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The similarity system

  • #5,581
  • Aug 14, 2014 8:34am Aug 14, 2014 8:34am
Quoting vlady1974
Some other notes I've compiled. One is regarding the zones and the numbers required to match the equivalence of time. For whatever reason, we are using 4500 minutes. I can't remember where this comes from. In my previous post, I mentioned a PDF in the attachments section - that was a compilation of posts from the thread specifically about Stochastics and Bollinger. It's the basis and foundation of the ZigZag Bollinger Method. Attached is my unfinished draft of my notes on the method. DISCLAIMER: These are unfinished or works in progress. Adapt them...
Some good discussion going on here (even though I don't completely understand it, I know it's good.. I think =p )
Thanks vlady for the attachments, Inorbi's reply was really enlightening to actually understand what dissimilarity is. I'm still working out the other ideas and haven't made time to read the other posts.
Is the idea that price (or an indicator) has to return to a level such that it's value matches the original value to create similarity again?
"Mrrraggglhlhghghlgh"
  • #5,582
  • Aug 14, 2014 8:39am Aug 14, 2014 8:39am
i wonder how's Eurusdd will react in current situation.... how i wish he is still around..
  • #5,583
  • Aug 14, 2014 8:42am Aug 14, 2014 8:42am
Quoting Baillie
{quote} 1.3295 is a level I have as a long range target also, like where your going with your analysis
It's at a crossroads. It's okay to be a bull, it's okay to be a bear.
Fundamental reports I've read have a bearish sentiment. Then there are the conflicts in Ukraine, Syria, Gaza, Iraq. Oil and Gold are falling. Dollar Strong.

However, we are rangebound on the 4H, topside 1.3440 to 13340 give or take. Long if its above the middle, Short from the top. Risk is the difference between your entry and the Top. Short if below the middle, Long if on the bottom - Risk between your entry and bottom. Not rocket science. Doesn't require similarity.

But if you had some levels that you anticipate had a higher chance of returning to..... how would you trade?

My short was stopped out again at 3395. Re-entered 3394.9, SL at 3406. News item at 3:30pm but don't know how gas will affect Dollar.
Let's see what happens.
A pip is only worth it if you know how much you risked to earn it
  • #5,584
  • Aug 14, 2014 8:47am Aug 14, 2014 8:47am
Quoting LiquidGenius
{quote} Some good discussion going on here (even though I don't completely understand it, I know it's good.. I think =p ) Thanks vlady for the attachments, Inorbi's reply was really enlightening to actually understand what dissimilarity is. I'm still working out the other ideas and haven't made time to read the other posts. Is the idea that price (or an indicator) has to return to a level such that it's value matches the original value to create similarity again?
I don't have the best analogy.

But it's kind of like Warren Buffet enters a big Long on EU at 3331 and it's so huge that the price dropped. Because he uses FXCM, any indicator will show an imperfection of that price compared to say IGINDEX, IBFX, etc. Because he placed that trade at US Open, the 4H and 1H can probably show it but it will not mean much on the 5M or 1M.

Price then shoots up 100 pips. Market goes WTF!? Goldmans, Deutsche, Morgan Stanley etc get wind of the trade and immediately sell a shitload of reserve EUR to get the price back down to where Mr Buffet entered. Bang, price returns to 3333 and everyone is Long.

Kind of like that.
A pip is only worth it if you know how much you risked to earn it
  • #5,585
  • Aug 14, 2014 8:48am Aug 14, 2014 8:48am
Quoting vlady1974
{quote} It's at a crossroads. It's okay to be a bull, it's okay to be a bear. Fundamental reports I've read have a bearish sentiment. Then there are the conflicts in Ukraine, Syria, Gaza, Iraq. Oil and Gold are falling. Dollar Strong. However, we are rangebound on the 4H, topside 1.3440 to 13340 give or take. Long if its above the middle, Short from the top. Risk is the difference between your entry and the Top. Short if below the middle, Long if on the bottom - Risk between your entry and bottom. Not rocket science. Doesn't require similarity....
nice analysis. I think I'm finally getting the final missing piece in my puzzle. DS gives me no-brainer targets. The problem was the no-brainer entries. Eureka!
  • #5,586
  • Aug 14, 2014 8:52am Aug 14, 2014 8:52am
EFFING EU! Lol.

Stopped out -10.
Re-entered short @ 3406, SL 3412 smaller size.
If price back at 3395, will re-enter again with same size to match original order.

Target MIDDLE part of range 3375-3380.
A pip is only worth it if you know how much you risked to earn it
  • #5,587
  • Aug 14, 2014 8:58am Aug 14, 2014 8:58am
Shorts cancelled for now!!! It was starring me in the face all along and I didnt see it!!! Targets 4s have no entry signals YET!!!
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDH1.png Size: 66 KB
  • #5,588
  • Aug 14, 2014 9:04am Aug 14, 2014 9:04am
Newbie Question:

Based on the chart setup:

Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot2.png Size: 39 KB


I am looking for divergences between the upper and lower charts. So in order to know what's diverging, I'm looking at two things: 1) the relationship between the upper ema1-to-nearest band and 2) the relationship between the lower stoch red line (Main)-to-nearest band. As long as those two relationship remain "similar" (not sure how that quantifies), we think "continuation". However, when those two relationships become dissimilar, we look to enter or exit.

Is this correct? What about this is incorrect?

As always, thanks...
Vita est simillimus forexum(Life is like forex)
  • #5,589
  • Aug 14, 2014 9:12am Aug 14, 2014 9:12am
Quoting vlady1974
{quote} But it's kind of like Warren Buffet enters a big Long on EU at 3331 and it's so huge that the price dropped..
Wait, he bought and THEN price dropped? Or he bought BECAUSE price dropped? o_O
"Mrrraggglhlhghghlgh"
  • #5,590
  • Aug 14, 2014 9:13am Aug 14, 2014 9:13am
@ Vlady1974,
how to operate in a dis-similarity?
for example:
we are in downtrend, but dis-similarity appears.
How you have to negotiate?
1- Set price dis-similarity, the similarity wait appears, and negotiate to the level of dis-similarity?
2 Negotiate the dis-similarity? How we negotiate the dis-similarity ?.
  • #5,591
  • Aug 14, 2014 9:19am Aug 14, 2014 9:19am
Quoting dennis681
Newbie Question: Based on the chart setup: {image} I am looking for divergences between the upper and lower charts. So in order to know what's diverging, I'm looking at two things: 1) the relationship between the upper ema1-to-nearest band and 2) the relationship between the lower stoch red line (Main)-to-nearest band. As long as those two relationship remain "similar" (not sure how that quantifies), we think "continuation". However, when those two relationships become dissimilar, we look to enter or exit. Is this correct? What about this is incorrect?...
No, that does not mean "continuation" start with dissimilarity and finish trade with similarity, this is the easiest way to try to understand the principle.
  • #5,592
  • Aug 14, 2014 9:27am Aug 14, 2014 9:27am
Quoting vlady1974
Some other notes I've compiled. One is regarding the zones and the numbers required to match the equivalence of time. For whatever reason, we are using 4500 minutes. I can't remember where this comes from. In my previous post, I mentioned a PDF in the attachments section - that was a compilation of posts from the thread specifically about Stochastics and Bollinger. It's the basis and foundation of the ZigZag Bollinger Method. Attached is my unfinished draft of my notes on the method. DISCLAIMER: These are unfinished or works in progress. Adapt them...
Thank you very much Vlady ...
  • #5,593
  • Aug 14, 2014 9:30am Aug 14, 2014 9:30am
Quoting LiquidGenius
{quote} Wait, he bought and THEN price dropped? Or he bought BECAUSE price dropped? o_O
Imagine you are buying a house and you are Warrent Buffet.
Prices are rising for "The EU" Deluxe, £450K

You order 10 of those with a specialist Estate Agent but only if he can secure them at £275K.
He comes back and says the supplier will agree on £320K.

The order goes on the books.

What's the price?

EDIT:
It doesn't mean the fundamentals have changed either. Buffet (ie. you) is buying because he's researched the area and the fundamentals and he knows he can sell all the units for £1.5M in 25 years.

RE-EDIT: LOL
The price dropped because of him. He is a Big Player.
A pip is only worth it if you know how much you risked to earn it
  • #5,594
  • Aug 14, 2014 9:32am Aug 14, 2014 9:32am
Hallo all,
is there problem at 1.3655 ?
Thanks
  • #5,595
  • Aug 14, 2014 9:34am Aug 14, 2014 9:34am
Quoting smallcat
Hallo all, is there problem at 1.3655 ? Thanks
What ? More than 250 pips ??? Hm.... i can say that your calculation is Wrong .....
  • #5,596
  • Aug 14, 2014 9:41am Aug 14, 2014 9:41am
Quoting smallcat
Hallo all, is there problem at 1.3655 ? Thanks
I don't have at the moment. I think tbird is right ....
  • #5,597
  • Aug 14, 2014 9:41am Aug 14, 2014 9:41am
Quoting smallcat
Hallo all, is there problem at 1.3655 ? Thanks
1.3655??? or did you mean 1.3355??? problem is actually at 1.3349 and 1.3343.
  • #5,598
  • Aug 14, 2014 9:43am Aug 14, 2014 9:43am
Quoting burnssss
@ Vlady1974, how to operate in a dis-similarity? for example: we are in downtrend, but dis-similarity appears. How you have to negotiate? 1- Set price dis-similarity, the similarity wait appears, and negotiate to the level of dis-similarity? 2 Negotiate the dis-similarity? How we negotiate the dis-similarity ?.
Burnsss, from the old discussions I recall that big moves happen after similarity is restored.

If I was to use Ralome's Indicator to tell me when an DS has started, then I would be looking for an extreme price move.... using my method, preferably a close outside of Bollinger. At that point, I will look for any kind of set up (ie. nothing to do with Similarity) to enter a trade. I take note of the price and which ever direction it takes off at, I will be looking for a retrace/test.

Therefore, I react to DS Price and never try to predict it.

a) DS Happens
b) Price reacts to this. I wait for an extreme price move. (ie. it changes trend and forms a bottom or top)
c) The initial move happens.... if it's a larger timeframe I could decide to join the run or keep waiting.
d) The Extreme Price event happens (top or bottom) and price starts to return in the direction of DS.
e) Look for the retrace to DS.
f) Once Retrace has confirmed, join trend.

So... we never negotiate the DS Price. It's a past event.
Am I making sense? It's like LikeChild's chart.... his Zigzags form but there is a retest. I would enter after the retest.
A pip is only worth it if you know how much you risked to earn it
  • #5,599
  • Aug 14, 2014 9:46am Aug 14, 2014 9:46am
Quoting vlady1974
{quote} Imagine you are buying a house and you are Warrent Buffet. Prices are rising for "The EU" Deluxe, £450K You order 10 of those with a specialist Estate Agent but only if he can secure them at £275K. He comes back and says the supplier will agree on £320K. The order goes on the books. What's the price? EDIT: It doesn't mean the fundamentals have changed either. Buffet (ie. you) is buying because he's researched the area and the fundamentals and he knows he can sell all the units for £1.5M in 25 years. RE-EDIT: LOL The price dropped because...
Umm, price = 320k?
How does this relate to dissimilarity again? LOL
My initial guess is that it has something like buying a huge order will actually be able to create a drop in price? (drop in price=dissimilarity -> positions now long ->long?)
Sorry for struggling with this, thanks for taking the time to explain it though
"Mrrraggglhlhghghlgh"
  • #5,600
  • Aug 14, 2014 9:46am Aug 14, 2014 9:46am
Quoting vlady1974
Morning All! something I was looking at this morning, playing with Exp Moving Averages. I have 1H on the left EMA 4, the right is 30M with EMA 8. Notice the blimp at 3378-3382. Also notice how the EMA stays centre of price action, and all the highs and lows stick out like centipede legs. One could argue that the average is the real trend whilst the price action is the arbitrage market movements of buyers and sellers. When price action moves above the EMA it's obviously a Long, but then it goes short and heads back into the EMA. This is very similar...
Thanks vlady. Your image of platform is not MT4 .... may i know what is it ?
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