Finding anomalies in price movement

[Fair Value]

Hi all,

Let's assume that a certain aspect of the price movement is a random distribution process. We plot two points on the distribution curve that are not too far apart, plug in two sensors at the points and take readings. If the points are not too far apart, the curve is nearly linear, so the readings are proportional and can be normalized to look identical.

Because the two points on the distribution curve correspond to different probabilities, one of them is "stronger" than the other.

The weaker reading is plotted on top and the stronger at the bottom.

If the upper curve A1 moves up and the lower curve A2 does not confirm the move, there is an anomaly in the price movement and it will move toward the stronger lower curve. And vice versa for down moves.



Attached are 1 minute YM charts for the last trading session of 27 Jan. 2017. The anomalies are clearly visible.

What do you think?

 

[Handle123]

Well, at least you have an idea, that is more than most, but one day does not make a system and unless you have like 3,000 sample size over several years, is best way to find the divergences between two indicators. I have always preferred to use indicators the masses use and look for abnormalities so when masses take them, I have better edge of going counter. Just don't get hung up on the loses, too many try to fix losses, when they should instead be working on more winning trades and most importantly on when to not take trades based on what has already happened to the left of now.

 

[murray t turtle]

Hi all,

Let's assume that a certain aspect of the price movement is a random distribution process. We plot two points on the distribution curve that are not too far apart, plug in two sensors at the points and take readings. If the points are not too far apart, the curve is nearly linear, so the readings are proportional and can be normalized to look identical.

Because the two points on the distribution curve correspond to different probabilities, one of them is "stronger" than the other.

The weaker reading is plotted on top and the stronger at the bottom.

If the upper curve A1 moves up and the lower curve A2 does not confirm the move, there is an anomaly in the price movement and it will move toward the stronger lower curve. And vice versa for down moves.



Attached are 1 minute YM charts for the last trading session of 27 Jan. 2017. The anomalies are clearly visible.

What do you think?

%%
Nice chart; i dont consider anything random,=maybe difficult some times. I thought i found a random pattern, once, my female friend shopping; but then i realized she enjoyed shopping so much ,she simply aimed @ spending time shopping,walking in a strange pattern . Not a random walk @ all.