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95% of the time Price will close above or below the open price

  • #41
  • Jul 12, 2016 6:04am Jul 12, 2016 6:04am
Quoting BillYon
A line and 2 time frames coupled with MM is what's needed. Not a get rich quick but it works. Timeframes not for historic analysis but more rather for zoom, MM and exiting. Time frame can be self defined
so you are profitable now ?
  • #42
  • Jul 12, 2016 12:01pm Jul 12, 2016 12:01pm
Anyone have a good idea about trade management after we enter at the line with the goal of minimising losses and maximising profits?
  • #43
  • Jul 12, 2016 1:09pm Jul 12, 2016 1:09pm
Quoting strbac
Anyone have a good idea about trade management after we enter at the line with the goal of minimising losses and maximising profits?

95% of time price will close above or below the open line. Use ohlc data to determine statistically how far away that might be for a given candle...say...the weekly. One might have quite a few BE entries accumulated by then.
  • #44
  • Jul 12, 2016 1:57pm Jul 12, 2016 1:57pm
Quoting Carllos
I think TRO (The Rumpled One) built a strategy around this long time ago. From what i remember he just used statistics to get an edge.
The strategy is called THE BUY ZONE and MILKING THE COWS.
If price goes up to X then it will go up to Y, Z% of the time based on statistics (frequency distributions).
Finding the best picks for the method is what made it a winner.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #45
  • Edited 3:58pm Jul 12, 2016 2:15pm | Edited 3:58pm
Quoting strbac
"95% of the time Price will close either above or below the opening price. Less than 5% of the time, Price will close at its opening price. Within this truth lies the pot of gold." This statement has changed the way I look at the markets and charts forever. When I first read this it was the greatest enlightenment I ever had about trading. Most people do not see the enormous edge in this statement. How can we apply this to actual trading? The above statement is equivalent to: Price will always move away from any given reference point. Price will...
I've done alot of experiments (backtested EA's) with such systems, and I can tell you straight away - In the long run, the expectancy per trade for this strategy will fluctuate between -1 and 0 ! The strategy does indeed provide very small edge, but it cannot overcome the cost ot trading (spreads+commisions+slippage). In theory, if the cost of trading was 0, this system will generate consistent profits.
But, under real market conditions, this system will lose in the long run (just like all other "systems" from this type)!
  • #46
  • Jul 12, 2016 2:38pm Jul 12, 2016 2:38pm
Quoting alphaomega
{quote} I've done alot of experiments (backtested EA's) with such systems, and I can tell you straight away - In the long run, the expectancy per trade for this strategy will fluctuate between -1 and 0 ! The strategy does indeed provide very small edge, but it cannot overcome the cost ot trading (spreads+commisions+slippage). In theory, if the cost of trading was 0, this system will generate consistent profits. But, under real market conditions, this system will lose in the long (just like all other "systems"...
To what conditions do you refer?
(spreads+commissions+slippage) depend on broker.
Did you analyze the pair being tested and tune the EA for each pair?
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #47
  • Jul 12, 2016 2:52pm Jul 12, 2016 2:52pm
Quoting alphaomega
{quote} I've done alot of experiments (backtested EA's) with such systems, and I can tell you straight away - In the long run, the expectancy per trade for this strategy will fluctuate between -1 and 0 ! The strategy does indeed provide very small edge, but it cannot overcome the cost ot trading (spreads+commisions+slippage). In theory, if the cost of trading was 0, this system will generate consistent profits. But, under real market conditions, this system will lose in the long (just like all other "systems" from this type)!
This is spot on unless you have an edge in understanding when and when not to trade it. Here lies the success on any type of mechanical entry system of this type. If you understand maybe when the market is re balancing and trading back then implement the model in that direction.
  • #48
  • Jul 12, 2016 3:01pm Jul 12, 2016 3:01pm
Quoting squawk
{quote} This is spot on unless you have an edge in understanding when and when not to trade it. Here lies the success on any type of mechanical entry system of this type. If you understand maybe when the market is re balancing and trading back then implement the model in that direction.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #49
  • Jul 12, 2016 3:35pm Jul 12, 2016 3:35pm
Here you can play with this system. The logic is almost the same, but I use the open of the H1 candle as reference point. The ma is the same (200). SL is 2 pips (you can change it).

You want to see something fun? Backtest on GBPUSD for the last month (2016.06.01 - today) , set the "LeverageRatio" to 50 and the spread in the tester to 1. Start with 50 000 capital
Attached File(s)
File Type: ex4 95 %.ex4   21 KB | 1,029 downloads
  • #50
  • Jul 12, 2016 3:36pm Jul 12, 2016 3:36pm
Quoting squawk
{quote} This is spot on unless you have an edge in understanding when and when not to trade it. Here lies the success on any type of mechanical entry system of this type. If you understand maybe when the market is re balancing and trading back then implement the model in that direction.

I dont think so , whether its possible to know when and where market condition is changing.
I see posters so far have different opinions about managing , exiting trades. In that case how are we supposed to know ...
Whether edge lies in below sentence -

"95% of the time Price will close either above or below the opening price. Less than 5% of the time, Price will close at its opening price. Within this truth lies the pot of gold."

Or in traders ability to apply discretion in entering , managing trade.
  • #51
  • Jul 12, 2016 4:19pm Jul 12, 2016 4:19pm
Hi STRBC
how to determine the reference point
  • #52
  • Jul 12, 2016 5:43pm Jul 12, 2016 5:43pm
This same discussion from last year


http://www.forexfactory.com/showthread.php?t=533279
Solutions ONLY!!!
  • #53
  • Jul 12, 2016 6:28pm Jul 12, 2016 6:28pm
Quoting squawk
{quote} This is spot on unless you have an edge in understanding when and when not to trade it. Here lies the success on any type of mechanical entry system of this type. If you understand maybe when the market is re balancing and trading back then implement the model in that direction.
to know when to trade or not is an edge any system needs, so if you need it to trade that "95% of the time Price will close either above or below the opening price. Less than 5% of the time, Price will close at its opening price. Within this truth lies the pot of gold." then that sentence is useless by itself.
its like saying there is an edge in trading moving average crossovers...but you need to know when to trade or not the right crossover
  • #54
  • Jul 12, 2016 6:58pm Jul 12, 2016 6:58pm
Quoting metta87
{quote} to know when to trade or not is an edge any system needs, so if you need it to trade that "95% of the time Price will close either above or below the opening price. Less than 5% of the time, Price will close at its opening price. Within this truth lies the pot of gold." then that sentence is useless by itself. its like saying there is an edge in trading moving average crossovers...but you need to know when to trade or not the right crossover
Absolutely. Knowing when to trade and being patient until that happens is the edge. The other edge is to know what to do when it gets there. Having a probability trading model that gives you the confidence to trade the intra day move if thats your trading style. Where do you take, profits, add to trade etc. But if you think its all about the entry then theres a long way to go.
  • #55
  • Jul 12, 2016 8:30pm Jul 12, 2016 8:30pm
Quoting squawk
{quote} Absolutely. Knowing when to trade and being patient until that happens is the edge. The other edge is to know what to do when it gets there. Having a probability trading model that gives you the confidence to trade the intra day move if thats your trading style. Where do you take, profits, add to trade etc. But if you think its all about the entry then theres a long way to go.
well i thought the pot of gold layed only in the sentence above, now we need 2 edges,1 knowing when to trade or not and 2 what to do when it gets there. Fantastic! Now if you dont mind me asking:Have you found those 2 edges yet. ?Are there any more edges needed to trade that famous sentence ?
  • #56
  • Jul 12, 2016 8:47pm Jul 12, 2016 8:47pm
Quoting ronaleo10
{quote} I dont think so , whether its possible to know when and where market condition is changing. I see posters so far have different opinions about managing , exiting trades. In that case how are we supposed to know ... Whether edge lies in below sentence - "95% of the time Price will close either above or below the opening price. Less than 5% of the time, Price will close at its opening price. Within this truth lies the pot of gold." Or in traders ability to apply discretion in entering , managing trade.
certainly not in that sentence.95% of the time you ll have a candlestick and less than 5% of the time you ll have a doji. I dont even know if the stats are correct or not but a pot of gold in that sentence ??? Comon now !
  • #57
  • Jul 12, 2016 8:48pm Jul 12, 2016 8:48pm
Quoting metta87
{quote} well i thought the pot of gold layed only in the sentence above, now we need 2 edges,1 knowing when to trade or not and 2 what to do when it gets there. Fantastic! Now if you dont mind me asking:Have you found those 2 edges yet. ?Are there any more edges needed to trade that famous sentence ?
Good luck to you.
  • #58
  • Jul 12, 2016 9:15pm Jul 12, 2016 9:15pm
Quoting squawk
{quote} Good luck to you.
that says a lot about you my friend.
  • #59
  • Jul 12, 2016 9:33pm Jul 12, 2016 9:33pm
Quoting squawk
{quote} Absolutely. Knowing when to trade and being patient until that happens is the edge. The other edge is to know what to do when it gets there. Having a probability trading model that gives you the confidence to trade the intra day move if thats your trading style. Where do you take, profits, add to trade etc. But if you think its all about the entry then theres a long way to go.
In my opinion, the main edge is in catching the big moves and letting the winners run. The rest is just build-up - winning a little, losing a little, keeping your account together while you wait for the two or three big moves of the year.

Everyone knows that you're supposed to do this, but in practice it's extremely hard to do. The bigger the paper profits become in a strong move, the more overwhelming it is to cash them in before the market reverses. It's like I said in shellsnail's thread a few weeks ago: how many traders here entered short when EUR.USD was near 1.4 and held it until 1.10 or even lower? Not many I bet (me included). And this is despite price not closing above the MA-50 on the daily during all that time!

It's like the Guiness ad... good things come to those who wait...
Inserted Video
You reap what you sow.
  • #60
  • Jul 12, 2016 9:40pm Jul 12, 2016 9:40pm
Quoting NorthTrader
{quote} In my opinion, the main edge is in catching the big moves and letting the winners run. The rest is just build-up - winning a little, losing a little, keeping your account together while you wait for the two or three big moves of the year. Everyone knows that you're supposed to do this, but in practice it's extremely hard to do. The bigger the paper profits become in a strong move, the more overwhelming it is to cash them in before the market reverses. It's like I said in shellsnail's thread a few weeks ago: how many traders here entered...
nice post NorthTrader.
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