Probability Bands

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Quote from protradingsys:

Here is the last 6 trading days Probability Bands for Dow Jones.

On 5/10 First major low made at 95% level, which held two other times for nice scalps.


On 5/12 Notice on the first 2 and the 4th leg down the probability bands held and there was a small, small, and large reversal.
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5/10 without clear rules on stops and profit targets you can clearly see that price behavior continued to move lower thus stopping you out on several occassions.

5/12 is a repeat of the 10th. you could have easily used sigma or even BB bands to point that out.

what entry and exit rules go with your system?
how did you do with it on the above days mentioned.
so far i just see price moving up and down back and forth through your green lines but you have not given any data as to the precise entry and exits for the days mentioned.

so without the BS can you tell us what rules you use for entry and exit including profit targets?
 
you do not need any additional software as you mentioned in order to compute the probability bands especially since you are calculating them using the 'close'.

simply substitute the MA for the close using the standard deviation formula and.........youve got probabilty bands!

as for the 'volatility' you speak of.
well we all know what measurement of volatility is used dont we?

answer: average true range.
atr is a good source of historical volatility calculation.
implied volatilty is not as useful IMO.

now do you want to come clean or do i have post the actual calculations for your 'probability bands'?:mad:
 
Yes Guardian,

Would you do that, Please?

Michael B.


Quote from Guardian Angel:

you do not need any additional software as you mentioned in order to compute the probability bands especially since you are calculating them using the 'close'.

simply substitute the MA for the close using the standard deviation formula and.........youve got probabilty bands!

as for the 'volatility' you speak of.
well we all know what measurement of volatility is used dont we?

answer: average true range.
atr is a good source of historical volatility calculation.
implied volatilty is not as useful IMO.

now do you want to come clean or do i have post the actual calculations for your 'probability bands'?:mad:
More...
 
Quote from Guardian Angel:

you do not need any additional software as you mentioned in order to compute the probability bands especially since you are calculating them using the 'close'.

simply substitute the MA for the close using the standard deviation formula and.........youve got probabilty bands!
More...

LOL. Don't know what else to say to the above.

Quote from Guardian Angel:

as for the 'volatility' you speak of.
well we all know what measurement of volatility is used dont we?

answer: average true range.
atr is a good source of historical volatility calculation.
More...

Yes it is useful in the Keltner channels but again these are not bollinger bands or keltners. I've posted many examples which show what a 'typical' band looks like. Ours do NOT change during the day.


Quote from Guardian Angel:

implied volatilty is not as useful IMO.
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Well I guess Kevin Haggerty who used to run Fidelity is full of BS. LOL.

Quote from Guardian Angel:

now do you want to come clean or do i have post the actual calculations for your 'probability bands'?:mad:
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Go ahead, post the probability band formula. The formula is worthless without the volatility data and on 1,400+ stocks it costs $840/mo. Haggerty sells these bands for $150/mo. I used to manually calculate them every day for the S&P's, NASDAQ, Dow and about 14 sectors, it is a royal pain to do so. Imagine how much time it would take to manually calculate 1,400 stocks probability bands each day and draw them on 1,400 stocks.

The fact is few people know about these bands and that is one of the reasons I decided to post here. Guardian Angel definitely doesn't know the formula as they have nothing to do with Average True Range or moving averages or keltners. And even with the formula its too much work to do every day. Even though they worked I often didn't calculate them do to getting into the office late (lived in California at the time).
 
Hey Folks:

Once again I am stunned at the way people ignore good advice. Here is the reference for the probability bands:

http://www.tradingmarkets.com/yahoo.site/stocks/education/traders/735E5C5074454359425D7158584A25131E

I can't wait to hear how it "transforms" your P&L.

Steve46:cool:

By the way, implied volatility is available from a number of sources including the CBOE and www.ivolatility.com
When Kevin first came out with this approach, he used to calc the individual stocks on a spreadsheet. If anyone wants to automate this procedure, they can pick a group of stocks (Dow30 for instance), start a spreadsheet and print it out every morning before the markets open. Would you like Ketchup with those fries?
 
Quote from protradingsys:


The fact is few people know about these bands and that is one of the reasons I decided to post here.
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The other reasons being . . .
 
Hey:
This is just one opinion of course, but I would not be using bands for trend following. Moving averages are really the way to define a trend. I use the 8 period weighted average on weekly, daily and intraday (60 min, 15 min) charts. As the character of the market changes seasonally I will move the average to 5 period (summer season) but the method remains the same. This serves to organize my approach, defines trends on each time scale and keeps me out of bad trades. What more can I say?
 
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