Monthly Archives: July 2014

Funny looking rectangles and useless drivel

http://www.forexfactory.com/showthread.php?t=496501

 

7th in the flesh! (e-flesh?) in 2014! Wow.

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H-L range by hour

Here’s a stat I did quite a while ago and just never published. Not very necessary for what I’m doing now, but I figured I’d throw it out there

 

Pip range by hour.

fishing

A lot to this picture. Two ways to see the same thing. On one hand, if I’m looking to catch the big bars, I should stick around until at least 11EST. It starts to dry up fast after London close and by 1500, 77% of the bars are 20 pips or less. London/NY cross gets quite volatile, where close to 85% of the bars that occur in the 0900-1000 hour are at least 20 pips or more. On the other hand, when opening trades in the dead times or right before volatility picks up, the risk to get stopped out with a 20 pip SL is low.

Vacation!

Vacation! I have one small scheduled post later today, but other than that there will be no other posts for the next 2 weeks minimum. After that I will hopefully be trying my hand at a wave indicator, but I have a lot of steps to cover before I am ready to start writing it. Now that I fully understand (I think) the scope, validity, and usefulness of it, I have to design it. This is not just an MQL obstacle, as I need to work out the abstract as well.

Some notes, (some assumptions, some discovered ‘truths’) mostly for myself:

  • To maintain MTF, I think only tracking H-L is necessary.
  • Fixed TF will cause some movements to be ‘lost’ or un-captured, which I am ok with for the time being.
  • Try to only identify useful zones: areas where practical trades can occur (P/L ratio that makes sense/worth pursuing)
  • Trade in Flow. Momentum is very evident, yet is required to have stopping points. Perhaps some more extreme or out side of the box SB Fill ideas can help show this.
  • ‘TF control’ has limits when it comes to practical movement.

 

 

Archiving the pivot, thoughts on averages and trends

I recently have been taking more time away from looking at the data and formulas and more time looking at the chart. There are some things I’ve noticed and it’s helped me realize some things; why some things and theories work and why others don’t. At least, why some things don’t work in an efficient manner.

First, predicting the high/low/close. It definitely feels like something is there, however I’ve increasingly become more adamant about the idea that fixed time frames don’t work. Yet, I see a great reason why some people do. To explain why I’ll use the ‘sb flats’ indi, which i’m extremely grateful for because I feel that it’s taught me a lot. Its a bit hard to explain at the moment, but I’ll try my best:

First, observing that the flats do a decent job at highlighting turning points, indicated by the blue boxes:

flats

 

Next, a rough idea of how they work internally:

newwave

 

Price on the left side of the chart has been moving down at a steady pace. The highlighted box gives a hypothetical situation of where a flat might be drawn. Why/how? The indicator does its best to show when price has stopped the ‘steady pace’. It’s half theory, half pure fact.

Theory: If price stalls, it might turn:
Fact: For price to turn into an up wave (given a current down wave), price must move up.

By highlighting areas where price has stalled relative to recent movement, it provides the opportunity to show turning points. Of course, never forget that price may just stall and then continue. That’s why such a simple indi is not perfect.

Why fixed time frames don’t work:

I was a bit puzzled by some of the boxes on the very right side of the chart in the first picture. Price continuing up, but ‘turning point’ boxes keep showing up? (as an aside, again I believe this is why some of the “art of the indicator” has been lost and now rendered useless. People would market the above indi as one that shows turning points; true, but misleading if you don’t actually know how the indicator works. And these days people who use traditional indicators know only the most basic idea of why they “work”). The reason is that those days are a bit smaller than average, so they practically always print as turning points no matter the movement! However, they are just more ‘slow’, and are cut as below average because 24hr is not enough time to complete the intended move.

Why fixed time frames work:

Even with the above, fixed time frames can be used (to an extent) when the market is moving favorably, or in a predictable fashion. If we assume that most days are average, or have a H-L of a certain range, then something like the flat indi will work very well. Why do some people insist so heavily on certain brokers or platforms that are based on xx:xx candle opens? To fit the ideal mold! Remember that generally, volatility is dead between NY close and Tokyo open. People like using D1 candles that are NY close because the dead period acts as a ‘reset’ and generally will protect them from cutting off the day in the middle of a wave. Generally.

 

Finding an edge in averages and oscillators

One of the things I like a lot about doing fx research is the kind of ideas you can implement to test ideas and find exploits in the market patterns. Unfortunately my repertoire atm is quite small, but in seeing Rel’s work (TY :D) I’m learning about methods that I think are really cool. For example, a really simple idea is to try to trade an oscillator away from extremes, but  this limits you because you have to wait for extremes to occur and perhaps at that point it’s not really useful to trade using that knowledge. However, other things to try include creating dynamic lines and try to trade via crosses similar to MAs. Or perhaps three lines and trading when a certain pattern stack (x>y>z, x>y, z>y, etc). The reading of existing indicators exists for a reason I think (MA crosses, RSI/Stoch oscillators, Pivot projections (flat), Bollinger bands(dynamic)). Each is interpreted using it’s own legend so to speak and maybe what doesn’t work when read as a cross over works well if you could implement it into bollinger bands.

 

I mostly just wanted to post these pictures, but thought a little context would be nice to have.

start

 

 

2

 

I’m already starting to confuse myself a bit with what exactly this is measuring, but if I get this, it’s game over.

Not useful:

  • Predicting the point where any line will fail to make a higher high or lower low. Bounds are already known, and help predict max points, not min points.

Useful:

  • Knowing if any line will cross the 0 line.
  • Knowing if a point will reach at least some point above/below the 0 mark.
  • Somewhat useful is knowing if a line will be subordinate or dominant to another line, since if x must be subordinate to y, y must be at least x value.

My favorite 2 SB posts.. Hmm.. Can I find a similar pattern?

http://www.forexfactory.com/showthread.php?p=5910720#post5910720

http://www.forexfactory.com/showthread.php?p=5910928#post5910928