direct statistical trading a "clearly" defined approach by NTW31

OK, since I made my last post, I've been trading this on the GBP/USD, Monday morning UK time.

I've been stopped out a few times and the more I think about it the more I realise that, although the maths can work out correctly, you can lose continuously because of the timing of the market.

For instance, the new hour opens 1.6160 and you short at 1.6151 with your TP at 1.6143. The market falls to 1.6151 bringing you in to the market. It falls to 1.6149, then rises to 1.6167, stopping you out at a loss. The market then falls to 1.6140 and closes at 1.6155.
Everything has worked out well mathematically but the timing hasn't.

This scenario has played out a few times this morning, so I'm standing back and taking a closer look at the logic because it seems that its not just the distance a price moves from the open but also the timing.

I'm not the sharpest knife in the drawer, so perhaps someone can tell me what's wrong with my thinking here.
 
Quote from Dr Who:


I'm not the sharpest knife in the drawer, so perhaps someone can tell me what's wrong with my thinking here.
More...
in the thread I talk about the problems with this and the resolution.. if you want to just trade bars i wouldnt recommend hourly bars i would recommend something like 3 to 4 hour daily bars.. take trades indirection of IRD and also when you measure the data measure as its building price from zero moves 5 then 5 more before it retreats to 0.. so you know if you place a order at 5 itll go 5 and you can stop at 0... get it?
 
Nuke i am still a bit lost about how to calculate accuracy level,
could you please be so kind and explaine one more time using
a sample you have used earlyer in the tread

LSD= 7 DFO
SLD = 14 DFO
n = 21 bars

entrance= 8 DFO
stop = open
take prof = 14 DFO
MDRR= 4:3
%tile accurate = 19/21 or 90.48%
POT= N trades 114
LOT= N trades 16
NPOT=N trades 98

LSD= longest shortest distance
SLD=Shortest Longest distance
N= period of calc bars
MDRR= market defined risk reward
POT=Profit over term
LOT= loss over term
NPOT= Net POT

next bars trade
open +8 entrance
open + 14 TP
open stop
expected success rate = 90.48%

what is the calculation made, to arrieve at that 90,48% outcome
for the succes rate / accuracy level ?
 
I have re-read the first 35 pages and hope i got it now.

am i correct to say that before every trade you will take your current LSD and SLD and virtually go over the last N bars to calculate the % of succes rate for those N bars and then if that succes rate ( which is called in this tread EXPECTED SUCCES RATE ) is higher than your chosen ACCURACY and NPOT is high enough and MDDR fits your Risk, ONLY then you will trade the next candle ?

so in other words you will take current stats and compare them to last N (21) Bars and only take the trade if those current stats fits those old N bars stats enough to give a virtual, statistical and "historical" profit ?

is this correct?
 
Hey nukes, have you been able to find tradable edges using tick data with the original concepts in the thread? I've written a program that implements your original LSD/SLD algo on OHLC data and it seems to work pretty well. Later I wrote another program that crunches tick data to do the same statistical analysis. Problem was it didn't have an edge, basically just a coin toss.

It seems strange that there's an edge with OHLC data but not ticks.
 
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