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The similarity system

  • #5,941
  • Aug 18, 2014 4:54am Aug 18, 2014 4:54am
Quoting jurn_e
ok my brain is officially fried by markov and all the theories and equations. lol Demo-ing on the indi posted. Long in EU betting this area will be transient. I think i am getting it wrong. {image}
My long time buddy. For your sake, I will post a clear plan for you to follow. I will write the document and post it here or pm you as pdf. Stay blessed. Your picture shows that you still don't get the concept yet ooh even if your trade is right.
  • #5,942
  • Edited 5:59am Aug 18, 2014 4:56am | Edited 5:59am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting jurn_e
ok my brain is officially fried by markov and all the theories and equations. lol Demo-ing on the indi posted. Long in EU betting this area will be transient. I think i am getting it wrong. {image}
Eurusdd has shown us that Transient zones are low probability. There is a higher probability that it will be a recurrent zone.
An expert is a man who has made all the mistakes which can be made
  • #5,943
  • Aug 18, 2014 4:59am Aug 18, 2014 4:59am
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 12 KB

Someone once asked me if i trade binary options and I said yes. In fact, i find it easier than spot....

Just placed two trade for today

rate of success is >95%

So if anyone is doing binary for eurusd, i can help you here, when I return. !!!
  • #5,944
  • Aug 18, 2014 5:06am Aug 18, 2014 5:06am
Quoting Eurusdd
{quote} My long time buddy. For your sake, I will post a clear plan for you to follow. I will write the document and post it here or pm you as pdf. Stay blessed. Your picture shows that you still don't get the concept yet ooh even if your trade is right.
Thanks for the advice. I will go back to your posts and reread, at least i know what i did/interpret was wrong.
Pivot Boss in the making~
  • #5,945
  • Aug 18, 2014 5:22am Aug 18, 2014 5:22am
I leave you with something to thinK about: it will form the basis of your success with probability and business.

Suppose I have a fair coin, we all know that the probability for Head is 50% and that for tail is 50%. Now supposed I tossed the coin 6 times and I got

H-H-H-H-H-H

after this i tossed the coin once and got

H-X-X-X-X-X

The X positions are for the remaining 5 tosses. Will you bet that the remaining five positions will be H or be on the safe side and expect at least one T?
That is what you need in this forex business. You need to look for very rare events and then when you find one, bet that the next instance which is STILL DEVELOPING will not be that rare event that just occurred!! SIMPLE!
  • #5,946
  • Aug 18, 2014 5:30am Aug 18, 2014 5:30am
Quoting Eurusdd
I leave you with something to thinK about: it will form the basis of your success with probability and business. Suppose I have a fair coin, we all know that the probability for Head is 50% and that for tail is 50%. Now supposed I tossed the coin 6 times and I got H-H-H-H-H-H after this i tossed the coin once and got H-X-X-X-X-X The X positions are for the remaining 5 tosses. Will you bet that the remaining five positions will be H or be on the safe side and expect at least one T? That is what you need in this forex business. You need to look for...

Thanks Eurusdd, this post made things much clearer
  • #5,947
  • Aug 18, 2014 5:34am Aug 18, 2014 5:34am
Quoting jurn_e
ok my brain is officially fried by markov and all the theories and equations. lol Demo-ing on the indi posted. Long in EU betting this area will be transient. I think i am getting it wrong. {image}
Hello jurn_e . Actually you have to be looking fora short trade above the current zone of the price, because you bet that it is currently in a transient zone, when it gets above it, you presume that it is entering recurrent zone, so it must AT LEAST return to the end of the transient zone. Of course there is a fairly big chance that it could retrace the whole pin so there happens to be no transiet area at all there.
  • #5,948
  • Aug 18, 2014 5:49am Aug 18, 2014 5:49am
Quoting jurn_e
ok my brain is officially fried by markov and all the theories and equations. lol Demo-ing on the indi posted. Long in EU betting this area will be transient. I think i am getting it wrong. {image}
I now see where you are coming from jurn_e but that is a dangerous way to apply the principle. Why? Transient zones have small probability and even if you assume that region is one, that is not where to trade it. The right area is below!!!!

What you are betting on has very small probability. so, don't be happy even if you get it right!
  • #5,949
  • Aug 18, 2014 6:04am Aug 18, 2014 6:04am
Hi, can someone explain this topic of recurrent zones/transient zones and h and k in laymens terms for those less versed in mathematical lingo?
  • #5,950
  • Aug 18, 2014 6:06am Aug 18, 2014 6:06am
Quoting Eurusdd
{quote} I now see where you are coming from jurn_e but that is a dangerous way to apply the principle. Why? Transient zones have small probability and even if you assume that region is one, that is not where to trade it. The right area is below!!!! What you are betting on has very small probability. so, don't be happy even if you get it right!

In other words, where there exists a Transient Zone (3% probability) T, it defines the start of the Recurrent Zone (97% probability) R.
So it's better that price go through a T and we place a trade on the R.

Even if we miss an entry in the first bar of entering an R zone, we can be assured that Price X(t) has a high chance of being returned to.
Price will tend to move AWAY from a T zone, either as a bounce or a one-time transition through it, within a period of h bars.
A pip is only worth it if you know how much you risked to earn it
  • #5,951
  • Aug 18, 2014 6:09am Aug 18, 2014 6:09am
Quoting Eurusdd
I leave you with something to thinK about: it will form the basis of your success with probability and business. Suppose I have a fair coin, we all know that the probability for Head is 50% and that for tail is 50%. Now supposed I tossed the coin 6 times and I got H-H-H-H-H-H after this i tossed the coin once and got H-X-X-X-X-X The X positions are for the remaining 5 tosses. Will you bet that the remaining five positions will be H or be on the safe side and expect at least one T? That is what you need in this forex business. You need to look for...
Hello again Eurusdd, I have been following since your return but this is the first post I felt I could comment on.

Say you toss the coin 4 times and you get H-H-H-H, that is a rare event then another H even rarer and another H very rare.
So applied to trading Forex one could have bet against another H after the 4th toss.
  • #5,952
  • Aug 18, 2014 6:15am Aug 18, 2014 6:15am
Eurusdd,

I notice that you are only placing sell trades even though there have been some buy opportunities. Is this because:

a) you know there is still a problem at 1.3347
b) the last T zone on a higher timeframe was above current price so you will sell until a bottom T zone is created on the higher tf
c) a combination
d) neither

If you'd prefer not to answer, I'll understand. It's just that I think I'm beginning to get the hang of it but my buy trades have given me some mild worries before they came good this morning. However, all have been profitable so I am very happy
  • #5,953
  • Aug 18, 2014 6:15am Aug 18, 2014 6:15am
Quoting normtold
{quote} Hello again Eurusdd, I have been following since your return but this is the first post I felt I could comment on. Say you toss the coin 4 times and you get H-H-H-H, that is a rare event then another H even rarer and another H very rare. So applied to trading Forex one could have bet against another H after the 4th toss.
I have not gone yet, so i haven't returned.

And that is not what I meant. 6 Hs is a rare event with probability 0.5^6= 0.015625. So, if the probability you will meet a mad person on your way to school is 0.015625 and you just met one, then it is safe to say that the next person you meet will not be mad. That is a safer bet because if the next person is mad then you just witnessed and event with probability 0.5^12 = 0.00024441 of occurring. How many people do you have to meet on your way to school on average for this event to occur? 1/0.00024441 = 4091

So, in the game of forex you need to play this type of safe bet. Each trade with a safe bet is better than trades without a sound reason

The point is : play the strategy of rare events do not immediately follow rare events on average!!
  • #5,954
  • Aug 18, 2014 6:21am Aug 18, 2014 6:21am
Quoting hepsibah
Eurusdd, I notice that you are only placing sell trades even though there have been some buy opportunities. Is this because: a) you know there is still a problem at 1.3347 b) the last T zone on a higher timeframe was above current price so you will sell until a bottom T zone is created on the higher tf c) a combination d) neither If you'd prefer not to answer, I'll understand. It's just that I think I'm beginning to get the hang of it but my buy trades have given me some mild worries before they came good this morning. However, all have been profitable...
Nice observation. (A) is the key reason though.
  • #5,955
  • Aug 18, 2014 6:22am Aug 18, 2014 6:22am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting Eurusdd
{quote} I have not gone yet, so i haven't returned. And that is not what I meant. 6 Hs is a rare event with probability 0.5^6= 0.015625. So, if the probability you will meet a mad person on your way to school is 0.015625 and you just met one, then it is safe to say that the next person you meet will not be mad. That is a safer bet because if the next person is mad then you just witnessed and event with 0.5^12 = 0.00024441 of occurring. So, in the game of forex you need to play this type of safe bet. Each trade with a safe bet is better than trades...
Do you only hold out for those trades (beyond the transient zones)?
Or do you also take the 97% ones towards what are likely (but not guaranteed) to be recurrent zones?
An expert is a man who has made all the mistakes which can be made
  • #5,956
  • Aug 18, 2014 6:27am Aug 18, 2014 6:27am
Quoting Neio
{quote} Do you only hold out for those trades (beyond the transient zones)? Or do you also take the 97% ones towards what are likely (but not guaranteed) to be recurrent zones?
I am trading this microscopically on the 1min 5min tfs..

Once price is above my h bars, I label that zone a suspect transient zone and start looking for my SURE 1-10 pips above it, assuming it is forming up...!!
  • #5,957
  • Aug 18, 2014 6:31am Aug 18, 2014 6:31am
Quoting Eurusdd
{quote} Nice observation. (A) is the key reason though.

Thanks. That makes sense - though it would have been easier if the answer had been B) . I'm not too bad at getting levels that agree with you but I get more of them and still can't get my head around which one gets taken out first.
  • #5,958
  • Aug 18, 2014 6:34am Aug 18, 2014 6:34am
Quoting Eurusdd
{quote} I have not gone yet, so i haven't returned. And that is not what I meant. 6 Hs is a rare event with probability 0.5^6= 0.015625. So, if the probability you will meet a mad person on your way to school is 0.015625 and you just met one, then it is safe to say that the next person you meet will not be mad. That is a safer bet because if the next person is mad then you just witnessed and event with probability 0.5^12 = 0.00024441 of occurring. How many people do you have to meet on your way to school on average for this event to occur? 1/0.00024441...

When I said your return I meant from here,

http://www.forexfactory.com/showthread.php?p=7398800#post7398800

Thank-you for the above explanation though, it is much clearer now.
  • #5,959
  • Aug 18, 2014 6:34am Aug 18, 2014 6:34am
Quoting Eurusdd
{quote} Nice observation. (A) is the key reason though.
Do you ever look at the star formations?
If you fall, I shall be there. - The floor
  • #5,960
  • Aug 18, 2014 6:37am Aug 18, 2014 6:37am
Calendar August 2014. This month is known Silver Pockets Full.
This is the only time you will see this phenomenon in your life unless you are a vampire!
August, in 2014, has 5 Fridays, 5 Saturdays and 5 Sundays. This happens only once every 823 years. Check for star formations!
If you fall, I shall be there. - The floor
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