SUNDAY / AUGUST 30, 2020
Numerical Price Prediction (NPP) was developed through the application of two major biblical principles: (1) testing all things and holding fast to that which is good; and (2) gaining insight into how one should interpret the signs of the times.
Eventually, these principles led to the formation of a system (NPP) predicated on two core beliefs:
It attempts to use a methodology similar to the numerical weather prediction protocols applied by meteorologists when making weather forecasts; that is, the collection of precise, up-of-date, quantitative information at a given time and location followed by an interpretation of this data to make accurate predictions. But instead of analyzing humidity, temperature, barometric pressure, wind velocity, cloud formation and the direction of air currents; it focuses on moving averages, typical price ranges, historical support and resistance levels, market structure and repetitive price patterns—all in multiple time frames. So as with life, a key to success is a mastery of relationships.
But as with numerical weather prediction, market forecasts are significantly inhibited by intrinsic predictability limitations, which lead to error growth with time. So in a way, the level of accuracy attributable to a given market forecast might be thought of as being governed by yet another Christian principle—that of subsidiarity, which holds that operations conducted in immediate proximity are accomplished with much greater efficiency and efficacy than those handled more remotely. This is why the system is applied almost exclusively to intraday trading using five- and one-minute charts.
At this point in time, NPP conceptualizes the four-hour price range as the intraday foundation on which foreign currency pair price action is built—the backbone of the Forex market, on which the rest of the "body" is constructed.
Nonetheless, it is the 90-minute baseline that is used to determine the ultimate direction in which price is headed at the intraday level, which of course implies it should also be used to detect full-fledged intraday reversals.
Though the 90-minute baseline determines the ultimate direction of price, the 30-minute price range envelope, otherwise known as the “TUBE,” is what rules when it comes to projecting where price will eventually head in the immediate future.
Establishing the direction of the short-term trend is accomplished using the five-, ten-, and 15-minute baselines, referred to as "the short-term cluster," along with an associated moving average "flatworm" envelope. This indicator replaces what was known as the "bubble worm" envelope, which is no longer plotted on the main chart, but is still utilized in that its parameters are applied to the lower panel to generate an oscillator used for determining entry levels.
Note however that the bubble worm oscillator is not an automatic signal to execute trades. Rather, it serves as an early warning alerting one of the fact that the right conditions for entering a position might be just around the corner. The next step is not to make a trade, but to instead ask (and answer) six questions with respect to the five-minute chart configuration:
So then, other than when there is a full-fledged reversal in the 90-minute trend, probably the most profitable setup is when candlesticks are coming out of a pullback in which the short-term cluster was on a temporary trajectory headed in the direction opposite the slope of the 30-minute price range envelope, especially if it (the angle of the TUBE) is also aligned with the slope of the 90-minute baseline.
That said, and as implied by the six questions listed above, it is probably a good idea to avoid (or pass on) entering positions until and unless candlesticks are forming to the outside of the flatworm envelope on the far side away from the trend, or at least until the appropriate/corresponding band(s) of the short-term envelope(s) have made contact with it ("it" being the "outside" band of the flatworm envelope). One might also find it advantages to refrain from doing so until and unless the flatworm envelope is angled in the same direction as the slope of the TUBE.
Note also that the probability of trades ending in success appears to be increased even more so if positions are entered to the outside of the TUBE, especially if near the projected limit(s) of the 90- and/or 240-minute price range. So then, it is important to pay particular attention (be watching for reversals) when there is a convergence between the upper or lower bands of the flatworm envelope, the TUBE, the 90-minute price range envelope, and/or the four-hour price range envelope.
To avoid getting stopped out, the trigger signal for entering positions when one observes the structure/situation described above is when the candlesticks crossover or begin forming to the "inside" of the five-minute baseline on a one-minute chart, or as already mentioned, when there is a reversal in the instantaneous moving average envelope on a five-minute chart. (If you want to be extra safe, you can wait for the candlesticks on the five-minute chart to cross over the ten-minute baseline and/or for the ten-minute baseline to reverse direction to realign itself with the slope of the TUBE.)
All of this suggests that the opposite side of the flatworm envelope is a reasonable and conservative level at which to lock in gains, with the opposite side of the TUBE being a more aggressive/ambitious goal.
Also, about the only time the short-term trend oscillator on the one-minute chart configuration really comes into play is when there is a breakout (as suggested by the five-minute baseline) where it looks like an asset is starting to trend with momentum (i.e., has initiated a run) and one wishes to identify an optimum level from which to get in on the journey. (Possible take-profit targets are the ten-minute price range at 0.15% deviation, or the closest of the three 90-minute price range levels, or the four-hour price range, or the intraday price range...given that the candlesticks will already be forming to the outside of the flatworm envelope and the TUBE.)
Numerical Price Prediction (NPP) was developed through the application of two major biblical principles: (1) testing all things and holding fast to that which is good; and (2) gaining insight into how one should interpret the signs of the times.
Eventually, these principles led to the formation of a system (NPP) predicated on two core beliefs:
- A carefully chosen moving average is the best prognosticator for predicting the direction in which price might ultimately be headed within a particular temporal context—with one specific, painstakingly selected moving average filling this role better than all others—otherwise known as a baseline.
- Generally speaking, exchange rates will separate or distance themselves only so far from a given baseline before one begins to observe the phenomenon of regression toward the mean (or mean reversion) come into play.
It attempts to use a methodology similar to the numerical weather prediction protocols applied by meteorologists when making weather forecasts; that is, the collection of precise, up-of-date, quantitative information at a given time and location followed by an interpretation of this data to make accurate predictions. But instead of analyzing humidity, temperature, barometric pressure, wind velocity, cloud formation and the direction of air currents; it focuses on moving averages, typical price ranges, historical support and resistance levels, market structure and repetitive price patterns—all in multiple time frames. So as with life, a key to success is a mastery of relationships.
But as with numerical weather prediction, market forecasts are significantly inhibited by intrinsic predictability limitations, which lead to error growth with time. So in a way, the level of accuracy attributable to a given market forecast might be thought of as being governed by yet another Christian principle—that of subsidiarity, which holds that operations conducted in immediate proximity are accomplished with much greater efficiency and efficacy than those handled more remotely. This is why the system is applied almost exclusively to intraday trading using five- and one-minute charts.
At this point in time, NPP conceptualizes the four-hour price range as the intraday foundation on which foreign currency pair price action is built—the backbone of the Forex market, on which the rest of the "body" is constructed.
Nonetheless, it is the 90-minute baseline that is used to determine the ultimate direction in which price is headed at the intraday level, which of course implies it should also be used to detect full-fledged intraday reversals.
Though the 90-minute baseline determines the ultimate direction of price, the 30-minute price range envelope, otherwise known as the “TUBE,” is what rules when it comes to projecting where price will eventually head in the immediate future.
Establishing the direction of the short-term trend is accomplished using the five-, ten-, and 15-minute baselines, referred to as "the short-term cluster," along with an associated moving average "flatworm" envelope. This indicator replaces what was known as the "bubble worm" envelope, which is no longer plotted on the main chart, but is still utilized in that its parameters are applied to the lower panel to generate an oscillator used for determining entry levels.
Note however that the bubble worm oscillator is not an automatic signal to execute trades. Rather, it serves as an early warning alerting one of the fact that the right conditions for entering a position might be just around the corner. The next step is not to make a trade, but to instead ask (and answer) six questions with respect to the five-minute chart configuration:
- Are the candlesticks painting beyond the interior of the flatworm envelope?
- Are the candlesticks painting beyond the interior of the TUBE?
- If so, are the candlesticks located on the exterior side of the flatworm envelope that is opposite the envelope’s trajectory and/or that of the TUBE?
- And/or are the candlesticks located on the exterior side of the TUBE that is opposite the direction of its trajectory?
- Are the candlestick painting beyond or near the projected top or bottom of the price range corresponding to the 90- or 240-minute baseline, or that of the intraday or daily price range?
- Has the instantaneous price range envelope begun to reverse direction?
So then, other than when there is a full-fledged reversal in the 90-minute trend, probably the most profitable setup is when candlesticks are coming out of a pullback in which the short-term cluster was on a temporary trajectory headed in the direction opposite the slope of the 30-minute price range envelope, especially if it (the angle of the TUBE) is also aligned with the slope of the 90-minute baseline.
That said, and as implied by the six questions listed above, it is probably a good idea to avoid (or pass on) entering positions until and unless candlesticks are forming to the outside of the flatworm envelope on the far side away from the trend, or at least until the appropriate/corresponding band(s) of the short-term envelope(s) have made contact with it ("it" being the "outside" band of the flatworm envelope). One might also find it advantages to refrain from doing so until and unless the flatworm envelope is angled in the same direction as the slope of the TUBE.
Note also that the probability of trades ending in success appears to be increased even more so if positions are entered to the outside of the TUBE, especially if near the projected limit(s) of the 90- and/or 240-minute price range. So then, it is important to pay particular attention (be watching for reversals) when there is a convergence between the upper or lower bands of the flatworm envelope, the TUBE, the 90-minute price range envelope, and/or the four-hour price range envelope.
To avoid getting stopped out, the trigger signal for entering positions when one observes the structure/situation described above is when the candlesticks crossover or begin forming to the "inside" of the five-minute baseline on a one-minute chart, or as already mentioned, when there is a reversal in the instantaneous moving average envelope on a five-minute chart. (If you want to be extra safe, you can wait for the candlesticks on the five-minute chart to cross over the ten-minute baseline and/or for the ten-minute baseline to reverse direction to realign itself with the slope of the TUBE.)
All of this suggests that the opposite side of the flatworm envelope is a reasonable and conservative level at which to lock in gains, with the opposite side of the TUBE being a more aggressive/ambitious goal.
Also, about the only time the short-term trend oscillator on the one-minute chart configuration really comes into play is when there is a breakout (as suggested by the five-minute baseline) where it looks like an asset is starting to trend with momentum (i.e., has initiated a run) and one wishes to identify an optimum level from which to get in on the journey. (Possible take-profit targets are the ten-minute price range at 0.15% deviation, or the closest of the three 90-minute price range levels, or the four-hour price range, or the intraday price range...given that the candlesticks will already be forming to the outside of the flatworm envelope and the TUBE.)
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