how to identify price reversal points - page 7
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andreybs: В чем вы видите разницу в поиске точек разворота тренда и поиске локальных точек разворота цены? Ведь разницы нет.
Mathemat: До сих пор не понимаю, почему тут обсуждаются только точки входа. А что, точки выхода не важны, что ли? Или тут рассматриваются только переворотные системы?
If there are pivot points, all you have to do is roll over into them. And you will be very happy. A pivoting TS - excludes exit parameters, which leads to a reduction in optimisation parameters, consequently a reduction in the probability of fitting.
The difference is very significant. Since there are many more pivot points than trend change points, finding them is correspondingly easier and the probability of finding the "right" points increases.
Right. The probability of "guessing" in case of a trend is much higher. But as the number of entry points decreases, the profit decreases. Unless you do not make large bets, which, as I said before, lead to large drawdowns, which does not happen with frequent entering with small bets. We are just talking about different types of strategies - trend and channel.
Now imagine that we took your approach as a base - we trade by trend, but we do not place all bets at once but little by little... Everything along the trend when the price turns in the direction of the trend. The drawdown is less, the profit is bigger, the risk is less. In my opinion, it makes sense.
What makes you think I'm not familiar with this method? I just use a channel-type TS and this method does not work for me.
We know for a fact that reversal points are, in the vast majority of cases, resistance/support levels.
The only difficulty is that we don't know these opposing forces(the forces of bears and bulls at the level), so at each level we should have been prepared for any development.
It is common knowledge that reversal points are, in the vast majority of cases, resistance/support levels.
The only difficulty is that we don't know these opposing forces (bearish and bullish forces at the level), so at each level one would have to be prepared for any development.
Quite right. So it is not enough to just follow the price. There is a hypothesis that the market is cyclical and these cycles manifest themselves also on small intervals. There are many non-linear filtering methods (digital signal processing, fast Fourier transform etc.) that allow to make short-term forecast about price behavior in the future. This allows you to build non-linear filters that just identify pivot points. They can indeed be associated with support and resistance levels. It's a good idea to use these levels as a filter for received pivot points to calculate entry points. I will definitely try to check this out. Thanks.
ZS: Can you suggest a good indicator of support-resistance levels? It would be easier for me to check it... because you can't check the filter by eye... )
I haven't met any trend indicator that becomes horizontal in the presence of a flat. The point is that the calculation period of a trend is always longer than that of a flat.
As it is, I will give you a chance to look at such an indicator. The green line is a bullish trend, and the red line is bearish. Above the adjustable level - trend, below - flat.
I agree. However, from experience and some evidence, a decrease in loss clearly leads to a decrease in profit. That is, reduction of losing entry points, leads to reduction of profitable entry points, because you will filter all points - both profitable and unprofitable, because you can not know in advance what kind of trade you will have, profitable or unprofitable. And reducing drawdowns is a matter of MM. Of course, moving towards conservative strategies not only leads to less drawdowns, but also to less profits. But it is rather a question of greed. How much do you want to earn?
You know, it is more correct to say not how much I want to earn, but how much time I am willing to spend to support a stable earning MTS (I do not trade manually). So, I want to create MTS, which will take me maximum 1 hour per week. At the same time it should stably bring profit. You see, I wouldn't trust robot to trade with big lots, so trend catching is not really what I want.
As for the relationship between losing trades and number of market entries, they are naturally directly proportional to each other (and maybe not linearly). But there are a lot of ways to reduce losses (stop loss, trailing, correct exit points...). I'm going to use them all. I've seen how the MTSs work in the championship. I'm sure that if someone was able to achieve such success, so can I. It's just a matter of time... )
Above the regulated level is trending, below is flat.
In your case (chart), it is not a flat, it is a bear and bull fight (resistance level). How this bickering will end, we don't know. The price may continue to move down, or it may bounce back up.
We can see a similar level on the chart just above (1.6100), where the bears failed on their first attempt.
All right, I will give you a chance to look at such an indicator. The green line is a bullish trend, and the red line is bearish. Above a regulated level - trend, below - flat.
It is difficult to judge an indicator by a single picture. Apart from an adjustable level, what parameters does it have? I have not found the USI indicator on the web - is it your development?
The whole point is that a flat is bound to be associated with a scale (study period). That is, within a given period, the cumulative price movement tends to zero.
One more thing - this indicator allows to estimate the strength of a trend, but not the presence of a flat. Look, where there should be a flat, the indicator has gone beyond the adjustable level.