Statistical Probability Trading With Price Action

GbpUsd (DR)

GbpUsd (DAR)

GbpUsd The pink line is the DAR for 2007 and the blue line is DRM for the past 20 days.

The WAR for the gbpusd

The pink line shows the 2007 AWR for the GbpUsd

GbpJpy DRM (SP)

GbpJpy DAR

The pink line is the 2007 DAR for the GbpJpy and the blue is the DRM the last 20 days.

WAR gbpjpy

The yellow line is the gbpjpy WAR for 2007 and the pink line is the WAR for the last 5 weeks the blue line is WRM for the year.

Posts 510-514 are for gbpjpy
Posts 505-509 are for gbpusd

Hi Goodthings,

One quick question. If I use an ATR indicator it gives me similar but different values for AWR in GBP/JPY. How and why do you calculate AWR?

For instance the WAR for usdchf is 167 the gbpusd is 244 the gbpjpy is
480 pips. It helps me to set trading parameters and gives me and idea when a move for the week is stretching its range of motion and is ready for a retrace. Of course the past few weeks all the currencies have had RM beyond the norm compared to the daily and weekly. My objective is to keep my trades with in the 70% to 50% (SP) Example the GbpUsd has a daily Statistical Probibility Daily Range of Motion (SPDRM) of 80% for it moving atleast 80 pips in a day and a (SPDRM) of 47% of it moving at least 110 pips. So I base my entries and exits on that information and of course price action during . If a person tries to capture 100 pips or 150 pips on a trade what is he basing it on. On today's move or the currency moving that many pips in two or three days. That's also why I look at daily retracement probabilitys. Up 100 pips back 50 up 100 pips back 50 up 100 pips and you have 150 pips. Over simplified but thats what I look at. Again these are trading guide lines not a complete system in itself. In short it helps me to understand the motion of the currency. Basing a trade on 70% to 80% probability is safe, yes you leave pips (money) on the table but what system or business doesn't. I work with a contractor who recently told a story of an estimator
miscalculating a job by $100,000. Because of the contract he still had to do the job and did make some money. But obiviously he left money on the table. His attitude is what do you do, you go on to the next job(s). Same way with trading. Post #4 with this link http://www.forexfactory.com/showthread.php?t=8017
explains a realisistic attitude in catching a move. Thats what daily weekly averages help me to do. Thats the why. How I calculate it I just add up for example the range of motion for days and divide it by the number of days. For example the last 5 days a currency moves 80 pips 100 pips 100 pips 150 pips 200 pips total pips 630 pips. Divide that by 5 you have a DAR for the last 5 days of 126 pips.

Thankyou for the detailed explaination. It's amazing how much confidence your info has given my trade decisions lately. I don't care that it's not a system, I prefer a methodology to a system any day.

(DRSP) EurJpy Daily Range Statistical Probability

EurJpy DAR

EurJpy (DAR) The pink line is the DAR for 2007 the yellow line is DAR for the last 10 days. The blue line is showing the RM for the last 20 days.

EurJpy WAR

The pink line is the 2007 WAR the yellow line is the WAR for the past 5 weeks for the EurJpy. The blue lines shows the RM for all the weeks of the year. The previous 15 of 17 posts show statistics for GbpJpy,GbpUsd, and EurJpy.

Hey, I need you guys over here. Are you willing to pitch in?

http://www.forexfactory.com/showthread.php?t=41188

SPDR for UsdJpy