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Transient Zones - Basics

  • #321
  • Edited 11:00am Oct 26, 2014 8:36am | Edited 11:00am
Quoting NorthTrader
{quote} Hi Gregoryy, I personally feel that the probability of this (bold statement above) is less than 97%. It's more like 80%. Please see my post on page 14 if you want to see why. I think the 97% figure is dangerous and misleading to people who are new to trading and new to this concept. 97% sounds like something you could bet your house on. Even 80% sounds good. But please be aware of current issues before placing your trade, and don't bet too much.
Quoting giovanni4000
{quote} Totally agree mate, we need to practice, and practice, and practice ..... until TRZ becomes a friend for us , before it is too late Thanks for your good posts mate. Edit: about this 3%, for example we have 1000 bars on chart, and we use it for calculation. We get 42 bars that really already finished Transient Bars (Not Resolved one). So, we get : (42/1000)*100% = 4.2% . Is this the way we calculate the TZ (by looking for the right "h" & "k") to get result around 3% ? Edit : Or from 1000 bars on chart we use for calculation,...
I don't know how well this explaination will suffice but yes 97/3 is a working probability. Mathematically there will be deviations but I am inclined to think it does not go until 80/20. I know North is trying to say be careful and thats fair. But at least for myself I have stressed many times that the levels indentified are high probability but the caveat is still how a trader returns to that level.

97/3 has a couple of meanings to it.
1) Take any price x on a chart and 97% of thoes prices will be revisited at some point in time. This is the premise of the recurrent nature of price. I really do not want to explain again why this alone is not tradable pratically at least.

2)This value can be easily obtained by using Kpsra indicators and adjusting the h value till you get the ~ read out of 97/3. This is not curve fitting variables to fit a model rather it is adjusting the data set presented to you such that you see data that historically 97/3. You are not limited to working with 97/3. I don't know the excat math of Kpsra indicator but 97/3 there mean only 3% of the PTZs you see turned out to be TZs

Edit : Mistake on my part. 3% of all bars you use for count become TZs
I want more brain power!
  • #322
  • Oct 26, 2014 9:05am Oct 26, 2014 9:05am
Quoting cfdtaleong
{quote} {quote} I don't know how well this explaination will suffice but yes 97/3 is a working probability. Mathematically there will be deviations but I am inclined to think it does not go until 80/20. I know North is trying to say be careful and thats fair. But at least for myself I have stressed many times that the levels indentified are high probability but the caveat is still how a trader returns to that level. 97/3 has a couple of meanings to it. 1) Take any price x on a chart and 97% of thoes prices will be revisited at some point in time....
Thank you mate, this is so interesting. I think it is not easy to get exactly 3%, may be trader A can get 2.543% , trader B get 3.3023%, trader C get 2.9634% , trader D get 3.0101%. This different result because of different value of h & k they are using. Now i understand, why h & k are so secret .
  • #323
  • Oct 26, 2014 9:28am Oct 26, 2014 9:28am
Quoting giovanni4000
{quote} Thank you mate, this is so interesting. I think it is not easy to get exactly 3%, may be trader A can get 2.543% , trader B get 3.3023%, trader C get 2.9634% , trader D get 3.0101%. This different result because of different value of h & k they are using. Now i understand, why h & k are so secret .
That is why I always refer to 97/3 as a working figure. I'm sure some can but it is quite beyond me to derive the actual values. h is really not secret actually, what people don't realise in the beginning, myself included of course is that you need to find a h that works for you. I belive the same applies to k but on a lesser degree although there is still much fog on what it really is
I want more brain power!
  • #324
  • Oct 26, 2014 9:45am Oct 26, 2014 9:45am
Quoting cfdtaleong
I don't know the excat math of Kpsra indicator but 97/3 there mean only 3% of the PTZs you see turned out to be TZs
Hi cfd, I'm afraid I can't dispute this without seeing kprsa's indicator, which is impossible for me right now. I just assumed that the "97% / 3%" you were talking about in his indicator was "97% recurrent bars / 3% TZ bars", not "97% potential TZ bars that become recurrent / 3% potential TZ bars that become TZ bars". The two concepts are different and produce different stats (in my opinion). Thanks anyway.
You reap what you sow.
  • #325
  • Edited 11:09am Oct 26, 2014 10:28am | Edited 11:09am
Quoting NorthTrader
{quote} Hi cfd, I'm afraid I can't dispute this without seeing kprsa's indicator, which is impossible for me right now. I just assumed that the "97% / 3%" you were talking about in his indicator was "97% recurrent bars / 3% TZ bars", not "97% potential TZ bars that become recurrent / 3% potential TZ bars that become TZ bars". The two concepts are different and produce different stats (in my opinion). Thanks anyway.
I suggest you read my post carefully, it was quite clear. But I will rephrase it for your benefit as you may not be familiar with the acronyms but the onus would be on you to get aquanited with them.

On indicator - 97/3 mean 97% of problem bars became recurrent, only 3% of the problem bars became transient for the period of selected h.

On price - 97/3 means 97% of all prices are recurrent and 3% transient. This means that a working value of 97% of prices you see on a chart will get revisited at some point in time. Time in this case has nothing to do with h value.

I've said it before and shall repeat it again. 97/3 is indeed two different concepts when explained in the manner I have done. Because simply using 97/3 as the nature of price is untradable on its own, structure needs to be added thus only certain prices get indentified and we then apply the assumption that because price chooses to be recurrent most of the time only 3% of the sample bars actually become transient. Therefore it can also be agrued that 97/3 is but one concept.

Therefore it is up to you to apply the logic and concept. Beyond this I do know how else I can articulate the matter or the reason of your dispute. There is however without dispute that there will be different stats depending on how you calculate and apply the logic. Price will have to be predominantly recurrent in order for the market to function.

Edit : My mistake. I was indeed not clear
I want more brain power!
  • #326
  • Edited 11:02am Oct 26, 2014 10:32am | Edited 11:02am
Quoting NorthTrader
{quote} Hi cfd, I'm afraid I can't dispute this without seeing kprsa's indicator, which is impossible for me right now. I just assumed that the "97% / 3%" you were talking about in his indicator was "97% recurrent bars / 3% TZ bars", not "97% potential TZ bars that become recurrent / 3% potential TZ bars that become TZ bars". The two concepts are different and produce different stats (in my opinion). Thanks anyway.

I think I understand it that same way as you NT

As per the attached screenshot, when I look at the EURUSD H1 with h=31
The Potential TZ's are 13.24% of the bars
The fully formed TZ's are 3%
Which means that 77.32% of the PTZ's are resolved
meaning that 22.68% of PTZ's go on to be fully formed TZ's


I find that Sciurus's indi makes it visually very clear.
All the salmon coloured areas are PTZ's
The blue coloured are the fully formed TZ's
Attached Image (click to enlarge)
Click to Enlarge Name: recurrence indi.jpg Size: 599 KB
Attached Image
He has the right to criticize who has the heart to help. Abraham Lincoln
  • #327
  • Oct 26, 2014 10:45am Oct 26, 2014 10:45am
is k a threshold for the probability of a PTZ falling into the group of 97% or of 3%?
  • #328
  • Oct 26, 2014 11:07am Oct 26, 2014 11:07am
Quoting Jim4x
{quote} I think I understand it that same way as you NT As per the attached screenshot, when I look at the EURUSD H1 with h=31 The Potential TZ's are 13.24% of the bars The fully formed TZ's are 3% Which means that 77.32% of the PTZ's are resolved meaning that 22.68% of PTZ's go on to be fully formed TZ's {image}
Quoting NorthTrader
{quote} Hi cfd, I'm afraid I can't dispute this without seeing kprsa's indicator, which is impossible for me right now. I just assumed that the "97% / 3%" you were talking about in his indicator was "97% recurrent bars / 3% TZ bars", not "97% potential TZ bars that become recurrent / 3% potential TZ bars that become TZ bars". The two concepts are different and produce different stats (in my opinion). Thanks anyway.
Yes you guys are right. The terms you used are correct and I have made the necessary correction on affected posts.

3% true problem bar is derived from number of bars calculated.

77.32% means what it say. It does not necessarily equate to 77.32% of the PTZs get cleared.

The remaining presmis stay the same

I hope this clarifies.
I want more brain power!
  • #329
  • Oct 26, 2014 2:01pm Oct 26, 2014 2:01pm
I see 97/3 as a way to identify and quantify, through parameters, where the repellent/attractive forces of TZ's/PTZ's, and their decay, is tradable.
  • #330
  • Oct 26, 2014 7:18pm Oct 26, 2014 7:18pm
Quoting Jim4x
{quote} I think I understand it that same way as you NT As per the attached screenshot, when I look at the EURUSD H1 with h=31 The Potential TZ's are 13.24% of the bars The fully formed TZ's are 3% Which means that 77.32% of the PTZ's are resolved meaning that 22.68% of PTZ's go on to be fully formed TZ's I find that Sciurus's indi makes it visually very clear. All the salmon coloured areas are PTZ's The blue coloured are the fully formed TZ's {image} {image}
Thanks Jim, for a moment there I thought I was losing my mind! It's hard to disagree with the cold hard bar counts in front of your eyes. And thanks cfd for editing your posts to reflect your mistake.

And so, I'll repeat my warning for the newbies: if you're trading the TZ concept in this way (i.e. waiting for a potential TZ to form and trading it as a target), then do not expect price to return 97% of the time. It will only return about 75 - 80% of the time.

Actually, the most interesting thing about my post with the bar stats is the final conclusion, repeated here:

"So, the chance of price returning to all prices in the current bar, within the next 21 bars, is always nearly four times greater than price not returning to them."

This is saying that the chance of returning to any bar on the chart, within the next h bars, is on average almost 80%. Am I the only one who finds that mindblowing?
Edit: the value of h must be set so that 3% of all bars are TZ bars (contain full transient price zones).

(Disclaimer: be careful though, it's the 20% that will kill your account if you're not careful)
You reap what you sow.
  • #331
  • Edited Oct 27, 2014 12:20am Oct 26, 2014 10:44pm | Edited Oct 27, 2014 12:20am
Quoting NorthTrader
{quote} Thanks Jim, for a moment there I thought I was losing my mind! It's hard to disagree with the cold hard bar counts in front of your eyes. And thanks cfd for editing your posts to reflect your mistake. And so, I'll repeat my warning for the newbies: if you're trading the TZ concept in this way (i.e. waiting for a potential TZ to form and trading it as a target), then do not expect price to return 97% of the time. It will only return about 75 - 80% of the time. Actually, the most interesting thing about my...
I tire of the exchanges with you. You made it sound as if I agree with your value and quite frankly I don't. 97/3 is indeed flawed there are deviations but not to the extend of your proposition. Your 80/20 is flawed with considerations you neglected or have failed to understand. So do not go around speaking as if your values have been vindicated.

EDIT : But if you are saying only 80% of PTZs and not price, gets resloved then yes I concede that there may be some truth to the value. I still however feel 97/3 is valid but it depends on how you look at it. You need to look deeper
I want more brain power!
  • #332
  • Oct 27, 2014 12:05am Oct 27, 2014 12:05am
Quoting cfdtaleong
{quote} {quote} Yes you guys are right. The terms you used are correct and I have made the necessary correction on affected posts. 3% true problem bar is derived from number of bars calculated. 77.32% means what it say. It does not necessarily equate to 77.32% of the PTZs get cleared. The remaining presmis stay the same I hope this clarifies.
Thank you for clarification mate
  • #333
  • Edited 2:53am Oct 27, 2014 12:10am | Edited 2:53am
Quoting NorthTrader
{quote} Thanks Jim, for a moment there I thought I was losing my mind! It's hard to disagree with the cold hard bar counts in front of your eyes. And thanks cfd for editing your posts to reflect your mistake. And so, I'll repeat my warning for the newbies: if you're trading the TZ concept in this way (i.e. waiting for a potential TZ to form and trading it as a target), then do not expect price to return 97% of the time. It will only return about 75 - 80% of the time. Actually, the most interesting thing about...
Very nice NT, thanks. You are right, TZ means price will not touch it (in next "h", or may be more bars). So, it is better not to use it as a target. It must be something else ..... . I think trading is not only about Fundamental and Technical thing, it needs also Mental Management. Vlady's proposes us to read some books, and i am reading one of them. I like the book of Mark Douglas "trading in the Even Zone, really good one.
  • #334
  • Oct 27, 2014 12:45am Oct 27, 2014 12:45am
Hi cfd, yes I was talking about 80% of PTZs getting resolved (revisited). If we were sat together with charts, calculators, pencils, paper and beer then I'm sure we could thrash this out much easier. But we aren't, so let's leave it at that. Only 20% difference anyway. Not worth fighting over!

Giovanni, I think you're right - best to exit before the PTZ is revisited. Less chance of getting stuck in the 20%.

Cheers
You reap what you sow.
  • #335
  • Oct 27, 2014 1:22am Oct 27, 2014 1:22am
Quoting NorthTrader
Hi cfd, yes I was talking about 80% of PTZs getting resolved (revisited). If we were sat together with charts, calculators, pencils, paper and beer then I'm sure we could thrash this out much easier. But we aren't, so let's leave it at that. Only 20% difference anyway. Not worth fighting over! Giovanni, I think you're right - best to exit before the PTZ is revisited. Less chance of getting stuck in the 20%. Cheers
Yes true. You work with your values and I'll work with mine.

I will sing the same tune as you for the new guys. 97 or 80 they are good odds but just don't go in like you found the magic cup.

And read the arugments between me and North, it will actually do you good as you try to understand this TZ business

Peace
I want more brain power!
  • #336
  • Oct 27, 2014 7:56am Oct 27, 2014 7:56am
For pondering and development. MM, trade entries, management and exits are your own secret. Decided to leave this nugget of info on the thread for those who may need a spark. This is but one understanding. Be careful as this is but a piece of the puzzle.

Thanks for the kind PM's.

7
Attached File(s)
File Type: pdf eureKa.pdf   103 KB | 1,584 downloads
  • #337
  • Oct 27, 2014 8:01am Oct 27, 2014 8:01am
Quoting Rahimseven
For pondering and development. MM, trade entries, management and exits are your own secret. Decided to leave this nugget of info on the thread for those who may need a spark. This is but one understanding. Be careful as this is but a piece of the puzzle. Thanks for the kind PM's. 7 {image}
Thanks mate
  • #338
  • Oct 27, 2014 8:25am Oct 27, 2014 8:25am
Thanks to the nugget,
I've finally understood the concept of PTZ..
but one thing that i'm still trying to figure is whether to trade away or trade towards the PTZ..

which direction should i proceed from here? or should i say where to start to search for the next puzzle?
  • #339
  • Oct 27, 2014 8:56am Oct 27, 2014 8:56am
Quoting Gregoryy
Thanks to the nugget, I've finally understood the concept of PTZ.. but one thing that i'm still trying to figure is whether to trade away or trade towards the PTZ.. which direction should i proceed from here? or should i say where to start to search for the next puzzle?
Gregorry, that is your opportunity to fully express yourself as a trader. Either way must be an opportunity which you've now been shown a way to qualify/quantify a probability for.

By this I mean, if I can borrow some notes from books I've read, that we as traders never trade the market. We don't even trade what we see etc.
We trade our beliefs. Full stop. Our translated beliefs can turn into an edge when we have more higher probability trades than lesser probability trades. That's it.
Losing trades are not "losers" but feedback that you may have broken your rules or not have adequate rules. Rules, you develop from all sorts of observations and study.

So... TZs form. We have h, we can estimate k. Where is it more probable to go?
You can test either of your directions because you can define your risk.
A pip is only worth it if you know how much you risked to earn it
  • #340
  • Oct 27, 2014 11:07am Oct 27, 2014 11:07am
[Quote = LITEchild; 7818495] {quote} Por que não colocar alguns comércios onde está a boca? Você já tomou até um comércio baseado em todo o theaory você está jorrando? Aqui estão quatro cartas (comércios) Estou atualmente. Com base no que está sendo explicado aqui. 'Simples' e 'claro' o suficiente para você? Eu te desafio a mostrar ainda UM! Se não, então talvez você é louco afinal. Suas palavras não minhas. {Imagem} {imagem} {imagem} {imagem} [/ quote]


He LiteChild.. for me it's a perfect entries.... what is your configuration of your SymphoneX indicator?

Best Regards
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