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Transient Zones - Basics

  • #641
  • Mar 6, 2015 6:11am Mar 6, 2015 6:11am
Quoting FX-Jay
In order to get the ball rolling and hopefully get some ideas flowing, I will be discussing my latest TZ and Probability related project. I am continuously working on developing the concepts in the last 6 months (while almost everyone was giving up). With the help and perseverance of a few smart traders, coders, and mathematicians most of which I had the honor to meet on ForexFactory, we're now able to introduce the whole concept into new already existing systems in order to have an additional edge. The current project that is being developed has...
Here's the update

Please keep in mind that this is just a testing phase. It looks so amazing to have all these profitable trades all in deep profits, but as I briefly explained this is a trend following system that uses a combination of TZ and currency strength.

As tempting as it is to close positions or book some profits at such a stage of profitability, the aim is to actually test how far the market could go

So let's see if it will continue, or just totally reverse
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 84 KB
  • #642
  • Mar 6, 2015 6:28am Mar 6, 2015 6:28am
Quoting FX-Jay
{quote} as I briefly explained this is a trend following system that uses a combination of TZ and currency strength. As tempting as it is to close positions or book some profits at such a stage of profitability, the aim is to actually test how far the market could go So let's see if it will continue, or just totally reverse {image}
With the NFP right around the corner all possibilities are open. A protective SL at BE for all the orders could be an option for example

So if you want to take part in developing this idea, you may start by sharing different methods of existing a position trade or a trade that is riding the trend for some time.

Why exit at 50 pips, 100 pips, 500 pips ... and not more/less?
Would you use protective stops? If yes, then where?
Would you hedge before major news releases? Why or why not?

These are just sample questions that could get the ball rolling.

If you expect to learn something interesting and useful you should be ready to contribute something interesting and useful
  • #643
  • Mar 6, 2015 6:34am Mar 6, 2015 6:34am
Quoting FX-Jay
{quote} Here's the update Please keep in mind that this is just a testing phase. It looks so amazing to have all these profitable trades all in deep profits, but as I briefly explained this is a trend following system that uses a combination of TZ and currency strength. As tempting as it is to close positions or book some profits at such a stage of profitability, the aim is to actually test how far the market could go So let's see if it will continue, or just totally reverse {image}


OH WOW! Quite amazing!

I may be way off but..

So are you trading the TZ as you did before and using currency strength to choose pairs to trade or using it to hone in on your entries? So they don't close until target PTZ is hit correct? If your window closes and a full TZ forms do you exit then?

My biggest problem at this point is confidence in pinpointing my entry.
Solutions ONLY!!!
  • #644
  • Mar 6, 2015 7:14am Mar 6, 2015 7:14am
Hi guys,

this is the indi I wrote back in December/January. I was trying to understand the FX-Jay's TZ idea along with two great friends: PiratePip and Zelo.

I never shared this indi before since when I code it, this TZ's threads were dying and pepole spread out over other forums. Now that it seems that there are still people here interested in this thread, I thought it may be the time to share this tool.

Regards!
Attached File(s)
File Type: mq4 %_B_RecurrenceStatisticV4.3_Mod.mq4   70 KB | 810 downloads
  • #645
  • Mar 7, 2015 1:42pm Mar 7, 2015 1:42pm
Quoting Rparm
{quote} Personally for myself I prefer counter trading past confirmed mtz's, this method makes up a small part of my strategy. Below is a picture I stole (lol) from Lowphat if he doesn't mind {image} I'm glad to see some life being breathed back into Transient discussions! I'll be standing by waiting on FX Jay and others to get the ball rolling on New topics/perspectives (MTZs has been discussed several times already so I don't see a point in talking about it unless someone has a different method of trading it)
i think their is some hole in that logic. Problem is that current price is not dependent on past prices, current moment is unique and what happened 1-2-10 days ago does not determine in a straight equation the behavior of market participants, and therefore a 5% rare event can happen 3 times in a row or even 4 or 5 times more frequently than we think. One of eurusdd ideas said in simple words would be to bet against a rare event. it is the same with every signal. if a certain type of price target has 92% statistical chance of getting hit on any particular ocassion, then we can certainly bet that 2 consecutive misses would be <1% chance of hapenning and 3 times is almost impossible to encounter, however I have discovered that many of my high proability targets get missed sometmes in a row. I have a target level with 90% probability of getting hit within a certain period, and have encountered many many ocassions where 2-3-4-5 targets are missed one after another. The statistical chance for that to happen is extremely low, however I experience it on a regular basis. Still, the >90% chance of the target is maintained. I am very far from those subjects , but maybe the smarter of you guys could provide answers to that false logic that I encounter. Stacking of probabilities in trading, concentration of probabilities does not work in the way it should work by theory. Betting against rare events does not work as expected and also reduces trading opportunities greatly.

P,S, i have read all threads so am not just arguing against your methods for the sake of it.
  • #646
  • Mar 8, 2015 1:55pm Mar 8, 2015 1:55pm
Quoting feline207
{quote} i think their is some hole in that logic. Problem is that current price is not dependent on past prices, current moment is unique and what happened 1-2-10 days ago does not determine in a straight equation the behavior of market participants, and therefore a 5% rare event can happen 3 times in a row or even 4 or 5 times more frequently th
"current price is not dependant on past prices" I have to disagree with you on that brother, if that was the case then we would be seeing numerous larger H zones in a row instead when we want to see 3+ failed zones in a row we have to scroll the charts quite a bit to find one. When we apply any indi that displays the statistics of MTZs occurring to any given period of time the % chance remains consistent give or take a few %. When you mention more frequently than we think, I know if I see 3-4 zones in a row with a decent sized H value on a chart if I scroll back the chart I will be seeing numerous 1st MTZs to account for that rare event.

You are definitely right when you say 2 sometimes 5 TZ can appear in a row, when I do place a limit order I wouldn't consider it a winner I would be thinking about what my next trade would be in the event of that trade being a loser (recovery method)
I traded this logic with success awhile back even with terrible R:R. Money management is very important when I *used to* trade the 2nd zone I traded very minimal lots. After noticing the failure rate of 2nd zone I began trading only the 3rd zone usually with H30 and greater values. I have yet to observe more than 4 zones on any TF or pair for H30. Another thing that helped me with MTZs is not to be afraid to aim for greater Reward. If the Accuracy is say 90% for a zone to be cleared within H I try to have a R:R of no less than 1:0.15 and used a timed EA to close the trade after H bars. The SL can be wide to account for movements but I would make the TP take into account % accuracy and spread, even if the trade is a loser within the H bars the timed EA would close the trade way before it's set SL...
(I no longer trade with just MTZs everything I said is what I used to do Gluck)
A Positive Mind, and Positive Spirit lead to True Happiness
  • #647
  • Mar 9, 2015 1:08pm Mar 9, 2015 1:08pm
Quoting feline207
{quote} Problem is that current price is not dependent on past prices, current moment is unique and what happened 1-2-10 days ago does not determine in a straight equation the behavior of market participants, and therefore a 5% rare event can happen 3 times in a row or even 4 or 5 times more frequently than we think.
Who confirmed that current price is not dependent on past prices?
I'm not arguing that the opposite is true, but at least statistically speaking (not theoretically) reality is closer to the idea that there is in fact a relationship between past prices and current price even though this relationship isn't determined by a straight linear equation.

Quoting feline207
{quote} if a certain type of price target has 92% statistical chance of getting hit on any particular ocassion, then we can certainly bet that 2 consecutive misses would be <1% chance of hapenning and 3 times is almost impossible to encounter, however I have discovered that many of my high proability targets get missed sometmes in a row.
You've mentioned that if a certain setup has a 92% chance, then 2 consecutive misses have <1% chance , and 3 consecutive misses is almost impossible.
I'm assuming that's based on 'theory' right? How about checking that in reality and going through the history bar by bar for the last 10 years?
The results will differ for each TF, each Pair, H value ... so eventhough it is tempting to generalize, it is better not to


Quoting feline207
{quote} I have a target level with 90% probability of getting hit within a certain period, and have encountered many many ocassions where 2-3-4-5 targets are missed one after another. The statistical chance for that to happen is extremely low, however I experience it on a regular basis. Still, the >90% chance of the target is maintained.
I understand low probability events happening once or twice every while, but on a regular basis?
If they are happening on a regular basis then the are not rare, and you are probably looking in the wrong direction
  • #648
  • Edited 5:33am Mar 10, 2015 4:02am | Edited 5:33am
Have you guys thought about eyeballing PTZ before choosing h? Use a blank chart and eyeball forming zones before running probability and statistics on it with the indicators. Analyze the h the market gives. WOWZERS!!!!!


This with a strong sentiment indicator seems a winner...

Testing Testing Testing...
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDH1.png Size: 57 KB
Solutions ONLY!!!
  • #649
  • Mar 10, 2015 6:24am Mar 10, 2015 6:24am
FX what do you think about the logic here?
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDH4.png Size: 43 KB
Solutions ONLY!!!
  • #650
  • Mar 10, 2015 6:53am Mar 10, 2015 6:53am
Then with the recurrent statistic indy you can tweak the right +h numbers to get your probability of return % up. This gives a time window of when to expect the trade to close and if you mix in some trend sentiment...BAM!!!

I think...

So basically go chart hunting for wicks with blank space to the left and proceed with you probability analysis.


Solutions ONLY!!!
  • #651
  • Mar 10, 2015 5:04pm Mar 10, 2015 5:04pm
Quoting FX-Jay
{quote} Here's the update Please keep in mind that this is just a testing phase. It looks so amazing to have all these profitable trades all in deep profits, but as I briefly explained this is a trend following system that uses a combination of TZ and currency strength. As tempting as it is to close positions or book some profits at such a stage of profitability, the aim is to actually test how far the market could go So let's see if it will continue, or just totally reverse {image}
Update

The trend seems to be continuing.

Main positions are still being held, no reversal spotted yet.
I've closed the extra positions that were opened next to the main entries.

Also added a NZDUSD short

Let's see how thing goes .. looks promising.
If this keeps on solidly performing I'll give it its own thread sometime soon
Attached Image(s) (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 45 KB
Click to Enlarge Name: Capture2.PNG Size: 41 KB
  • #652
  • Mar 10, 2015 5:16pm Mar 10, 2015 5:16pm
good one Jay, great to see all the trades closed in profit, keep going :-)
  • #653
  • Mar 11, 2015 6:25am Mar 11, 2015 6:25am
Added a new position, CHFJPY short ... trend continues

By the way this seems to be a a nice thread if you're into Trend Trading: Trend Trading System
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 44 KB
  • #654
  • Mar 12, 2015 11:16am Mar 12, 2015 11:16am
Quoting Rparm
{quote} Personally for myself I prefer counter trading past confirmed mtz's, this method makes up a small part of my strategy. Below is a picture I stole (lol) from Lowphat if he doesn't mind {image} I'm glad to see some life being breathed back into Transient discussions! I'll be standing by waiting on FX Jay and others to get the ball rolling on New topics/perspectives (MTZs has been discussed several times already so I don't see a point in talking about it unless someone has a different method of trading it)
hello Rparm, can you talk a bit more about how you counter trade those mid tz and the logic behind ? i find the picture, along with what you wrote in it quite interesting. Thanks.
  • #655
  • Mar 13, 2015 2:41am Mar 13, 2015 2:41am
Quoting metta87
{quote} hello Rparm, can you talk a bit more about how you counter trade those mid tz and the logic behind ? i find the picture, along with what you wrote in it quite interesting. Thanks.
Here ya go Metta! The 1st Picture explains how to place limit orders once a past MTZ has finished forming. You will need KPRSA's Recurrence Indicator and an Indicator to display Mid Transient Zones both of which can be located here on FF. The 2nd Picture shows how the method used in the 1st one can fail along with two of many options a trader has to handle such an event, (remember you can always walk away from a trade you're unsure of)

Attached Image (click to enlarge)
Click to Enlarge Name: Detailed Mid TZ for Rookies.png Size: 106 KB



Ok so lets say you placed limits expecting that a low probability event wouldn't happen as shown in picture one... well lets change it up a bit and say it does happen, in other words... you see a Yellow Box followed by another Yellow Box (Two Mid Transient Zones)

Attached Image (click to enlarge)
Click to Enlarge Name: Detailed MTZ for Rookies #2.png Size: 69 KB


You will witness 2 and 3 Zones in a row from time to time, and very rarely 4 zones in a row dependant on currency pair being traded... I have yet to see 5 zones in a row which is good news BUT I wouldn't doubt it's existence. Try and manage your money with the mentality:
"Even though this trade setup is of high probability, if I lose this trade what will be my next move... what if I lose that one too, then what?"
Thinking like this will reduce your stress and you will be prepared to handle losses.

Good MM plan:
Since counter trading a 2nd Zone as shown in the 1st picture has a greater chance of failure than trading the 3rd zone in the 2nd picture why not commit little funds for trading the 2nd zone? Expiriment with Stop Loss and even Take Profit Placement Tactics you may find out something new for yourself... after all this is just discussion and not a rock solid strategy. Goodluck!

Without using an indicator you can also look for "Gap Bars,: specifically Gap Bars that price does not touch for many bars on the left and right side of it... now look towards the right, when price hits that area how does it react. Transient Zones are a handy way of applying probabilities to trading in my opinion
A Positive Mind, and Positive Spirit lead to True Happiness
  • #656
  • Mar 13, 2015 3:33am Mar 13, 2015 3:33am
Quoting Rparm
{quote} Here ya go Metta! The 1st Picture explains how to place limit orders once a past MTZ has finished forming. You will need KPRSA's Recurrence Indicator and an Indicator to display Mid Transient Zones both of which can be located here on FF. The 2nd Picture shows how the method used in the 1st one can fail along with two of many options a trader has to handle such an event, (remember you can always walk away from a trade you're unsure of) {image} Ok so lets say you placed limits expecting that a low probability event wouldn't happen as shown...


Excellent! I have ideas flowing in now. Thanks!
Solutions ONLY!!!
  • #657
  • Mar 13, 2015 10:10am Mar 13, 2015 10:10am
Thanks Rparm, im gonna read it a second time to make sure that i get it right. On a side note, those mid tz look a lot like hiddengap zones. Someone else already mentioned it tho.
  • #658
  • Mar 13, 2015 11:56am Mar 13, 2015 11:56am
Quoting metta87
Thanks Rparm, im gonna read it a second time to make sure that i get it right. On a side note, those mid tz look a lot like hiddengap zones. Someone else already mentioned it tho.
You are right, Hidden Gap Bars are Mid Transient Zones, by using statistics you can determine % chance of success/failure with your trades as a I show with those pictures using TZs and by doing this you will get into the habit of always taking Past Gap Bars into account when trading once you discover for yourself what size "H" MTZs have what type of end results.

Here is KPRSA's indicator that displays statistics:
Attached File(s)
File Type: ex4 RecurrenceStatisticV4.1.ex4   43 KB | 646 downloads


Here is Xixi's indicator that visually draws Fractal and MTZs on charts
Attached File(s)
File Type: ex4 xixi_tz_1_8.ex4   45 KB | 798 downloads



PLEASE NOTE, Mid Transient Zones and Fractal Zones have been discussed to death in the past in numerous threads here on Forexfactory, any question you may have has already been answered in the past, do a quick search and you'll find better explanations than I can provide.

I will not be talking about MTZs, Fractals, or explaining any further. Thanks for taking an interest in the way I trade/look at Mid Transient Zones. In the future I may have my own thread to discuss these things further but for now I want to learn new things instead of bring back old topics. Just waiting on FX Jay to get the ball rolling I know he's a busy guy!
A Positive Mind, and Positive Spirit lead to True Happiness
  • #659
  • Mar 13, 2015 3:49pm Mar 13, 2015 3:49pm
thanks man
  • #660
  • Mar 18, 2015 12:26pm Mar 18, 2015 12:26pm
I'm testing kprsa indicator and i don't understand why you said zone fail more times than statistics showed. If at past all indicator zones found are cleaned within range then is evident you will have more 90% success counter attacking that zone inside h bars...In my testing around 18 pips i have more 98% zone was retested. If that not happens then indicator statistics are wrong calculated.
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