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Statistical Probability Trading With Price Action

  • #241
  • Jun 10, 2007 6:26am Jun 10, 2007 6:26am
Posts 230 thru 240 are updated posts for the GbpUsd.
  • #242
  • Jun 10, 2007 11:22am Jun 10, 2007 11:22am
Hi goodthings, Thank you for your generosity! A question or two. What are the, "not the same day, same week," statistics? That is to say,for daily levels,if price does not complete a retracement to the fib levels on the same day, what percentage of the time does price actually complete these retracements and within what time frame? Same basic question for weekly levels, if price does not complete a retracement to fib levels during the same week,what percentage of the time does price actually complete these retracements and within what time frame? Also, how does size of range affect percentage of completed retracements? For example,how much more likely are retracements to be completed when 100% of range is 100 pips than when it is 200 pips? Hope I am not asking too much. Patrick
Vincit qui se vincit.
  • #243
  • Jun 10, 2007 2:33pm Jun 10, 2007 2:33pm
Those are good questions. In regards to same day next day or same week next week. It doesn't make any difference. I am looking for a perfect set up which obvously does not happen every day/ every week. The amount of range of motion (ROM) on a daily basis I have not updated my info. Will do it. There is a difference with (ROM) of 200 pips a day. I have posted some examples of same day/week and next day/week to look at .
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  • #244
  • Jun 10, 2007 2:38pm Jun 10, 2007 2:38pm
Here is a chart showing the statistical probability of retracement for the GbpUsd after a week with 300 pip range of motion (ROM) which it has done 31 times since Jan 2006. See post 228 showing all weekly fib retracements since Jan 1 2006
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  • #245
  • Jun 10, 2007 3:18pm Jun 10, 2007 3:18pm
Next day retracement repost from 243 because it did not come out clear
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  • #246
  • Jun 10, 2007 3:19pm Jun 10, 2007 3:19pm
Same day retracement post 243 did not come out clear
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  • #247
  • Jun 10, 2007 3:20pm Jun 10, 2007 3:20pm
Same week retracement again post 243 not that clear
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  • #248
  • Jun 10, 2007 3:21pm Jun 10, 2007 3:21pm
Next week retracement again post 243 did not come out that clear
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  • #249
  • Edited 4:35pm Jun 10, 2007 4:14pm | Edited 4:35pm
Hi goodthings, Thanks for your responses! My thinking goes like this:we can't trade based on fib levels established on high/low prices until the day or week is completed. For example the daily 23.6 level for 6/8 has already been met, as well as the weekly 23.6 for 6/4-6/8. We know these things only at the close on 6/8. We can(and I will)trade targeting the 38.2,50.0,and 61.8 levels. My question in this connection was aimed at trying to get a sense of how often trading opportunities to these levels might arise. If levels are met mostly same day or same week we won't get many chances to trade retracements. The stats for completed retracements do not show a breakdown by range high/low. For example,weekly stat for 50.0 is 81%. That is for all weeks including those with 150 pip high/low range and those with 300 pip high/low range and all those in between, above and below. Aren't completed retracements more likely as range high/low decreases and less likely as range high/low increases? Probability of completed retracements varies as a function of range high/low. Can we formulate this function? I don't mean to be a bother. Hope you don't mind. Patrick ps In God We Trust.
Vincit qui se vincit.
  • #250
  • Jun 10, 2007 6:47pm Jun 10, 2007 6:47pm
Quoting Pippopotamus
Hi goodthings, Thanks for your responses! My thinking goes like this:we can't trade based on fib levels established on high/low prices until the day or week is completed. For example the daily 23.6 level for 6/8 has already been met, as well as the weekly 23.6 for 6/4-6/8. We know these things only at the close on 6/8. We can(and I will)trade targeting the 38.2,50.0,and 61.8 levels. My question in this connection was aimed at trying to get a sense of how often trading opportunities to these levels might arise. If levels are met mostly same day or same week we won't get many chances to trade retracements. The stats for completed retracements do not show a breakdown by range high/low. For example,weekly stat for 50.0 is 81%. That is for all weeks including those with 150 pip high/low range and those with 300 pip high/low range and all those in between, above and below. Aren't completed retracements more likely as range high/low decreases and less likely as range high/low increases? Probability of completed retracements varies as a function of range high/low. Can we formulate this function? I don't mean to be a bother. Hope you don't mind. Patrick ps In God We Trust.
If you review post 244 shows a break out of pip retracements following a 300 pip (ROM) for 31 past weeks. This would be applicable for the coming week. As you said sometimes high and low are established mid week and currency ranges between that and you do not know the high and low for sure is established. With Weekly fib retracement you will not have a set up every week that is a high probability trade. Same with daily fibs you will not always know when the days high and low is ment for sure until the end of the day.
Further study into it will come with relation to the weekly or daily (ROM).
  • #251
  • Jun 10, 2007 6:56pm Jun 10, 2007 6:56pm
Below is a quote explaining why you will find often the market retraces around 10:00 am eastern time. That is when I look to close my trades (75% of the time) and take profits. Once again you will not have a perfect set up every day of the week. It is just like when you trade pin bars. You do not trade every pin bar unless it meets certain paramateres making it a high probability trade. The daily averag range (DAR) and weekly average range (WAR) are not systems in themselves. They give a person an idea of the range of motion (ROM) a currency has to help his entry and exit strategies. Hope this is helpful.

Goodthings:

I was told by a former bank trader that options expire each weekday at 10:00 USET. As a result, he said you can expect "strange" things to happen during the 09:30-10:30 USET period. This may explain what you have been observing.

I consider myself an active-swing trader; but most of my trades are intraday; and the 09:30-10:30 USET period has been one of my favorite "fishing holes." I sometimes catch a trade in one direction leading up to the 10:00 USET option expiration and a trade in the opposite direction after that time. The pip movements during this hour or so are not usually what most of us would call significant, but it has been a profitable time period for me so far.

Congratulations on recognizing and sharing what may be a very helpful observation to a lot of traders browsing this forum.

...\larry.bye
  • #252
  • Jun 10, 2007 8:51pm Jun 10, 2007 8:51pm
Quoting Pippopotamus
Hi goodthings, Thank you for your generosity! A question or two. What are the, "not the same day, same week," statistics? That is to say,for daily levels,if price does not complete a retracement to the fib levels on the same day, what percentage of the time does price actually complete these retracements and within what time frame? Same basic question for weekly levels, if price does not complete a retracement to fib levels during the same week,what percentage of the time does price actually complete these retracements and within what time frame? Also, how does size of range affect percentage of completed retracements? For example,how much more likely are retracements to be completed when 100% of range is 100 pips than when it is 200 pips? Hope I am not asking too much. Patrick
Reviewing your questions. Fib retracements are looked at within the same day after high or low is established or by the end of the next day. Same thing with weekly that week after high and low are established or by the end of the following week.
  • #253
  • Jun 10, 2007 9:31pm Jun 10, 2007 9:31pm
Quoting goodthings
Posts 230 thru 240 are updated posts for the GbpUsd.
See above posts for GbpUsd updates
  • #254
  • Jun 11, 2007 4:27am Jun 11, 2007 4:27am
Hi Tom

Thanks once again for your continued efforts to provide these stats.
Regards
  • #255
  • Jun 12, 2007 3:52am Jun 12, 2007 3:52am
With the news the GbpUsd has bounced off the 38.2 weekly fib.
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  • #256
  • Jun 12, 2007 3:56am Jun 12, 2007 3:56am
Last couple of months it has had a Tuesday or Wendesday reversal.
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  • #257
  • Jun 12, 2007 2:59pm Jun 12, 2007 2:59pm
Hi goodthings, Thanks for the clarification in post#252. I'm trying to figure out how best to use all this info. Patrick
Vincit qui se vincit.
  • #258
  • Jun 12, 2007 6:53pm Jun 12, 2007 6:53pm
Came with in 9 pips of the weekly 50 fib
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  • #259
  • Jun 12, 2007 6:57pm Jun 12, 2007 6:57pm
Retraced to the daily 50 fib after a 96 pip run. Post 227 shows daily fib retracement percentages and post 228 show weekly fib retracements percentages
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  • #260
  • Jun 12, 2007 10:39pm Jun 12, 2007 10:39pm
goodthings

first, thanks for all the hard work with these charts.

Read the whole thread and got a couple of questions, which should clear up some of my confusion.

1. Can you use other time frames besides the daily to plot highs and lows and the possible retracements??? example: hourly high/low, 30 minute high/low, etc, etc

2. Today for example, the high/low was reached by about 3pm, but the GBP already retraced to the 50% before 5pm. What would you do in that case?

Hope I didn't confused you, just looking to see if I can use this on smaller timeframes.
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