Your Market Beliefs - page 8
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MiniMe
I was not looking for AN answer, but your personal take on the subject. Seeing how your beliefs are based in part on cycles I though you could explain more on the subject. I could do a Google search myself that was not what I was asking.
KeitI did answer but then changed the text, because FFL give the link to the thread and there is much more info in there than I can summerize in a single post
how I see it , might be different than what another trader sees it but if you wish to know I use different settings for digital filter and treat them as MTF ... that way you can define the short trend and the long trend ...and they have been very accurate with me
Looks like your lines are not drawn in the right places
I guess that depends on what "right" is. It's all a matter of interpretation.
Price moves in a 100% random way.
Only recently you were trading price action and putting a big emphasis on things like the direction of the asian market overnight can give an indication of the potential direction for the day etc.
If someone had of said to you that price moves in 100 percent a random way I am confident you would have passionately argued your point with them Igor so why do you now state this randomness as a fact and not just as your opinion?
Are you 100 percent confident that the information at your disposal is far superior to anything anyone else has access to?
Not looking to argue but I find this interesting.
Cheers
FXP
Looks like your lines are not drawn in the right places
Cockeyedcowboy,
His lines were drawn exactly at the right place...with 2 trendlines he projected the exact TIME of a high..This is a technique known as reversal
projections(others call it reversal magic)...sometimes it works,other times it doesn`t
Regards
Simba
how I see it , might be different than what another trader sees it but if you wish to know I use different settings for digital filter and treat them as MTF ... that way you can define the short trend and the long trend...and they have been very accurate with me
Thanks for the reply, that statement says a lot to answer my questions.
Thanks
Keit
Simba,
Long time no talk... good to see you. If I'm not mistaken, the time projection (or, reversal projection as you called it) is based on fractal geometry. Supposedly, the secret key to unlocking the mystery of the markets.
Cockeyedcowboy,
His lines were drawn exactly at the right place...with 2 trendlines he projected the exact TIME of a high..This is a technique known as reversal
projections(others call it reversal magic)...sometimes it works,other times it doesn`t
Regards
SimbaYes I've seen it before. I have also seen the reverse used and thats where I was going. I saw his down trend in a different place the top line on my chart may not be true as more data would be needed. If you have two trend lines on differening time frames then when one brakes you can project the intersection to the higher time frame. works some times other times it doesn't.
Keit
Persistence and Kurtosis
I beleive some are missing the point of what is random. My post of last night Hit on the supject, in a round about way. Let me say more, if one were to use a computer to generate a truly random time series with open highs lows and closes it would look feel and taste just like any market derived time series, with its trends ranges cycles etc.. This computer generated data study would have no out side infulances to effect it but it would still have all the qualities of a real price series including all the elements that you are claming to be not random events.
If one studies gameing theries one would realize that to get a run of say 20 red numbers in a row in roulette is in fact possible and anyone betting against the 21 number not being red is still 50/50 (not counting the zeros). but with a run of 20 reds I would be real hesitatent to bet on black to show, This is what is known as a run (trend) in numbers and they can presists. This can and does happen in any fair and random game of chance.
KeitKeit,
Good reply to my previous post
...yes,you can do it trough different points,sometimes it works ,sometimes it doesn`t...because we don`t know the points to chose beforehand.
Mr Marketz,Keit
You can generate a truly random time series that looks like an actual time series of forex prices...BUT,when estimating the Hurst exponent of both you will inmediately detect which one of the 2 is the random one and which one is the real one,as long as you have enough samples of each(1 week of h1 prices is not enough
)......why?
Because the Hurst exponent of the Forex time series will be around 0.9 and the H exponent of the computer generated one will be around 0.5....and this means that the Forex time series shows persistence in time,while the random one doesn`t...
In case of comparing actual dice or roulette runs of live series,you won`t detect that difference (unless roulette has some mechanical problem that biases it )because both time series(dice,roulette...vs computer generated) are random....and both will have H exponents near 0.5
That is what zupcon was saying to iGor when he talked about kurtosis...markets can`t be random if there is kurtosis,and this was proven by Benoit Mandelbrot....if there is kurtosis(fat tails) the distribution can`t be normal and having persistence means that the changes in price are not random...this doesn`t mean that they are predictable either.
You can check the attached picture,and see that a 30 years data series of the deutsche mark has a Hurst exponent of 0.9762 showing extreme persistence(top left of the pic)...and that there are extreme differences in the bins(kurtosis) when compared with normal distribution.
You can test your own series of data(link is at the pic Fractal Statistics ) ,download all history on D1 or W1 for your favourite Forex pair...and check the Hurst exponent and bin vs normal..you will see very similar results to those of the deutsche mark...then you can generate a true random set ,trough excel..and you will see that the H exponent is nowhere near 0.9...it will be near 0.5....then you can just estimate the H exponent for short periods of price data,and you will see some of them with H= approx 0.5(randomness) ,others with H= approx 0.9(persistence) and others with H= approx 0.1(antipersistence)
So,in the long term,price changes in markets are not random....(persistence means non randomness) and they don`t follow the Normal Distribution of probability ..what are them?They are chaotic..and they follow a very different probability distribution,one with long tails,where the unexpected can happen more often than our common senses(and the Normal distribution of probability) can imagine...a couple of weeks ago we had 1 day with 2000 pips range in GJ,we are seeing almost on a weekly basis,one day or two with >10% moves in SP500 and major market indexes....which according to normal distribution of probability could happen only once every 10 thousand years,and we are not THAT old
....
BTW,I am trying to reply to Marketz question and post support for my arguments,which is based on chaos and fractals...and if anybody is willing to learn more about this interesting area...here is another link
Fractal Geometry
Markets are like water,they can show 3 states(liquid(water),solid(ice),gas(vapor))..so, markets are persistent (if enough history is considered),random(for short pockets of time) or antipersistent(for short pockets of time too)...you can play trends and forget for 30 years,or you can look for pockets of predictability by finding either short term persistence ( trend following gives you a probability edge in this case) or short term antipersistence(oscillator or cycle trading,selling breakouts,buying breakdowns...give you a probability edge),or,if you don`t find this pocket of predictability,you can devise a good strategy trough the proper use of MM(like iGOr or Marketz seems to be doing) and make money from it.
Regards
Simba
Marketz
Marketz,
Some feedback?
Am I converting you to the true chaotic religion?
Or are you triangulating trendlines to find the next turning point?
....then you are doing right...if there is antipersistence 
So,do you still think markets are random?
Or could it be that they change their "state"..from random,to trend,to range trading?
So,we need to define first which is the state? then,next,use the right tools for that state?...Think about it...and ,please,post your comments.
Regards
Simba
Simba, very impressive analysis.
BTW, I use 3rd party statistical software as well. Just finished a week training on the use of the software which is used in cutting edge medical applications. It is amazing the type of distribution curve in today's software. Most of which I have no idea what is being done to make the curve fit, but as long as the professor and designer of the software is up to date with the latest educational releases, it's no problem for me.