direct statistical trading a "clearly" defined approach by NTW31

____________________________________________________________
% acc u determine what your willing to use 90 or 80 or 95 or 85
n 21
so
n*1-% accuracy = # trades can be filtered out the extremes

stops always at open
entrance at LSD +1
tp at SLD -1

MDRR = stop distance: take profit distance
NPOT= ((n*%accuracy)take profit distance from entrance)-((n*1-%accuracy)Staop distance from entrance)

if mdrr is a good ratio for you and Npot is high then trade next candle
___________________________________________________________________


Would you mind expanding on this?

I read this as n =21 as a time period

But where did the stat % accuracy come from? What is it and how is it calculated?

And from that what trades can be filtered out the extremes

This is confusing me, sorry.

The acronyms:
MDRR
NPOT

Do they stand for Max distance risk reward and N=potential of trade?


So here are the latest numbers N21 on the EURUSD 180M BARS numbers; with about 1 hour left on the latest bar (hopefully the high has been put in, so no need to recalculate before next bar

SD

SD
0.0001
0.0012
0.0022
0.0014
0.0011
0.0029
0.0034
0.0002
0.0006
0.0012
0.002
0.0024
0.0004
0.0016
0.0022
0.0019
0.0024
0.0002
0.0002

LD
0.0071
0.0046
0.0042
0.0048
0.0116
0.0038
0.0057
0.0086
0.0029
0.0056
0.0039
0.0078
0.0143
0.0071
0.0091
0.0035
0.0029
0.0096
0.0006 lowest #

SD and LD with LSD moved to LD


SD
0.0001
0.0002
0.0004 LSD
0.0002
0.0002

LD
0.0071
0.0046
0.0042
0.0048
0.0116
0.0038
0.0057
0.0086
0.0029
0.0056
0.0039
0.0078
0.0143
0.0071
0.0091
0.0035
0.0029
0.0096
0.0006
0.0012
0.0022
0.0014
0.0011
0.0029
0.0034
0.0006 SLD
0.0012
0.0024
0.0016
0.0022
0.0019
0.0024
0.0020

For the next bar I would trade it like so?

Stops always at open

Entrance at LSD +1

LSD currently is 0.0004 so enter @0.0005 passed opening?

tp at SLD -1

SLD currently is 0.0006 so tp @0.0005 passed entry?

5 ticks seems slim for a 3 hour bar? I am missing something
 
Quote from armchairtrader:

____________________________________________________________
% acc u determine what your willing to use 90 or 80 or 95 or 85
n 21
so
n*1-% accuracy = # trades can be filtered out the extremes

stops always at open
entrance at LSD +1
tp at SLD -1

MDRR = stop distance: take profit distance
NPOT= ((n*%accuracy)take profit distance from entrance)-((n*1-%accuracy)Staop distance from entrance)

if mdrr is a good ratio for you and Npot is high then trade next candle
___________________________________________________________________


Would you mind expanding on this?

I read this as n =21 as a time period
yes N is period time
But where did the stat % accuracy come from? What is it and how is it calculated?
More...

% accuracy is a just a simple quick way to thin out extremes you can im cool with winning 90/100 trades so im going to use 90% then drop out 10% of the trades the "extremes" usually are in the top 10-15%... you need to create less than perfect trades at 100% you will either never enter a trade enter a trade and lose or enter a trade win and be eaten by the spread.

your not at the level yet of knowing exactly your movement stats because you still only doing bar formation stats which is a less than perfect way. so you allow for a 20% statistical error.
so your accuracy is intersection of your bar formation % after the PNR(point of no return) * 1-statistical error..

so if you choose 90% to filter extremes your picked %tile acc is 90% .... true accuracy is 90%*80%ish.

And from that what trades can be filtered out the extremes
More...
SLD or LSD can be filtered whatever gives you the biggest distance between the two like if filtering LSD would give you 3 pip distance but filtering SLD gives you 7 remove the SLD's as they are the extremes.

note this is a simplified method for calculation of statistical bar formation to truly do the statistical bar form calc youd need a statistical text book a TI-86 graphing calc and a whole lotta paper and testing.

this is a simple method of doing it without that ... that is around plus or minus 5% around what that crazy method would tell you. either spend 10 min doing the math or 2 hours lol.

This is confusing me, sorry.

The acronyms:
MDRR
NPOT
More...

its cool imagine how long it took crunching numbers to figure this out when there is no info out there for it lol.

MDRR is simply MARKET DEFINED RISK REWARD
this is the RISK:REWARD the market says that its offering you to attempt the trade at your accuracy level.

NPOT is simply NET PROFIT OVER TIME or how many expected profitable trades * take profit distance from entrance
- how many expected loss trades * stop distance from open
this will give you Net profit you would have expected if you had traded SLD and LSD at your accuracy level over N amount of bars.

So here are the latest numbers N21 on the EURUSD 180M BARS numbers; with about 1 hour left on the latest bar (hopefully the high has been put in, so no need to recalculate before next bar

SD

SD
0.0001
0.0012
0.0022
0.0014
0.0011
0.0029
0.0034
0.0002
0.0006
0.0012
0.002
0.0024
0.0004
0.0016
0.0022
0.0019
0.0024
0.0002
0.0002

LD
0.0071
0.0046
0.0042
0.0048
0.0116
0.0038
0.0057
0.0086
0.0029
0.0056
0.0039
0.0078
0.0143
0.0071
0.0091
0.0035
0.0029
0.0096
0.0006 lowest #

SD and LD with LSD moved to LD


SD
0.0001
0.0002
0.0004 LSD
0.0002
0.0002

LD
0.0071
0.0046
0.0042
0.0048
0.0116
0.0038
0.0057
0.0086
0.0029
0.0056
0.0039
0.0078
0.0143
0.0071
0.0091
0.0035
0.0029
0.0096
0.0006
0.0012
0.0022
0.0014
0.0011
0.0029
0.0034
0.0006 SLD
0.0012
0.0024
0.0016
0.0022
0.0019
0.0024
0.0020

For the next bar I would trade it like so?

Stops always at open

Entrance at LSD +1

LSD currently is 0.0004 so enter @0.0005 passed opening?

tp at SLD -1

SLD currently is 0.0006 so tp @0.0005 passed entry?

5 ticks seems slim for a 3 hour bar? I am missing something [/B]
More...
yes it does

this is saying that the market has been overly volatile or has been not as volatile and isnt fitting statistically in this manner and you should wait for it to straighten itself out before trying.

your MDRR is 5:0 so for every 5 your risk you get 0 in return.... not a good risk/reward tells you to stay out.

your NPOT is going to be negative because of that ration and this tells you as well to stay out
More...
More...
 
my guess armchair is that you were calculating for the 11:00 3hr bar

if im right here is a graph of the open

you would have been stopped out like crazy its like the market was almost telling you that its not acting statistically like it normally does and dont trade it. and if you would have tried it it would have been like you telling the person in a movie that there is a axe wielding murder up stairs in the house as they are walk up the stairs not listening only to get butchered and you saying "i tried to warn you"
 

Attachments

Quote from knocks420:

Back-tested version of your strategy utilizing only ATR and a 2:1 Risk to Reward.
More...

should be atleast .62357 reward/risk ratio seems about right tho when i started i blew 2 $250 accounts till i got the ratios worked out and then 250 to 50k in around 3 years .... not all trading like this but some sort of statistical way.


Mostly century max range reversals <- highest risk:return with highest prob of success imo
 
statistically should not of ever happened ........

this is why we use stops ... remember that even if you dont want to as ive some people not thats ur decision but atleast consider using a act of god stop
 
Quote from nukethewhales31:

Mostly century max range reversals <- highest risk:return with highest prob of success imo
More...

Ooh, please tell.

(Sounds like you're combining the classic observation that price frequently reverses at "centuries" (i.e. 1.xx00) with something else.)
 
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