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The similarity system

  • #6,041
  • Aug 18, 2014 10:16am Aug 18, 2014 10:16am
Quoting Netflix
{quote} Hi Vlady, could you post your chart in order to understand how you mark the "P" on each time frame? Thanks to Eurusdd for your wonderful lesson. I'm trying to catch up everything you have taught in this forum as well. I respect you guys.
I made the chart up!
The idea is to understand what it represents. Good luck!

Edit: P represents that price touched the price value in question. X represents that it did not hit the price on that level. On your chart, x will just be a blank space.
A pip is only worth it if you know how much you risked to earn it
  • #6,042
  • Aug 18, 2014 10:18am Aug 18, 2014 10:18am
Quoting Sciurus
I like this idea of recurrence, if only for the idea that it aligns with a lot of ideas from other threads, like in the James16 thread they talk about setups with a lot of "space" to the left. Remind you of something? Or how about in Market Profile, where they teach that you want to trade the extremes. Remind you of something? Or how about VSA where they teach you to trade wide range bar gaps. Remind you of something???
Recurrance is what price does all the time. It's the effect of a well balanced market that is volatile.
Otherwise, you will get transient prices.
A pip is only worth it if you know how much you risked to earn it
  • #6,043
  • Aug 18, 2014 10:25am Aug 18, 2014 10:25am
With the Recurrent statistic indicator the best I could come up with is:

# of bars = 25437
# of problem bars = 220
Frequency of problem bars = 6.2547
Probability of resolving = **** 86.1725%****

This is just for probability #1
  • #6,044
  • Aug 18, 2014 10:32am Aug 18, 2014 10:32am
Quoting Baillie
With the Recurrent statistic indicator the best I could come up with is: # of bars = 25437 # of problem bars = 220 Frequency of problem bars = 6.2547 Probability of resolving = **** 86.1725%**** This is just for probability #1
Using the above settings to identify the correct bar if you target 75% of the move your % will increase to above 95% or even more.

This is just one of many strategies that can be used.
  • #6,045
  • Aug 18, 2014 10:35am Aug 18, 2014 10:35am
eurusd is trying to solve the 1.3347 problem/
  • #6,046
  • Aug 18, 2014 10:40am Aug 18, 2014 10:40am
Quoting Baillie
With the Recurrent statistic indicator the best I could come up with is: # of bars = 25437 # of problem bars = 220 Frequency of problem bars = 6.2547 Probability of resolving = **** 86.1725%**** This is just for probability #1
Hi, you are surely aware of this, but others please note that this percentage includes both statistics for the potential transient (for example candle closes above the max of previous h bars) and potential fractal (candle closes below the max of previous h bars, even though the high of it was higher than the previous max).

The resolving means that the potential transient/fractal zone was cleared within the next h bars (k=0). This is in principle not necessary for trading, one can use Eurusdd´s recipe and win pips even if the transient zone is not cleared completely in the future (i.e. if k>0).

I'll make a second version where the stats for transient and fractal cases are distinguished, so that it is easier to use for trading.

Cheers,
kprsa
  • #6,047
  • Aug 18, 2014 10:43am Aug 18, 2014 10:43am
1.3365 first maybe
  • #6,048
  • Aug 18, 2014 10:43am Aug 18, 2014 10:43am
Quoting kprsa
{quote} Hi, you are surely aware of this, but others please note that this percentage includes both statistics for the potential transient (for example candle closes above the max of previous h bars) and potential fractal (candle closes below the max of previous h bars, even though the high of it was higher than the previous max). The resolving means that the potential transient/fractal zone was cleared within the next h bars (k=0). This is in principle not necessary for trading, one can use Eurusdd´s recipe and win pips even if the transient zone...
Awesome
  • #6,049
  • Aug 18, 2014 10:46am Aug 18, 2014 10:46am
Quoting josh11
1.3365 first maybe
Just a very rough calculation, but not for at least 15-16 2M bars

Edit: or I could be dead wrong. Just trying to apply the theory real-time.
And if it did head in that direction, not greater than or equal to 3371.3
LOL
A pip is only worth it if you know how much you risked to earn it
  • #6,050
  • Aug 18, 2014 10:50am Aug 18, 2014 10:50am
Quoting vlady1974
{quote} Just a very rough calculation, but not for at least 15-16 2M bars Edit: or I could be dead wrong. Just trying to apply the theory real-time.
Don't know about the timing but I am on the 15min TF so lets see
  • #6,051
  • Aug 18, 2014 10:54am Aug 18, 2014 10:54am
I guess anyone can answer this and not just Eurusdd but please correct me if I'm too far off.

To wrap my head around this way of trading; We find some extreme values and determine a proper h value to get the omega points. From here we define the transient zones which Eurusdd usually mark as blue as the Omega point (Y-axis max value) +5 pips to get the volume, the rectangle. And to create the Recurrent lightblue zone we add the K value, which we have to calculate in our own way just like h?

And to use all this we need price to enter the recurrent area on another bar once it has left the transient zone in the omega point?
Thanks in advance if this gets answered. Just trying to get this sorted and I figured a post might save a couple of hours of reading
  • #6,052
  • Aug 18, 2014 10:56am Aug 18, 2014 10:56am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting vlady1974
{quote} Recurrance is what price does all the time. It's the effect of a well balanced market that is volatile. Otherwise, you will get transient prices.

Also if you get any kind of momentum bar or big bar down you can always expect a retrace at some point. (if the bar has not had any previous recurrence)
An expert is a man who has made all the mistakes which can be made
  • #6,053
  • Aug 18, 2014 10:58am Aug 18, 2014 10:58am
Quoting kprsa
{quote} Hi, you are surely aware of this, but others please note that this percentage includes both statistics for the potential transient (for example candle closes above the max of previous h bars) and potential fractal (candle closes below the max of previous h bars, even though the high of it was higher than the previous max). The resolving means that the potential transient/fractal zone was cleared within the next h bars (k=0). This is in principle not necessary for trading, one can use Eurusdd´s recipe and win pips even if the transient zone...
I just noticed as more bars come in the probability of resolving % has increased, very interesting.
  • #6,054
  • Aug 18, 2014 11:08am Aug 18, 2014 11:08am
Quoting Baillie
{quote} I just noticed as more bars come in the probability of resolving % has increased, very interesting.
Hi, I am not at my hobby computer now, please note that if the change of probabilities with new bars is significant, it may be a bug (try reloading the indicator and check if there is a difference - reloading the indy should always give you correct values! bug may arise from some variable not being reinitialized every tick...).
  • #6,055
  • Aug 18, 2014 11:14am Aug 18, 2014 11:14am
Quoting Velites
I guess anyone can answer this and not just Eurusdd but please correct me if I'm too far off. So we find some extreme values and determine a proper h value to get the omega points. From here we define the transient zones which Eurusdd usually mark as blue as the Omega point (Y-axis max value) +5 pips to get the volume, the rectangle. And to create the Recurrent lightblue zone we add the K value, which we have to calculate in our own way just like h? And to use all this we need price to enter the recurrent area on another bar once it has left the...
You pick an h value first.
Best to use ForexFox's indicator.

The result will then highlight a bunch of regions marked yellow/red. These are potential transient zones (3% probability of happening again).
Anything not in this area is a recurrent zone (97% probability price will hit this level again). However, the indicator only shows Tops and Bottoms.

There are transient ranges which are in larger timeframe bars. This implies (strongly) that lower timeframes have different settings to higher timeframes.
If you take note of all the transient bar zones, use them as S/R blocks.

The way price behaves around a transient zone provides the trade opportunity. If it goes through, then enter on the other side recurrent zone but use a recurrent price zone not a transient price. If it goes through the transient zone but in the same bar returns to the same recurrent zone (ie. bounce), then you can trade in the direction of the bounce, again using a recurrent price not a transient price.
A pip is only worth it if you know how much you risked to earn it
  • #6,056
  • Aug 18, 2014 11:17am Aug 18, 2014 11:17am
Quoting vlady1974
{quote} Just a very rough calculation, but not for at least 15-16 2M bars Edit: or I could be dead wrong. Just trying to apply the theory real-time. And if it did head in that direction, not greater than or equal to 3371.3 LOL
Looks like it was greater than 15. Currently 21 bar count from my anchor. My anchor could be wrong.
But it didn't go near 3360 for at least 16 bars of 2 minutes.
A pip is only worth it if you know how much you risked to earn it
  • #6,057
  • Aug 18, 2014 11:20am Aug 18, 2014 11:20am
Quoting vlady1974
{quote} You pick an h value first. Best to use ForexFox's indicator. The result will then highlight a bunch of regions marked yellow/red. These are potential transient zones (3% probability of happening again). Anything not in this area is a recurrent zone (97% probability price will hit this level again). However, the indicator only shows Tops and Bottoms. There are transient ranges which are in larger timeframe bars. This implies (strongly) that lower timeframes have different settings to higher timeframes. If you take note of all the transient...
Finally i can understand a bit after reading your post.
Pivot Boss in the making~
  • #6,058
  • Aug 18, 2014 11:20am Aug 18, 2014 11:20am
Quoting kprsa
{quote} Hi, I am not at my hobby computer now, please note that if the change of probabilities with new bars is significant, it may be a bug (try reloading the indicator and check if there is a difference - reloading the indy should always give you correct values! bug may arise from some variable not being reinitialized every tick...).

Probability of resolving was: 86.1742%

With increase of multiple bars, it increased to: 86.1896% I don't know if that is a bug, I switched TF's and % changed. I then went back to original TF and % stayed the same 86.1896%
  • #6,059
  • Aug 18, 2014 11:23am Aug 18, 2014 11:23am
Quoting Baillie
{quote} Probability of resolving was: 86.1742% With increase of multiple bars, it increased to: 86.1896% I don't know if that is a bug, I switched TF's and % changed. I then went back to original TF and % stayed the same 86.1896%
Ok, most likely not a bug then.
  • #6,060
  • Aug 18, 2014 11:33am Aug 18, 2014 11:33am
my recurrent zone is 1.3352-57; I am not sure if I got this right.
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