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The similarity system

  • #3,121
  • Jul 18, 2013 4:57pm Jul 18, 2013 4:57pm
Quoting vlady1974
This is to do with today's discussion on ZigZag Tops and Bottoms... ZZ Top and ZZ Bot On the 15M, the most recent swing high is not yet "confirmed". We devised some rules for confirmation: Price is marked by the ZigZag Price is outside the BB Stoch is outside the BB Price crosses the BB Midline AFTERWARDSThere are some exceptions that I've seen... so I would say this is 97% accurate Below is a chart showing the most recent swing high or ZZ Top is possibly a fake or won't be the ZZ Top for much longer.... hopefully. {image}
YOU are becoming on expert on this APPROACH.
  • #3,122
  • Jul 18, 2013 4:57pm Jul 18, 2013 4:57pm
5M chart looks interesting, hinting price may rise!
  • #3,123
  • Jul 18, 2013 4:57pm Jul 18, 2013 4:57pm
Quoting Eurusdd
{image} This is a beautiful case to analyze. A new zone is expected at BLUE and the one above could continue to YELLOW. The gap will be small for price. If price takes out the top one the we will be heading into a strong uptrend. Price cannot remain in the small gap for long. CLASSIC!!! We could be heading into a spike or strong move!!! Some NEWS must be cooking in the kitchen.
Of course, this doesn't necessarily mean that price can't enter the YELLOW ZONE and NOT clear the zone... ie. failure at 3158?
This failure would be a catalyst to go south.... especially once similarity is regained.

That could then take out two lower zones at once, on the way to 1.29XX
A pip is only worth it if you know how much you risked to earn it
  • #3,124
  • Jul 18, 2013 5:01pm Jul 18, 2013 5:01pm
Quoting Eurusdd
{quote} YOU are becoming on expert on this APPROACH.
Only after realising my massive fail this morning. After 2 great trades, 3122 happened and was confirmed.....err... but i thought it was a fake. Hadn't come up with the rules yet.

Some of the guys helped out big style today. I owe them!

But thank you for your encouraging words.
A pip is only worth it if you know how much you risked to earn it
  • #3,125
  • Jul 18, 2013 5:05pm Jul 18, 2013 5:05pm
as we have learned, if price moves below the low of the dissim starting bar we will expect price will stay below the new to be formed zone, but in this case price first went down and than up, through the expected zone...see yellow marker on chart...
so it is always possible, that the expected zone could be broken and do not act as resistance/support??
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  • #3,126
  • Jul 18, 2013 5:11pm Jul 18, 2013 5:11pm
Attached Image (click to enlarge)
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I present more ramblings in picture.
I want more brain power!
  • #3,127
  • Jul 18, 2013 5:14pm Jul 18, 2013 5:14pm
The only problem I have with price comes from the STOC-BB-ZZ method.

There is a problem at 1.31583. There is >97% chance that the problem will be corrected. So without any reason price can just push there, correct it and jump down again!
  • #3,128
  • Jul 18, 2013 5:23pm Jul 18, 2013 5:23pm
Quoting Forex Lion
as we have learned, if price moves below the low of the dissim starting bar we will expect price will stay below the new to be formed zone, but in this case price first went down and than up, through the expected zone...see yellow marker on chart... so it is always possible, that the expected zone could be broken and do not act as resistance/support?? {image}
Hey Lion,

To me, if it's not on the chart yet, I am not going to create a trade decision based upon it.

I think that this expectation of where price is compared to an unborn zone causes confusion.
I realise it's important. But wouldn't it be easier if the unborn zone is NOT considered a support/resistance zone until it is born? That removes your question's issue.
Also, once Dissimilarity Starts.... the price can do anything it wants... dissimilarity is just the difference between price and stochastic, that doesn't mean traders wont push prices above below or even through the FIRST BAR'S HI or LOW.

Thoughts? I mean... can someone go through how they would trade this unborn zone then?
A pip is only worth it if you know how much you risked to earn it
  • #3,129
  • Jul 18, 2013 5:24pm Jul 18, 2013 5:24pm
Quoting cfdtaleong
{image} I present more ramblings in picture.
good.!!! I think price has something to correct at 1.31835. The probability for error is very small. good night!
  • #3,130
  • Jul 18, 2013 5:28pm Jul 18, 2013 5:28pm
Quoting vlady1974
{quote} Hey Lion, To me, if it's not on the chart yet, I am not going to create a trade decision based upon it. I think that this expectation of where price is compared to an unborn zone causes confusion. I realise it's important. But wouldn't it be easier if the unborn zone is NOT considered a support/resistance zone until it is born? That removes your question's issue. Also, once Dissimilarity Starts.... the price can do anything it wants... dissimilarity is just the difference between price and stochastic, that doesn't mean traders wont push...
OK, you mean we should not take care if price is above or below the unborn zone?
  • #3,131
  • Jul 18, 2013 5:33pm Jul 18, 2013 5:33pm
Quoting Eurusdd
{quote} good.!!! I think price has something to correct at 1.31835. The probability for error is very small. good night!
1.31835 or 1.31583
  • #3,132
  • Jul 18, 2013 5:36pm Jul 18, 2013 5:36pm
Quoting Forex Lion
{quote} 1.31835 or 1.31583
1.31583. sorry. There is a technical problem there and for purely technical reasons - not fundamentals - price can run there.
  • #3,133
  • Jul 18, 2013 5:43pm Jul 18, 2013 5:43pm
Quoting Forex Lion
{quote} OK, you mean we should not take care if price is above or below the unborn zone?
I think it means be aware of it... but since it's not "there" while Dissimilarity Time exists... then what trade could possibly affect it? None. Therefore you can still trade a ZZ Top or Bottom inside or outside that zone. You can also still use it as a target.
A pip is only worth it if you know how much you risked to earn it
  • #3,134
  • Jul 18, 2013 5:55pm Jul 18, 2013 5:55pm
Quoting vlady1974
{quote} I think it means be aware of it... but since it's not "there" while Dissimilarity Time exists... then what trade could possibly affect it? None. Therefore you can still trade a ZZ Top or Bottom inside or outside that zone. You can also still use it as a target.
Yes, that makes sense, thanks for clarifying.

I take it that the idea of using two charts with the two rv indicators has been shelved. Maybe I missed that post. Everyone seems to be using one still?

Come on price, you know you want to 'flow' upwards!!!!
  • #3,135
  • Jul 18, 2013 5:58pm Jul 18, 2013 5:58pm
Quoting vlady1974
{quote} Hey Lion, To me, if it's not on the chart yet, I am not going to create a trade decision based upon it. I think that this expectation of where price is compared to an unborn zone causes confusion. I realise it's important. But wouldn't it be easier if the unborn zone is NOT considered a support/resistance zone until it is born? That removes your question's issue. Also, once Dissimilarity Starts.... the price can do anything it wants... dissimilarity is just the difference between price and stochastic, that doesn't mean traders wont push...
You are 10 times the trader I am but I will embarrass myself and offer the following counter suggestions.

1)Where price will be when the zone forms is not just important,it is key that is why we have to mark it first.
2)When price breaks the DS we can guess where price will be be but that answer is not confirmed since it is observed that price can very well go back and break it the other way therefore we need to observe how it behaves around the unborn zone first. If it bonces off the unborn after the break or reverses near it I think we can assume the direction of the break to be true. If it goes thru and break the other way we simply repeat the observation again. If price were to bounce off the unborn it tends to do it a few times so we have ample time to determine if a break is true or false
3)I am inclined to think at the moment that DS or not, price movement is restricted to the zones it is currently between, if we look only at painted or painting zones all we will see is history...we need the unborn in order to project price movement and pick targets

For your considerations
I want more brain power!
  • #3,136
  • Jul 18, 2013 6:00pm Jul 18, 2013 6:00pm
Quoting Eurusdd
{quote} good.!!! I think price has something to correct at 1.31835. The probability for error is very small. good night!
I want more brain power!
  • #3,137
  • Jul 18, 2013 6:04pm Jul 18, 2013 6:04pm
Quoting cfdtaleong
{quote}
Careful, he corrected this to 1.31583
  • #3,138
  • Jul 18, 2013 6:38pm Jul 18, 2013 6:38pm
Quoting taypot
{quote} Careful, he corrected this to 1.31583
Thanks for the warning but its not that price that I am concerned about at the moment. Its the validity of the framework I am working on that is of primary concern. If my way of predicting price movement and picking targets is correct I may very well have found a reliable way to trade this concept.
I want more brain power!
  • #3,139
  • Jul 18, 2013 6:39pm Jul 18, 2013 6:39pm
Quoting cfdtaleong
{quote} You are 10 times the trader I am but I will embarrass myself and offer the following counter suggestions. 1)Where price will be when the zone forms is not just important,it is key that is why we have to mark it first. 2)When price breaks the DS we can guess where price will be be but that answer is not confirmed since it is observed that price can very well go back and break it the other way therefore we need to observe how it behaves around the unborn zone first. If it bonces off the unborn after the break or reverses near it I think we...
These are excellent questions!

1. For me, it is not key. I trade price. If a zone is real, it either becomes a target or a blockage. A price range that "could be a target or blockage" gives me no trading opportunity right now. I don't disregard it, I am aware of it and know where it is at all times in relation to current price and other nearby zones.

2. See chart and the notes

3. I disagree in a sense that my target is not the Pregnancy, but the Baby at the End of the Pregnancy. As show in the Chart, one pregnancy took a bloody long time to finish. Price went up and down like a yo-yo.... but no baby.... What then is your target? The answer must be, an older Zone that is real and has already been born. In addition, I think the overlooked goldmine is that Dissimilarity is what we have to TRADE. Most of the ZZ Tops and Bottoms appear near/on/after the start of DS. So why would I worry about the pregnancy being support/resistance if my target is another zone?

Those are my thoughts. I think there is definitely a discussion to be had - and possibly someone (Neio probably, as he says he has a plan for the DS Zones) can show us a trading plan based on a new Dissimilarity Zone. But your points are valid and obviously should be thought about.
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A pip is only worth it if you know how much you risked to earn it
  • #3,140
  • Edited 7:19pm Jul 18, 2013 6:56pm | Edited 7:19pm
Quoting vlady1974
{quote} These are excellent questions! 1. For me, it is not key. I trade price. If a zone is real, it either becomes a target or a blockage. A price range that "could be a target or blockage" gives me no trading opportunity right now. I don't disregard it, I am aware of it and know where it is at all times in relation to current price and other nearby zones. 2. See chart and the notes 3. I disagree in a sense that my target is not the Pregnancy, but the Baby at the End of the Pregnancy. As show in the Chart, one pregnancy took a bloody long time...
I think we are getting close......let me put both ideas together and think it through. Your input has been invaluable

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I would have planned my trades the same way on the circled part. In this case you planned it such because the blue zone was the only valid target, it was an "incentive" for price to move that way if can phrase it in such a way. Do correct if I'm wrong. I planned mine the same way because I felt price had "no choice" but to go there. Two thoughts one result we have DS and S across traders!!!
I want more brain power!
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