The similarity system

Thanks Baillie ... trying to understand it. It's late now, ... will try again tomorrow. Good night every body ....

I think we will have to revisit 1.3372. eurusdd initially said that 1.3348 was not the true bottom, so it has to go lower. and I have been targetting 1.3342 since before ny open.

I was just wondering that. Looking for evidence.

Here ZZ semaphore printed but price did not hit outer BB, stochastics are at zero. 5 min chart is a 3rd level ZZ and 30 min chart is a 1st level ZZ, MUST correct. Price at this point 1.3335

Attachment

Hello. I understand your explanation (think I do ) but what bothers me is this - how do you know for sure that the so called retrace is confirmed and price is definately going to reach your DS target, what if you are wrong. What I mean is this - i think that the concept of DS must be concentrated around the idea that price MUST, and by must i mean like 99.xx% (surely) return to a specific level. And also that it must return to that level in a reasonable ammount of time and not go too far before that. Because most of the levels are going to be filled again, but that doesnt have to do with similarity... If we place anabsolutely random trade with a random tp level, it is almost sure that we will hit it someday if we can survive the fluctuations before that. And there comes the problem, we need to be sure that level is going to be hit SOONER and know how far price can go before it snaps back. And you say that you wait for confirmation of the retrace to ds level and then enter. Well, how is that different from just entering on the reverse of the immediate trend with a take profit level that has nothing to do with dsisimilarity? Chances are not much lower for your trade to get to the level. It seems that you have found your ways to deal with situations and make good trades, I am not arguing, but at least for me- I need to put the concept in a smaller frame. Probably the main difference comes by the fact that you use stops and i do not and that changes the game Anyways I like your explanations! I am thankful that there are other people besides eurusdd that invested their time and effort and are giving back to the others. Keep going

For me that is the main question from the beginning of the thread. How can I expect the maximum distance that price can travel on a specific timeframe , before getting back. Lets say we have a dissim on small TF, maybe M5, but price travels 300 pips before returnign back. Well, that could be completely random. I do not have at least for now( and i doubt i will ever have) the capacity and knowledge to analyse the market like eurusdd does. I cannot give exact probability in % of the price levels, i cannot give the exact time. But then how do I know that my targets are hit because of DS and not by chance? Right now we have a rangind market. In a ranging market most levels are returned to and are getting hit, but that does not prove that our analysis is completely in place. Am I right? Problems comes in a strong trednging market, when price doesn look back. Look at the highs from may 8 2014, look at the more recent drops from 1.36xx . As far as I remember there were people sure that 1.3550-1.3560 will be hit soon. And that was 1 month ago. Where is price now ? There were many things hapenning during that time. Yes price will eventualy return to 1.3560, but that fact by itself is not enough to make a strategy on its own.

Here's a pick me up for you all, enjoy!

http://youtu.be/YdPmzv_-kaI

1.33600 REACHED exactly like Mr eurusdD said.
So now will?? resume upper move or go lower.
1.3395 is a point of interest only for me.

there is looking good thread by Mr Relativity , where he gives his explaination about time factor.
http://www.forexfactory.com/showthread.php?p=7675507#post7675507
Hope you find it interesting

There is only one thing I do not understand eurusdd, why you were always posting (and well) on eurusd thread and as you were always targeted by there, you suggested that anyone who wanted to follow you have to come to this post and now you're here one day and you're leaving?
what made you change your mind?
Those calls were appreciated and also probabilities.
I've been studying the system but there are things that you see there that I think no one else can see and so accurately.

EURUSDD did a great job but he was wrong in 1.3347 problem. It won't go there.

Already did todayAttachment

He mentioned that after this…..

Here it is. your right.

What makes you so sure?
I think it will.

A little advise for everyone.
1: The similarity concept is very powerful but when you choose your indicator and strategy based on the similarity principle O not let anyone know the exact code of your strategy. It is very important that you keep that close to your heart because we are dealing with levels. Let people doubt you until the level is HIT!!!. You can give the levels you are watching to your friends .....: but how you came to that level should remain a secret.

2: I promised to pass through during weekends and I will still do that. I am just not into trading for now. Got research to complete!!!!
bYE.

Why??? It won't affect the outcome in any case? We are too small in a Multitrillion Dollar daily turnover market to even make any impact! I believe we have all been beneficiaries of kind hearted individuals who have given unreservedly to us all in the true spirit of sharing. No offence intended, but apart from bragging rights, I really see little to gain in such a mindset. Just my own opinion anyway.... Tnx for everything you've shared with us so far and awesome trading by the way...200%+ in a week!!! Even if it's just a demo account, it's still quite remarkable. Welldone!

@Feline207

Thanks for your questions. There are many ways to answer but at the heart of it, if I think I've understood you - you want to know how to use the principle as we know it for predictive purposes. If I am right, there in lies the problem.

Principle 1: Starting with Price being a consistent value as modelled by any indicator until a change causes a dissimilarity between Price and the Indicator. (see my Zones attachment).

Principle 2: When Dissimilarity has begun, movements will extend price beyond the price origin for a period of time until it begins to return to that price .

As far as I know.... that's it. Now, the problem with these principles is that by themselves, they cannot be used for predictive purposes. It's about as good as saying that price sometimes bounces off 50% Fibonacci range between 2 prices. We all know that sometimes it does, sometimes it doesn't.

It is only when we start applying the principle to a set of indicators that you are comfortable with, that the art of expressing the principles through your trading begins. At this point, it becomes an art not a science. Why?

For the simple reason that we don't have the REST of Eurusdd's principles, or the 4 other tools that he uses to predict Price Level, Price DNA, Probability and Time. So wondering whether DS1 @ 1.3551 will be returned to is almost made irrelevant.

What has been shown today by some others which has been quite helpful is their interpretation and implementation of the principles. Let's take Bailie's use of multiple timeframes. Eurusdd has provided many examples of how he applies the principles regarding the timeframes, which you could probably add as a sub principle:

The more timeframes that confirm that price level as a Dissimilarity Price, the more significant it is as a price level to repel or attract price.

His method allows him to stack reasons for assessing direction. If 4H has Top, the next is Bottom. If 1H is 2 and 15M is 1 in the same leg from a Top... then you have 3 timeframes that tell you that Similarity has been reached and price should now travel lower. Observation should then lead towards the level where Dissimilarity started and you could try to create a trading plan to target that price. If you are wrong, you use a stop loss.

Nothing in that plan assumes that price will return there for certain. It's just not how trading works.... nothing is for certain. To believe that requires that you know what all traders at all times at all values at all volumes will be doing..... impossible. Which is why I say, the PRINCIPLES are not trading plans.

So when I say, wait for a confirmation of a retrace.... what if doesn't happen!?! Well, then you don't enter the trade! Let price happen. But if you look at Bailie's charts, you can see that they almost always happen in some way or another. I can pull out other charts based on Semaphor ZigZag which does the same thing. You will reply that this has nothing to do with the Principles but randomness. But actually - if you were to use the one indicator that this thread has produced which is quite valuable: Ralome's StochDiffZones 2.6 then this will mark the BAR and the time duration of DS..... then you can allow for all the randomness around the price levels and simply create a trading plan that does either two things: Trade Away or Trade Towards it.

[quote=LITEchild;7675942] No offence intended, but apart from bragging rights, I really see little to gain in such a mindset. Just my own opinion anyway./quote]
Then you run counter to my trading philosophy and there is nothing else I can tell you. The biggest lie you accept is this :what you do does not matter.
I will not be part to that lie or failure. You can let the world know the code to your levels and very soon so will start failing!!!

I will keep my code close to heart and always be right!!!

If you will give out such a secret then we cannot deal!!!!

There is a code of conduct in every successful enterprise. In three months time, all my levels will still be right. Yours may start failing when your code flow through the system and is dissolved!

Suppose after two years you are now 30billion dollars richer and everyone knows the code of your success. They know exactly how you picked your level. Do you know your future success is no more guaranteed? nothing is too small or big in an information game. Every little information is crucial to those looking for an edge!!!

Okay, here's a quick view of the 1H using one of the MT4 templates I use.

The ZigZag shows a Bottom to Top swing... both of which have price closing outside bollinger bands and also the stochastic closing outside bollinger (lower window).
The Light Blue 300EMA in the price window is capping price and keeping my short bias. The moment price closes above it, will be a period of transition and direction will be hard to call until a firm confirmation is received.

Now because I don't know whether 3340 will be tested or not, all I know is that a Yellow Bottom is expected in the next sequence. To invalidate that, a new Top needs to be printed. How would I know? Thankfully the Bollinger has a middle line that I can use to tell me either Lower or Upper. If you didn't have Bollinger and used Fibs, then that would just be 50%..... this isn't new.... but now you can use it in combination.

Also, the indicator below (Ralome's StochDiffZone 2.6) shows the start (pink) and end (green) of a DS Zone. The rectangle to the right of the Green is a zone that can either attract or repel price action. You can see that it's origin happened way back on the 11th of August 6pm. It was resolved today with price crossing the zone. The height of that rectangle is basically the HI/LO of the original candle. All of this is in the thread for you all to research.

Finally, bias.... I am still short biased but I am very wary about price being near 300EMA. The last time this happened, it went from Bull to Bear and it was a very difficult 2-3 months to predict direction as it was a consolidation period. Were a change in trend to happen, any cross of the EMA will obviously undergo numerous tests/retests... retraces and failures then more tests/retests until a dominant sentiment is confirmed. Geopolitics will play a hand in this as well as Interest Rates.

Therefore, don't dismiss the bulls.... there's a reason to test that 300EMA which is now encroaching 1.3396

Good luck for tomorrow.