Quantify the market - breakout or fakeout

Imagine the market as a girl that is always flirting with you until you will love her, you will be attracted to a "price". Not bad

Alex

I have it sussed. But I'm not telling It's not complicated! You're all barking up the wrong tree.

Quantify breakouts or fake outs ?
The key would first be to identify what is it that price is breaking out from ? Are we talking ticks, to 5 min TF to Weekly TF. Watching the tick chart might show weakness in price movment, bound for reversal but might also show big banks being wrong or a big business transaction occurring and they don't care about "market price". Watching the hourly may give a false signed because it's to late. Watching the 1 min TF shows the weakness for the continued trend and reversal.
IMO its first most important to identify key turning points on all TFs, this will b the beginning signs to show weakness, strength or a channeling market. Using tools such as fibs, patterns, candle patterns etc at these levels is the key. To say there is only one tool that works can lead to lower probability. The key is to identify first the area where the market doesn't kno the direction.

02:50
3 simple rules to describe the flight of starlings.
If I ask you to describe the market, what rules would you use?
Oh a trader doesn't see other 7 traders or more trading, a trader sees price and trades price.
Price goes up and down in a battle between who THINKS it's going up and who THINKS it's going down.
Example.
There are a total of 1000 people trading and creating the market.
1) 550 buy and 450 sell, price moves up a bit
2) after that there is a shift and 100 traders that was buying decide to sell, 450 buy and 550 sell, price moves down a bit
3) after that there is a shift and 300 traders that was buying decide to sell, 150 buy and 850 sell, price moves down MORE than previous time
at point 3 there are more people that agree on the side of "sell"
Have you ever asked yourself why do you sell/buy? When do you press the button to sell/buy? How do you perceive price going up and down? How many times do you need to see price going up or down before you push the button?


Alex

How do people increase to buy or sell with change of price deviation? Sometimes right questions can give useful answers
http://www.dailymail.co.uk/news/arti...ties-1-15.html

Alex

Logarithm and mind

http://www.scientificamerican.com/ar...a-natural-log/

https://newsoffice.mit.edu/2012/thin...thmically-1005

I would rather want to press the sell button before the price goes down and press the buy button before the price goes up. After I see it, its history, I cannot particiapte in past occurrences. There is past that we cannot participate into, then we have future that is uncertain, and then we have the now momment, which is even hard to define. You have to get on the train before a move unfolds to capitalize, that is a sure thing.

Great thread Alex! Keep the inquiry going!

So I was pondering on how a market could be measured or a period sum worked out to give us a constant to use against our current price as a measurement. This got me thinking about all sorts of ways I could average price or see price change withing a certain period. This also lead to me thinking that If I have a period as my constant, surely this is using the past? An average of say the last 10 candles is looking at history and not current price.
I also looked into the rate of change over a set period (basing this all on ticks).
What I am wondering is, using time based readings in our tick charts is bringing us back to using time as a constant. So I would need to remove time altogether and only use tick counts and price change.....

Lots to think about and my head hurts

Rexz

I'll ban you. Your reply has not purpose, two charts without explanation. Plus this thread is not about posting trades.
Hope everyone will understand this.

Alex

Please let me add something. Long time I didn't understand CPs application of Newtonian laws to the markets. My point of view was and is that markets will only change due to recent exchanges of money (long/short). Thus, it didn't make sense to apply Newtons first law on the markets as the move of prize always depends on the disequilibrium of buyers' and sellers' volumes. Before two days I realized that it was just a metaphor that CP used to describe the markets - a metaphor that can put you to the right track. Now I have a rough idea how I can recreate a similar influx/eflux indicator ...

Would you please answer which periods you use to calculate order flow?

you can use ANY PERIOD at ANY POINT as your reference