Flip of a coin..but

[hilmy83]

By the way, as you seem to be interested in quantitative trading, please check out this old two part articles series. It was a good primer for me back in the day for a way to trade without charts.

Some good stuff here, IMO. Maybe you'll find the time to do a back-test for the most recent years.

https://www.trade2win.com/articles/766-developing-trading-strategy

https://www.trade2win.com/articles/768-developing-trading-strategy-part-2-a

There was a pdf I read while back where someone did a study on pivots points (PP, S1,R1, S2, R2 etc) in forex.

He provided statistics of how often each level is hit, how often price close within the levels, and how often both sides of PP are hit.

It turns out the further out you are, the less likelihood that both sides of the PP are hit (ex if R2 is hit, S2 being hit at the same time is less likely). And also the more likely price wil close within the outside levels.

It follows the same concept of the ORB study posted in that forum. The longer the probing period, the less likely price will make a V shape move to test other side of the range. He did mention you have "less" of the day's range left with the longer probing period. Sort of like a reverse R:R trade. Sure my stop is less likely to be hit, but I just got a small portion of the day left to profit off.

So you do things like scalein and maybe buy the "dip" within that range just short of the stop being hit to tip the R:R in your favor.

 

[SunTrader]

Just showing the flip side of ORB, which I use. It's 50/50 at that scale.

Incorporating stop and reverse, b/e, and fixed martingale seem to eek out a small edge from my own personal trading.

ORB is typically defined as first 5 to 30 minutes.

1 minute is micro-scalping stuff and not meant to be held to EOD.

I use first 5 minutes average price and how first 60 minutes trades and closes in relation to it.

Although today was an example of it not indicating the right direction - more bars above average and closing above it @ 1030am meant up direction was more likely. It was till it wasn't.

 

[hilmy83]

ORB is typically defined as first 5 to 30 minutes.

1 minute is micro-scalping stuff and not meant to be held to EOD.

I use first 5 minutes average price and how first 60 minutes trades and closes in relation to it.

Although today was an example of it not indicating the right direction - more bars above average and closing above it @ 1030am meant up direction was more likely. It was till it wasn't.
View attachment 304072

DDF follows the same concept as the ORB study.

You're basically making the assumption that when price is a certain distance away from the whatever reference point you create (in this case the average of 5 minutes), then it's unlikely that price will hit the other side of the range/reverse

It's like the MACD- the further away moving averages diverge, the stronger the trend. When MAs converge, you assume it's going sideways.

The higher probablity with longer probing period of the ORB and the 1hr wait time for DDF, it's just a way to trade an obvious trend and hoping the momentum carries it the rest of the day.

But that's half the story. Now you gotta figure out when to enter which is it's own probabilty. Even if you have a 60% chance of guessing the overall day's momentum in the right direction, your entry is basically going to make it a 50/50 shot or worse.

Remember, you need to get the direction right AND the entry with relative to your stop correct (multiply your individual probabilties)

https://www.statisticshowto.com/pro...probability-of-two-events-occurring-together/

 

[SunTrader]

DDF follows the same concept as the ORB study.

You're basically making the assumption that when price is a certain distance away from the whatever reference point you create (in this case the average of 5 minutes), then it's unlikely that price will hit the other side of the range/reverse

It's like the MACD- the further away moving averages diverge, the stronger the trend. When MAs converge, you assume it's going sideways.

The higher probablity with longer probing period of the ORB and the 1hr wait time for DDF, it's just a way to trade an obvious trend and hoping the momentum carries it the rest of the day.

But that's half the story. Now you gotta figure out when to enter which is it's own probabilty. Even if you have a 60% chance of guessing the overall day's momentum in the right direction, your entry is basically going to make it a 50/50 shot or worse.

Remember, you need to get the direction right AND the entry with relative to your stop correct (multiply your individual probabilties)

https://www.statisticshowto.com/pro...probability-of-two-events-occurring-together/

I use DDF (think Dr Clayburg claims 60-70, 75% accuracy depending on symbol) on both RTH open and the previous night's globex open.

And as for entry, if trend continues after 1st hour, I just use breakout of that 1st hour's range and/or support/resistance breaking.

Never did stats on it but it is much better than 50/50.

 

[murray t turtle]

Just google brownian motion and financial markets. There are many studies proving prices are random

I have people debating that long term price is not random, that's why asset prices in the stock market rise over time.
Ok great, then go ahead and invest.

%%
I can see where some believe in random markets\
especially with 1 minute small sample.
And if i could not tell the difference between a bull + bear markets, it maybe worse than random , due to even a good tight bid\ ask.
I've seen a lot of walkers but no random walkers; someone did title a book that way, so takes all kinds to make a market.
My comments include markets over2,000 years old, not just bull+ bear cycles which by definition =are not random.
I do see a lot of people confuse random with a 1 minute small sample.