Numerical Price Prediction (NPP) Observations

[expiated]

According to Michael Sincere (and I guess many, many others), Jesse Livermore was a brilliant trader. But I'm not so sure, given that Sincere also writes that Livermore lost all his money. A biography by Holt, Rinehart and Winston states that on three separate occasions he was in so much debt that he declared bankruptcy (but instead of walking away from the debt, which the law permitted him to do, he always repaid those he owed in full).

Though The Robust Trader states, "Jesse's wealth was estimated to be over $100 million when he died in 1940" (roughly $2 billion in purchasing power today), the above mentioned biography indicates that, with another bankruptcy on the way, he died by his own hand, committing suicide not long before Christmas.

(On Thanksgiving day, November 28, 1940, just after 5:30 pm, Livermore fatally shot himself with an Automatic Colt Pistol in the cloakroom of The Sherry-Netherland hotel in Manhattan. ~Wikipedia)

Sincere says that when Livermore lost his money, it was often because of a strategy he used called "plunging" (with his other two strategies being pyramiding and probing). Personally, I really like using the plunging approach in my Nadex demo account as a means of testing whether I've achieved acme in interpreting my system's models. I've set my defining milestone as using plunging to multiply a $10,000 trading account to $100,000 in short order, which I have yet to accomplish.

The closest I've come to date is $70,000. However, with the system having now been fully developed, my plan going forward is to record key thoughts about its implementation to assess which among them seems to hold the greatest profit generating power, and to see if I can't use these observations to help me finally reach the level of acumen I've set as my goal.

That said, AUDUSD is certainly currently day-to-day bearish, but according to my daily charts, I should see its rate retreat from the 0.6272 level should it happen to fall that low during this 24-hour market cycle, so that an in-the-money binary option call contract with a strike price below that level "should" still be in profit territory 15 hours from now...

 

[maxinger]

huh? Your 41st Journal?

 

[expiated]

For me, 15 hours is an awful long time to have to wait to know the outcome of a given contract. It also severely limits the number of money-making opportunities in any given 24-hour market cycle. Nadex DOES offer five-minute contracts (on Forex derivatives) but the risk/reward structure on these instruments is so terribly odious that, in my case, they are a total nonstarter.

Consequently, in the past I've mainly traded the back half of Nadex two-hour binaries. However, my latter forecast models might make it possible to successfully navigate 20-minute contracts (which Nadex now offers for the major indices) using 15-minute charts. Yet, because the two time frames do not match up exactly, it might prove more difficult to do than I'm thinking, if it is workable at all. In any case, based on my 15-minute charts, I'm hoping that US Tech 100 (the Nasdaq) will still be above 15000.2 when the 20-minute contract expires 10 minutes from now...

 

[expiated]

Of all the pairs I follow, at 8:00 AM PST GBPJPY seems to be trending the best from hour to hour. I'm therefore thinking it has the best chance out of all of them to still be in-the-money an hour from now if I purchase such a contract with a strike price at 181.94...

On the other hand, as I take another look at the one-minute chart, it occurs to me that the pair is losing momentum in the sense that the high on the last three one-hour candlesticks has been the same, so that I'm now not so sure that this was such a great idea after all. From now, I need to make this comparison of the highs (or lows, as appropriate) beforehand!

UPDATE: Yes... GBPJPY has reversed its 20-minute trend, which told me to bail on my long position and enter a short position with a strike price of 182.150 instead. Had I not been monitoring my charts, I would have ended up with a major loss, which is why putting on trades and then walking away remains unworkable for me; and now that I will be renting an office where I can do all my trading during whatever hours I wish for as long as I wish, this should no longer present the problem it's been in the past.

 

[expiated]

Because the two time frames do not match up exactly, it might prove more difficult to do than I'm thinking, if it is workable at all.

So then, you might want to wait for the formation of a new 15-minute candlestick, and then look for any 20-minute contracts that might lead to profits with the time remaining. At the top of the hour won't work, because more than 15 minutes would be left. Also, you would probably almost never trade 15 minutes after the hour (if ever) because only five minutes would remain

This leaves 30 minutes after the hour, when ten minutes would be left on a 20-minute binary option contract, and 45 minutes after the hour, when 15 minutes would be remaining.

 

[expiated]

See how often this works when trading foreign currency pairs...

When the 30- and 45-minute price flow is clearly headed in one direction, and the corresponding rate pulls back to the opposite side of the 10-minute price range channel at 0.09% deviation, enter a position in the direction of the dominant trend as price begins to come out of this potentially temporary pullback, taking profit if and when candlesticks reach the opposite band of the channel at that same level (0.09%).

 

[expiated]

When the 30- and 45-minute price flow is clearly headed in one direction, and the corresponding rate pulls back to the opposite side of the 10-minute price range channel at 0.09% deviation, enter a position in the direction of the dominant trend as price begins to come out of this potentially temporary pullback, taking profit if and when candlesticks reach the opposite band of the channel at that same level (0.09%).

I was revisiting my four-hour charts to see if I had one that projects the maximum length of four-hour candlesticks so that I might refer to it when purchasing Nadex's Forex derivative two-hour binary option contracts in the same way I'm using 15-minute charts for trading US Index 20-minute binary options.

But, as I modified the best suited chart so it would be expressly customized for this purpose, one thing kept leading to another until what I ended up with was a configuration (making exclusive use of proprietary indicators) that looks like it highlights weekly high/low points in the three-day price flow, much like the description in the post quoted above suggests that the ten-minute price range channel at 0.09% deviation can be use to highlight highs/lows in the 30- to 45-minute price flow...

Four-hour chart with weekly highs and lows in the three-day price flow:

If true, this would ideal for trading Nadex weekly knock-outs. Accordingly, I'm hoping my plan to start trading full-time beginning next week comes to fruition so I can start trying this out.

 

[expiated]

In comparing the nine matching trigger signals on the four- and one-hour charts below, note that if a trader entered a long position based on the fifth signal, it would have been an unprofitable trade. This recommends waiting until one actually witnesses a reversal in the (dark slate blue) intraday trend before opting to submit one's order (in the case of the first signal, the one-hour price flow did not really change direction until five hours later); or in the case of trades seven and eight, where there wasn't much of a pullback...waiting until candlesticks cross back over the (purple) eight-and-a-half hour baseline.

The next comparison seems to show that fully-fledged reversals in the day-to-day trend are confirmed by the eight-and-a-half hour baseline, with the greatest odds of corresponding trades leading to success if positions are entered above or below (or very near) the upper or lower band of the dynamic/adaptable one-and-a-half day price range envelope, as appropriate—especially if this converges with the (thin black) upper or lower band of the adaptable three-day price range envelope on the four-hour chart, as in the third instance.

 

[rb7]

No offense, but you should start a blog.
A forum is not meant for the way you are using it.
A forum is meant for people to interact with each other on specific topics.

 

[expiated]

No offense, but I started this in Journals, and ET defines a journal, at least in part, as "a place to maintain a daily [record] of wins, losses, personal thoughts and anything else related to [my] quest of becoming a better trader," and this is exactly what I am doing.

ET also defines itself as a group of 115,000 plus financial traders that have meaningful conversations to help each other learn faster, develop new relationships, and avoid costly mistakes. It would be wonderful if this had been the bulk of my experience. But unfortunately, my interactions have primarily been with numerous trolls who have no idea what the heck they are talking about, use language plagued with vulgarity, and love to engage in pointless arguments full of profanity and ad hominem attacks.

If someone like BlueWaterSailer, Robert Morse or rb7 wishes to offer information about trading stock options, starting a proprietary trading firm, or ceasing to incorrectly refer to the trading desks at multinational banks, big hedge funds or proprietary trading firms as "market makers" (as I was hearing so many others do), you will find that I have engaged their posts without a problem.

Nonetheless, given that I have developed what I claim to be a profitable trading system by NOT listening to the likes of Xela and those like her/him; and did so thanks in large part, perhaps even primarily, to journals just like this one; which was facilitated by putting all the (in my opinion) disrespectful individuals and folks who seem to thrive on engaging in blather on ignore so as not to be overly distracted from my quest(s) to take NPP to levels I wasn't even originally considering; I will continue to work on this journal and the one I started on options so long as it's okay with Baron.

If it's not okay with you, go ahead and put me on ignore. I won't mind, and I won't take offence.