i can tell and no retail trader will be able to maintain a single edge indefinitely. So essentially, it's a mundane occupation which requires just waiting and staring at a chart trying to find some discernible pattern to trade not knowing whether it will win or not. But in the very short term the patterns may have a higher probability of repeating themselves which could prove to be an interim edge until the inevitable change in market conditions in which case its back to waiting and drawing random lines and looking at price reactions to levels.

Some people find the edge by identifying a trend. Some people by swinging. I believe it's how you identify the structure and take punts accordingly. It's never a sure game obviously.

Of course, I don't have any proof for this, this is just my fantasy theory. Which does keep me afloat. But my point is that even if there is an edge there is no constant edge. That would just be the holy grail and who's the richest man again? I really don't think he day-trades or has an edge. He makes rockets and electric cars and talks about random things on twitter.
  • #134
  • Oct 25, 2022 7:02am Oct 25, 2022 7:02am
Quoting goldfish3
{quote} .. But my point is that even if there is an edge there is no constant edge. That would just be the holy grail and who's the richest man again? I really don't think he day-trades or has an edge. He makes rockets and electric cars and talks about random things on twitter.
First Part is correct, Edges are changing over time, I would say 2-4 Years, sometimes longer.

2nd Part: Can you be richest person in world with trading? The answer is: No. But the reason is different. It has to do with market limitation. The edge of small traders like us is that we can get a fill of probably 100 Million Dollars (1000 lots) in 1-3 seconds, moving the market not at all or very, very little (1 pip may be sometimes).

If you exceed a certain limit of volume, you change sides. You get a big shark and they have to play other strategies like us. I know 2 moneymanagement strategies which can be used against big sharks/players and of course using them with >100 Million Dollar trades by yourself will end up losing,- simple: You change sides and get a big shark, too.

I give you an example how "big sharks" breathe (beware, the example I show here is difficult to exploit by small traders, it's just of illustration to show the limit, even of big sharks":
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What you can see is a typical attack of big sharks. If you are really good you can fill all your shorts (see my orange arrows where i shorted?) with almost no loss in the orange area (you trade yourself out of the minus- you can do that because you are small). THAT's what they want to avoid! They want you to sit there and wait like a rabbit hoping for a return to the downside. They wait before next move until they could sell some of their crap for having enough fire power to kick the market up one more time (and hoping to get your stop loss which is extra fuel for them).

The reason why scenarios like that often also collapse (so it goes down again) is just the lack of volume of buyers in that area. Sharks are filled too much with longs and cannot unwind enough. So in the end they make most times a last burn out to the top side to get some SL from retail traders and gently after that sell their longs which often causes in few hours later abrupt sell offs to certain levels.

Why sharks unwind positions very fast is another topic.

Sum up: I just wanted to show what is the reason why there are so few billionaires in trading. The markets are just too small. But I would be happy to make $100.000 per Month and that is no problem.
  • #135
  • Oct 25, 2022 8:51am Oct 25, 2022 8:51am
Quoting JackintheBox
{quote} First Part is correct, Edges are changing over time, I would say 2-4 Years, sometimes longer. 2nd Part: Can you be richest person in world with trading? The answer is: No. But the reason is different. It has to do with market limitation. The edge of small traders like us is that we can get a fill of probably 100 Million Dollars (1000 lots) in 1-3 seconds, moving the market not at all or very, very little (1 pip may be sometimes). If you exceed a certain limit of volume, you change sides. You get a big shark and they have to play other strategies...
Yes I see what you mean. These liquidity hunts on smaller timeframes are indeed regular and I've always had the same idea about what causes them. But correct me if I'm wrong. Assuming someone risks 100m per trade and trades 5m charts (forgetting about r:r) and nets out on average after taking 4 or 5 trades per day, 100m per day. Then theoretically you have a billion in 10 days. so even the ability to take a 50m risk per trade should make at least some billionaire day traders?

Ive been doing this for a while and i find this is perhaps where the traders personality comes in. Id be fine with even 50k a month. But i start reducing my risks and levels of return when actual dollar amount increases. Which is wrong. But bigger money i just haven't found the courage to take those trades. I cant trade them like i trade smaller capital like risking 150 to 200 a day. Thats my roadblock is which i believe is preventing my edge.
  • #136
  • Oct 25, 2022 9:27am Oct 25, 2022 9:27am
Quoting driven18
Great Topic Riskcuit! Hello RickM **Here is my Edge** I created an ea that takes into consideration 200 conditions(parameters) using 1 Hour Bar(as an example) across 3 previous months of trading. Conditions can be anything: patterns, session times, various indicators, SL, Trailing's, various TPs, Sup/Res, Pivots, etc...you name it....These 200 conditions are the most important conditions I trade throughout my 10 years experience in trading. Every month I optimize these 200 conditions across previous 3 months and pick the best set of inputs....
this is the right approach you are doing

for diversification, I use various intervals. for example, I use 10 years of data, then 5 years of data, then 3 years of data for optimizations, and then 2-3 years for forwarding tests in all cases. In that way, I create EAs portfolios of various data setups. re-optimization once per year.

But your appproach to re-optimize every month is good too. I maybe are too lazy.. but my approach seems working also. I bet hedgefunds have teams with coders who do that re-optimizations for various intervals and re-optimize one per year, per quarter, per month, per week. They run thousands of EAs setups. Or even they have programmed special software which do that re-optimizations in automated fashion. they do not use MT...

yea.. but we small traders can do what we can with resources we have and still make some profits.

here optimization 2010 - 2020, then forwardtest:

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and here optimization 2017 - 2020, then forwardtest (looks more stable):

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I saw a lot where patterns "stop to perform" starting from 2017.. when optimized with 2010 data. Something changed from 2017 globally in markets. But still profitable and i keep them running for diversification purposes.

those results in pictures i provided are not for 1 particular EA setup but for portfilios of 10 to 20 EAs setups.
  • #137
  • Edited 11:43am Oct 25, 2022 10:00am | Edited 11:43am
Quoting joyny
{quote} this is the right approach you are doing for diversification, I use various intervals. for example, I use 10 years of data, then 5 years of data, then 3 years of data for optimizations, and then 2-3 years for forwarding tests in all cases. In that way, I create EAs portfolios of various data setups. re-optimization once per year. But your appproach to re-optimize every month is good too. I maybe are too lazy.. but my approach seems working also. I bet hedgefunds have teams with coders who do that re-optimizations for various intervals...
You are going too far in time....I did reoptimize 1 year worth of data every month, but I stopped caring about results from longer then 3 months ago as ea delivered the performance I expect with 3 months of optimization 200 parameters.

200 parameters is the Key here. Only 2 of the parameters are ordinary parameters that can be found in any software package, 198 of other parameters mostly deal with natural price action, volatility at various time frames, session times, patterns, Risk management, etc...

Any results beyond 3 months are meaningless to me...My edge is momentum and 3 months momentum optimized on "every tick" is just right for my way of trading.

As we are talking, I am showing today trades, 1 Short and 1 Long - today all winners (5 min TF), total +2.8% profit

I am reiterating again...success of these 2 trades took years and at least 10,000 hours of hard work to accomplish..traders who are here(on FF) for the last few years, understand. My last point to up and coming traders - Do Not Give Up.
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  • #138
  • Oct 25, 2022 11:54am Oct 25, 2022 11:54am
Quoting joyny
{quote} here optimization 2010 - 2020, then forwardtest: {image} and here optimization 2017 - 2020, then forwardtest
Hi Joyny, thanks for your insights! Am I correct, that your numbers are optimized till 2020 (for example 229.92 you showed in 2017and 2018 only 94.62).
So your results were good in backtesting but with the same parameters you get worse results in backtest since 2018?

This is lots of work, I know, again thanks for sharing.

Out of the blue I would say your EA's rely mostly on trend following? that would suit the breakdown from 2018.

I can tell you my thoughts of changing markets from 2017: What I observed was a huge reduction in volatility (ADR) on EUR/USD and changing of vola in side currencies (like EUR/SEK, EUR/PLN) and so on. It seems they are more connected to each other now, probably of more algo-trading today.

Markets were getting more and more balanced and harder to exploit. Moves are faster and / or more accurate but again: That you also can exploit again.

What I learned last years: Making money on Forex is not only knowing how to gain money but when to use the strategies. You need strategies which work in ranging markets and which work in trending markets and which work in very volatile markets.

For example USD/JPY last days: What I wanted to do from this monday was a pyramid system. That means you add positions over positions until trend ends. That's also what pros did. My mistake with that was I was just too late and BOJ intervened. But still in that intervention you could earn a hell of money. It is one of the highest market imbalances: extreme volatility.

One other thing to mention: Most trades feel comfortable when volatility is high. The reason is simple: Most use trend follow strategies and the market is ok if you make small mistakes. The reason behind that is you can afford mistakes because of market imbalances in high volatility.

What I try to learn is how big boys earn money so I know how to gain money from them. Quite simple question but extremely lot of data analyze.
  • #139
  • Oct 25, 2022 11:54am Oct 25, 2022 11:54am
Quoting JackintheBox
{quote} Finally someone with input (ryuryu and som others, too, thanks). Please all others: please do us a favor and stop posting nonsense, like YOU are the key, thank you. That's so far fetched, no one can make sth. out of it. Here some profitable strategies: - -Marketmaker Hunting (to key levels they go always, that means market imbalance in between these levels and you can profit of that in between) - can be used as trend or anti-trend trading. -Retracement trading (kicking ass of big boys because you have the edge of dropping your whole position...
JackintheBox it is impossible to stop them.

I think these characters are just sitting on the salary of brokers. Because with such serious faces, it is unlikely that anyone will do such nonsense for days for free.
They specifically talk about their unrealistic earnings by drawing lines on a graph to lure idiots to spend their money trying to become as successful as they are. I have no other explanation.
That's why I created my topic, it is a filter. To find like-minded people and cut off scammers.
All these stories about the right attitude, about the feeling of the market and other nonsense does not stand up to any criticism. But as one famous person said, the bigger the lie, the more people believe in it. But there is also good news: their work is playing into our hands. Because it's one thing to trade against brains, another against idiots. The second is much more profitable. Therefore, let them continue to tell fables about sup/res on forex and draw their beautiful colored lines who cares

Quoting TonyTepeli
Hi ryuryu. Thanks so much for your like chalk and cheese ideas that are much way tendentious to other traders. Somewhere along the discussion you said edge= math, I am much way believer of math & Physics just like any other, I humbly requesting any substantiate proposition regarding Fibonacci trading tool as one among the controversial ideas you objected. Do you believe in golden ratio Ø=(1+√5)/2 =1.618...... Why in most trends ( down trends & uptrends) this golden ratio in maths tend not to be defied by price action and give nice entry in...
You know, once I have created an approach. I placed lines on the chart. Each 0.25% distance. And you know what? In most trends (down trends & uptrends) price hit some.
But the key word here is "most". Also more lines you place more hits you receive. I call it Ryuryu Lines Rule. Do you believe in Ryuryu Lines Rule?

But i think you right when you talk about physics. And may be psychology too. Because why shorts are at least 10% wider than longs? Think about it. Why so? Because it is easier to fall than jump, or because 99% don't know how to short?
Observer effect
  • #140
  • Oct 25, 2022 5:16pm Oct 25, 2022 5:16pm
Quoting goldfish3
{quote} This is quite the conversation starter thread. I have a very simple and different logic to most of the above. To me it's all about exploiting algorithms to benefit from small fluctuations in the markets. Algos work solely on some complex (but not complicated) rules which are based on indicators, perhaps mildly altered by programmers to suit market conditions. From what I've read, and I have researched algos a lot, most big orders are objectivised to get the best price for the clients. Which is why, in my experience, pivots and EMAs work...
Heres a paper by BIS on algos and their structure. Its quite informative. No need to really go through the math if you dont want to text is enough to underatand their functionalities.
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