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Transient Zones - Basics

  • #681
  • Edited 12:10pm Mar 27, 2015 11:03am | Edited 12:10pm
Quoting NorthTrader
{quote} Those quotes of Rahimseven and Eurusdd you quoted are confusing to me. They are saying that it's based on price, and not bars ("there is no center bar", "it is not the bars you should count for the probability"). However, the h value is measured in bars, so you need a bar chart to measure h-transience and h-recurrence. I thought they were alluding to the idea that once a price becomes h-transient, then the next time price returns to that level it will almost surely be h-recurrent. So I built an indicator to measure that idea, and posted...
I would say that this is an incorrect interpretation but in itself a great tool! I could be wrong though so...

The 97% is not dealing with H-transient/recurrent bars

The 97% is based on the recurrent aspect of printed prices period. This does not jive with the fractal nature of the market. Which is really a created thing. The market is not fractal, it's the timeframes that are. Bottom line is there is no timeframe as such. Timeframes are a tool to sample or organize the ever flowing market.

You cannot use the current tools to prove 97% as fact. What you have done is proven that based on you H setting the bars are 87% recurring. This is also great indeed!

"I thought they were alluding to the idea that once a price becomes h-transient, then the next time price returns to that level it will almost surely be h-recurrent."

This was 1 idea shared as a way to think about trading after a "rare event" loss . Since it's 3% rare what's the chances it will happen again? Say you took a trade and low and behold you are hit with a rare 3% event. Well the next time the probability of this not happening again is even greater.

Quoting Eurusdd
So, if you find one instance on your chart where your choice of h or k did not work or price did not behave as you expected immediately, that is a rare event. There next instance is most likely to work So, do not raise your hand to the sky cursing the powers that be. Have more confidence that you will not be living to see a rare-rare event. Probability is on your side. The next instance is good to go...


But see...

You guys with the creative minds came up with a way to trades this idea by waiting for the rare event and planning the trade from it by extending it out and such. Even though you may not have capture a true rare event as i'm now understanding it.
Solutions ONLY!!!
  • #682
  • Mar 27, 2015 11:31am Mar 27, 2015 11:31am
The idea presented by eurusdd

"So, those problem bars are the ones that contain the KEY transient states (price). Once we calculate the time-interval, we can make a call that the process will return to those prices within the time period!!!"

You have a tool that finds the Transient prices (prices that have only printed once). This price will be the same on all timeframes. The problem bar is the one that contains that transient price which is so rare that we are almost 100% sure that it will be resolved.

and this...

"Now this is the KEY secret: No matter the currency pair you are trading, no matter the state of the market, trending, sideways WHATEVER! , there will always be problem bars.

There are easy ways to find at least 10 recurrent states per day…" (Ways to find at least 10 transient prices to resolve per day)

So NOW we whip out the handy dandy -h+h measuring tool to time our entry


Let me think about this...
Solutions ONLY!!!
  • #683
  • Mar 27, 2015 12:09pm Mar 27, 2015 12:09pm
So based on eurusdd's statement on the window of opportunity being 10 pip max (Riskless)

eurusdd
"You don't wait. once the previous h bars, give you a hint that a transient zone may be forming, you act assuming that will be the case and act. (This is where the secret is) Riskless profit in most cases.
you can declare the area immediately above the zone as h-recurrent and then look for a sell.

The following things will happen.

If your zone turns out to be h-recurrent, your sell will still win.
if your zone turns out to be h-transient, your sell will still win. EITHER way, you will win!!"


So... What i'm understanding is that we would trade counter trend (so to speak) back towards the problem that we just broke out of with a 10 or 11 pip Stop loss.

k- I assume is a small cushion above problem price that you can use as you trigger even if the bar is not completed forming yet

Still thinking...
Solutions ONLY!!!
  • #684
  • Edited 5:05pm Mar 27, 2015 4:44pm | Edited 5:05pm
Ok so transient prices can occur at extremes and we can capture the revisit by using k as Rahimseven has described it.


How I see it is k is and very small cushion around the transient price. so actually the direction price breaks from k is what matters. Say k is a 2 pip envelop around the problem price and you use this as a constant. Once price breaks out of k you then bet on the almost 100% sure revisit to k even the bar is finished or not. this way if that problem price turns out to be truly transient (3% rare event) it matters not because you are targeting k. So it's a win if it become transient or not.

My thing would be the need of a deviation study or some other tool to time my entry.

does the 10 pip max arbitrage figure truly hold weight and what is the probability on this max 10 pips on arbitrage windows?? Has this be validated with a max deviation study with this setup?
How can your entry be riskless? Do we take a position each pip after k up to 10 pips with each targeting k with stop loss for all at -11 pips? Get my drift?

BRAINSTORM!!!!
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Attached File(s)
File Type: pdf eureKa.pdf   103 KB | 978 downloads
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  • #685
  • Mar 27, 2015 7:18pm Mar 27, 2015 7:18pm
Quoting BillYon
You cannot use the current tools to prove 97% as fact. What you have done is proven that based on you H setting the bars are 87% recurring. This is also great indeed!
Just to be clear, that particular indi measures recurrent prices, not bars. I have another one for bars. The only reason it's applied to a bar (candlestick) chart is because h is measured in bars. So it's 87% of prices which are recurrent, not bars.
You reap what you sow.
  • #686
  • Mar 27, 2015 7:51pm Mar 27, 2015 7:51pm
Quoting BillYon
... does the 10 pip max arbitrage figure truly hold weight and what is the probability on this max 10 pips on arbitrage windows?? Has this be validated with a max deviation study with this setup? How can your entry be riskless? Do we take a position each pip after k up to 10 pips with each targeting k with stop loss for all at -11 pips? Get my drift? BRAINSTORM!!!!
As far as I can see, the problem with trading as Eurusdd said is that if price continues going in the same direction (up, in the stated example), then you will lose. On the bar chart it will look like a mid-bar TZ. And price might keep going in a strong move. Studies show that consecutive mid-bar TZs are actually quite common.

The only way this might prove profitable, with a stop loss, is on low TFs such as M1 or below. The value of k is relatively small on these TFs because most prices are revisited. But it's pretty frantic trying to catch the opportunities, and personally not my style. It's also dangerous - price can still fly away from you. I don't know how profitable it would be over time, using a sensible stop loss and taking into account costs such as slippage, spread and commission, but it's common knowledge that the master himself blew several trade explorers using this method. This suggests to me that either it doesn't work, or he wasn't very good at it
You reap what you sow.
  • #687
  • Mar 27, 2015 11:21pm Mar 27, 2015 11:21pm
Quoting NorthTrader
{quote} Just to be clear, that particular indi measures recurrent prices, not bars. I have another one for bars. The only reason it's applied to a bar (candlestick) chart is because h is measured in bars. So it's 87% of prices which are recurrent, not bars.


I see...

I'll be digging into that thread for sure today.

Thanks

I'm having some ideas
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  • #688
  • Mar 28, 2015 12:41am Mar 28, 2015 12:41am
Quoting NorthTrader
{quote} As far as I can see, the problem with trading as Eurusdd said is that if price continues going in the same direction (up, in the stated example), then you will lose. On the bar chart it will look like a mid-bar TZ. And price might keep going in a strong move. Studies show that consecutive mid-bar TZs are actually quite common. The only way this might prove profitable, with a stop loss, is on low TFs such as M1 or below. The value of k is relatively small on these TFs because most prices are revisited. But it's pretty frantic trying to catch...

This is my worry exactly

But, what if the focus was only on that event on 1min/below when price flys away creating a wide window of opportunity for the revist? Having a max deviation study could give you a stop loss location...


Ok, so I'm thinking out loud so this may come out as irrational.

this is also an earlier thought mixed

what if we made target k dynamic and it grew as price deviated from the problem area to be cleared. We the take trades in the direction of k and add positions during the deviation, let's say every 10 pips or so

now if we add a strong trend sentiment filter this could increase the odds for hitting the now dynamic target k

Again this is the mixing of TZ concept as the first target in a grid system like Matrix grid trader thread.



Thoughts???
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  • #689
  • Mar 28, 2015 3:45am Mar 28, 2015 3:45am
So k basically covers the spread. Because of spread targeting the TZ itself would be problematic. The price may get resolved but the full spread may not cover it so target K instead. That's why the eurusd is preferred for that way of trading TZs

I know this is redundant to these threads

but these things are just coming clearer to me.

It seems an easy task for an EA to target k in this way.

Has it been tested?


North is there a MT4 indicator that matches yours? Yours is Ninja right?
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  • #690
  • Mar 28, 2015 7:29am Mar 28, 2015 7:29am
Quoting BillYon
So k basically covers the spread. Because of spread targeting the TZ itself would be problematic. The price may get resolved but the full spread may not cover it so target K instead. That's why the eurusd is preferred for that way of trading TZs I know this is redundant to these threads but these things are just coming clearer to me. It seems an easy task for an EA to target k in this way. Has it been tested? North is there a MT4 indicator that matches yours? Yours is Ninja right?
Yes, all my indicators are NinjaScript. Sorry, I've never used the MT4 indis and I've lost track of everything that's available for TZs.

Regarding combining TZ strategies with other strategies... yes, that's exactly the way to go. A TZ strategy doesn't stand up on its own, in my opinion. I've been working deeply on a TZ Tip strategy for the last few months and will publish my results soon. Until then, I'll refrain from commenting further on TZs
You reap what you sow.
  • #691
  • Mar 29, 2015 7:31pm Mar 29, 2015 7:31pm
Quoting BillYon
So k basically covers the spread. Because of spread targeting the TZ itself would be problematic. The price may get resolved but the full spread may not cover it so target K instead. That's why the eurusd is preferred for that way of trading TZs I know this is redundant to these threads but these things are just coming clearer to me. It seems an easy task for an EA to target k in this way. Has it been tested? North is there a MT4 indicator that matches yours? Yours is Ninja right?
Hi BillYon, Love to see the new enthusiasm for TZ's but a lot of what you are discussing has been covered.

No I dont believe K is the spread. Whilst it might "cover" it, nowhere does the TZ theory cover Bid vs Ask prices. It just assumes price.
K is simply a height (pips) of the TZ box. It can be used in many ways but basically it is meant to measure the amount of retrace. e.g. A new high is formed at 1.3500, then price reverses away, then retraces back to 1.3490, then reverses away again leaving a Transient Zone with a 10 pip K.

In this way K is used to increase your probability of hitting your target. e.g. Price retraces back to a TZ but does not make the zone Recurrent instead leaving a box of K pips in height. If you targeted 2 x assumed K value away from the High then your target would likely have been hit whilst the zone remained Transient.
What's it all about? It's all about money.
  • #692
  • Mar 29, 2015 7:34pm Mar 29, 2015 7:34pm
Quoting NorthTrader
{quote} Yes, all my indicators are NinjaScript. Sorry, I've never used the MT4 indis and I've lost track of everything that's available for TZs. Regarding combining TZ strategies with other strategies... yes, that's exactly the way to go. A TZ strategy doesn't stand up on its own, in my opinion. I've been working deeply on a TZ Tip strategy for the last few months and will publish my results soon. Until then, I'll refrain from commenting further on TZs
Hi Northtrader,
I eagerly await your results of the "TZ Tip strategy"!! Sounds fascinating.
What's it all about? It's all about money.
  • #693
  • Mar 30, 2015 1:09am Mar 30, 2015 1:09am
Quoting Innate
{quote} Hi BillYon, Love to see the new enthusiasm for TZ's but a lot of what you are discussing has been covered. No I dont believe K is the spread. Whilst it might "cover" it, nowhere does the TZ theory cover Bid vs Ask prices. It just assumes price. K is simply a height (pips) of the TZ box. It can be used in many ways but basically it is meant to measure the amount of retrace. e.g. A new high is formed at 1.3500, then price reverses away, then retraces back to 1.3490, then reverses away again leaving a Transient Zone with a 10 pip K....

In your example highlighted, would a retrace not make all those prices caught in the retrace recurrent? This is what I was thinking and the reason I assumed initially that no extreme TZ are valid TZ because creating that small wick is a price recurring action. I then thought that well, maybe the very last price at the extreme TZ could be transient leaving a 1 pip high zone. Now, mid TZs could be higher as price breaks in one direction.

Then I thought, price also could be at an extreme and reverse by actually jumping (gap) over previously printed prices and leave a TZ, but you will need to be zoomed way into price to see it. This makes sense to me. Now a common retrace where price prints in one direction and then turns around and prints those same priced in the opposite direction is by definition a recurrent act. So just because price reverses away does not mean we have a TZ (price feed error, gap, or the like...)

That my thought and as I read eurusdds old threads I see a lot of focus on exploiting these types of opportunities

eurusdd "If price goes above a Zone before it is done forming, you can assume the zone is transient and the prices above it recurrent. Those prices are the ones you will expect to be re-visited, not the prices in the zone."

in that statement I assume zone to be TZ price not TZ bar. That's why a TZ (transient price(s)) can be traded inside a bar using lower timeframe and not the bar itself. So, one needs to zoomed down as much a possible to catch it or have a EA to catch it.

This is only my personal understanding at this hour, I may understand differently in a few minutes...LOL

There were so many ideas that grew that I have to focus slowly.

But, i'm still learning.



This is why I assumed k= spread or some sort of cushion.

From eurusdd...

So, all you have to do is estimate a constant value for k, OR let it depend on the current bar. However, in general K should be small!!
If the forces of demand are very close (sounds like spread to me), almost equal then there is a way to find the optimal value for k. That is why I trade only eurusd because demand and supply (Bid and ASK???)are almost equal. That is the strength of bulls and bears are almost equal in every state of the market. How you calculate k is up to you. That will differentiate you from another person applying the same principle. Keep that secret.




Thought???


Sorry if i'm unclear. Just woke up!
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  • #694
  • Mar 30, 2015 1:35am Mar 30, 2015 1:35am
Hey Bill

I've also been reading TZ experiments in penguin traders forum. Have you checked it out?

I keep an open mind and always like to hear how ppl are using TZ in their own way and interpretation. For me, K is a retracement value in a h-length zone. Smaller K gets me higher percentage of win than a big K (that too can work against me of coz, bad r:r).

Using K this way, there will never be wick/ fractal TZs. Only mid-TZs.

But I'm a pussy when it comes to trading with no SL. I use a fairly big SL. So no matter how small percentage TZ can occur, I haven't been exactly thrilled with what I'm doing so far.
  • #695
  • Mar 30, 2015 3:00am Mar 30, 2015 3:00am
Quoting summicron
Hey Bill I've also been reading TZ experiments in penguin traders forum. Have you checked it out? I keep an open mind and always like to hear how ppl are using TZ in their own way and interpretation. For me, K is a retracement value in a h-length zone. Smaller K gets me higher percentage of win than a big K (that too can work against me of coz, bad r:r). Using K this way, there will never be wick/ fractal TZs. Only mid-TZs. But I'm a pussy when it comes to trading with no SL. I use a fairly big SL. So no matter how small percentage TZ can...

Yes, i've bounced all around getting tid bits of info about the TZs. Penguin site seems to not have recent activity on the subject. Since i'm still on the basics I came to this thread.

Can you illustrate your way? Do you mean retracement value above the Transient price? If so, It makes sense to me. So you would scalp that retracement value? Say you choose 2 pips value and price rises 2 pips above transient price in up trend. Do you do a 2 pip counter trend scalp? Now you would also have to include spread to gain profit right?

Maybe i'm missing you on this...
Attached Image (click to enlarge)
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  • #696
  • Mar 30, 2015 4:42am Mar 30, 2015 4:42am
Quoting Innate
{quote} Hi Northtrader, I eagerly await your results of the "TZ Tip strategy"!! Sounds fascinating.
Thanks Innate. Actually I meant to say Tip TZ strategy (as oppose to Mid TZ... haven't even started looking at those yet!), but it came out as TZ Tip. Anyway, you probably know what I meant.

I wouldn't get TOO excited, by the way. The strategy does give you a small edge but nowhere near as much as I was expecting. I'm still optimising it for as many pairs and as much data as I've got - been at that stage for weeks But the end is finally in sight.
You reap what you sow.
  • #697
  • Edited 10:35pm Jun 4, 2015 9:32pm | Edited 10:35pm
Quoting BillYon
The idea presented by eurusdd "So, those problem bars are the ones that contain the KEY transient states (price). Once we calculate the time-interval, we can make a call that the process will return to those prices within the time period!!!" You have a tool that finds the Transient prices (prices that have only printed once). This price will be the same on all timeframes. The problem bar is the one that contains that transient price which is so rare that we are almost 100% sure that it will be resolved. and this... "Now this is the KEY secret: No...
i am confused about this. If we trade at TF M1 or M5 only, and just trade 1 pair, i think there is no 10 transient prices per day. Except we trade some pairs, or the transient price is build not only by real TZ, but also the fractal one. about time interval calculation, is it based on current TF, where the transient state exist, or we do it at bigger TF? ( i come to this thought, because it is not rare that the transient state was touch more then h bars after the zone became CTZ. )
Good friends are more valuable than gold ...
  • #698
  • Jun 4, 2015 10:23pm Jun 4, 2015 10:23pm
Quoting BillYon
{quote} Yes, i've bounced all around getting tid bits of info about the TZs. Penguin site seems to not have recent activity on the subject. Since i'm still on the basics I came to this thread. Can you illustrate your way? Do you mean retracement value above the Transient price? If so, It makes sense to me. So you would scalp that retracement value? Say you choose 2 pips value and price rises 2 pips above transient price in up trend. Do you do a 2 pip counter trend scalp? Now you would also have to include spread to gain profit right? Maybe i'm missing...
i am very happy to find this attachment, thanks a lot mate. I am sure this will be really helpful, will try to contemplate it. And i
think the second image is more logical. But i will take the opportunity if the price reach more than just spread + k, may be between them and 10 pips ? Still thinking about it ...

Good friends are more valuable than gold ...
  • #699
  • Jun 5, 2015 6:34am Jun 5, 2015 6:34am
Quoting pedma
{quote} i am confused about this. If we trade at TF M1 or M5 only, and just trade 1 pair, i think there is no 10 transient prices per day. Except we trade some pairs, or the transient price is build not only by real TZ, but also the fractal one. about time interval calculation, is it based on current TF, where the transient state exist, or we do it at bigger TF? ( i come to this thought, because it is not rare that the transient state was touch more then h bars after the zone became CTZ. )


It's not based on any timeframe in my understanding It's based on the rare event of price printing once on the ticker without a recurrent print. You would need to zoom into the 1 min or tick charts to catch it. Robot needed to catch it. Now h-tansient is a way to add and study the probability of/statistic of a return to transient price found. So you can use the lower timeframe to find the transient price but the probability of return may increase as timeframe increases.

So you (robot) spot the rare event

Spread is surpassed in the deviation from such

Best h value chosen by probability tool scan. (could be h1440 on 1min, h24 on 1hr, h6 on 4hr) all being the same h segmented

trade entered towards the transient price

+ h expiration noted (could be h1440 on 1min, h24 on 1hr, h6 on 4hr)

Stop loss based on Northtraders research.

etc etc etc...


So yes it may be that 10 transient prices show up each day, but 10 deviations far enought to exploit?
10 complete h-transient exits? Yeah maybe on 1 min with small h value but with good probabilities... doubtful



I'm sleep typing so this may all be rubbish...
Solutions ONLY!!!
  • #700
  • Jun 5, 2015 1:12pm Jun 5, 2015 1:12pm
One of the best things any trader can do is to walk away from all the noise and step back into complete focus.
Removing the noise allows space and clarity to creep back in.

It's amazing how much noise (opinions, methods, charts, indicators, products) can skew opinions.

But in the 6 months that I've not visited FF since the dramas of 2014, I can definitely say it's been bloody worth it.

-----

It's weird coming back to this thread today... it's good to see some people still posting.
There is merit to the original concepts and the multitude of work done by various groups.
I've not caught up on what's happened since I stopped visiting - I actually don't care.

For the record, I was upset and felt betrayed at the time. But again.... clarity and space can be achieved when you walk away.
I've been trading on my own and with some others - the TZ's work the way I apply them to my own trades. So it's my edge.
In the end, treat them like any other tool - they are not a stand-alone system - for that to be real it would be with its original creator.

-----

Looking to get into a massive short on the German DAX.
I believe the EUR is still to complete Wave 4 so watching in the coming weeks/months for the short down to parity. Likewise, USD is a buy into the final Wave 5.
AUD is a short, and is a pair that I've found works well as an overnight trade.
USDCAD is still long biased and therefore looking for shorts on Light Crude.
Interestingly, I've not looked at YEN.....

Well friends, keep at it. I may drop in from time to time.

Green pips to you all.
A pip is only worth it if you know how much you risked to earn it
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