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Similarity: A Practical Approach

  • #441
  • Jul 31, 2013 8:41am Jul 31, 2013 8:41am
Quoting Me3w
{quote} Hi joe, Can I ask you how you make use of your RSI and CI ?
I wait for the dissimilarity in the indicators. Believe it or not, this concept is not new. The best person to get books on about this is Constance Brown. It is high level stuff, tho.

What I do is I just wait for the RSI to be pointing up, and the Composite Index to be pointing down, or vice versa. Very easy to spot, and works on all timeframes. Similarity returns when both indies are going in the same direction, or one of them is flat. This is the vast majority of the time. I will post charts whenever I spot a DZ in my setup. Also, remember, there is more than one way to apply this principle.
If you are good at something, never do it for free--Joker
  • #442
  • Jul 31, 2013 8:47am Jul 31, 2013 8:47am
I do not use similarity-dissimilarity. I find it too confusing for my little brain to grasp.

And it seems to follow no rules. I know EURUSDD said that most of the time the price comes back to the dissimilarity zone. But most of the times it also seems not to. Also there are too many variables with this method. First of all we do not know if the dissimilarity that we are looking at is the real one or not. According to EURUSDD there is 65% chance of that dissimilarity to be the true one. But I cannot trust my luck. Strong money management might help here.
But still even if we know that a zone is a true dissimilarity we do not know if it will act as a support or resistance or it will attract price and let the price pass through it easily. We do not know if this is going to happen then when is it going to happen - at what time the price will return back to take out the dissimilarity zone. On the second thoughts the true ZZ top/bottom might help here. But do we know how to judge a true top/bottom.

Too many variables in this method but only if you can manage them properly and find an optimum equilibrium between them then this method can be a real winner. But till then be cautious and keep experimenting.
  • #443
  • Jul 31, 2013 8:54am Jul 31, 2013 8:54am
Quoting Richterzoo
{quote} Good for you! More success to you.

Thanks Richterzoo!!

I hope everyone here gains something from this thread and become wiser with this tricky market. Success to all
  • #444
  • Edited 9:16am Jul 31, 2013 8:57am | Edited 9:16am
Quoting ravs_avs
{quote} Hi Effex, The chart has been posted above. Red lines denote entry and TP. Blue arrows are the various signals that I look for. If ZZ appears the outer band I do the following: Place buy at a little distance above the ZZ Place sell after it has been confirmed in 5 mins TP on the other BB band I trade 5-15 mins chart
Hy Rav,

Very good and many thanks for sharing !

We can see during the climb of the ZZ how much it repainted and not confirmed by the stock.
Multi-phase setup, each step is confirmed by another one gives the result is more reliable. Please correct me if i am wrong :

1 - ZZ shows a new top or bottom
2 - Is Stock = 100 or 0 (100 here) ? No : wait for a new top or bottom of ZZ in the same direction. If not the same direction, goto 1.
3- Put pending buy above top, pending sell at blue line (and move it on every bar)
3 - Wait for buy or sell tiggered, cancel the other one.
4 - Exit at the last bottom if the price retraces
5 - Exit at ? when price continues (not shown in the graph)

For confirmation, your blue line is an EMA ?

Wish the best for everybody.
Enter Signature
  • #445
  • Edited 9:37am Jul 31, 2013 9:15am | Edited 9:37am
Quoting jmn5611
{quote} I wait for the dissimilarity in the indicators. Believe it or not, this concept is not new. The best person to get books on about this is Constance Brown. It is high level stuff, tho. What I do is I just wait for the RSI to be pointing up, and the Composite Index to be pointing down, or vice versa. Very easy to spot, and works on all timeframes. Similarity returns when both indies are going in the same direction, or one of them is flat. This is the vast majority of the time. I will post charts whenever I spot a DZ in my setup. Also, remember,...
I thought her CI is used to capture the +/- divergence/reversal where the RSI divergence/reversal did not capture.

Is it you called the Dissimilarity in the indicators ? OR
your dissimilarity in the indicators is refer to the stochdiff created the zone ?

How about her derivative osc, can it use for the same purpose ?
  • #446
  • Jul 31, 2013 9:23am Jul 31, 2013 9:23am
Quoting FxGunner
{quote} Hy Rav, Very good and many thanks for sharing ! We can see during the climb of the ZZ how much it repainted and not confirmed by the stock. Multi-phase setup, each step is confirmed by another one gives the result is more reliable. Please correct me if i am wrong : 1 - ZZ shows a new top or bottom 2 - Is Stock = 100 ? No : wait for a new top or bottom of ZZ in the same direction. If not the same direction, goto 1. 3- Put pending buy above top, pending sell at blue line (and move it on every bar) 3 - Wait for buy or sell tiggered,...
Hi FxGunner,

Very well summarised though I do not use the blue EMA for placing my pending order. My orders are more based on the distance from the daily pivots and/or ZZ top/bottom confirmation on 5 min or 15 min.

Ravs
  • #447
  • Edited 10:54am Jul 31, 2013 9:38am | Edited 10:54am
Quoting jmn5611
{quote} I wait for the dissimilarity in the indicators. Believe it or not, this concept is not new. The best person to get books on about this is Constance Brown. It is high level stuff, tho. What I do is I just wait for the RSI to be pointing up, and the Composite Index to be pointing down, or vice versa. Very easy to spot, and works on all timeframes. Similarity returns when both indies are going in the same direction, or one of them is flat. This is the vast majority of the time. I will post charts whenever I spot a DZ in my setup. Also, remember,...
Hi Joe, Would you mind giving me your view on this 4hr difference which I have spotted. I am trying to understand what is happening with these two indicators as there is at first glance strong divergence but I think its just the scale or time of charts I have wrong as it doesn't make sense to me at the moment.
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  • #448
  • Edited 10:54am Jul 31, 2013 9:51am | Edited 10:54am
Quoting taypot
{quote} Hi Joe, Would you mind giving me your view on this 4hr difference which I have spotted. I am trying to understand what is happening with these two indicators as there is at first glance strong divergence but I think its just the scale or time of charts I have wrong as it doesn't make sense to me at the moment. {image}
Here I have put them both on the same 1 hr chart. Maybe I can compare them easier like this
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  • #449
  • Jul 31, 2013 9:54am Jul 31, 2013 9:54am
Quoting taypot
{quote} Here I have put them both on the same 1 hr chart. Maybe I can compare them easier like this {image}

Here is some idea for you, Constance Brown's Composite Index is actually CFG MO
http://www.dailyfx.com/forex_forum/f...scillator.html
  • #450
  • Jul 31, 2013 9:56am Jul 31, 2013 9:56am
Hi,

Started to play with the Fib levels and pivot points. Have to work long ours the next two days, will catchup later. Tell me if these indicators help with your trading?
Attached File(s)
File Type: mq4 Fibonacci_Daily.mq4   6 KB | 459 downloads

Attached File(s)
File Type: mq4 Fibonacci_Daily.mq4   6 KB | 459 downloads

Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-m15-forex-capital-markets-2.png Size: 43 KB

PS sorry I downloaded Fib daily twice
Attached File(s)
File Type: ex4 Pivot Support Resistance Auto.ex4   5 KB | 348 downloads
  • #451
  • Jul 31, 2013 10:06am Jul 31, 2013 10:06am
Quoting ravs_avs
According to EURUSDD there is 65% chance of that dissimilarity to be the true one.
Ravs,


The 65% of dissimilarity zones being true, is ONLY based on using Ralomes indicator to find the zones.

Also thanks for sharing your setups. however, just wondering if you have tried using the below method:

Placing one sell limit order above the FIRST point that ZZ appears rather than a buy stop above?

This was effective on the 1m time frame to great use by placing a sell limit/buy limit order above or below the point at which the ZZ FIRST appears. You need to be very aware however of the average number of bars it will take for the ZZ to repaint...During different volatility periods this can range depending on the pair as well. Sometimes price hits your order and sometimes it doesn't.

Here is the link to the strategy with explanation, perhaps this can be used with the ZZ top/bottom method, just ognore the part where he wants to make it into an EA.

http://www.forex-tsd.com/elite-secti...new-lines.html
  • #452
  • Edited 10:54am Jul 31, 2013 10:23am | Edited 10:54am
Quoting Me3w
{quote} Here is some idea for you, Constance Brown's Composite Index is actually CFG MO http://www.dailyfx.com/forex_forum/f...scillator.html
Wow thanks Me3w.. i have homework to do. So much interesting stuff today and my demo trades were mostly winners too!

I will take a look at CFG MO but in the meanwhile here's an interesting (pretty) view of Joe's indicators with some DS blocked in in blue. They seem to mark turning points, fractals often accompany them and the BF MWI shows most of them as low volume fade areas or high volume fight areas .

There's actually one taking place at the moment on the hour chart
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  • #453
  • Jul 31, 2013 10:37am Jul 31, 2013 10:37am
Hi Joe,

OK. I see some thing. Seen also linked to you zigzag Top/Bottom
Look forward to your posting.
Attached Image (click to enlarge)
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  • #454
  • Jul 31, 2013 10:39am Jul 31, 2013 10:39am
Just to get back on topic similarity. Is anyone using this template from the other forum? I took a trade after the dissimilarity. Used the fib numbers to get in and out. 1.32418, 1.35192. Practice account up $333.00. I like how it predicts when dissimilarity will begin. I don't know where the template can be downloaded. Any thoughts?
Attached Image (click to enlarge)
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  • #455
  • Jul 31, 2013 12:00pm Jul 31, 2013 12:00pm
It is now the 6th day price has failed to break and stay over the 1.3294 level.
There is massive resistance at this level and two zones (one currently painting) has been acting as resistance at this level.

If we spike up now and take out that currently painting zone, I will set my aim on the zones below.
That is ofcourse if not price closes and stays above 1.3294. If it does I think we will continue the uptrend.

Another thing that makes me feel that we are going down soon is how we have that strong resistance at 1.3294 witch have put us in a rather ranging market when looking at higher TFs, and at the same time we have lower lows on the bottoms each time.

There are some zones below that should be closed! At least some of them!

Attached Image (click to enlarge)
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  • #456
  • Jul 31, 2013 12:16pm Jul 31, 2013 12:16pm
Hi guys!

I'm relatively new to this method but I have traded micro lots using EURUSDD's similarity approach in the past few weeks.
Still using the CI method though, haven't really go through the Stoch-BB-ZZ method yet.
I just want to say my thanks to EURUSDD, madmoney, vlad, and Neio (for posting the pdf) for the method.

Here's my result for the past few weeks:
Attached Image (click to enlarge)
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As you can see, I've increased my lot size today to indicate my confidence in the system.
I have also set stop losses after the huge loss on 25th July.

Still, I am having problem figuring out the core theory/idea behind the similarity system.
Hopefully, I'll be able to learn from the experts here.

Till then, happy pipping!
  • #457
  • Edited 1:36pm Jul 31, 2013 1:07pm | Edited 1:36pm
Quoting xuenn
Hi guys! I'm relatively new to this method but I have traded micro lots using EURUSDD's similarity approach in the past few weeks. Still using the CI method though, haven't really go through the Stoch-BB-ZZ method yet. I just want to say my thanks to EURUSDD, madmoney, vlad, and Neio (for posting the pdf) for the method. Here's my result for the past few weeks: {image} As you can see, I've increased my lot size today to indicate my confidence in the system. I have also set stop losses after the huge loss on 25th July. Still, I am having problem...
Congrats Xuenn !

As a "practical approach" of the CI indicator : how do you handle the CI repainting ? I am always in the "learning phase". I hesitate into the two methods... CI is really easier but this is the repainting stuff that makes it not easy.

Thank you.
Enter Signature
  • #458
  • Jul 31, 2013 1:10pm Jul 31, 2013 1:10pm
Quoting spufuz
If we spike up now and take out that currently painting zone, I will set my aim on the zones below. That is ofcourse if not price closes and stays above 1.3294.
All right, so that did just happen. It will be very interesting to see what happens now.
Got new dis-similarity on M5 right on the bar that took out the zone. Looks like we could get dis-sim on H1 when the bar Closes.
  • #459
  • Jul 31, 2013 1:20pm Jul 31, 2013 1:20pm
By the way, that move was huge! I took out the zone in a matter of seconds. Crazy!
This is to me a hint that these zones are not just there by coincidence, there is some big forces behind it.
  • #460
  • Jul 31, 2013 1:22pm Jul 31, 2013 1:22pm
Quoting xuenn
Hi guys! I'm relatively new to this method but I have traded micro lots using EURUSDD's similarity approach in the past few weeks. Still using the CI method though, haven't really go through the Stoch-BB-ZZ method yet. I just want to say my thanks to EURUSDD, madmoney, vlad, and Neio (for posting the pdf) for the method. Here's my result for the past few weeks: {image} As you can see, I've increased my lot size today to indicate my confidence in the system. I have also set stop losses after the huge loss on 25th July. Still, I am having problem...

Great post Xuenn! Congrats for your results! The CI method continues to be great profits for many

The problem I had (and I think many others) was getting the settings right on the indicator.

Did you use Eurusdd original formula on the indicator or did you have to adjust anything? Do you mind posting your settings for us to try out as it seems it differs a lot cross brokers as well when using CI. (in fact this was one of eurusdd main teachings as well - cross broker dissimilarities)

Happy pips!
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