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The similarity system

  • #5,741
  • Edited 9:09pm Aug 15, 2014 7:44pm | Edited 9:09pm
J
Quoting Eurusdd
I told you people I will leave you with something to think about while I am away till end of October. I am going to post a series of ideas that are used to calculate my probabilities and pick out problem bars. Please do not post until I am done with my posts. Thank you.
Thanks Eurusdd. I will be always here i will make a reminder for end of October ... Edit: Thanks for your last some posts, i will do my home work. I want to make sure that i am ready for october ..... Edit: SORRY Eurusdd, i did some posts. I though you have finished posting before. I hate this slow internet connection. after i finish with typing, i see your new post is already there ....
  • #5,742
  • Edited Aug 16, 2014 8:36am Aug 15, 2014 7:58pm | Edited Aug 16, 2014 8:36am
This is the heart of the matter and it works on any time frame. I will prove this to you.
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  • #5,743
  • Edited 8:44pm Aug 15, 2014 8:05pm | Edited 8:44pm
Quoting mario777
HI all, my lucky 35 pips trade today . Honestly I wasnt sure about it. I just entered after i saw divergence on stoch and targeted my DS zone. Vlady please comment {image}
Hi mario,
I am still learning this concept, like some of us doing. I am not good, but i am happy that my DS zone is similar with some of us. I did not use Ralome's indicator "as it is". The indicator is great, but i must change it a little. I take the main code to apply to my needs.
From your picture, i think you also got the concept !!! But it is different than what i did. I take advice from some one here : 'you must read all of Eurusdd's thread, not only one thread. This is a puzzle, and the pieces are there... find them , and you will see the light ....' Edit: sorry, just see that your question is for Vlady ...
  • #5,744
  • Edited 8:31pm Aug 15, 2014 8:15pm | Edited 8:31pm
Right now, I will just choose random numbers for h and k and apply it to the pair USDCHF.

Let us choose h=5 . So I will draw a rectangle of length on the daily chart, T=DAILY.

We can then identify the h(T,k)-transient prices!!!
  • #5,745
  • Aug 15, 2014 8:20pm Aug 15, 2014 8:20pm
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The 5-transient prices are represented by the yellow/red zones. Very few of them.

The 5 means that within the bars where those prices occur, none of the next 5 bars, behind or in front of the bar in question, passed through those prices.

Now, if you get the h and k right, you will find that transient price-zone occur with very LOW -probability. That is prices are h-recurrent almost-surely

for some positive h.
  • #5,746
  • Aug 15, 2014 8:33pm Aug 15, 2014 8:33pm
Now if you get the h right for a given time frame and at the current price p, the previous bars never hit p, then probability is on your side for a hit within the next h bars because the probability that p is h-transient is very low.

If your h is right, this probability should be about 3%. That is 97% of the time, at least one of the next h bars should hit p.

This works in theory and in practice for any stochastic process similar to the ones that govern currency prices!!!

Very important: If your h is correct, then the height of your rectangle should be very small. This means that most prices choose to be h-recurrent!
  • #5,747
  • Aug 15, 2014 8:40pm Aug 15, 2014 8:40pm
I urge you to verify this fact for any pair.
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  • #5,748
  • Aug 15, 2014 8:48pm Aug 15, 2014 8:48pm
If you consider what this means theoretically and practically, you should see how to rake in the $$$ quickly.

I leave you to think about what it means!!! bye.
  • #5,749
  • Aug 15, 2014 8:59pm Aug 15, 2014 8:59pm
I believe I see where this is going...
I must say I was planning on something similar to this but didn't quite work out how to approach it. You mentioned something interesting about the h/k values which I pondered. Then for a second my mind was blown.
Well done hehe
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"Mrrraggglhlhghghlgh"
  • #5,750
  • Aug 15, 2014 9:03pm Aug 15, 2014 9:03pm
Quoting LiquidGenius
I believe I see where this is going... I must say I was planning on something similar to this but didn't quite work out how to approach it. You mentioned something interesting about the h/k values which I pondered. Then for a second my mind was blown. Well done hehe {image}
GOOD liquidgenius. Let me blow your mind now! If a bar has you rectangle then the probability the next one will have a rectangle is 0.00005463% on any time frame. NOW think what that means.....
ONE THING: $$$$
  • #5,751
  • Aug 15, 2014 9:17pm Aug 15, 2014 9:17pm
Quoting Eurusdd
If you consider what this means theoretically and practically, you should see how to rake in the $$$ quickly. I leave you to think about what it means!!! bye.
THANK YOU VERY MUCH FOR THE NICE CLASS Eurusdd ... i am weak in mathematics, still trying to understand this deep and great lesson.
  • #5,752
  • Aug 15, 2014 9:18pm Aug 15, 2014 9:18pm
Quoting tbird2121
{quote} Hi mario, I am still learning this concept, like some of us doing. I am not good, but i am happy that my DS zone is similar with some of us. I did not use Ralome's indicator "as it is". The indicator is great, but i must change it a little. I take the main code to apply to my needs. From your picture, i think you also got the concept !!! But it is different than what i did. I take advice from some one here : 'you must read all of Eurusdd's thread, not only one thread. This is a puzzle, and the pieces are there... find them , and you will...
tbird thanks for the reply ans suggestion. I have been reading it many times now. I think we have to go to learn the basics.
  • #5,753
  • Aug 15, 2014 9:19pm Aug 15, 2014 9:19pm
One way to use this to your benefit.

since transient rectangles have small heights in general, if price falls into the region A, we can assume we are in a recurrent zone. So prices within the zone A will be hit by at least two bars or price will pull back into the rectangle above!!!


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  • #5,754
  • Aug 15, 2014 9:27pm Aug 15, 2014 9:27pm
Quoting Eurusdd
{quote} GOOD liquidgenius. Let me blow your mind now! If a bar has you rectangle then the probability the next one will have a rectangle is 0.00005463% on any time frame. NOW think what that means..... ONE THING: $$$$
Ok you're right. Now it's really blown.
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  • #5,755
  • Aug 15, 2014 9:28pm Aug 15, 2014 9:28pm
Quoting Eurusdd
{quote} There are two ways to trade under the similarity-umbrella. You can wait for the lines to disagree and then MARK the price for a return! But that does not happen often so you will not have many trades a day!!! The other way: Since the lines will look exactly the same >97% of the time, TRADE WITH THAT EXPECTATION!!!! When the stoch is ahead of or behind the main price - Place your trade expecting stoch to agree with price eventually. You will get many trades that way. Money-management of course. I can get 100 wins in a role that way!!!
Im reading about this old statement od EU.
1.wait for the lines to disagree and then MARK the price for a return
2.When the stoch is ahead of or behind the main price - Place your trade expecting stoch to agree with price eventually

Are they not the same? which means Dissimilarities? The only difference is the way to trade but doesnt mean the second one is you will get many trades than the first since they are the same you have to wait for DS. Am i right?
  • #5,756
  • Edited 10:23pm Aug 15, 2014 9:45pm | Edited 10:23pm
Quote
Here's one I'm in. Trading back up to the dis-similar area from a similar area signal.
"""Since the lines will look exactly the same >97% of the time, TRADE WITH THAT EXPECTATION!!!! When the stoch is ahead of or behind the main price - Place your trade expecting stoch to agree with price eventually. You will get many trades that way."""


There are two ways to trade under the similarity-umbrella. You can wait for the lines to disagree and then MARK the price for a return! But that does not happen often so you will not have many trades a day!!!
The other way: Since the lines will look exactly the same >97% of the time, TRADE WITH THAT EXPECTATION!!!! When the stoch is ahead of or behind the main price - Place your trade expecting stoch to agree with price eventually. You will get many trades that way. Money-management of course. I can get 100 wins in a role that way!!!

The Title for this thread = The similarity system. Similarity-probability is 97.6578%
( I wonder WHY people are eagerly trying to find DIS-similar for an entry ? lol)
Neural Network Algorithm and Econophysics
  • #5,757
  • Aug 15, 2014 9:46pm Aug 15, 2014 9:46pm
Hi Eurusdd,About Markov at post #5720 :i think it can be used for calculating the Average, so we do not need MA or ATR. Is it right ???thanks. Edit: or it is the same calculation used by MA ?
  • #5,758
  • Aug 15, 2014 10:30pm Aug 15, 2014 10:30pm
Hi George, i think you must see "3 plan" post #221. Everything is there.
  • #5,759
  • Aug 15, 2014 10:32pm Aug 15, 2014 10:32pm
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Neural Network Algorithm and Econophysics
  • #5,760
  • Aug 15, 2014 10:37pm Aug 15, 2014 10:37pm
Quoting tbird2121
Hi George, i think you must see "3 plan" post #221. Everything is there.
Thanks Tbird, now it is clear ...
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