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Similarity: A Practical Approach

  • #161
  • Jul 28, 2013 4:07pm Jul 28, 2013 4:07pm
Quoting Gvc
{quote} Spot on with Strategy 1 Dewey. It is a high probability trade if the Stoch reaches the 0 or 100 level with your conditions in strat 1.
Yes, and tie it in with the period after a DZ forms in order to test the system Jmn proposed in post 1!!! We have a plan.


Quoting Jmn Now for the system.


After a DZ is formed, we wait for price to move away from it. It needs to move far enough away for price to breach the BB, a semaphor and zigzag must also have formed. The original similarity thread has gone deep into theory, so I thought I would use a piece of that theory and create a system for everyone to test. The rules are not in stone. So everyone is welcome to contribute. The idea for this thread is to have clear, concise rules. Coders and testers are welcome, of course.

Quoting Dewey Strategy 1

Stoch goes outside band, EMA goes outside same band, ZZ Top or Bottom forms, Enter trade, SL = 10 pips, TP is middle band
  • #162
  • Jul 28, 2013 4:19pm Jul 28, 2013 4:19pm
I have marked an example on the picture below.

That is not a dissimilarity, but one of eurusdd methods on his indicator thread.....

The real sweet trade is on the bottom left of the picture.

A dissimilarity with the Stoch almost on 0 and all the other conditions....
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.gif Size: 15 KB
  • #163
  • Jul 28, 2013 5:11pm Jul 28, 2013 5:11pm
Quoting taypot
{quote} Yes, and tie it in with the period after a DZ forms in order to test the system Jmn proposed in post 1!!! We have a plan. Quoting Jmn Now for the system. After a DZ is formed, we wait for price to move away from it. It needs to move far enough away for price to breach the BB, a semaphor and zigzag must also have formed. The original similarity thread has gone deep into theory, so I thought I would use a piece of that theory and create a system for everyone to test. The rules are not in stone. So everyone is welcome to contribute. The idea...
I actually find it easier to trade away from the "unborn" zones than finding the right spot for entry when price wants to go back and close a zone.
Done some good trades in simulator today and I really find the Stoch/BB/ZZ method combined with the zones indicator very promising!
This is actually the first time I have been able to expect where price is going rather than hoping/guessing.

However, I have a long way to go. Have to manage my entries better, with right S/L and T/P strategies.

What im currently testing is Stoch/BB/ZZ with dis-similarity combined on the H1 chart.
Will post charts as I demo-trade it live and we will se how it goes!
  • #164
  • Jul 28, 2013 5:23pm Jul 28, 2013 5:23pm
Nothing for me to post yet, price has returned to similarity, but is still inside the DZ. I need to take a nap, so when I wake up, I will post what I see. If I missed a trade, I will post that also. I am still waiting for FF to give me vouch privileges so I can thank the folks on here who have expanded my knowledge. I will use the vouches responsibly as the rules state.
If you are good at something, never do it for free--Joker
  • #165
  • Jul 28, 2013 7:03pm Jul 28, 2013 7:03pm
Quoting Dewey McG
Thanks for starting this thread. Here is something I was working on before getting locked out. I have been working on 2 strategies that came from different ideas that were presented which I think show some promise: Strategy 1 Stoch goes outside band EMA goes outside same band ZZ Top or Bottom forms Enter trade SL = 10 pips TP is middle band Strategy 2 Stoch goes outside band EMA goes outside same band ZZ Top or Bottom forms Price crosses mid band enter trade SL is opposite band (top band if a short, lower band if a long) TP is next ZZ top or bottom...
Hey Dewey,

Thanks for a clear outline but you must take note of the following I think:

Your analysis and your win/loss ratio is based on the history of your charts. This looks great on historical charts yet the problem is identifying these anomalies and applying it in real time when price is actually outside of the BB.

For example your first strategy was suggested as this:

Stoch goes outside band

EMA goes outside same band

ZZ Top or Bottom forms

Enter trade


Yet in real time it looks like this (and this is what we are trying to solve using the similarity principle):


Stoch goes outside band (and could go further) = problem #1

EMA goes outside same band (and could go further) = problem #2

ZZ Top or Bottom forms (but as this indicator repaints, it cannot be considered a real top or bottom unless confirmed by the principles of similarity using the stoch/bb/zz method developed and still being investigated by vlady and others from the old thread and this one was well) = problem #3

Enter trade (you would be entering on nothing more than price and the ema being outside the Bollinger bands in which case we are not entering the market with any correlation of similarity, thus making this entry void on the porinciples of simlarity.)
  • #166
  • Jul 28, 2013 7:11pm Jul 28, 2013 7:11pm
I wasn't expecting to take any trades in the Asian session, but when I pulled up my chart this was right here in front of me. Since it is a demo I decided to go for it, even if my entry was a tad late. I also clicked the close trade just before it hit the middle band--trigger finger but you get the idea.
Attached Image (click to enlarge)
Click to Enlarge Name: trade example.jpg Size: 300 KB
  • #167
  • Jul 28, 2013 8:21pm Jul 28, 2013 8:21pm
Quoting Dewey McG
I wasn't expecting to take any trades in the Asian session, but when I pulled up my chart this was right here in front of me. Since it is a demo I decided to go for it, even if my entry was a tad late. I also clicked the close trade just before it hit the middle band--trigger finger but you get the idea. {image}
Thanks Dewey
Now we got your point...
i worshipped... Momentum
  • #168
  • Jul 28, 2013 8:37pm Jul 28, 2013 8:37pm
Quoting xixi
{quote} I think there's no difference between testing environment and realtime.
Ok thanks Xixi, I hope that is right and I am watching the charts as we speak.. Is it an option that we can make this indicator for other pairs and/or other time frames?

jt
"Even if you fall down face first, you still went forward."
  • #169
  • Jul 28, 2013 9:27pm Jul 28, 2013 9:27pm
Quoting Effex
{quote} Hey Dewey, Thanks for a clear outline but you must take note of the following I think: Your analysis and your win/loss ratio is based on the history of your charts. This looks great on historical charts yet the problem is identifying these anomalies and applying it in real time when price is actually outside of the BB. For example your first strategy was suggested as this: Stoch goes outside band EMA goes outside same band ZZ Top or Bottom forms Enter trade Yet in real time it looks like this (and this is what we are trying to solve using...
Well defined!! How do we overcome the issues then? To me we are just entering based on indicators..even with the sim principles. Its is mentioned that even with sim principle, accuracy is only 97%. So I won't bother with the perfect entry I focus on placing sensible stops. I won't say I can solve the issues but for myself I mitigate them using the zones as S/R.
I want more brain power!
  • #170
  • Jul 28, 2013 9:54pm Jul 28, 2013 9:54pm
Quoting Effex
{quote} Hey Dewey, Thanks for a clear outline but you must take note of the following I think: Your analysis and your win/loss ratio is based on the history of your charts. This looks great on historical charts yet the problem is identifying these anomalies and applying it in real time when price is actually outside of the BB. For example your first strategy was suggested as this: Stoch goes outside band EMA goes outside same band ZZ Top or Bottom forms Enter trade Yet in real time it looks like this (and this is what we are trying to solve using...
Your points are well taken and this strategy is by no means a proven one at this point. The idea came from the Similarity thread and I simply felt it is worth exploring further.

A couple points though—if you use the ZigZagN indicator you can see where the ZigZag indicator painted to help with visual back testing. Also, the idea of only taking the trade when you have confirmation from both the BB of the stoch and the ZigZag should help reduce the runners which kill any BB-only strategies.

What I have observed, albeit from a small sample, is that you can use a small stop loss (10 pips) and still have mostly winners which will average being higher than most of the losers.

What I would like to do is to code an EA for this as mentioned so I can back test it over a longer period of time, then optimize and do a walk forward analysis to see if it is really worth running live. My coding skills are very limited so if I do this on my own it may take a while. I might try this on the Zorro platform first because it is easier and the testing phase is much faster as well, then transfer over to Mt4. In the meantime, I will also try this on demo since forward testing is best anyways. I have done a few weeks chosen at random on a trade simulator with decent results. The sample is too small to say this is a great strategy yet but I think it warrants further testing.

Will using Ralome's similarity indicator make it more viable? I don't know yet. At this point I wanted to test this further
  • #171
  • Jul 28, 2013 9:54pm Jul 28, 2013 9:54pm
So strategy tester and live aren't at this stage looking the same. See the red and green dots/bars which are the targets on pic 1? (strategy tester) bu nothing on live chart no. 2.

http://i43.tinypic.com/ou8jv7.png

http://i40.tinypic.com/2pzjzig.png
"Even if you fall down face first, you still went forward."
  • #172
  • Jul 28, 2013 10:29pm Jul 28, 2013 10:29pm
Quoting juicyt
{quote} Ok thanks Xixi, I hope that is right and I am watching the charts as we speak.. Is it an option that we can make this indicator for other pairs and/or other time frames? jt
You can use it for any pairs or timeframes if you like but you must find the optimal parameters. Eurusdd said parameters we are using is optimal for EU M15 only.
  • #173
  • Jul 28, 2013 10:36pm Jul 28, 2013 10:36pm
Quoting juicyt
So strategy tester and live aren't at this stage looking the same. See the red and green dots/bars which are the targets on pic 1? (strategy tester) bu nothing on live chart no. 2. {image} {image}
Looks like there's another indicator included when you run strategy tester. The red and green dots are not from StochDifZoneX indicator.
  • #174
  • Jul 28, 2013 10:45pm Jul 28, 2013 10:45pm
I deleted everything and ran it and those dots/lines still appear in the tester. As you can see, nothing else there....

Help!


http://i42.tinypic.com/555ekn.png
"Even if you fall down face first, you still went forward."
  • #175
  • Jul 28, 2013 10:52pm Jul 28, 2013 10:52pm
ok, so it seems my mt4 has decided to put those dots/lines there as it knows the future. All indicators deleted and there they are, appearing all over the place.

http://i43.tinypic.com/116pa1f.png
"Even if you fall down face first, you still went forward."
  • #176
  • Jul 28, 2013 10:57pm Jul 28, 2013 10:57pm
Quoting metcalfe
{quote} Could you post the template?

Hi Metcalfe, sorry for late reply
here my template
and also u need that 3 custom indicators for complete setting
the rest are standard indicators..


pass for #Signal_Bars_v10a ff : free_at_ff

hope it helps
Kiads.
Attached File(s)
File Type: tpl ! mth stoch bb env diffzone.tpl   40 KB | 513 downloads
File Type: ex4 #Signal_Bars_v10a ff .ex4   39 KB | 539 downloads
File Type: ex4 !T_KIADS_Market_Time_v01.ex4   66 KB | 561 downloads
File Type: mq4 StochDifZoneX_v2_1.mq4   10 KB | 597 downloads
  • #177
  • Jul 28, 2013 11:13pm Jul 28, 2013 11:13pm
Quoting jmn5611
Thanks to all who want to continue this very interesting discussion. So, what is similarity? What does it represent? What are these so called black holes? Well from what I can see, which is not very much, using indicators to spot the black holes has to do with momentum. Or better yet, uniform price flow. I think dissimilarity begins when uniform price flow ends. So price has to go back there to correct that "error" Thoughts?
Hi Bro,

I am in. Thanks for starting it.
  • #178
  • Jul 28, 2013 11:28pm Jul 28, 2013 11:28pm
Quoting spufuz
{quote} I agree about price coming back in to BB. Its too dangerous taking entry at what you believe is the top when price is outside the BB. Price often continues away in that direction and stops you out. It would be great to be able to wait for price to come back into BB and take entry there, BEFORE we get to middle band..
Yes, that really correct. i use 2 bb (high and low) to reduce that problem..
  • #179
  • Jul 29, 2013 12:28am Jul 29, 2013 12:28am
Quoting jmn5611
{quote} They have a 14 day lifespan. After that, the probability of them being viable targets falls off the cliff, according to EURUSDD. There is something like a 90% probability that they will be taken out within 14 days. Even if we do not know when, if we follow the rules we have set for ourselves so far, our R/R ratio should put us in a good place.
Hi Joe, or anybody who already know.. why 14 days.. could you explained the logic behind please ?. and counting from when/where ? because different broker time zone will give us different set of data especially on H4 above.. and if we want to know when that 'big boys' enter or exit the market i believe that we must 'see' similar price data with them ( base on 0 gmt maybe..,) so we must use indicators that capable to make time shift adjustment.. and we will 'see' same sim-disim zone when we discuss about that..
  • #180
  • Jul 29, 2013 12:54am Jul 29, 2013 12:54am
Quoting juicyt
I deleted everything and ran it and those dots/lines still appear in the tester. As you can see, nothing else there.... Help! {image}
Note that you're using Ralome's indicator, not mine.
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