neither side triggered over 3 hours low range candle formed.
bias still up next 3 hr will be traded same way.
direct statistical trading a "clearly" defined approach by NTW31
- Thread starter nukethewhales31
- Start date
bias still up next 3 hr will be traded same way.
will be away on vacation next like week so ill bump this when i get back
in this image we can see the distribution of short side from open distances.
some stats on short sided distances.
of a 1000 bar sample 1 hour
26.13% was at 3 pips or less
51.7% was at 5 pips or less
71.3% was at 7 pips or less
95.6% was at 14 pips or less
4.4% was greater than 14 pips
stats coming on long side....
and ill post chart
and stat driven excel for you....
here imageshack is not worth the effort
Heres some stats run on long side distances from open..
stats:
80% are 10 pips from open or more
60% are 15 pips from open or more
50% are 16 pips from open or more
25% are 25 pips from open or more
extreme distance of 40 or more pips happened 8.7% of the time.
stats:
80% are 10 pips from open or more
60% are 15 pips from open or more
50% are 16 pips from open or more
25% are 25 pips from open or more
extreme distance of 40 or more pips happened 8.7% of the time.
note that in order for this data once configured to be a viable strategy and not curve fit (i believe is the name for it) we must run extensive tests on OOS(out-of-sample data).. this is a trap many new trader fall into when they say hey i have a great system they backtest it make it work just right then when they are happy that the system shows great profitability they open a account and blow it...
why because theyve fit the system to the sample data to show the best success for that sample data but when applied to oos data they get rocked because the system simply doesnt work or its to refined to the sampled data to work on oos data.
why because theyve fit the system to the sample data to show the best success for that sample data but when applied to oos data they get rocked because the system simply doesnt work or its to refined to the sampled data to work on oos data.
when we sort though this data we can see the flow of numbers and distribution shows that distances from open have meaning as the curve suggests and within certain levels of accuracy we can define limits to how a candle will form.
such as if a candle forms 7 pips on one end and passes through open if it passes 7 pips on the other side it has a 96% chance of at least moving to 12 pips or more.
this is derived from the EUR/USD currency pair from a random sample over the course of the 08 year w/ non consecutive candles in the sample and sample size of 1000 candles.
such as if a candle forms 7 pips on one end and passes through open if it passes 7 pips on the other side it has a 96% chance of at least moving to 12 pips or more.
this is derived from the EUR/USD currency pair from a random sample over the course of the 08 year w/ non consecutive candles in the sample and sample size of 1000 candles.
now lets take a look at a chart
heres a 3hr candle were gonna break it down to 30 min candles
the one in the vert lines is the one we are looking at.
specifically the 3hr on eur/usd on jan 8th starting at 0800.
0-1.36155
H-1.36998
L-1.36056
heres a 3hr candle were gonna break it down to 30 min candles
the one in the vert lines is the one we are looking at.
specifically the 3hr on eur/usd on jan 8th starting at 0800.
0-1.36155
H-1.36998
L-1.36056
remember on our other 3hr trades 35-70 was our ranges..
heres the candles on the 30 min chart its in the middle square the bottom line is open and top is a missmarked high because im not perfect.
note how it pushes down low comes back on the first bar and comes back creating the low before making new high then hits the statistical point on the second bar and closes on the second bar...
but what happens if a bar doesnt conform through exact formation parameters that we tested like what if it drops back to open or past open before coming back up to create new high or what if i hits the entrance drops back down stops hits he buy area 7 on the other side comes back up to form the 96% of 7 -12 formation?
heres the candles on the 30 min chart its in the middle square the bottom line is open and top is a missmarked high because im not perfect.
note how it pushes down low comes back on the first bar and comes back creating the low before making new high then hits the statistical point on the second bar and closes on the second bar...
but what happens if a bar doesnt conform through exact formation parameters that we tested like what if it drops back to open or past open before coming back up to create new high or what if i hits the entrance drops back down stops hits he buy area 7 on the other side comes back up to form the 96% of 7 -12 formation?
nukethewhales31 is putting a lot of effort into this journal.
I hope someone is able to make use of it, if so you might want to let him know through your response(s).
And if it isn't working for you, you might want to let him know why not.
I hope someone is able to make use of it, if so you might want to let him know through your response(s).
And if it isn't working for you, you might want to let him know why not.