From theory to practice. Part 2 - page 4
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For some reason a lot of people throw themselves into extrapolation. I think it's silly to predict chaotic movement (a non-stationary process).
Any trade implies prediction: it's not opening for a torch, it's opening for profit, so it's assumed that we know the future with some probability. Whether or not you draw some line into the future is irrelevant, there is still a prediction, just without the line it is in an implicit form.
But, for some reason, a certain A.G., a very strong mathematician working exclusively with trends, is now going into a steadily negative 3 months of trading.
Minuses in our business are inevitable. What matters is the drawdown and the statistics of equity recovery after it. If your drawdown was less than ten percent and the growth would then overlap it by several times, then I wouldn't say a word to you, I would just subscribe to your signal)
Therefore, the Koldun method kind of just has to work in the market.
Let's look at the AUDCHF charts for the past 3 weeks:
Alexander, can you show how the indicator works on a trend chart?
Yes, of course.
Here are the trades on EURNZD over the last 3 weeks:
Two are on the plus side.
But the first one was a disaster. Neither the moving average system nor the Warlock system could handle such a move...
And the price increments on the upper chart and the increments on the lower chart coincide?
If not, why should the price on the upper chart repeat the movements (forecasts) on the lower chart?
No, they don't.
Good question.
The idea of the bottom indicator is based on the fact that the set of sums of increments in the sliding window should form a Gaussian distribution. The well-known "bell" with a standard set of persentatives. When the sum of increments reaches the tail of the distribution, it will surely start to return to expected payoff =0. And the price behaves similarly. But, as we can see, this does not always happen, unfortunately...
That is another oscillator. Like other oscillators, it can stay in the overbought/oversold zone for a long time. Looking not to enter these zones, but to exit them?
Any trade involves a prediction...
A standard mistake all newbies make is relying on "predictions"...
Imagine a Businessman relying on predictions... How long will he stay in business?
ANY BUSINESS relies on a SETTLEMENT....
If the calculations are wrong, the downside is guaranteed... It is not the predictors who survive in business, but the clever and calculating businessmen...
No, they don't.
Good question.
Then another good question is why the Sum of Gains since the opening of a trade tends to zero, while price continues to move against it?
What is the Sum of Gains in dynamics is the arrival of a new value from the head and the departure of the last value from the tail of the sample.
The trend here is the lack of sample size, the system becomes blind. Suppose the sample size is 20 bars and price goes in one direction for 100 bars, it means that 5 times the indicator will signal for reversal.
That's the trick - price moves in certain channels, the sampling for which cannot be assigned arbitrarily.
I am absolutely convinced that there are only a few such channels in the market - whose sliding window sizes are predetermined and unchanging. These are trading session, day, week, month, year. Other samples are unacceptable.
However, this does not make the task easier. It is not an easy task to understand in which channel you should work now.
That is why I decided to use just one - a day.
And I have learned to take defeat calmly. Well, or almost calm :))).
If a day candle has a body - the sum of increments is not 0. If most of the day candles have bodies - apparently the window must capture at least several candles. Or the idea is unworkable.
I am absolutely convinced that there are only a few such channels in the market - whose sliding window size is predetermined and unchanging. These are trading session, day, week, month, year. Other samples are not acceptable.
That is, you have to determine by some magic way which channel you have to work in now and jump between them?
Ha ha, I once had a dream that you were posting pictures of a graphical system, and it looked like this:
Sort of like an incremental sum chart, but the value there was jumping from channel to channel and trading on its boundaries. ))