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How can I get 99% of profit trades? this is my idea...

  • #61
  • Apr 11, 2014 4:00am Apr 11, 2014 4:00am
Quoting Nepul
"A good analogy is a coin toss: The probability of tossing 2 consecutive heads is 50%^2, i.e. 25% But if a head has just been tossed, the probability of the next toss being a head is still 50%" Chaosbun i want to mean , that "in the same chart" to see one marubozu candle or to see two consecutive marubozu candle have the same probability? no for sure man... Remember we are talking of the same chart ! Not 2 consecutives marubozu of my trades.... I guess that if we assume that it's rarely a marubozu candle appears, next( IN THE SAME CHART AND ONLY...
Hanover is talking about conditional probability. What is the probability of seeing two consecutive morabozus? What is the probability of seeing a morabozu given that the day before was already a morabozu?
The probability of a morabozu is 929 chance out of 3839 (24.19%), according to my E/U daily database. If this event is independently distributed, two consecutive morabozus would happen with probability 0.2419*0.2419=0.05856. Then for 3839 candles I should see around 225 pairs of morabozus. I found 228 of them in my database! Therefore there is a very very good chance than the occurence of one morabozu yesterday doesn't reduce the chance of seeing one today.
No greed. No fear. Just maths.
  • #62
  • Apr 11, 2014 4:05am Apr 11, 2014 4:05am
what you are sayng is that we have 24.19% to see 1 marubozu, and 5.85% to see two consecutives marubozu?
did i understand well Pipmeup ?
  • #63
  • Edited 4:56am Apr 11, 2014 4:06am | Edited 4:56am
E/U opened, went up 20 pips and returned to the entry price. What is the probability it reaches 10 pips TP before 40 pips SL?
If the pips movements are independent and identically distributed, 80%. If you find more in your historical data you have an edge. A small one but one.

EDIT: oops 80% not 20% (which is the proba to lose).
No greed. No fear. Just maths.
  • #64
  • Apr 11, 2014 4:30am Apr 11, 2014 4:30am
Quoting Nepul
what you are sayng is that we have 24.19% to see 1 marubozu, and 5.85% to see two consecutives marubozu? did i understand well Pipmeup ?
Correct. And also that if yesterday was a marubozu, today can be a marubozu too with the same proba. of 24.19%. Not smaller.
No greed. No fear. Just maths.
  • #65
  • Apr 11, 2014 6:24am Apr 11, 2014 6:24am
Quoting PipMeUp
{quote} Correct. And also that if yesterday was a marubozu, today can be a marubozu too with the same proba. of 24.19%. Not smaller.

i really don't understand PipMeUp, unlukly i'm not able like you to test it with excel something like that.
I'm also not good in math, but also if i try to check in the past daily chart, i find rarely a marubozu, and still more and more rarely two consecutives marubozu candle, so i supposed to have less probability, by the way maybe i wrong.
The best way should be to test it with an indicator or ea, or an excel too..

it's like a bet, roulette black or white, after 5 times that show us black , i think in the next one(6 time) we have more probability....it doesn't have sense , but it is..i guess...
by the way correct me please if i wrong
  • #66
  • Apr 11, 2014 6:28am Apr 11, 2014 6:28am
Quoting PipMeUp
E/U opened, went up 20 pips and returned to the entry price. What is the probability it reaches 10 pips TP before 40 pips SL? If the pips movements are independent and identically distributed, 80%. If you find more in your historical data you have an edge. A small one but one. EDIT: oops 80% not 20% (which is the proba to lose).
Target hit. But I don't know if the 3900 RN helped or not.
No greed. No fear. Just maths.
  • #67
  • Apr 11, 2014 6:40am Apr 11, 2014 6:40am
Quoting Nepul
{quote} i really don't understand PipMeUp, unlukly i'm not able like you to test it with excel something like that. I'm also not good in math, but also if i try to check in the past daily chart, i find rarely a marubozu, and still more and more rarely two consecutives marubozu candle, so i supposed to have less probability, by the way maybe i wrong. The best way should be to test it with an indicator or ea, or an excel too.. it's like a bet, roulette black or white, after 5 times that show us black , i think in the next one(6 time) we have more...
I'm not technically searching text book morabozu but candles with no wick longer than 7 pips at the side of the open. Because this was the losing scenario.
When you look at a chart it's not obvious at all that a doji is the most probable candle. Yet it is. The excel file contains the daily candles I have for E/U. HTH
Attached File(s)
File Type: xlsx EU-Daily.xlsx   160 KB | 274 downloads
No greed. No fear. Just maths.
  • #68
  • Apr 11, 2014 6:41am Apr 11, 2014 6:41am
Quoting PipMeUp
{quote} Target hit. But I don't know if the 3900 RN helped or not.
target hit? are you testing it today, there was no chance on EU today about this strategy,,,
  • #69
  • Apr 11, 2014 6:58am Apr 11, 2014 6:58am
Quoting Nepul
it's like a bet, roulette black or white, after 5 times that show us black , i think in the next one(6 time) we have more probability....it doesn't have sense , but it is..i guess...
by the way correct me please if i wrong
I must correct you here. This is called "Gambler fallacy". The 6th time you'll get black with the very same probability as for any spin: 48.65% (00 is green!)
If ever you go some day to a casino ask a croupier how many times he saw like 20 red in a row. You'd be amazed!
No greed. No fear. Just maths.
  • #70
  • Apr 11, 2014 7:07am Apr 11, 2014 7:07am
Quoting Nepul
{quote} target hit? are you testing it today, there was no chance on EU today about this strategy,,,
No the one I explained you posts 34 and 42.
No greed. No fear. Just maths.
  • #71
  • Apr 11, 2014 10:33am Apr 11, 2014 10:33am
Quoting PipMeUp
{quote} I'm not technically searching text book morabozu but candles with no wick longer than 7 pips at the side of the open. Because this was the losing scenario. When you look at a chart it's not obvious at all that a doji is the most probable candle. Yet it is. The excel file contains the daily candles I have for E/U. HTH {file}
No, this is not our losing sce nario.it is only when open is completely the same of or a low or a high..Thar is the main important thing
  • #72
  • Apr 12, 2014 5:28am Apr 12, 2014 5:28am
PipsMeUp i want say say you something about the strategy that is extremely important:
The open must be completely the same of the high or low to be a marubozu and to make us to lose.
No not longer than 7 pips, but completely the same, this is the only candle make use lose! and this is the really rarely candle i was talking for.
In your past test are you refering to it?

Remember #post 32 chart, there i explain how i think to entry in the candle.
Price open and go quickly down( in this time high == open), when price go down 5pips(or 6 ,depend from your spread) we wait until price go to make the high! ok?
when price make just 1 pips above the open(high) we exit from the position(and we earn 5-6 pips), because we are assuming that the only marubozu with open = high are very rarely not the other.
A candle who make 2-3-4-5 pips of max or min, have more probability to appear and i'm not refering to it.
  • #73
  • Apr 12, 2014 5:41am Apr 12, 2014 5:41am
Quoting Nepul
PipsMeUp i want say say you something about the strategy that is extremely important: The open must be completely the same of the high or low to be a marubozu and to make us to lose. No not longer than 7 pips, but completely the same, this is the only candle make use lose! and this is the really rarely candle i was talking for. In your past test are you refering to it? Remember #post 32 chart, there i explain how i think to entry in the candle. Price open and go quickly down( in this time high == open), when price go down 5pips(or 6 ,depend from...
If price opens and goes down, you're buying against the current move. What is your trigger to go long? If your target is the open price the potential profit is too small to make this method profitable if the SL is 40 pips below the open. what is your SL?
This is E/U from Friday 00:00 UTC. It went up from the open. So you would have gone short? Where would you have entered?
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-M5.png Size: 24 KB
No greed. No fear. Just maths.
  • #74
  • Apr 12, 2014 10:10am Apr 12, 2014 10:10am
Thanks you for the chart PipMeUp, it's a good example...
If we assume , as you said in your excel file, that marubozu with wick of 0 are only 6%, we can say that all the other candle (94%) are all possible winning trades...am i right about the 6%?if not, are you able to check with excel how many candle we can find with 0 high or 0 low, please???thank you in advance...

As you can see in your last chart of friday price go out from the open candle for 20 pips, before to make a new daily low...so we could profit for 20 pips(that is the distance from the open) and stop loss for still 20...or taking only 5pips risking 50 pips...by the way for now i'm not concentring on the entry, but only on the number...

As i said in my first post in this thread i'm looking for 99% probability, even if i take only 5 pips, i dont care...i need 99%.... later anyway we can improve in a better way taking profit more pips.
  • #75
  • Apr 12, 2014 1:56pm Apr 12, 2014 1:56pm
I uploaded an excel post#67 so you can test ideas.

Why do you NEED 99%?

What about this day? It went up 3 pips only. Would you have entered short after 2 pips to reach the open for 1 pip?How would know that you shouldn't wait longer?
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-M15-2014-03-19.png Size: 17 KB
No greed. No fear. Just maths.
  • #76
  • Apr 12, 2014 3:22pm Apr 12, 2014 3:22pm
Thanks to your excel test we know that candle with wick = 0 appears only 6%, so for 94% there's no candle with high or low = open....right?
this is the most important thing!

What about this day? It went up 3 pips only. Would you have entered short after 2 pips to reach the open for 1 pip?
Look the chart i posted it explained better what i want to say...if price go up at least for 5 pips i go short/buy...if not i dont trade.

How would know that you shouldn't wait longer?

Sometimes i should wait more sometimes not, i dont know it...i'm just tryng to take advantage of a statistical thing.

By the way you can think this strategy is with nosense...and you are right !
the only thing i say and i see is that at the end of the day for 94% open is not equal to high or low...
Attached Image (click to enlarge)
Click to Enlarge Name: pi.png Size: 31 KB
  • #77
  • Apr 13, 2014 7:17am Apr 13, 2014 7:17am
I don't know if this is the most important thing or not. Usually I think risk is the most important thing to focus on.

For now we don't have any system. We only have statistical facts:
- 84% of the daily candles have a wick on the side of the open longer than the spread. (We must overcome the spread)
- 78% of the daily candles which close up/down have a lower/upper wick less than 40 pips.

A UP day can be up by only a few pips and this is the most probable outcome.

Its candle will probably have a upper shadow. That is a retracement will occur.

Opening a long in a (future) up day doesn't guarantee a profit. To be in the money for sure when we are long in a up day the entry must be below the open.

Of course we don't know if the day will be up or down. The best guess is 50%.

The 8th of Apr was a up day (~50 pips). It started by going above the open. It went up 6 pips. So short? For 4 pips TP?
Attached Image (click to enlarge)
Click to Enlarge Name: EU-M5-08-04-14.png Size: 54 KB
No greed. No fear. Just maths.
  • #78
  • Apr 13, 2014 9:09am Apr 13, 2014 9:09am
why 84% ? we are assuming that open = high or low, so wick =0...if you want to count also spread with my dukascopy platform i pay only 0.6 - 0.8 pips...
From your excel is 94 %... with wick=0...

"The 8th of Apr was a up day (~50 pips). It started by going above the open. It went up 6 pips. So short? For 4 pips TP?"
In my platform that day price opened qo up for only 4 pips...so was not a trade to do...we need at least 5-6 pips(including spread) that is distance from the open...
  • #79
  • Apr 14, 2014 3:11am Apr 14, 2014 3:11am
Well, now three examples of my idea system.
This night after the open daily candle price go quickly up or down making a distance from the open.
High or low was the same of the open, we assume that at the end of the day it's very rarely that it happens.
There is a very high probability that a daily candle end with high or low equal to the open.
  • #80
  • Edited 5:27am Apr 14, 2014 3:16am | Edited 5:27am
gbp usd +13
usd chf + 5
eurusd + 12

why did i have that target?
Until now there's no strategy , there's no reason, i could sell eurusd when it was 5 point distance from the open, earning 5 pips...or 10 distance from the open, earning 10 pips, i'm still improving it..
The most important thing is that when price went quickly out from the open , i have a very high probability that price come back to the open, cause is too rarely that a daily chart end with high or low equal to the open.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: usdchf.png Size: 29 KB
Click to Enlarge Name: eurusd.png Size: 27 KB
Click to Enlarge Name: gbpusd.png Size: 28 KB
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