Numerical Price Prediction Daily Analyses
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USDCHF saw its global baseline turn bearish about 24 hours ago and candlesticks began painting below the universal baseline about 20 hours ago. I must therefore conclude that the asset is now continuing its long trek southward and will not be returning to the regions above any time soon; which is why I'm hoping the pair follows through and that I can simply sit around and wait for it to give me a hundred pips of profit (or at least a couple of dozen) over the next few hours or days.
Wednesday / December 30, 2020
Right now, I'm liking the eight-hour price range envelope on 15-minute charts for actionable price flow, with entry levels suggested by the 16-hour (⅔ of a day) pullbacks. The instantaneous moving average traces the short-term trend, with its frequent fluctuations, as the 80-minute baseline tracks it more smoothly, confirmed by the two- (or two-and-a-half) hour baseline.
USDCHF appears to have gotten stuck, so I have moved my take-profit target up to 0.8822 (after pocketing some of the gains from prior surges).
Wednesday / December 30, 2020 / Noon PST
These are my ideal entry levels based on the eight-hour price flow and the ⅔-day pullback (subject to change as time passes)…
AUDJPY - Buy at 78.93
AUDUSD - Buy at 0.7643
CADJPY - Sell at 81.03 (three or four hours ago)
EURAUD - Sell at 1.6067
EURGBP - Sell at 0.9076
EURJPY - Sell at 127.01
EURUSD - Buy at 1.2252
GBPJPY - Buy at 139.79
GBPUSD - Buy at 1.3526
NZDJPY - Buy at 74.03
NZDUSD - Buy at 0.7174
USDCAD - Sell at 1.2809
USDCHF - Sell at 0.8853
USDJPY - Sell at 103.38
These are my ideal entry levels based on the eight-hour price flow and the ⅔-day pullback (subject to change as time passes)…
AUDJPY - Buy at 78.93
AUDUSD - Buy at 0.7643
CADJPY - Sell at 81.03 (three or four hours ago)
EURAUD - Sell at 1.6067
EURGBP - Sell at 0.9076
EURJPY - Sell at 127.01
EURUSD - Buy at 1.2252
GBPJPY - Buy at 139.79
GBPUSD - Buy at 1.3526
NZDJPY - Buy at 74.03
NZDUSD - Buy at 0.7174
USDCAD - Sell at 1.2809
USDCHF - Sell at 0.8853
USDJPY - Sell at 103.38
Monday / January 11, 2021 / 8:00 p.m. PST
I'm looking at a tactic (just now came up with it) that might be both easier to trade and more profitable than "Secret Sauce," which I'm labeling "15-Minute Touch," at least for now, based on the four-hour baseline and six-hour temporal support and resistance levels...very simple.
I'm looking at a tactic (just now came up with it) that might be both easier to trade and more profitable than "Secret Sauce," which I'm labeling "15-Minute Touch," at least for now, based on the four-hour baseline and six-hour temporal support and resistance levels...very simple.
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Thursday / January 14, 2021
I have adjusted the measurements plotted on my longer-term charts in a manner that I believe will allow me to increase the typical size of my trades to a greater fractional portion of a standard Lot without reducing the confidence I have in them, while simultaneously doubling or tripling the average gains returned by each of my transactions.
The modifications were made for the purpose of transitioning to more of a structure-based style of trading, rather than the intraday approach I've been using for two years (and more).
That said, EURJPY looks to be more-or-less range bound, so that the asset will become a BUY if and when the candlesticks begin to paint a picture of a general ascent.
On the other hand, USDJPY’s day to day price flow turned bullish by just a tiny, tiny amount on January 8th (last Friday), so I will be looking to buy this pair as well if and when it too bottoms out. However, there is no way to know ahead of time where this is going to happen. It might take place anywhere between where the pair is now and 103.27. And yet, I also wouldn’t be surprised to see it happen anywhere between that mark and 102.64. But, to drop any lower than that, it seems to me the pair would probably have to turn bearish again, at which point, I would no longer be interested in buying it anyway.
USDCHF has been falling ever since the end of last September (or May of 2019, depending on one’s point of view). So ideally, I would love to sell the pair. Unfortunately, the time to do so was when it was in the neighborhood of 0.8913, where it was on Monday, Tuesday, and then again earlier today (Thursday).
But, seeing as how it has been climbing the last eight hours (from 0.8855) I will construe the next downturn in the hourly trend as my next best opportunity to enter a short position, that is, IF I am interpreting my forecast model correctly.
(P.S. The image above is NOT my forecast model.)
I have adjusted the measurements plotted on my longer-term charts in a manner that I believe will allow me to increase the typical size of my trades to a greater fractional portion of a standard Lot without reducing the confidence I have in them, while simultaneously doubling or tripling the average gains returned by each of my transactions.
The modifications were made for the purpose of transitioning to more of a structure-based style of trading, rather than the intraday approach I've been using for two years (and more).
That said, EURJPY looks to be more-or-less range bound, so that the asset will become a BUY if and when the candlesticks begin to paint a picture of a general ascent.
On the other hand, USDJPY’s day to day price flow turned bullish by just a tiny, tiny amount on January 8th (last Friday), so I will be looking to buy this pair as well if and when it too bottoms out. However, there is no way to know ahead of time where this is going to happen. It might take place anywhere between where the pair is now and 103.27. And yet, I also wouldn’t be surprised to see it happen anywhere between that mark and 102.64. But, to drop any lower than that, it seems to me the pair would probably have to turn bearish again, at which point, I would no longer be interested in buying it anyway.
USDCHF has been falling ever since the end of last September (or May of 2019, depending on one’s point of view). So ideally, I would love to sell the pair. Unfortunately, the time to do so was when it was in the neighborhood of 0.8913, where it was on Monday, Tuesday, and then again earlier today (Thursday).
But, seeing as how it has been climbing the last eight hours (from 0.8855) I will construe the next downturn in the hourly trend as my next best opportunity to enter a short position, that is, IF I am interpreting my forecast model correctly.
(P.S. The image above is NOT my forecast model.)
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Not only has the hourly trend not yet turned downward, but the readings on my forecast model are now indicating that I should stop watching for the pair to do so. Consequently, my previous plan has just been nullified.
But, all is not lost. It appears AUDUSD might be reorganizing itself for a BUY sometime within the next few hours.
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The reversal I was waiting for might be unfolding at this very moment (as of 8:20 a.m. PST). Too bad it's only a few hours before the market closes for the week.
Friday, January 15, 2021
Copyright © 2021 Fred Duckworth
Numerical Price Prediction is an approach to trading foreign currency pairs that I came up with based on five biblical principles:
Instead, I attempted to rightly interpret the signs of the times by devising a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability.
The idea was to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting.
But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; I evaluate the synergy (or "relationships") between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance, trend lines and market structure (which is to say, "a multitude of counselors that proved to be valid and reliable" over several weeks and months) all in multiple time frames—with the result being a graphical depiction (computer model) of current conditions that I could then use to help me make precise, well-timed trades (or in other words, "good choices based on rightly interpreting the signs of the times").
The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole.
I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles.
So, the notion that there are no "best" moving averages to use when trading is not one to which I subscribe. Again, at the heart of my system is the use of carefully selected baselines which I calculated in the manner explained above. (By baselines, I mean painstakingly selected moving averages able to rightly discern whether price is rising, falling, or maintaining its altitude within a particular time frame.)
However, it is not enough, in my opinion, to stop at merely determining which are the best moving averages to use when trading charts of a given time frame. To trade with the clarity and precision I desired required me to carry out one final step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope—to answer the question: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day?
Determining the specific moving average that best represented price movement for each of the major time intervals along with their corresponding price range envelopes seemed to be the final step I needed to carry out in order to complete the development of my trading system to my full satisfaction.
And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance.
In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions, it seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system.
As of today, when putting this system into practice, I switch back and forth between 240-, 60-, 15-, 5-, and 1-minute charts to get different perspectives, even though all of these time frames are basically configured with the same relative/corresponding measures.
I rely on the three-day baseline to convey the overall day-to-day market bias. However, this is not an actionable measure in a practical since in that it evidences far too much lag. So then, the highest time frame that is of any actual use in helping me decide in which direction to trade from a longer-term perspective is the 16-hour baseline (two-thirds of a day). I look to this measure in conjunction with 8-hour price flow (i.e., the slope of the 8-hour price range envelope). However, for a more immediate/finely tuned measure of price flow, I turn to the four-hour price range envelope.
As for where I watch for reversals, generally speaking, I anticipate them taking place at intraday statistical support/resistance, which is to say, at the four-hour price range support or resistance levels, and/or at the six-hour temporal support or resistance levels. (In this sense, the system incorporates aspects of mean reversion or regression toward the mean.) If these levels don’t hold however, I go to my backup, which is the eight-hour price range envelope.
The highest time frame of interest to me with respect to executing reversal-related trades is the four-hour baseline. To me, calculating reversal-related entry levels using the 16-hour and/or three-day measures would be like trying to perform surgery with a sledgehammer. From my perspective, attempting to operate in this manner with any kind of precision at all is virtually impossible.
However, for more immediate reversals, I’m interested in the one-hour trend. Yet, this measure evidences too much fluctuation to be trusted and must therefore be confirmed by the two-hour baseline. So then, perhaps what I am really looking for are reversals in the two-hour trend, using the one-hour baseline to help me recognize when such reversals have taken place (based on the slopes of the two measures and their positional relationships to one another).
At the "microscopic" level, I track the slopes of the 20- and 40-minute baselines, and I also monitor the 20-, 40- and 120-minute temporal (statistical) support/resistance levels. These measures are good for pinpointing pullback entry levels in the intraday trend and for detecting early indications of reversals in two-hour and four-hour sentiment/bias/price flow.
Copyright © 2021 Fred Duckworth
Numerical Price Prediction is an approach to trading foreign currency pairs that I came up with based on five biblical principles:
- The first being to test everything and hold fast to only those things which prove to be valid and reliable.
- The second was a belief that, as in life, when you have a system operating at peak performance, more often than not, it's at least in part due to the interactions between its various components evidencing strong, healthy relationships.
- The third is the fact that the best of plans are typically established in the presence of a multitude of counselors.
- The fourth is the necessity of being able to rightly interpret the signs of the times.
- And the fifth is that, once again, as with life itself, positive outcomes are usually the result of having made good choices.
Instead, I attempted to rightly interpret the signs of the times by devising a methodology similar to that used by meteorologist to predict the weather—one based as much as possible on statistical analysis and mathematical probability.
The idea was to gather and evaluate precise, up-to-date, quantitative data and use it to calculate the odds of price reaching designated values within a given time period by patterning the system's elements after the equations, wave functions, and computer models used in weather forecasting.
But, instead of monitoring wind velocity and direction, cloud formations, humidity, temperature, and barometric pressure; I evaluate the synergy (or "relationships") between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance, trend lines and market structure (which is to say, "a multitude of counselors that proved to be valid and reliable" over several weeks and months) all in multiple time frames—with the result being a graphical depiction (computer model) of current conditions that I could then use to help me make precise, well-timed trades (or in other words, "good choices based on rightly interpreting the signs of the times").
The system incorporates the idea of cycle theory, which holds that cyclical forces, both long and short, drive price movements, and can be used to anticipate turning points. It's also compatible with Edgar Peters' fractal market hypothesis, which views financial markets as fractal in the sense that they follow cyclical and replicable patterns—ones consisting of fragmented shapes that break down into parts which then replicate the shape of the whole.
I used these cycles to generate what some call "baselines" by conducting a thorough analysis to first uncover the cyclical waves formed in the wake of price action, followed by the defining of their general frequencies and magnitudes; and then finally plotting centered moving averages that came as close as possible to approximating the zero amplitude of the corresponding waves/cycles.
So, the notion that there are no "best" moving averages to use when trading is not one to which I subscribe. Again, at the heart of my system is the use of carefully selected baselines which I calculated in the manner explained above. (By baselines, I mean painstakingly selected moving averages able to rightly discern whether price is rising, falling, or maintaining its altitude within a particular time frame.)
However, it is not enough, in my opinion, to stop at merely determining which are the best moving averages to use when trading charts of a given time frame. To trade with the clarity and precision I desired required me to carry out one final step in which I assigned a specific temporal value to each individual baseline and its corresponding or associated price-range envelope—to answer the question: What moving average best conveys in which direction and by how much price moves every five minutes? Or every thirty minutes? Or every four hours? Or even every day?
Determining the specific moving average that best represented price movement for each of the major time intervals along with their corresponding price range envelopes seemed to be the final step I needed to carry out in order to complete the development of my trading system to my full satisfaction.
And yet, even after this "final" step, their emerged still another aspect to interpreting price action that proved deserving of my consideration which I had not envisioned at all—the concept of "temporal" support and resistance.
In other words, not only do I believe there is a certain amount of distance beyond which exchange rates will typically resist separating themselves from the central tendencies of key price distributions, it seems to me I have also observed that there is generally a limit to the amount of time exchange rates will advance in one particular direction without deviation. I refer to these limitations as temporal support and resistance, and they have proven to be a welcome enhancement to my system.
As of today, when putting this system into practice, I switch back and forth between 240-, 60-, 15-, 5-, and 1-minute charts to get different perspectives, even though all of these time frames are basically configured with the same relative/corresponding measures.
I rely on the three-day baseline to convey the overall day-to-day market bias. However, this is not an actionable measure in a practical since in that it evidences far too much lag. So then, the highest time frame that is of any actual use in helping me decide in which direction to trade from a longer-term perspective is the 16-hour baseline (two-thirds of a day). I look to this measure in conjunction with 8-hour price flow (i.e., the slope of the 8-hour price range envelope). However, for a more immediate/finely tuned measure of price flow, I turn to the four-hour price range envelope.
As for where I watch for reversals, generally speaking, I anticipate them taking place at intraday statistical support/resistance, which is to say, at the four-hour price range support or resistance levels, and/or at the six-hour temporal support or resistance levels. (In this sense, the system incorporates aspects of mean reversion or regression toward the mean.) If these levels don’t hold however, I go to my backup, which is the eight-hour price range envelope.
The highest time frame of interest to me with respect to executing reversal-related trades is the four-hour baseline. To me, calculating reversal-related entry levels using the 16-hour and/or three-day measures would be like trying to perform surgery with a sledgehammer. From my perspective, attempting to operate in this manner with any kind of precision at all is virtually impossible.
However, for more immediate reversals, I’m interested in the one-hour trend. Yet, this measure evidences too much fluctuation to be trusted and must therefore be confirmed by the two-hour baseline. So then, perhaps what I am really looking for are reversals in the two-hour trend, using the one-hour baseline to help me recognize when such reversals have taken place (based on the slopes of the two measures and their positional relationships to one another).
At the "microscopic" level, I track the slopes of the 20- and 40-minute baselines, and I also monitor the 20-, 40- and 120-minute temporal (statistical) support/resistance levels. These measures are good for pinpointing pullback entry levels in the intraday trend and for detecting early indications of reversals in two-hour and four-hour sentiment/bias/price flow.
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