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River Theory Trades

  • #101
  • Nov 24, 2007 9:03am Nov 24, 2007 9:03am
Quoting kenneith
Bro i have downloaded those two indicators, can you pm how to set up them? i read this thread but i didnt find any rules and any method. would you be able to explain me about this method? Your help is appreciated in this regard.
Regards
read this whole thread

http://www.forexfactory.com/showthread.php?t=18243
  • #102
  • Nov 24, 2007 10:27am Nov 24, 2007 10:27am
For all that interested of river theory, before we succumb into that indicator, level, value, etc, we must realize that as human, we have been given a greatest gift that called Awareness. This is the one that makes us different from other lifeform on earth. The one that makes Aristotle, Copernicus, Galileo, Newton, and many other known and unknown individual 'discovered' something.
Our greatest tools in trading is this awareness, to see something that majority does not, to find the edge of the methodology we use. So lets do some mental excersise to be aware of ourself, aware of what we are doing, aware
that we have "awareness" of life, of creation, of the universe we living in. And be thankful for it. With it, we can detach bad emotion and trade better.

...Thats sounds like some demonic cult brainwashing, isn't it? :
  • #103
  • Nov 24, 2007 12:22pm Nov 24, 2007 12:22pm
Hey Dito, people

One of the biggest things that helped my understanding of how Price Distribution works was the below diagram since I am very much a visual learner. The zones for me are ultimately derived from extremes in the bell curve, which is somthing i've often heard DRT mention. In particular, price is considered out of equilibrium within the areas of 2% std deviation. These are what I consider to be the edges of zones.

The movement of price as I understand to use it with this is that once price crosses inside of 2% deviation, it will often keep going until it reaches the other extreme, often building value in the 68% on both the way there and back again. Alternatively, it will continue seeking out of the 2% deviation into a new area, creating a new bell curve, creating a new zone.

If anyone has anything to add or correct my understanding on please do so
Attached Image
To be one with the market, you must first be one with yourself.
  • #104
  • Nov 24, 2007 2:25pm Nov 24, 2007 2:25pm
You're right Unforeseen. However, using the market data, often the bell curve is extremely distorted. And depends on which time to start, the shape could be different. Therefore we have to view it in a common economical time-cycle: year, quarter, month maybe? And while we might have better result of levels using real stddev calculation over price distribution curve, I lack in programming skill to transform that indicator to calculate inside arrays etc :.

So I just use the simplest substitution to define the 'edge' of the bell curve, which is high/low of the used timeframe. Surprising enough that these projected edge to the average value, is often symmetrical, or have 1:2 ratio between up and down projection, extremely rare to go past the 4th line, bounce strongly on average value of the distribution, and some other characteristics. Kinda reminds me of mm lines actually.

Ideally, we should watch the peak and valley too -which is often exist in the average value of distributed price/or exist in the other projected level
- since these area most likely will be the turning / retest point on the development of the new curve. This new curve often overlap the previous period curve, but when you see in a bigger timeframe, its just a normal distribution. Thats why I draw from year - month (can't program it into quarters haha), to see whats happening on the big picture, and then refine the entry into smaller timeframe.

Here's the year price distribution for mt4 if you interested, you'll see alot of places where the peak become the valley, vice versa. And If you do the price projection as I mention above, backtest it a few years back on several pairs, I hope you'll see what I see. I mod this indicator to works only in daily chart for better visual.
Attached File(s)
File Type: mq4 PD Yearly.mq4   6 KB | 457 downloads
  • #105
  • Nov 25, 2007 12:47pm Nov 25, 2007 12:47pm
I need help. Anyone knows where I can read material about how people with big funds play? Does the value builds because the big funds is loading up their bullets to eat small fries money? Does the quick bounce/single print/shooting stars whatever the name is happen because a huge load of position is covered? Does value retest/fake breakouts happens because big funds stop hunting? Things like that, and how futures/option market in currency works.

If anyone could point me to what book/links that really explain that, It would be much appreciated.

cheers
  • #106
  • Nov 27, 2007 4:31pm Nov 27, 2007 4:31pm
dito, I second the request it sure would help me have a more rounded understanding of the market.
Also unforseen,thanks for the input.
  • #107
  • Nov 27, 2007 8:24pm Nov 27, 2007 8:24pm
Quoting dito
You're right Unforeseen. However, using the market data, often the bell curve is extremely distorted. And depends on which time to start, the shape could be different. Therefore we have to view it in a common economical time-cycle: year, quarter, month maybe? And while we might have better result of levels using real stddev calculation over price distribution curve, I lack in programming skill to transform that indicator to calculate inside arrays etc :.

So I just use the simplest substitution to define the 'edge' of the bell curve, which is high/low of the used timeframe. Surprising enough that these projected edge to the average value, is often symmetrical, or have 1:2 ratio between up and down projection, extremely rare to go past the 4th line, bounce strongly on average value of the distribution, and some other characteristics. Kinda reminds me of mm lines actually.

Ideally, we should watch the peak and valley too -which is often exist in the average value of distributed price/or exist in the other projected level
- since these area most likely will be the turning / retest point on the development of the new curve. This new curve often overlap the previous period curve, but when you see in a bigger timeframe, its just a normal distribution. Thats why I draw from year - month (can't program it into quarters haha), to see whats happening on the big picture, and then refine the entry into smaller timeframe.

Here's the year price distribution for mt4 if you interested, you'll see alot of places where the peak become the valley, vice versa. And If you do the price projection as I mention above, backtest it a few years back on several pairs, I hope you'll see what I see. I mod this indicator to works only in daily chart for better visual.
Thanks Dito, this definitely adds some much needed detail. I was following along with DRT since the beginning and agree there is much more to it then a simple bell curve, such as being mindful of gaps in existing distributions.

Your thoughts on the economic cycles is something that brings clarity as well.

I don't quite understand the purpose of the lastdaystart variable in the indicators you have provided, can you explain that to me?

Thanks for the yearly PD, excellent stuff.
To be one with the market, you must first be one with yourself.
  • #108
  • Nov 28, 2007 1:45am Nov 28, 2007 1:45am
Lastdaystart if on, it would count current period price distribution development + n period before current period from period count variable.

Lastdaystart if off, it would count starting from the datetime variable. Useful for backtesting from years behind. Standard mt4 daily hlc history is from around 1980 I think, so we can backtest that far.
  • #109
  • Nov 28, 2007 5:54pm Nov 28, 2007 5:54pm
Quoting dito
Lastdaystart if on, it would count current period price distribution development + n period before current period from period count variable.

Lastdaystart if off, it would count starting from the datetime variable. Useful for backtesting from years behind. Standard mt4 daily hlc history is from around 1980 I think, so we can backtest that far.
Perfect thanks - I was wondering why the startdate seemed to have no effect on PD monthly.
To be one with the market, you must first be one with yourself.
  • #110
  • Nov 29, 2007 6:09am Nov 29, 2007 6:09am
This month result, quite some bounces there, especially around dynamic value area. Next month value will be around 2.713. I'll post some monthly static level chart for December on weekend.
Attached Image (click to enlarge)
Click to Enlarge Name: last week.gif Size: 26 KB
  • #111
  • Nov 30, 2007 11:26pm Nov 30, 2007 11:26pm
levels for December
Attached File(s)
File Type: zip lvls.zip   119 KB | 469 downloads
  • #112
  • Dec 1, 2007 12:55pm Dec 1, 2007 12:55pm
Thanks for the updates, I'll be using yours.
Mine are not matching up just like last month,keep up the good work.
I currently have orders in a couple of pair you listed.
S-usdcad - @ 1.0003
B-usdchf - @ 1.1173 with a tp @ 1.1349 then looking to S @ 1349-1393 area to 1.1016 area.
  • #113
  • Edited 10:01pm Dec 11, 2007 9:33pm | Edited 10:01pm
dito, did you catch the ride down as we left gbpusd level 20485? We stopped at fridays high and bouncing up to 1.4660 area, which on the weekly charts seems to be a level in its self. Anyway, whats the chances of this continuing a push down to 2.0260 area?
anybody have any thoughts?
Also, eurusd left the 1.4692 level, are you staying short to 1.4554 level area?
  • #114
  • Dec 12, 2007 5:49am Dec 12, 2007 5:49am
Nope, missed the gbpusd since it bounced 0.5 level. I'm focusing my trades only on round numbers level now.

But I do like eurusd setup down here. It's ABSOLUTELY not a trade recommendation. Its just my opinion.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 071212gbpusd.gif Size: 24 KB
Click to Enlarge Name: 071212eurusd.gif Size: 18 KB
  • #115
  • Dec 12, 2007 7:03am Dec 12, 2007 7:03am
On the other hand, if looking into weekly PD on GBPUSD, its a good setup too. But I haven't mastered weekly PD yet.
Attached Image (click to enlarge)
Click to Enlarge Name: 071212gbpusdweekly.gif Size: 17 KB
  • #116
  • Dec 13, 2007 1:50pm Dec 13, 2007 1:50pm
dito,captured partial zones yesterday and today although we did not make it completely, I'm stuck at 4616 contemplating taking profits on the eurusd. I'm hoping for a spike or a push down to the 1.4554 level. Whats your thought on going long from there?
gbpusd same situation with partial, whats your bias, long at 20260 ? If we make it.
I can here drt now, " patience".
I shorted the usdcad @ 1.0220 as it crossed over the 1.0209 level looking for 9920.
buy on audusd @ 8759 level.
short on usdchf @ 1439 as it crossed the 1.1393 level.
Now if somebody can tell a new guy if he's most likely going in the right direction I just might build my confidence.
I'll keep an eye on it and hopefully get on the right side whichever way it goes.
  • #117
  • Dec 13, 2007 4:37pm Dec 13, 2007 4:37pm
To be honest, I never know if any of my trades will go to the right direction or not. So maybe I'm not the right one to give you that advice. Unforeseen is better than me in price action recognition.

All I do, is to keep my RR ratio & stop losses area in check. Like the usdcad now, I'll wait till it bounced down, then put sell limit near the level.

Btw, about taking profit / partial profit, you should stick to your trading plan. It's nearing end of the year too, so put your sl to breakeven /w some profit locked in, and prepare for holiday Don't overtrade hehe.
  • #118
  • Dec 13, 2007 8:38pm Dec 13, 2007 8:38pm
Hi dito

How you are working out your levels is working quite well I reckon.

When you exxplained it to me last time, even with a drum roll, I dont get what the mean of distributed price chart projected to the high and low is all about.Can you please explain in simple terms what you are doing. Are you working off the range of the previous monthly bar?

I notice you use 4 hour charts, do you wait for the closure of the 4 hour bar , and not the 1 hour for acceptance of distribution to the new level.
Does the software give you the value area or 0 level.

Thanks again, I want to get this.

Cheers
  • #119
  • Dec 13, 2007 9:08pm Dec 13, 2007 9:08pm
dito, what do you mean bounce down and place sell in that area ? elaberate just curious to your planning.
  • #120
  • Dec 14, 2007 5:31am Dec 14, 2007 5:31am
Oztrader :
yes, Its like pivot point calculation, but with PD chart. Classic pivot uses H+L+C/3 as mid point. I use PD to calculate mid point.


Lilpip :
from this setup http://forexfactory.com/showpost.php...2&postcount=99
my entry method to reduce risk & increase reward :
Attached Image (click to enlarge)
Click to Enlarge Name: prev setup.gif Size: 28 KB
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