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EURUSD forecast & Chaos theory

  • #41
  • Dec 30, 2007 4:27pm Dec 30, 2007 4:27pm
thats why usd is being debacled, cause they are secretly dumping dollars.
better said, they are diversifying, they dont care.

but it is funny, about 5 years ago, china had little control over usa.
dumping $$$? what a joke.
after 6 year of Bush politics, they have control over the whole system and they could crash the dollar if they wished.
  • #42
  • Edited Dec 31, 2007 3:41am Dec 30, 2007 5:08pm | Edited Dec 31, 2007 3:41am
My last trade (27.12.2007 Buy=1.4480, Stoploss=1.4288) has to be closed (on 1.4718) as I see risk of short-time falling (for some days), but my system does not give an exact confirmed signal to initiate a short position so I am off a market with today. Please see total results for last two years (from 29.12.05 to 31.12.07) at the attached picture.
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  • #43
  • Edited Jan 1, 2008 2:29am Dec 31, 2007 4:58am | Edited Jan 1, 2008 2:29am
Some words about system logic. Its main task is to find out unstable equilibrium of the market when it is ready to action. To illustrate this I am attaching the solutions area of system in space of {C-close, V-volume, I-open interest}={X,Y,Z} calculated for USDCHF on the opening of 27.12.2007. Our location was on the yellow point and we were far from a "ring". It signified that we waited for strong falling of USDCHF. EURUSD shown an analogous signal too, but not such strong. Happy New Year!
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  • #44
  • Edited 12:25pm Dec 31, 2007 12:08pm | Edited 12:25pm
I am a euro-bull again.
Attached Image
  • #45
  • Dec 31, 2007 2:53pm Dec 31, 2007 2:53pm
Quoting Aleksey
Currently I see the course of EURUSD on 1.4726.
damn it...its all wrong
{Link Removed}]
  • #46
  • Dec 31, 2007 3:52pm Dec 31, 2007 3:52pm
That was my point. You didn't realize that there was an housing report coming out which pushed down on the Euro. The fundamentals will always win out and there is hardly an abstract theory that can change this or take them into account.

rudenstein
  • #47
  • Dec 31, 2007 3:55pm Dec 31, 2007 3:55pm
Quoting Aleksey
I am a euro-bull again.
Hey I have been looking for a bull believer. I am also long and I see today as a retracement for strength to forge on and break that stubborn 4750 resistance. Hopefully 4550 shd hold this downtrend
  • #48
  • Dec 31, 2007 4:12pm Dec 31, 2007 4:12pm
Quoting paululu
Hey I have been looking for a bull believer. I am also long and I see today as a retracement for strength to forge on and break that stubborn 4750 resistance. Hopefully 4550 shd hold this downtrend
Word. I believe too. 1.4750 is TOUGH.
My thoughts... 1.4530 is the 50% retrace of the latest move up. There are 3 days of very important data to bring $ down and Euro up off that level for another try at the 1.4750 level.
Then up to 1.50 and beyond... get ready guys!
  • #49
  • Jan 1, 2008 2:11am Jan 1, 2008 2:11am
Quoting kenari05
damn it...its all wrong
What do you mean?
  • #50
  • Jan 1, 2008 2:44am Jan 1, 2008 2:44am
Quoting Aleksey
Some words about system logic. Its main task is to find out unstable equilibrium of the market when it is ready to action. To illustrate this I am attaching the solutions area of system in space of {C-close, V-volume, I-open interest}={X,Y,Z} calculated for USDCHF on the opening of 27.12.2007. Our location was on the yellow point and we were far from a "ring". It signified that we waited for strong falling of USDCHF. EURUSD shown an analogous signal too, but not such strong. Happy New Year!
Is this a chart or a painting? Looks like something you would see in an artist show.

Happy New Year
  • #51
  • Edited 3:24am Jan 1, 2008 2:51am | Edited 3:24am
Quoting rudenstein
That was my point. You didn't realize that there was an housing report coming out which pushed down on the Euro. The fundamentals will always win out and there is hardly an abstract theory that can change this or take them into account.

rudenstein
The market model is not abstractly. The focus of its attention is money as the main market parameter (described by C-close, V-volume, I-open interest). Money interests govern the market and the market model keenly catchs they.
  • #52
  • Edited 3:20am Jan 1, 2008 3:04am | Edited 3:20am
Quoting WHTenn
Is this a chart or a painting? Looks like something you would see in an artist show.

Happy New Year
The shown picture is the solutions area of system in space of {C-close, V-volume, I-open interest}={X,Y,Z}. I calculate it by using the 3D visualizing program on the basis of solutions of nonlinear system equations describing the market.
I have met New Year, Happy New Year you too.
  • #53
  • Jan 1, 2008 4:32am Jan 1, 2008 4:32am
Quoting Aleksey
The shown picture is the solutions area of system in space of {C-close, V-volume, I-open interest}={X,Y,Z}. I calculate it by using the 3D visualizing program on the basis of solutions of nonlinear system equations describing the market.
I have met New Year, Happy New Year you too.
Glad to see you mentioning nonlinearity for the first time since you started your thread and the first person bold enough to say he can quantitatively represent market behaviour in this way

My only concern is that quantitative system equations can hardly describe dynamic behaviour of highly dynamical systems like FX. Well, this was acknowledged by the father of chaos Henri Poincaré 100 years ago. It can only be described qualitatively. For mechanical systems yes quantitative system of equations offers more precise solutions to chaotic problems.

FX cannot be solve quantitatively since you are falling back to historical data to predict how financial chaos will react to say future pending news that will be coming up in the next 1min, 15mins, 1hr, etc. that is, will it revealed or predict precisely the impact a pending news will have on established chaos path, will it say to what extent or levels news caused negative or positive impacts on chaos path.

So imagine when you have bag of mixed economic data and all coming out the same time, say 8:30 New York time, Any nonlinear equation will fall apart woefully like its sister and lagging and curve fitting linear equation. This is because FX directions or chaotic paths are not dependent on quantitative equations but on how human beings (traders) interpret and reacts to mixed events moving the market. Sometimes traders that moves market are very annoying, they will not react on time to economic data, they may even react to it even before data are released - "insiders" problem.

So can you see why all those indicators are not able to predict the market?
Same will be with quantitative method designed to interpret data after the
news but the actual market reacted before the news or even the system had time to look at the data.

I may be wrong since I am not a mathematician but I look at chaos qualitatively and not quantitative.

My 2cents.

But I will be keenly watching how chaos can be predicted quantitatively from your own perspective too.

Kudos to your effort - 2008 could be the year to convince people that with chaos there is nothing impossible about the market.
  • #54
  • Jan 1, 2008 5:24am Jan 1, 2008 5:24am
Quoting Aleksey
I am a euro-bull again.
You got in at 1.4751 ? ... niiice How do you people catch bottoms like that ?
  • #55
  • Jan 1, 2008 5:30am Jan 1, 2008 5:30am
Quoting Aleksey
The market model is not abstractly. The focus of its attention is money as the main market parameter (described by C-close, V-volume, I-open interest). Money interests govern the market and the market model keenly catchs they.
But what moves the market can't always be quantified technically. It could be that due to my lack of knowledge of Chaos Theory I am missing something here, but I don't see how a system like this can take fundamental news announcements into account.
Please explain.
  • #56
  • Jan 1, 2008 5:51am Jan 1, 2008 5:51am
Quoting Pirin
You got in at 1.4751 ? ... niiice How do you people catch bottoms like that ?
I caught 1.4571 by chance as I usually trade on the closing or the opening of a day.
  • #57
  • Edited 10:12am Jan 1, 2008 5:56am | Edited 10:12am
Quoting fxbroker
Glad to see you mentioning nonlinearity for the first time since you started your thread and the first person bold enough to say he can quantitatively represent market behaviour in this way

Kudos to your effort - 2008 could be the year to convince people that with chaos there is nothing impossible about the market.
Many Thanks and Welcome!

I built the pretty simple market model. Its base time-frame is a day (as well as a week, a month) since it can not work with time-frames less than 6H because of big value of signal/noise for their. Its signals usually forecast strong short-term moves of long-term trends. I usually get a signal and watch how fundamental news draw up in the direction or the signal.

BTW, insiders is very welcome for my approach as they partly give date for my system (hidden in behaviour of C, V, I).
  • #58
  • Edited 9:56am Jan 1, 2008 6:08am | Edited 9:56am
Quoting rudenstein
But what moves the market can't always be quantified technically. It could be that due to my lack of knowledge of Chaos Theory I am missing something here, but I don't see how a system like this can take fundamental news announcements into account.
Please explain.
Frequently insiders, sagacious traders prepare the ground for future moves before it is confirmed fundamental date and the system catches it.
  • #59
  • Jan 1, 2008 7:57am Jan 1, 2008 7:57am
Quoting Aleksey
I caught 1.4571 by chance as I usually trade on the closing or the opening of a day.
Your comment just caught my attention here.
Why chance entry?

I decide to quickly cast a chaotic look on Eur/usd this is what I see (though trade station has closed), it is not yet the end of market or chaos unless London's closing is your closing day.

There is nothing technically showing a reversal on higher time frame absolutely nothing on my chart. Maybe at 1.4338 from daily to weekly. Of cause this is a long term look which is not ideal way to use chaos to look at events.

For academic argument sake this what I am seeing:

Assuming current behaviour is to continue, if there were not to be temporal close of market or trade stations, and your phase space is a homogeneous market.

1. Sell Bounce off 1.4582 if it survived it, there is a strong sell wedge at 1.4605 to turn the current bullish outlook on 15mins bearish.

2. 5mins time frame is still showing sinking pattern targetting next level of 1.4474 and then 1.4320.

However, next opening day, is the start of a new yearly trade cycle - or yearly chaos so any opening trade or analysis now or before then will be like taking a decision for hurricane that is yet to form.

If concept of self-similarity were to be applied at this moment this is what will happen

  1. If the next day decide to continue the bearish moves, 1.4472 will give way because similar support at 1.4698 caved in, thus 1.4323 will cave in and hence 1.3695. Not looking good for your stop loss?
  2. Your stop loss would have generated about -275 pips. Who knows what will happen from there.

Remember the above analysis is based on current price actions not on past data. The future is not looking bright for a buy at the moment unless this sentiment is changed on the first trading day of the year.

If that happened or attempt to stop this strong bearish move (this will depend on how the main participants feels about the market this year), your current held position may hold. That will require real good data from UK, and bad and bad situation for US data in the first month ……..January, I don’t know how to do fundamental analysis… in that case your position will move to

  1. price level 1.4701 ……….there is strong sell opposition here.
  2. if it over came that, it will move then to 1.4745, and then 1.4965.

This is just futuristic view of current price action and do not necessarily mean price will behave exactly the above manners.

Do not take my analysis too serious. It is merely a descriptive analysis not based on any sophisticated system of equations like yours. But it works fine most time.

  • #60
  • Edited 10:05am Jan 1, 2008 8:54am | Edited 10:05am
Thank you for the detailed posting and your attention to my thread! Your comments are logical but it was the short-term signal so I will look intently at future dynamics. My stoploss level can tell nothing to us about future move as it is determined volatility of last 10 days only. Future trend direction is not determined yet.

P.S. About "by chance"... I used the price level at 1.4571 as I saw that it already was the very good one to initiate the position. I could not wait for the closing of a day as I was going to celebrate New Year.
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