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The similarity system

  • #6,921
  • Aug 23, 2014 2:53am Aug 23, 2014 2:53am
Quoting Eurusdd
{quote} Seriously, I really don't think anyone here thinks that after 6 tosses, you have a better advantage of tail coming up! what we are saying is : if you tossed the coin and got 6 heads and I asked you to bet on what the next 6 outcomes will be? It is safer to expect at least one tail in the next 6 outcomes because that probability is 1-(.5)^6 which is about 98%. Therefore we can bet on not experiencing the rare event HHHHHH again immediately after one.
Some of you not understanding this concept pls read and re-read this post and pull up a chart and look at what Eurusdd is saying!!

You should get it! Remember the word that is stated rare event!!

Good luck
  • #6,922
  • Aug 23, 2014 4:10am Aug 23, 2014 4:10am
Quoting josh11
{quote} Some of you not understanding this concept pls read and re-read this post and pull up a chart and look at what Eurusdd is saying!! You should get it! Remember the word that is stated rare event!! Good luck
I think there are two ways you can interpret this:

1) If the last h bars didn't touch a certain price (so the current bar is left-hand transient), then the probability of the next h bars not touching the same price is small (especially if h is large).

2) If the current bar has a left-hand transient price zone, then the probability of the next bar being transient is small.

Of course different traders will have different ideas about where to enter, which direction, where to set targets and stops, depending on their different trading styles, so it's probably best if those kind of details are left unsaid!
You reap what you sow.
  • #6,923
  • Aug 23, 2014 5:03am Aug 23, 2014 5:03am
Quoting josh11
{quote} Some of you not understanding this concept pls read and re-read this post and pull up a chart and look at what Eurusdd is saying!! You should get it! Remember the word that is stated rare event!! Good luck

thanks for clarifying Josh. I was a bit puzzled on this example tbh
  • #6,924
  • Aug 23, 2014 6:30am Aug 23, 2014 6:30am
Hi,
I feel closer to reaching my Eureka, I would thank everybody!
I have now my paranoia: maybe the hands-free code in MT4 (experts) could be a "danger" for the arbitrage, we don't know exactly if something is sent/uploaded somewhere.

bye
  • #6,925
  • Aug 23, 2014 7:03am Aug 23, 2014 7:03am
Quoting NorthTrader
{quote} Thank you very much hepsibah for your generous hints, and congratulations on increasing your account by 40%! Unfortunately I was too busy to trade much last week, but I'll look into your low-h system from now. It's great that you're using it to predict "problem" levels too! I wonder if Eurusdd was doing the same? By the way, that C# indicator I was making for MultiCharts didn't turn out too well. It shows the TZs (including mid-bar) and statistics, but the graphics are poor. It seems that you can't even draw a rectangle easily on Multicharts....
No worries about the indicator, now I know what I'm looking for, I've gone back to just using the fractal indicator as I like my charts as clutter free as possible. Having said that, I do put lines on the chart to mark the mid bar zones as these require a great deal of respect - I think of them as walls and from now on will only trade the right side of the wall until it is broken!
  • #6,926
  • Aug 23, 2014 1:58pm Aug 23, 2014 1:58pm
Hello guys. I am heavily short UJ. Could you please confirm a problem on the Daily at 101.50/70? I know you are focusing on EurUsd, but I would appreciate confirmation of this UJ problem. My H value is 10.

Thanks a million.
Observation is the path to discovery.
  • #6,927
  • Aug 23, 2014 3:11pm Aug 23, 2014 3:11pm
Quoting Alorente
Hello guys. I am heavily short UJ. Could you please confirm a problem on the Daily at 101.50/70? I know you are focusing on EurUsd, but I would appreciate confirmation of this UJ problem. My H value is 10. Thanks a million.
Hi Alorente,

For what is worth, I'd bet there on short as well. It looks to me as if there is nothing to safely bet on at 101.50/70 anymore (it is a "true" h=10 fractal), but it seems highly probable that the potential transient zones (starting from 102.708 upwards) would be cleared within the next 7-8 trading days. The reason is that the 3 subsequent "true"/uncleared problem bars have a very low probability of occurring (<2% probability with h=10, so you have ~98% probability of reaching the 102.955 level and ~93% probability to reach 102.708).

Please note that also low probability events may occur.

Cheers,
kprsa
  • #6,928
  • Aug 23, 2014 3:42pm Aug 23, 2014 3:42pm
Quoting kprsa
{quote} Hi Alorente, For what is worth, I'd bet there on short as well. It looks to me as if there is nothing to safely bet on at 101.50/70 anymore (it is a "true" h=10 fractal), but it seems highly probable that the potential transient zones (starting from 102.708 upwards) would be cleared within the next 7-8 trading days. The reason is that the 3 subsequent "true"/uncleared problem bars have a very low probability of occurring (<2% probability with h=10, so you have ~98% probability of reaching the 102.955 level and ~93% probability to reach 102.708)....
Thanks kprsa. I will keep your post nearby in the next few days.

So you feel that once a problem bar has exceeded its H value without a test, the probability of it being taken out is very low?

I have seen EURUSDD give great credence to problem bars that were older than this one and fully expected them to be taken out at some point...
Observation is the path to discovery.
  • #6,929
  • Aug 23, 2014 4:05pm Aug 23, 2014 4:05pm
Quoting Alorente
{quote}So you feel that once a problem bar has exceeded its H value without a test, the probability of it being taken out is very low?
I don't feel anything, I calculate probabilities. :nerd:

For USDJPY, daily, FXCM broker:

if h=10:
probability of clearing the fractal problem bar (edit: within 10 days) is 71.154 %.
if the fractal problem is not cleared within 10 days, the probability of it being cleared within 20 days is 6.167 %.
if the fractal problem is not cleared within 20 days, the probability of it being cleared within 30 days is 3.077 %.
if the fractal problem is not cleared within 30 days, the probability of it being cleared within 40 days is 2.692 %.
...

Quoting Alorente
{quote}I have seen EURUSDD give great credence to problem bars that were older than this one and fully expected them to be taken out at some point...
The probability for time going to infinity will certainly reach ~100 %...
  • #6,930
  • Aug 23, 2014 7:17pm Aug 23, 2014 7:17pm
Quoting Alorente
Hello guys. I am heavily short UJ. Could you please confirm a problem on the Daily at 101.50/70? I know you are focusing on EurUsd, but I would appreciate confirmation of this UJ problem. My H value is 10. Thanks a million.
bad idea. Also, USD doing well atm.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: USDJPYM30.png Size: 37 KB
  • #6,931
  • Aug 23, 2014 8:36pm Aug 23, 2014 8:36pm
Quoting kprsa
{quote} I don't feel anything, I calculate probabilities. :nerd: For USDJPY, daily, FXCM broker: if h=10: probability of clearing the fractal problem bar (edit: within 10 days) is 71.154 %. if the fractal problem is not cleared within 10 days, the probability of it being cleared within 20 days is 6.167 %. if the fractal problem is not cleared within 20 days, the probability of it being cleared within 30 days is 3.077 %. if the fractal problem is not cleared within 30 days, the probability of it being cleared within 40 days is 2.692 %. ... {quote}...
Interesting analysis kprsa, thanks. Presumably you calculated the probabilities of a transient price being broken using a large sample of past data?

However, your last statement is interesting and appears to contradict the previous ones. The initial probabilities are decreasing with time, yet the last statement puts a very high probability of it happening when time is huge. Which makes sense, of course, due to the cyclical nature of markets. So this begs the question: at what point do the probabilities stop decreasing and start increasing? (I'm not asking for an answer, by the way, I'm just wondering aloud).

I would think that the probabilities are affected by a number of parameters, such as current trend, proximity to the transient price, volatility, news events, sentiment shifts, and so on. So is it fair to base probabilities on past data alone, I wonder?
You reap what you sow.
  • #6,932
  • Aug 23, 2014 9:35pm Aug 23, 2014 9:35pm
Quoting Eurusdd
{quote} No!! focus on the zone price is concerned with. the current price should guide you. The whole thing is simply. This and the DNA are the two tools one needs to develop revolution! I gave you people just the idea. You can modify it the way you want. But there are even more powerful things. That i keep for heaven. Nice weekend.
Quoting josh11
{quote} Some of you not understanding this concept pls read and re-read this post and pull up a chart and look at what Eurusdd is saying!! You should get it! Remember the word that is stated rare event!! Good luck
Quoting vlady1974
{quote} that's why I use Asia as a "lower timeframe " indicator to London and New York.
Thank you to you all, especially Eurusdd, Vlady, Burnsss, Dice, Kprsa, Samar, Ephisi, Josh and some others. Finally i see the light, a bright light
  • #6,933
  • Aug 24, 2014 2:01am Aug 24, 2014 2:01am
Quoting NorthTrader
{quote} Interesting analysis kprsa, thanks. Presumably you calculated the probabilities of a transient price being broken using a large sample of past data?
Yes. I use the recurrent statistic V2 indicator (I just added a minor modification to calculate probabilities of clearing the level after n*h, n=1,2,3...).

Quoting NorthTrader
{quote} However, your last statement is interesting and appears to contradict the previous ones.
I don't think so. For example, if you are summing the geometric series (1/2)+(1/2)^2+(1/2)^3+...+(1/2)^n+... the partial sums (s(n)=sum up to n-th element) are steadily growing even though the change with every new element (1/2)^(i) decreases. The sum converges to 1 for n->infinity. Similar to here: even though the probabilities are steadily dropping, they will sum to ~100% when time goes to infinity.

Quoting NorthTrader
{quote} So this begs the question: at what point do the probabilities stop decreasing and start increasing?
In my opinion, this can happen if the problem on the current time scale also makes a problem on a higher time scale.

Quoting NorthTrader
{quote} I would think that the probabilities are affected by a number of parameters, such as current trend, proximity to the transient price, volatility, news events, sentiment shifts, and so on. So is it fair to base probabilities on past data alone, I wonder?
All technical indicators rely on the past data to somehow conjecture the future.
  • #6,934
  • Aug 24, 2014 3:02am Aug 24, 2014 3:02am
Quoting kprsa
... All technical indicators rely on the past data to somehow conjecture the future.
I see kprsa, thanks. I understood now that you were talking about the sum of probabilities.

Regarding the last point, the probability would be much higher than 71% if the current price was only 10 pips away from the problem price (for example). Or much lower if it was 300 pips away! If this could be worked into the calculation somehow, along with any other current conditions that might affect it, then surely the indicator would become more accurate.
You reap what you sow.
  • #6,935
  • Aug 24, 2014 3:26am Aug 24, 2014 3:26am
Quoting NorthTrader
{quote}Regarding the last point, the probability would be much higher than 71% if the current price was only 10 pips away from the problem price (for example). Or much lower if it was 300 pips away! If this could be worked into the calculation somehow, along with any other current conditions that might affect it, then surely the indicator would become more accurate.
I wouldn't complicate the code without necessity. I provide the source, so you can add more conditions and do with it what you want. However, I can investigate the price distance factor.
  • #6,936
  • Aug 24, 2014 5:01am Aug 24, 2014 5:01am
Can some one show picture or price of TZ please .. past one or future one are ok. May be Vlady, Hepsibah, Josh, Dewachen or other? I think i got some thing too, but still not sure. I want to compare my TZ, to know my algo is right or wrong. Thanks in advance.
Similarity can change your life !
  • #6,937
  • Aug 24, 2014 8:33am Aug 24, 2014 8:33am
Quoting ChanhXanh
Hello guys, I am been through the entire thread and couldnt stop reading it, all my trading beliefs are under reconsidaration !!! Time to read it for the second then third time But from now on I wanted to start demo-trading, For those willing to try with me, a valuable friend has adapted the StochDifZones to the Mt4 v600 build. I hope it will help those of you that came across this thread ! Good luck to all of you, ChanhXanh {file}
hello chan, thanks a lot for the StochDifZones Indie v600. i was looking for that. can anybody tell me where to Change Settings for 1Min TF. i want to trade from there.
thanks a lot! mex
  • #6,938
  • Aug 24, 2014 11:11am Aug 24, 2014 11:11am
Quoting jackprobe
Can some one show picture or price of TZ please .. past one or future one are ok. May be Vlady, Hepsibah, Josh, Dewachen or other? I think i got some thing too, but still not sure. I want to compare my TZ, to know my algo is right or wrong. Thanks in advance.
There is a small bug at my code, i will post the price/image as soon as i get my code works perfectly ... soon ...
  • #6,939
  • Aug 24, 2014 2:52pm Aug 24, 2014 2:52pm
Quoting Alorente
Hello guys. I am heavily short UJ. Could you please confirm a problem on the Daily at 101.50/70? I know you are focusing on EurUsd, but I would appreciate confirmation of this UJ problem. My H value is 10. Thanks a million.
hello,

I believe is too early to go short. there are some signs that it may have found a top there indeed (divergences, SD etc.) but it is not yet confirmed to go short, especially "heavy".
however, looking at your system: why would you do this? I've put your extreme tma - new version template and your own system says Long: on Daily the Slo
  • #6,940
  • Edited 3:23pm Aug 24, 2014 2:59pm | Edited 3:23pm
Quoting Alorente
Hello guys. I am heavily short UJ. Could you please confirm a problem on the Daily at 101.50/70? I know you are focusing on EurUsd, but I would appreciate confirmation of this UJ problem. My H value is 10. Thanks a million.
hello,

with my tools, I believe is too early to go short.
there are some signs that it may have found a top there indeed (divergences, SD etc.), is true. But it is not yet confirmed to go short, especially "heavy". We should wait a bit, instead of rushing to hunt tops.

moreover, looking at your system: why would you do this? I've put your "Extreme tma - new version" template on, and your own system says Long:
- on Daily the Slope values is >0.4,
- on H4 is >0.8,
which according to your own rules below it says Long.
tell me I am wrong..

"
Extreme TMA System

Entry Rules:
1- We will first determine trend in the 3 TMAs by using the TMA Slope indicator values.
Ranging TMA (-0.40 to 0.40): Trades can be placed in both directions.
Buy Only TMA (Above 0.40): Place ONLY Long trades.
Sell Only TMA (Below -0.40): Place ONLY Short trades.
Super Range: Above 0.80: Hold longs till slope value drops under 0.80, at which point you should close all longs.
Below -0.80: Hold shorts till slope value climbs above -0.80, at which point you should close all shorts.

H4, D1, W1 slope values must be either Ranging or higher for Longs or Ranging or lower for shorts."
"
Attached Image(s) (click to enlarge)
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