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The similarity system

  • #6,581
  • Edited 4:32am Aug 21, 2014 4:03am | Edited 4:32am
Quoting LiquidGenius
...I discovered that if you martingale with this strategy in the right way, it looks like you can win...
Dear LiquidGenuis, with a system like this of 92% accuracy, I would never use concepts like martingale or trade averaging or similar cheats.
Why? Because I believe you will have less worst drawdown without using this - and less drawdown means you can risk more - and this
means you can make more profit.
And the other thing is: I have learned my lessons with martingale. You never can be sure if you get more losers than you expected.
-my opinion-
  • #6,582
  • Aug 21, 2014 4:07am Aug 21, 2014 4:07am
Quoting handy148
If this system tames "the beast" that really will be something.
hmmmn, i see you still got your eye on the beast. its really wild lol. i would demo it

taken a short at 70 expecting 77 to hold, above 77 i will buy. basic TRZ trades
  • #6,583
  • Aug 21, 2014 4:07am Aug 21, 2014 4:07am
Quoting LiquidGenius
I had my Eureka moment this morning before I went to bed. I woke up to test it and sure enough in it's vanilla version it looked to be about 92% accuracy. I added a filter and no stop loss and I discovered that if you martingale with this strategy in the right way, it looks like you can win (tested over 86640 bars). .
Fairly acceptable. If you don't mind, I'd like to know the time frame of your backtest, the total number of trades that your system gave and...

Quoting LiquidGenius
: Trade 1: Win: 92% Lose: 8% Trade 2 (of the 8%): Win: 86% Loss: 14% Trade 3 (of the 14% of the 8%): Win: 100% Loss: 0%
how many bars and trades in hypothesis 2 and 3 ?

Thanks.
Don't be smart. Be rich.
  • #6,584
  • Aug 21, 2014 4:19am Aug 21, 2014 4:19am
ephisi - re your short, the daily open at 58 might be a good short term target.
  • #6,585
  • Aug 21, 2014 4:36am Aug 21, 2014 4:36am
anyone believe we may correct 1.3344 today? based on similarity analysis? looking like it to me
  • #6,586
  • Aug 21, 2014 4:37am Aug 21, 2014 4:37am
Quoting maximinus
{quote} Fairly acceptable. If you don't mind, I'd like to know the time frame of your backtest, the total number of trades that your system gave and... {quote} how many bars and trades in hypothesis 2 and 3 ? Thanks.
I used the one hour time frame as my basis point because it was the one I had the most data on (~10 years)

Due to my coding capabilities I checked short trades only to begin. I generated about 1050 "signals" in total. 81 of those would have failed the first time, and 13 of the 81 would have failed a second time.

hope this clears things up.
"Mrrraggglhlhghghlgh"
  • #6,587
  • Aug 21, 2014 4:37am Aug 21, 2014 4:37am
i took profit. not sure anymore of bears. im seeing a correction today
Quoting handy148
ephisi - re your short, the daily open at 58 might be a good short term target.
  • #6,588
  • Aug 21, 2014 4:38am Aug 21, 2014 4:38am
Bulls are in control for now. i would rather be long
Quoting ephisi
i took profit. not sure anymore of bears. im seeing a correction today {quote}
  • #6,589
  • Aug 21, 2014 4:42am Aug 21, 2014 4:42am
Quoting ephisi
anyone believe we may correct 1.3344 today? based on similarity analysis? looking like it to me
It's got to be quite soon. The lowest TZ on my daily chart was taken out 2 days ago and has not been returned to.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDDailyaug21.png Size: 23 KB
  • #6,590
  • Aug 21, 2014 4:47am Aug 21, 2014 4:47am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting LiquidGenius
3. You cannot apply the concept effectively until you realize and understand the similarities/dissimilarities between what I call a left-side transient bar and a full transient bar. There is a critical reason why we assume that a left-side transient bar is a full transient bar and act as such in labeling other areas as recurrent. eurusdd has made no mistakes in labeling areas or answering questions.
Excellent post.

I just wanted to pick up on the point above because it is one that I recognise the importance of.

The reason for assuming it will be a full transient is that you can assume that the area below it will be recurrent. If the area below it is recurrent that means that price has a high chance of retracing back. Let's call these "beyond transient zone trades".

The problem we saw yesterday is that in a trending market is that multiple transients can occur in succession without an immediate retrace. This leads to drawdown. As I mentioned yesterday in a trending market the idea that we should trade when price goes beyond an assumed transient zone puts us in a position where would be trading against the main trend and trying to catch retraces.

I understand your way to deal with that is to introduce martingale as if you do it right price should at one point retrace enough for you to come out with a profit.

What I have seen is a way to handle it differently. Why not only take "beyond transient zone trades" that are going with the main trend of the day? How you determine the trend is up to you. A simple way could be if it is below/above the daily open.

As you will note on higher time frames you are not going to see transients that you can trade that way. But on lower time frames you will.
From what I have seen these with trend"beyond transient zone trades" have a very low failure rate.

Just thought I would throw that out there.

Regards

Neio
An expert is a man who has made all the mistakes which can be made
  • #6,591
  • Aug 21, 2014 4:47am Aug 21, 2014 4:47am
Hmm interesting that you are using 3 as H value on a daily time frame - I'll have to look into that.
  • #6,592
  • Aug 21, 2014 4:48am Aug 21, 2014 4:48am
Long TRZ setop on the 15mins and 3mins timeframe. sorry cant post charts
  • #6,593
  • Aug 21, 2014 4:50am Aug 21, 2014 4:50am
Quoting LiquidGenius
{quote} I used the one hour time frame as my basis point because it was the one I had the most data on (~10 years) Due to my coding capabilities I checked short trades only to begin. I generated about 1050 "signals" in total. 81 of those would have failed the first time, and 13 of the 81 would have failed a second time. hope this clears things up.
Thanks for the reply. To be honest with your readers you should have precised the info in bold in your initial post. Your presentation is biased, incomplet and the results are not valid (not yet at least).
Anyway, I know that coding and testing is time consuming, but that's the only way to proceed imo. So continue with this approach but be always fair with yourself and your readers. That will save your money.
GL
Don't be smart. Be rich.
  • #6,594
  • Aug 21, 2014 4:51am Aug 21, 2014 4:51am
Quoting handy148
Hmm interesting that you are using 3 as H value on a daily time frame - I'll have to look into that.
But only because I expect they will be taken out as opposed to longer h zones which may not be.
  • #6,595
  • Aug 21, 2014 4:51am Aug 21, 2014 4:51am
Quoting ephisi
Bulls are in control for now. i would rather be long{quote}
Bullish as well.

The Asian session indicated as such, posting the low of 3242 before 3232. (LOL, I sound like GatorInLA)

Driven by news, the return from 3242 to 3272 is just under the low (3274) of yesterday's first drop. To me this is the first Transient Zone that was breached in 8x1H bars and 13x1H bars. Any move through this zone, I expect to become a recurrent range before more higher lows.
A pip is only worth it if you know how much you risked to earn it
  • #6,596
  • Aug 21, 2014 4:56am Aug 21, 2014 4:56am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting Neio
{quote} Excellent post. I just wanted to pick up on the point above because it is one that I recognise the importance of. The reason for assuming it will be a full transient is that you can assume that the area below it will be recurrent. If the area below it is recurrent that means that price has a high chance of retracing back. Let's call these "beyond transient zone trades". The problem we saw yesterday is that in a trending market is that multiple transients can occur in succession without an immediate retrace. This leads to drawdown. As I mentioned...

Here is an M5 chart to illustrate the trading with trend "beyond transient zone trades"

The white line indicates the daily open. As you can see price is trending down below it. So we only take trades beyond transient zones that will help us to follow the main trend. These are show by the green vertical lines.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD.atmM5.png Size: 26 KB
An expert is a man who has made all the mistakes which can be made
  • #6,597
  • Aug 21, 2014 5:05am Aug 21, 2014 5:05am
Neio - interesting idea but then you can always rely on a Brit to come up with one (as long as it's not me).

I've been using 200 ema on my charts as a filter.
  • #6,598
  • Aug 21, 2014 5:09am Aug 21, 2014 5:09am
Quoting Neio
{quote} Here is an M5 chart to illustrate the trading with trend "beyond transient zone trades" The white line indicates the daily open. As you can see price is trending down below it. So we only take trades beyond transient zones that will help us to follow the main trend. These are show by the green vertical lines. {image}
Whats the indcator on your chart to draw the zones?
Pivot Boss in the making~
  • #6,599
  • Aug 21, 2014 5:11am Aug 21, 2014 5:11am
  •  Neio
  • Joined Oct 2012 | Status: Can't think outside?Enlarge the box | 688 Posts
Quoting jurn_e
{quote} Whats the indcator on your chart to draw the zones?
Unfortunately it is not mine to share....but the author of it reads this thread so it it is up to him if/when he wants to do so.

As Eurusdd said you do not need the indicator anyway. It just helps to visualise it. I could actually trade this on the mobile version of MT4 as you only have to be able to count bars
An expert is a man who has made all the mistakes which can be made
  • #6,600
  • Aug 21, 2014 5:16am Aug 21, 2014 5:16am
Quoting Neio
{quote} Unfortunately it is not mine to share....but the author of it reads this thread so it it is up to him if/when he wants to do so. As Eurusdd said you do not need the indicator anyway. It just helps to visualise it. I could actually trade this on the mobile version of MT4 as you only have to be able to count bars
Noted with thanks.
Pivot Boss in the making~
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