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Transient Zones - Basics

  • #481
  • Nov 14, 2014 9:51pm Nov 14, 2014 9:51pm
Quoting tickoedo
Hello Guys / Girls, its my first post because i was a quiete reader here. but now i want to participate active in this thread. i have a couple of questions und i hope to become a clear answer. i see there are many ways to use TZ and im very confused because everyone use TZ other or dont know what exactly to do. So please be hard and direct to me and say me if im right or wrong. i will be putting here some thesis / questions with a picture for each thesis / question. please say me if im wrong or right. nothing else this is like a small summary...
Hi mate, i am on the way learning this great Eurusdd's concept too. On your image nomero uno, Yes, it is recurrent where your put blue arrow. It is a good target, but every TZ on the left is also can be a target.
Similarity can change your life !
  • #482
  • Nov 15, 2014 1:27am Nov 15, 2014 1:27am
Hi everyone

I would like to continue to learn the principles that were taught on the other thread, I have learned a lot from a number of traders that have and continue to make a great contribution to this community, I hope those traders stick around, at least on this thread.

Cheers
Ezzy
What you do is a reflection of you....what I do is a reflection of me.
  • #483
  • Nov 15, 2014 1:44am Nov 15, 2014 1:44am
Everyone,

Thanks for dropping by. Wow! What a drama yesterday.
I'm still a little bit in denial but I have seen the evidence now with my own eyes - and I stand by what By my last posts on the Sim thread, ignoring the BS with Favorite.

Please feel free to use this thread as an extension of your learning. I have amended Post #1 with a short paragraph to state that the purpose of the thread has changed.

I still feel that it serves the community positively to remain secretive about your Eureka moments as it respects everyone's individual journey. When someone discovers their moment, it is usually because they have invested hundreds of hours into the effort.... No one wants to have their efforts given a value of zero even if they are generous enough to share in a post.

So to borrow from my coaching community, let's promote coaching (asking each other better questions for positive results) rather than mentoring (simply giving instructions). Sometimes mentoring will be necessary to initially give the idea, but let's really encourage people to make these ideas their own.
A pip is only worth it if you know how much you risked to earn it
  • #484
  • Nov 15, 2014 1:58am Nov 15, 2014 1:58am
Quoting kangeron
Hi Vlady1974, Tell me if i am interpreting this correctly, 1) is the recurent zone from the high of the focus candle to the top of the transient zone? 2)Is the trancient zone from the candle close to the wick low of the focus candle?
Not quite, but you're almost there.
It's best to explain by picture.

Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 743 KB


The Focus bar will be the Hi or Lo of a swing. You take the entire candle and create a range projected to the left and right. You then reduce the area of the range by the area of any candle up to the max of your h value. The remaining area of your focus bar, untouched by any price movement is Transient.

This is the most Basic approach and how the indicators are written.

The advanced concept is to not think of Transcience or Recurrence inPrice bars, but in fluid time. This is more difficult because how do you visually draw it or represent it in your mind? In the example above, we have determined a TZ by candle....but if that candle was 1H....within that 1H there is still a further recurrent/TZ zone.

The idea progresses further in that we are more interested in the Right side because the Left side has already happened. Probability is focused more on events to the right of the focus bar.
A pip is only worth it if you know how much you risked to earn it
  • #485
  • Nov 15, 2014 3:24am Nov 15, 2014 3:24am
thanks a lot for the clarity vlady1974.
  • #486
  • Nov 15, 2014 8:15am Nov 15, 2014 8:15am
Quoting tickoedo
1. Question: Recurrent Zone and Transient Zone on the picture nomber uno: is a confirmed transient Zone (yellow and red). the zone under and over the transient zone we called reccurent zone. is that right? Yes or No only please.
Yes, TZ is the coloured zone. Recurrent is everything else.

Quoting tickoedo
2. Question: The Art how we SHOULD use TZ from "eurusdd" view. Idea 1 we have a finished TZ. if price breakd the TZ we want to trade back to it where the TZ was. Is the main idea right? Yes or no only please. (the other idea is: if a PTZ appear [a trend consolidation] we trade in the direction of the PTZ in Assumption: - that the trend still is active and because of that the PTZ must break. the % of a break of a PTZ {image} {image} {image}
Idea 1: Let me rephrase what you said.
If a TZ has been finished or CONFIRMED..... then later price breaks this zone, we want to trade back to where the TZ was?
You have one extra step too many. If the TZ is confirmed then some time in the future it will be Recurrent.
In this chart of 4H, the circled TZ is returned to after another event has taken place.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD-4H.png Size: 150 KB


What you probably meant was: if it has been revisited once.... will it be revisited again? In a ranging / consolidation range I have this to be YES. But once it breaks away, all bets are off.

Yes, you can trade AWAY from TZ (which I like to do) or you can trade TOWARDS a previous or confirmed TZ. This may seem like it's just support and resistance but don't view it that way - the zones are filtered out by the value of H. If you put in H=2 then every swing top/bottom will appear.... putting in H=24 or 60 etc, increases the probability that zone will be transient because all the other price ranges will be recurrent. But you have to LOCALISE this concept into a trend. So therefore, common techniques like BREAKOUTS or RETRACES will work.

Quoting tickoedo
3. Question: another art how we should use TZ. Idea 2 when we assume that a PTZ should become a a TZ with very high % than we can assume that with every more break of the PTZ the % to become a real TZ will be more and a revisit to the "old PTZ" is very high. is this maybe the idea? but the problem what i have with that is: the old PTZ is no PTZ more... im very unsure... will read this thread again and the other long thread from page 280... but i hope comeone can me give a clear answer. {image} {image} {image}
Yes, this is getting better. An uneven TZ is a failed test price action formation - a retrace within your H period. At a lower timeframe, this is a breakout away from the swing top/bottom. If you catch that early, you don't need to wait until H completes, you just ride it. That's trading AWAY from. If a move has already happened and you're looking for a target, then if you have a TZ that has H completing, there is a chance it could be a target - this is trading TOWARDS. Another example of trading towards, is if an Uneven TZ has formed, breakout happens then price consolidates forming some TZ and price retraces slightly - then you could trade into those zones and the target is the price range on the other side of the zone. My criteria for this is that the Zone is a MID BAR ZONE or EVEN ZONE.
A pip is only worth it if you know how much you risked to earn it
  • #487
  • Nov 16, 2014 10:57am Nov 16, 2014 10:57am
hello vlady thank you very much for answering. ok now it is a little bit clearer.
to all people: i was checking the charts the whole night and have some trade setup ideas. please give me your opinion how you think about this.
i want to present just one idea, maybe later the other idea. just wanna some opinions how you guys / girls (are here some traderinns?) think about my setup.

Setup: Rare Trend Event

1. We are looking for a Rare Event -> we are looking for two consecutives confirmed TZ which make Higher high.
So now we have two UP TZ -> the prohability that the next TZ will be a Down TZ is very high (i didnt see very much 3 TZ bottom / tops)
this happen for example in the 5 minute timeframe. (screen nummer uno). But because we dont know WHEN the PTZ down will get confirmated (price can sink 50 Pips or 100 Pips and confirmate the PTZ or 1 Pip) we are going one timeframe lower and looking there for a Rare event too.

2. we go to 1 minute chart and looking there for a Rare event too! in first example its perfekt because we have a 2. PTZ which give us a good entry.

what do you think about this setup. is there really something behind or i am just thinking that this could be something? please give some opinions
Attached Image(s) (click to enlarge)
Click to Enlarge Name: uno.png Size: 84 KB
Click to Enlarge Name: two.png Size: 102 KB
  • #488
  • Nov 17, 2014 5:41pm Nov 17, 2014 5:41pm
Quoting tickoedo
hello vlady thank you very much for answering. ok now it is a little bit clearer. to all people: i was checking the charts the whole night and have some trade setup ideas. please give me your opinion how you think about this. i want to present just one idea, maybe later the other idea. just wanna some opinions how you guys / girls (are here some traderinns?) think about my setup. Setup: Rare Trend Event 1. We are looking for a Rare Event -> we are looking for two consecutives confirmed TZ which make Higher high. So now we have two UP TZ -> the prohability...
Very very good mate! You've done in 2-3 posts what many have not done in the original thread.
What I will tell you is to continue to test this and then sve it as a play book strategy.
There is a post by NorthTrader on Buried Treasure thread that has stats on T/B/T sequencing probabilities which may be of interest.

Your setup is great:
- you identified that TZs go in sequences.
- you identified the probability opportunity of the rare event
- you identified that if you don't see a setup in that timeframe, you go lower or fractal.

You haven't yet explicitly mentioned H but you are at least using completed or confirmed TZ. If you brainstorm on this clue I am giving you, perhaps you can create more ideas.

Keep up the good work.
A pip is only worth it if you know how much you risked to earn it
  • #489
  • Nov 17, 2014 5:48pm Nov 17, 2014 5:48pm
Quoting vlady1974
Everyone, Thanks for dropping by. Wow! What a drama yesterday. I'm still a little bit in denial but I have seen the evidence now with my own eyes - and I stand by what By my last posts on the Sim thread, ignoring the BS with Favorite. Please feel free to use this thread as an extension of your learning. I have amended Post #1 with a short paragraph to state that the purpose of the thread has changed. I still feel that it serves the community positively to remain secretive about your Eureka moments as it respects everyone's individual journey. When...
If you are good at something, never do it for free--Joker
  • #490
  • Nov 17, 2014 6:13pm Nov 17, 2014 6:13pm
thanks a lot Vlady for the clear explanation
  • #491
  • Edited 6:41am Nov 18, 2014 5:16am | Edited 6:41am
Attached Image (click to enlarge)
Click to Enlarge Name: EURJPY-15M.jpg Size: 957 KB
A pip is only worth it if you know how much you risked to earn it
  • #492
  • Nov 18, 2014 5:17am Nov 18, 2014 5:17am
Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 966 KB
A pip is only worth it if you know how much you risked to earn it
  • #493
  • Nov 18, 2014 5:28am Nov 18, 2014 5:28am
These 2 posts are to show drawdown trades on EJ.

I took the first Long on a signal that I'm testing.
I took the second Long also on another signal.

Both went under, but the Position Size meant that each trade had a max of $1K potential loss. They did not exceed $500 each, 5% of K. A little high for some and I get that. Just bear in mind that besides these trade, I had also been closing profitable ones as well.

Just as a general description, the 1st test lasted between 30 Oct to last week. I was using some momentum and currency strength indicators to help filter the decision making. This 2nd test is exclusively TZ and SS type indicators. Full credit to Kiads and Zelo for their coding genius and generosity.

One thing I will state is that another momentum indicator off chart has signalled long term that EJ will be a Long position so this helped in my confidence to manage the drawdown position. This indicator was from Alessio Rastani's Leading Trader site. (I really like his simple analysis).

To continue, I martingaled the last position by adding up the open position sizes and then waited for an Uneven TZ signal, plus reversal candle patterns and then I waited for a quite a few SS sequence triggers. The overall price action shape was suggesting a Cup type formation... which is a Bull Move.

The other trade of note is the CHFJPY which from Alessio's indicator is also a potential Long setup.... when I say Long Setup, I mean a combination of 4H, Day and Week timeframe so it could be a significant move.

EDIT:
I forgot to mention my TP. It was actually hit.... but because I was writing a stupid response post to Similarity Thread, I didn't set the TP. My TP was the previous TZ (Red Arrow). As you can see it went past and cleared it to complete the cup... it may retrace and form the handle formation (smaller cup) ... we shall wait and see. I haven't decided if I will take profits and close.
A pip is only worth it if you know how much you risked to earn it
  • #494
  • Nov 18, 2014 5:49am Nov 18, 2014 5:49am
H is the filter to concentrate your tests on.

By aligning H to time equivalents of 1 day, I find that you are able to focus your decision making to within 24 hours.
I have always said this.

It's harder to get equivalence for Weeks and Months to days because of varying number of month days and leap years.
However, we all know what 1 day is equivalent to: 24 hours. 24 x 60 = 1440 minutes.

Being able to do Multi Time Frame (MTF) analysis when H values do not provide you with setups is a
good way to indirectly train your senses to different price action formations .

I personally don't want to go below 15M anymore as my scalping days are over. Too much stress for me.
The 1H is generally all you need. My favourite is 4H.

The reason the 15M is used is because I can at least see with 4 candles what happened within 1H. And so the price action helps filter out the TZ style indicators without having to resort to Trendlines, Stochastics, Fibs, Pivots, Bollingers.

I have used Bollingers before (ZZBB Method!) and this too can be used. Kiads also showed how he uses this method in an excellent post some weeks back.
This can help in the Sequencing of the TZ because generally you want to see ZZ Top to ZZ Bottom... if you see a ZZ Top taken out, it will usually be a failure of the Bollinger mid line being crossed. If you saw that alongside a signal from TZ or SS or both, wouldn't you take it and set a small SL?

Ultimately it's about stacking your reasons for trading vs your stack of reasons for not trading.
A pip is only worth it if you know how much you risked to earn it
  • #495
  • Nov 18, 2014 5:50am Nov 18, 2014 5:50am
Quoting vlady1974
{image}
Great results!

But careful mate, in one of your trade comments in the screenshot, 'fxjay' is mentioned
Given the level of logic these days, some people will again think we're the same person or linked to some secret service institutions that wants to destroy FF members.
  • #496
  • Nov 18, 2014 5:54am Nov 18, 2014 5:54am
Quoting FX-Jay
{quote} Great results! But careful mate, in one of your trade comments in the screenshot, 'fxjay' is mentioned Given the level of logic these days, some people will again think we're the same person or linked to some secret service institutions that wants to destroy FF members.
Shite, thanks for the heads up!
I have to come up with another name for the setup you described in the original thread. Perhaps I can call it the the $50K setup! LOL.
On a serious note - that was a lapse on my part and I'll make sure not to use people's names in my setup comments! Thanks mate.

BTW... for whatever stupid reason... I placed a pending BUY on EURGBP and then cancelled. WTF? I can't explain it. But yes, that EURUSD move may be a keeper.
I'm not understanding GBP at the moment... so I'm out.
A pip is only worth it if you know how much you risked to earn it
  • #497
  • Nov 18, 2014 6:51am Nov 18, 2014 6:51am
EJ trades closed.

I'm slightly pissed that I didn't set my TP. Too many distractions this morning and I didn't get it done. Just goes to show that more than half the battle is not on the charts but behind it.
A pip is only worth it if you know how much you risked to earn it
  • #498
  • Nov 18, 2014 9:13am Nov 18, 2014 9:13am
Only open trade left CHFJPY.
Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 723 KB
A pip is only worth it if you know how much you risked to earn it
  • #499
  • Nov 18, 2014 2:28pm Nov 18, 2014 2:28pm
Quoting vlady1974
{quote} Very very good mate! You've done in 2-3 posts what many have not done in the original thread. What I will tell you is to continue to test this and then sve it as a play book strategy. There is a post by NorthTrader on Buried Treasure thread that has stats on T/B/T sequencing probabilities which may be of interest. Your setup is great: - you identified that TZs go in sequences. - you identified the probability opportunity of the rare event - you identified that if you don't see a setup in that timeframe, you go lower or fractal. You haven't...

hello vlady, thank you very much. jes i was thinking some nights about the whole thing. unfortunately im no coder or math, so i must do this all with my eyes (visuall backtest) and brain. but i see how the ideas coming: combining more timeframes, looking for other sequenzes/rare events. using same settings / or more settings and so on. but its very tricky in my eyes but i slowy understand. looking now for ways with excel to calculate myself some calculations and looking to combine more timeframes.

what i dont understand ist "k". i think it a area above the transient zone and when price pushes over "k" the prohability is very high that price revisit the breakout. maybe im false with this maybe not.
"You haven't yet explicitly mentioned H" this is another point im trying to work out. im trying do calculate how much TZ overlapping and how much space there is in average. but still dont know what excatly to do with "h". will work on this. thank you for answering
  • #500
  • Nov 18, 2014 9:02pm Nov 18, 2014 9:02pm
Hi everyone,

Vlady has asked me to post some TZ stats that might be interesting to some people, particularly the ones concerning TZ sequences (two consecutive TZs and three consecutive TZs). The indicator that produces these is my own but I'll post it on this thread very soon. It's written in C# for NT7 (NinjaTrader), so someone will have to convert it to MT4 if necessary. I'll provide the source code with comments to assist this. Alternatively you can download NinjaTrader for free, get some historical data, and run it in there. Here are the stats for 6 years of H1 data with h=30:

Run time = 19/11/2014 11:39:25 (local}
h Left = 30, h Right = 30, Pip = 0.0001, Bar = 60 Minute

Total bars = 36617 (from 23/12/2008 13:00:00 to 18/11/2014 14:00:00)
k Min = 1, Below-min-height TZ bars = 0 (0.0%), Gap bars (greater than 1 pip) = 135 (0.4%)

Total TZ bars = 1053 (2.9%)
Tip TZ bars = 736 (2.0%), average zone height = 7 pips, maximum zone height = 55 pips at 07/05/2010 04:00:00
(* zone height is smaller side in case of Uneven Tip TZs)
Mid TZ bars = 317 (0.9%), average zone height = 17 pips, maximum zone height = 259 pips at 19/03/2009 04:00:00
Consecutive (next bar) Mid TZ bars = 68 (21.5% of all Mid TZ bars)

Fully Recurrent bars = 25598 (69.9%)
Left-only Recurrent bars = 6166 (16.8%)
Right-only Recurrent bars = 3633 (9.9%)
(* some prices in the bar will usually be fully recurrent)
Tradeable bars (Fully and Right-only Recurrent) = 29231 (79.8%)

Two consecutive TZs
-------------------
Top + Top = 56 (15.0% of all 'Top + xxx's)
Top + Mid = 100 (26.8% of all 'Top + xxx's)
Top + Bot = 217 (58.2% of all 'Top + xxx's)

Mid + Top = 84 (26.5% of all 'Mid + xxx's)
Mid + Mid = 139 (43.8% of all 'Mid + xxx's)
Mid + Bot = 94 (29.7% of all 'Mid + xxx's)

Bot + Top = 232 (64.1% of all 'Bot + xxx's)
Bot + Mid = 78 (21.5% of all 'Bot + xxx's)
Bot + Bot = 52 (14.4% of all 'Bot + xxx's)

Three consecutive TZs
---------------------
Top + Top + Top = 9 (16.1% of all 'Top + Top + xxx's)
Top + Top + Mid = 17 (30.4% of all 'Top + Top + xxx's)
Top + Top + Bot = 30 (53.6% of all 'Top + Top + xxx's)

Top + Mid + Top = 15 (15.0% of all 'Top + Mid + xxx's)
Top + Mid + Mid = 48 (48.0% of all 'Top + Mid + xxx's)
Top + Mid + Bot = 37 (37.0% of all 'Top + Mid + xxx's)

Top + Bot + Top = 141 (65.3% of all 'Top + Bot + xxx's)
Top + Bot + Mid = 48 (22.2% of all 'Top + Bot + xxx's)
Top + Bot + Bot = 27 (12.5% of all 'Top + Bot + xxx's)

Mid + Top + Top = 17 (20.2% of all 'Mid + Top + xxx's)
Mid + Top + Mid = 23 (27.4% of all 'Mid + Top + xxx's)
Mid + Top + Bot = 44 (52.4% of all 'Mid + Top + xxx's)

Mid + Mid + Top = 36 (25.9% of all 'Mid + Mid + xxx's)
Mid + Mid + Mid = 58 (41.7% of all 'Mid + Mid + xxx's)
Mid + Mid + Bot = 45 (32.4% of all 'Mid + Mid + xxx's)

Mid + Bot + Top = 57 (60.6% of all 'Mid + Bot + xxx's)
Mid + Bot + Mid = 15 (16.0% of all 'Mid + Bot + xxx's)
Mid + Bot + Bot = 22 (23.4% of all 'Mid + Bot + xxx's)

Bot + Top + Top = 30 (12.9% of all 'Bot + Top + xxx's)
Bot + Top + Mid = 60 (25.9% of all 'Bot + Top + xxx's)
Bot + Top + Bot = 142 (61.2% of all 'Bot + Top + xxx's)

Bot + Mid + Top = 33 (42.3% of all 'Bot + Mid + xxx's)
Bot + Mid + Mid = 33 (42.3% of all 'Bot + Mid + xxx's)
Bot + Mid + Bot = 12 (15.4% of all 'Bot + Mid + xxx's)

Bot + Bot + Top = 34 (65.4% of all 'Bot + Bot + xxx's)
Bot + Bot + Mid = 15 (28.8% of all 'Bot + Bot + xxx's)
Bot + Bot + Bot = 3 (5.8% of all 'Bot + Bot + xxx's)
You reap what you sow.
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