ARTjoMS

I don't think there is any good theory written on this subject - it simply comes down to your level of understanding. Most of the "technical stuff'' has some idea (i.e. exploiting market inefficiencies) behind it (although that may not be stressed). 1) First you should broader your understanding of what technical analysis is. (because your's seem to be very short sighted) 2) Then you should understand who are participating in the market. 3) Then you should examine reasons why they open or don't open their positions. (2 and 3 are manageable tasks.) 4) Finally the last step will be called ''doing the analysis''. Hint: Focus on concepts -> don't try to exploit participants via indicator that they are using. Why? Because that will be like a drop in the ocean indeed.

This reminds me of this quote: "One idiot can ask more questions than ten wise men can answer." I certainly don't agree with your observations. Technical trading certainly has an impact on price.

I am aware of that. Yes, but that was not my question... this part (that i called as assumption) was "mathematically self evident" to me. Sometimes it is hard to explain yourposition without sounding at least argumentative.

Sorry, but did you read what I said? I said that it has nothing to with markets, outcomes could be whatever they are but since you are picking sell with 50% chance and buy with other 50% you are effectively getting BE. Imagine that coin toin toss has 100% chance to get heads and 0% to get tails (I believe this is what you mean by markets are not random). But you randomly pick heads or tails with 50% chance. In result you get 50% chance to win and 50% chance to lose in each coin flip. And this is purely random just like classic coin flip. I hope i shed some light on this. This type of stohastic process (binary+discrete) is called a "Bernoulli process" you can google that for more information and it has nothing to do with jump process. I don't see anyone claiming to have done tests here. But in a sense you are right. It was a bad idea to open this thread.

This is interesting, but very hard to believe. In a random entry system you enter short with 50% chance and enter long with other 50% chance, so you can imagine trades as a series of determined outcomes and your result depends entirely of whether system has picked buy or sell, but .. since it is effectively 50-50 I don't see how there can be longer runs than in coin flipping situation. Are you saying that a random entry system with various rick:reward ratious will still be BE in a long run? Now I don't know how close these numbers are in long run... but that shouldn't be true. You can imagine that as a combination of two 1:1 trades. You win 1st one and then risk 2:2.. so 1:3 in total. If both of them were 50-50 trades then 1:3 trade would be BE, but since 2nd trade contains information that market has moved in one direction it affects probability of outcome. It should still be close to 50-50, but not exactly 50-50.

I said your thinkiing process was right.

My idea was that from results obtained one could draw some conclusions of how trending the market is on particular time (pip) frame. Just maybe... it migh give some edge in deciding if it is worth to keep profits ride or close the trade.

Guys here are questioning things that are mathematically self evident. If on big sample size with R:R 1:1 one still doesn't get BE (EV=0) then he siply has wrong code.

Where did I say i want to use random entry system? If you read carefully my question ( ''how could these results be used further to realistically give some edge?'') then you probably would not ask such retorick questions or mention kindergarden remindments of slippage. Sorry for being harsh, but i have encountered issue like this countless times and it is really annoying that people don't reead what you have written... or they simply have no deduction skills.. or my english is so bad that they don't understand a word. It is ok to stay away, but why waste our time?

It is natural to assume that random entry system wirh risk:reward ratio of 1:1 would be BE. (I am sure that someone has proved it) And so I was wondering... should a random entry system with higher reward:risk ratious be +EV? (Since price tends to trend) Assuming that some risk:rewards (in exact pips) perfrom better.. how could these results be used further to realistically give some edge?

Great, will check it out!

Yes, that is what i used to do. But i don't want to use paint for this anymore, i don't find it convineint for this

Hello. Thus far i have tried to make a folder (as i am checking my desktop, i see "Inside bar examples" and "Range BO"... haven't cleaned my desktop for a while... lol.) and adding pictures. Watching those pictures in slide show isn't bad, but i don't know a conviniet way of how to add some comments, thoughts. Also i would really like to specify some parametrs, which could later be used to select some part of pictures.

hello, i am aware of oanda open positions for a while, but i am still unsure about some things. Q1: As I understand these numbers represent number of positions/orders rather total volume. Right? Q2: Is there significant positive correlation with volume? Q3: How big part of the total forex volume goes through a boker like oanda?

It is usually not a good idea to relay on what it "looks like" without confirmation. I don't recommend guesswork, unless you are really good at it. Just put up 1minute chart and watch how price approaches that level... That is what I call a great textbook example. Stall, BO, test - one of typical ways that suggest that price movement will continue, Solid red line is 03.10 top, purple lines - various resistances from 18.10.

I see that you say "To me", but I think it is totally the other way round - your approach is quantitative. Set of rules to validate something only help quality. Decisions based on "I think/feel" - not, unless you are some market guru.

Yes there are 2 pics I was referring to the one which appears as some symbol.

Hi, double clicking on that image or right clicking gets you nowhere? That was a really nice picture! Actually I feel like they are more useful when considering exits. Now imagine... you have put your take profit at level 1.2345, but price unfortunately reverses 1 pip before target.. and you have like absolutely no idea why. Now.. I think it might as well be good to just leave it as it, let alone you find out that 1.2346 was some precise Fibonacci number. Also It is important for me to be sure that I have as much of an edge as possible. I do have respect for those pure TA/Wyckoff traders, but I just seemingly don't get along with them. That thread wasn't about MA being S/R... but it turned out, because some wanted to be "nice" and unnecessarily educative... so it went off topic. It still troubles me that when trying to see 200 day average traders have to come up with so many variations... The problem exsists only with days (if we assume evryone is using simple), but unfortunately that is the only tf I find it really useful . I found one excellent book on net, where the author covered these issue extensively. Unfortunately only precise definitions (plus exceptions) of stuff like trendlines, retracements, breakouts...

Do you use fibonacci numbers? I had some automatic fibo indicator on my eur usd 4h chart (that was left there in one demo account for testing usage of it) and I mentioned exact 0.618.. was curious and looked for more... and as it appears there are quite a lot of fibo guys of amongst buyers. I don't know whether they are big guys.. (retracements are somewhat considerable) or weak hands... time might shed some light on this. You will have to go to link... picture does't appear her for me. Another one: picture sharing

Exactly. It makes a lot of sense for me to determine possible reversal zones that should be monitored on small time frames (here I mean really small) and depending on price action or some statistical background decide in which way to participate or stay away. I find that these zones usually can predict quite well, but eur/usd case wasn't clear to me even looking in hindsight so I went on to look deeper and consider possibly most logical/realistic reasons. I find that this approach suits really well for me, because I can prepare for some of these levels in advance, do my homework .... and then pull a trigger with small sl.

Skim read to find something about eur/usd. I think you said that you were expecting "stall or dip of some sort'' around 1.33, 1.34, 1.35. That is quite different in my eyes from expecting around 360 pip retracement from 1.370.

Hi there, You don't sound like an a**hole at all, I actually enjoy these kind of conversations and from my experience one can learn a lot from them.. well at least this have helped for me to improved in other areas. I think you have misinterpreted most of what I was saying. I wasn't willing to discuss what actually happened and how one could have see reversal potential taking pace (So.. I am not really willing to answer your last questions, or comment on arguments about long bar, pin bars). I was referring fully to potential reversal/correction zone (line) prediction in advance. I see two valid arguments: 27th of april and overbought state, so I am willing to comment on those. I felt like I should clarify this, because your last post was quite long.. and that was hopefully because you didn't really get what I mean. 27.04) I think you took my response as I would be saying it didn't add no value at all, which is not what I was saying. Still I am a believer serious level->serious bounce... it would make much more sense that bears would try to get in (or buyers getting out) around 200sma or 1.3. Eur/usd has been around 1.3 many times probably in every year from 2004-2012 except 2006.. one could go back and find many levels, but how much value does it add is controversial. From the chart alone as the price acted around 200sma and 1.3 I think it is fair to say that bulls are in control.. unless something happens. You also said that 1.3 is so ''critical'' therefore it makes no sense to me that you are now presenting 27.04 as resaon for retracement. And from your comment that you didn't expect it to retrace so much ... I think you are agreeing although don't realize it. I never said that there shouldn't be a test of 1.3 (for which 27.04 might as well be fine), I just didn't expect that price after succesful test of 1.3 wouldn't manage to go further as looking on eur/usd alone. overbought) Well, as for the state itself all depends on which time frame you look at. Looking solely at 200 day sma it appears to me that what actually happened is price moved from from oversold to neutral. Same time frame issue might probably be causing for you to not understand that I didn't look for a level at which price could potnentially decide to go back and test 1.3, but I was thinking in bigger picture... like a real retracement. P.S. I am familiar with Tom Bulkowski's homepage, really a lot of nice stuff.

HI, Why do you think 1.3 should have been so critical? I think price had tested 200 day sma, found barely any sellers made a breakout, then tested and then break out once more. There weren't many pips left till 1.300 after this. I have read, that round numbers may serve as support/resistance.... and it does make sense that it could have worked that way many years ago... but I don't feel like nowadays when everyone is using sophisticated trading strategies it is still viable. And it appears there was a mini retracement from 1.301.. that might be caused by some profit takers (who are apparently still using round numbers for exits..) who have set their profit target level over there. (Well as I read this.. I saw a bigger picture of the chart and 1.3 was indeed a very significant level. So don't answer that question, but you can comment on my thought process if you want.) l don't think that actual retracement had anything to do with the 27 of april. Who remembers that? Well, and even if someone does.. why should we follow them? Apparently they were caught on the wrong side of the market. It makes sense to include 200 sma and 1.3 as potential reversal zones which to monitor on smaller time frames, but unfortunately I couldn't imagine that support of the 27 of april.

Maybe try to put on heiken ashi and use your visual judgement? Or maybe you can abuse zig-zag somehow... ...just an idea.

Do you consider also correlation between currency pairs and/or metals/ oil/ gas?