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You can take a look at those gauges in here www.rtnstealth.com

I have been studying this phenomenon professionally for many years. I have a lot of fascinating results in this area. I have even designed a trading platform that helps traders to enhance their intuition skills. It is the most fascinating subject and up to this day (when I am not in the hospital...

You are on the right track! The answers are there. I too happened to believe that there is no reason for TA to "predict" future price developments, however, Bid/Ask/Size/Volume info has a "built-up" pressure indications.

The black swan events usually magnify this correlation. A couple of those swans have just landed on our pond and produced turbulence on the markets with such magnitude that nobody has expected! :)

I disagree. This information is more useful than you think. I used similar approach to create a discrete distribution. It's quite useful.

The very last hint I will give you guys is "QUANTUM Random Walk" Ok, from now on I will only answer PMs from people who will show the progress. Once we establish the circle of interested people we should share the further results privately; after all it is the war out there ... :cool:

FANTASTIC! Now, to correct the drift I can suggest using % values of the current prices rather than the absolute values in points (to specify the step value). The drift occurs due to the change in the probabilities of the steps if the ratio between the step value and the actual price is not...

It is a wrong interpretation, I am afraid. Think about a moving object. Is its quality called "INERTIA" embedded in every move that this object makes?

Because if you accept that the markets are Gaussian on the Price/Step plane then at any point of time the probability of the markets to go either up or down is 50/50. That is why any point on the chart picked by any TA method will have the same faith: - 50/50. This is the major difference...

I was expecting you to chime in! Your posts are always valuable! Please participate in this discussion as much as you can. If you create a step function (let's say 5 point step) and convert ES data into this function you should see that the number of steps vs. absolute move on the long run (...

Spot ON! Good man. Congratulations! You have passed level 1! Now, the challenge is to make the decision making algorithm that has consistent positive expectations. Off to the races! May the spline be with you!

OK, you can count 5 point moves, it really does not matter.

Good start. Now, go ahead and calculate how many steps of 1 point does the S&P make to move 100 points? It’s easy enough to calculate using historical charts. Is that number greater, equal to or significantly lower than the mean deviation calculated using the formula above?

http://www.freestockcharts.com/

I LOVE self education! I think it's THE key to everything! I admire and support people who spend time educating themselves. I am always pleased to help those people if I can and many times I end up learning from them as well. In a mean time, let us come back and discuss this:

In a family of interpolation curves that may approximate any future development there is a good chance that one of them would be pretty close to linear. So, the "certainty" about the future could be as uncertain as any other probable walk in this wonderful world of ultimate Randomness. The...

OTM Call butterflies look pretty inexpensive to me.

Try to incorporate the first derivative and use a threshold on it to switch from the following the mean to the mean reversion.

It appears that you are on the right track. Now try to use the natural spline and measure the standard deviations from it. You will see that you have almost perfect Gaussian distribution. The next step is to make a decision what and when to follow: i.e. the mean or the regression to it. :cool:

I guess it is time for me to explain why … As my dear friend Ex University of Toronto professor Burke Brown (he is 82 now and still going strong) I have always believed that opening eyes to the wonderful world of Randomness is my duty and a “higher purpose” if you will. And what is a...