Optimized h values

I’ve been trading a bit (small) for the past week or so and just trying to use as much of the information as I can. My R:R setups aren’t all that great, but I have some MM ideas I’d like to try out which will boost my return; however currently the whole idea of accelerating growth is one that I haven’t spent too much time one, I’m still focusing on “being right”.

prettypicture2

Odds are stacked fairly even on this one I think as far as which bound will be hit first, although I think I favor long just a tad more.

When odds are stacked, who wins? Knowing which type of signal is more likely to be right, or overtake another signal seems to be the kind of thing that SB is referring to when he talks about his metabrain. Not too hard of a concept to understand once you understand that building a system is about calculating probabilities for things to occur and not occur, rather than being fixated on the traditional signal->TP/SL->gogogo that new traders are sucked into.

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As for h values, I found the current way I wanted to go about studying optimal h values. Per usual the whole idea may lead to nothing, but in the scope of how I envisioned the design, what I have works.

h1 data, probabilities for price to return to bar in the future (right side transience)

hold

This is data on right side transience, and it actually says quite a lot about holding periods. First, 6% of bars are not returned to within a month. More practically, if I’m targeting any bar, it is most likely to return in a day or 2. If I’m anticipating it to take longer, I’m best off waiting for a full week. After that, It’s most likely to not return at all. In other words, what is not reached within a week will likely not be reached in the next 3 weeks. Building on that, each weeks extremes form resistance points for the next 3 weeks. This seems like a VERY good thing to know about the markets. Researching for an edge in here has 2 potentials: seeking both periods for h <24/48/120, or for h>480. When periods are likely to be small, target it. when periods are likely to be larger, use it as a stop loss.

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