Currency Heat-map EA - page 9
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How FX Neural Network Predictor works.
Hello !
I wanted to talk about how my indicator works. there is a lot of material about neuro networking on the net and many forums providing basic mt4 code to develop a working system.one of them is here : How to build a NN-EA in MT4.
There is a lot of material in the russian language that if you use google translator you can learn a lot about predicting price using neuro networking. this is nothing new really. stock and commodity traders have been testing and using such systems to predict may diferent sectors. Many universities studies have been done on the subject exclusively on the forex. Nasa uses it to control plants enviroment and tell which plant should be planted where and under what condition depending of the specie.
It could be said that neuro networking is what AI(artificial inteligence) is all about. NN is a way to mimic a brain and not nescesarily the human brain. Neurons are interconnected and each receiving ,procesing and sharing information to the whole, to then result in a final output. each neuron would be resposible to perform a task. neurons are grouped into layers,ie input layers, hidden layers and output layers; all interconnected. NN is non linear and thus my interest on appliyng to the market. it can resolve complex equations , it can identify complex and repeating patterns of whatever you feed into the input layer of the NN; let it be complex statistics of a product to be sold in the future by a company, wheather reports , humidity, plant specie,soil, oxigen in order to resolve which envioroment should be most suited of a particular kind of plant, or just simply feed the NN with confusion as you see on a eurusd price chart. The uses are endless, You must know there is software to recognize a finger print, or even face recognition, or how about voice recognition? these are all NN at work! yes its been in use since about two or three decades.
Now, lets get into the heavy most exiting thing Nn can do for all of us, traders, investors,etc. price prediction!
What I do with this indicator is categorize each time span(daily week month etc..)into price pattern numbers (30). then I take the previous completed pattern (day, week etc..) and look it going back x periods of time(years, months, etc..) and see how many times my previous day pattern repeated itself. When I find it let say yesterdays pattern was a p20, I'll look p 20 on H1 going back to 2007-2006 and count it how many times i have p20 on H1, while I do that , I will also see and record which pattern occured next day. ie: one week ago i find p20,on the 15 may 09, ok I will look what happend on day 16 may 09 and note which pattern traders responded to p20 on the previous day. lets say it is p3, p3 will be noted and counted including p3 day's high,low and pips from days open to days high and days low, weather p3 is an uptred, downtrend or sideways. all that info will be recorded for each pattern of the next day we find each time we find p20 going back two years ago.
I will compile a database of all 30 possible price pattern going back 2-3 years ago that occurred on the next day each time I found a p20. because I counted how many times each next pattern occurred, then I can take the 3 most repeating patterns. let say I find that p20 repeated itself 120 times. out of that I find that p3 happened 45 times, p19 12 times and p5 11 times.
then I will compute an average of all the highs of p3 and all the lows of p3 (45 highs and lows)and plot it on the chart:thick green and red lines. then take an average of the trend for p3, out of all 45 p3 i will find the average up down or sideways and put it on screen. I will repeat the same for the second and third predicted patterns p19 and p5 and plot those levels on screen. at the end what I have is , and here is the philosophy behind all this and the ovbious comes to view thanks to using Neural Net:
I find patterns of trading behaviour. you see, traders act in one way, who knows really why ,let it be emotions, news, rate cuts, international events, hidden info, market makers, financial crisis, etc. The thing is that using this, we know there is some high level of hidden order behind all the bs we are led to believe on TVs and Newspapers. When you take yesterdays finished pattern and look back , we are looking if in the past, traders behaved in the same way. if we do, bingo! that means we can have some sort of trading behaviour prediction for today. if we have p20 repeated itself several times before, then we know yesterdays behavior is well known and can be tken advantage of. if we also find that each time traders behaved like yesterday in the past , the next day they responded with another partcular repeated pattern on its own, then BINGO! another piece on our puzzle we are trying to put together, you see. once you do that with 3 or 5 most repeated trading behaviour of the next day after p20, then you can have a nice idea of where traders will drive prices to todays highs and lows, and most of the times, it works!!!
Using your own tools strategies and what not, you can then adapt this tool to your arsenal and better prepare yourself to trade todays market.
Hope this help.
Al Castillo
Hello !
I wanted to talk about how my indicator works. there is a lot of material about neuro networking on the net and many forums providing basic mt4 code to develop a working system.one of them is here : How to build a NN-EA in MT4.
There is a lot of material in the russian language that if you use google translator you can learn a lot about predicting price using neuro networking. this is nothing new really. stock and commodity traders have been testing and using such systems to predict may diferent sectors. Many universities studies have been done on the subject exclusively on the forex. Nasa uses it to control plants enviroment and tell which plant should be planted where and under what condition depending of the specie.
It could be said that neuro networking is what AI(artificial inteligence) is all about. NN is a way to mimic a brain and not nescesarily the human brain. Neurons are interconnected and each receiving ,procesing and sharing information to the whole, to then result in a final output. each neuron would be resposible to perform a task. neurons are grouped into layers,ie input layers, hidden layers and output layers; all interconnected. NN is non linear and thus my interest on appliyng to the market. it can resolve complex equations , it can identify complex and repeating patterns of whatever you feed into the input layer of the NN; let it be complex statistics of a product to be sold in the future by a company, wheather reports , humidity, plant specie,soil, oxigen in order to resolve which envioroment should be most suited of a particular kind of plant, or just simply feed the NN with confusion as you see on a eurusd price chart. The uses are endless, You must know there is software to recognize a finger print, or even face recognition, or how about voice recognition? these are all NN at work! yes its been in use since about two or three decades.
Now, lets get into the heavy most exiting thing Nn can do for all of us, traders, investors,etc. price prediction!
What I do with this indicator is categorize each time span(daily week month etc..)into price pattern numbers (30). then I take the previous completed pattern (day, week etc..) and look it going back x periods of time(years, months, etc..) and see how many times my previous day pattern repeated itself. When I find it let say yesterdays pattern was a p20, I'll look p 20 on H1 going back to 2007-2006 and count it how many times i have p20 on H1, while I do that , I will also see and record which pattern occured next day. ie: one week ago i find p20,on the 15 may 09, ok I will look what happend on day 16 may 09 and note which pattern traders responded to p20 on the previous day. lets say it is p3, p3 will be noted and counted including p3 day's high,low and pips from days open to days high and days low, weather p3 is an uptred, downtrend or sideways. all that info will be recorded for each pattern of the next day we find each time we find p20 going back two years ago.
I will compile a database of all 30 possible price pattern going back 2-3 years ago that occurred on the next day each time I found a p20. because I counted how many times each next pattern occurred, then I can take the 3 most repeating patterns. let say I find that p20 repeated itself 120 times. out of that I find that p3 happened 45 times, p19 12 times and p5 11 times.
then I will compute an average of all the highs of p3 and all the lows of p3 (45 highs and lows)and plot it on the chart:thick green and red lines. then take an average of the trend for p3, out of all 45 p3 i will find the average up down or sideways and put it on screen. I will repeat the same for the second and third predicted patterns p19 and p5 and plot those levels on screen. at the end what I have is , and here is the philosophy behind all this and the ovbious comes to view thanks to using Neural Net:
I find patterns of trading behaviour. you see, traders act in one way, who knows really why ,let it be emotions, news, rate cuts, international events, hidden info, market makers, financial crisis, etc. The thing is that using this, we know there is some high level of hidden order behind all the bs we are led to believe on TVs and Newspapers. When you take yesterdays finished pattern and look back , we are looking if in the past, traders behaved in the same way. if we do, bingo! that means we can have some sort of trading behaviour prediction for today. if we have p20 repeated itself several times before, then we know yesterdays behavior is well known and can be tken advantage of. if we also find that each time traders behaved like yesterday in the past , the next day they responded with another partcular repeated pattern on its own, then BINGO! another piece on our puzzle we are trying to put together, you see. once you do that with 3 or 5 most repeated trading behaviour of the next day after p20, then you can have a nice idea of where traders will drive prices to todays highs and lows, and most of the times, it works!!!
Using your own tools strategies and what not, you can then adapt this tool to your arsenal and better prepare yourself to trade todays market.
Hope this help.
Al CastilloNice work. Wish you all the best.
Another EURUSD PROJECTION AUG. 14,09 with NN
Here is another eurusd chart i like and bought eurusd to the predicted price. lets see how that goes at the end of the day.
Good luck!
Al
Do you have any experience with classification models?
Another usdchf chart with projected high/low with NN
Here is anoche shot of usdchf for today(Aug.14,09), Im selling usdchf to the predicted price, fxindex shows its base and secondary currency is weak and there is a high prob. that pedicted price will happen.
nice day!
Al
Do you have any experience with classification models?
Hi Biddick,
If classification models is a subject by itself, no, i dont really know exactly what that is although sounds familiar to what im doing now whith NN. I just have experience trading FX for over 5 years and recently Im leaning towards non-linear aproach to the market and this is where i got so far.
Al
Nzdusd predicction working so far.
Here is the sreen shot of a buy order to get to the predicted price on nzd. fxindex confirm strenght on both second and base currency confirming the probability of reaching the projected high of the day. the prediction was done using 15m,30m, and 60 data to predict todays h/l.
Next screen is a new prediction based on using four timeframes to predict todays highs and lows. I bought gbpusd after careful analisis of those levels and fxindex. here is whats going on so far.
This is very intense work you are doing here. I use a combination of trading strategies from currency group trading to hedged pairs trading. i have been trading this way a couple of months and averaging +500- +1500 pips a week as a extremely novice trader. I would like to add this to my trading arsenal to improve entries and exits. I don't like some of the DD. Was wondering if it could be modified to work with IBFX pairs. I really do not want to change brokers. They owe me some money.
From when i first started trading.
This is very intense work you are doing here. I use a combination of trading strategies from currency group trading to hedged pairs trading. i have been trading this way a couple of months and averaging +500- +1500 pips a week as a extremely novice trader. I would like to add this to my trading arsenal to improve entries and exits. I don't like some of the DD. Was wondering if it could be modified to work with IBFX pairs. I really do not want to change brokers. They owe me some money.
Hi Tony,
thanks for the comments,I didnt quite get exactly what would you like to change to work on IBFX. you mean the predictor tool? I dont think I would have to change anything really. I'll test it and see what happens.
Al
that could works like EA