Market theory - page 3
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Briefly:
1. Yes, the market model covers 50 formulas next to which you have not even passed;
2. you won't see them or explain them - you won't understand with that understanding of the situation anyway;
2. Doesn't give a chance for systematic profits, that's not what it's designed for! We are the ones who adapted Forex to make profit. That is why it does not provide such an opportunity. Too dangerous venture. In a casino the probability of making a profit is greater. But, we do not give up and look for patterns for a stable income. But, as you can see, there is a possibility to make a profit of some points, for example 5 points of 50-100 pips of movement. This is a very large profit, I think. Not all of the movement is allowed to make a profit. This is an illusion.
You are wrong. Quite a large number of people make significant profits, which they have much more consistently than winning at the casino.
The remark that "there is a possibility of making a profit of a few pips from the whole movement" - thank you, KEP. I can even tell you the average value of a fraction of the profits from the entire movement that you can actually have, obtained empirically. Here, I wonder what your theory has to say about it, and how much our numbers will add up.
Hello, dear participants. Earlier I mentioned https://www.mql5.com/ru/forum/43014 that, I am developing a market theory. Finally, I think it has been developed!
Conclusions
1. The market at this stage is competitive, when the price deviates from the settlement line, it promptly returns to the settlement line, and the market tries to return to breakeven (equilibrium). Forex initially does not give a chance for profit. But, now, knowing the state and desire of the market, it may be possible to guess profitable actions. One can see how the market tried to return to the equilibrium (break-even) with one spurt, crossed it, and hit the equilibrium line exactly with the second movement. And the levels show that the market first entered and then, broke through the allowed levels. The next leg will show where it came to.
Hi Yusuf! Price movement theory.... I've been yammering on this topic for a long time - it amuses the community. Well yes the market tends to equilibrium the price is overbought oversold - trivial stuff.)))) But tell me why the price tends to go out of equilibrium? What is the theory for? - I'll tell you myself for building TA, and only then... (don't trade theory).
Oversold overbought will not work - look for other patterns.
why are you attacking the man?
Oh! Exactly!
I still do not understand what the author is suggesting.
So far I see a superposition of some random graph on some incomprehensible approximation. Conclusions are made - here, they say, the market is competitive, here is a monopoly. (Let's forget temporarily huge market size and doubt that such indicators cannot change so drastically, maybe the author means something of his own by these terms). The most important thing - the word "high-yielding" appears (and apparently, the word "low-yielding" is posited as well).
И ? What next? Let the author keep his know-how to himself, but he must show practical use and benefit! Where is it? Waiting ...
Now let's look at the whole period for the last 52 weeks (almost 1 calendar year): In general, the market remained competitive, theoretically not providing individual participants with profit opportunities over 7 points (four digits), but, as we see, in practice it is possible, due to creation of local monopoly periods by large securities and/or funds, to achieve profit up to +32 basis points, though at the expense of incurred losses of -22 points by others or by the same market participants. The price levels in the market are over a wide range, although optimal market levels for the US and Eurozone economies are in the 1.4135 (Copt) and 1.4533 (Cr) bands. However, dealing with temporary difficulties in the economy, the pair had to break through the "ironclad" lower level of 1.1153, where it soon returned.
Look - the usual definition of a break-even point is a volume-price pair. You have only the price. So you have some kind of special concept of the break-even point.
Secondly, everyone has different fixed and variable costs, yet your break-even point price is fixed for the entire market. Have you introduced the concept of "variable and fixed costs of the WHOLE market" ?
Well even from your charts it follows that you could sell below the C1 price and still be in profit. What kind of "break-even point" does this turn out to be ?
1. Volumes are needed if I want to make a profit in dollars, examining the pattern of income in dollars depending on the selling price of the commodity in the market in dollars. Since I operate in pips, I also make profit or loss in pips. The two break-even points are obtained as a solution to a quadratic equation that is part of the profit equation. Moreover, the discriminant turns out to be the difference between the squares of the market price and the optimal price. Therefore, the optimal price can never rise above the market price. These are the patterns of breakeven point formation for both a small shop and a huge forex market. That's it for now, to make a long story short.
2. It is not for me to teach you that the variable cost of buying a commodity is determined by multiplying income by the ratio of the purchase and sale price of the commodity. Forex variable costs are found similarly, and the income (loss) is taken as the difference of the opening price of the current week versus the previous week in pips.
3. I will answer later, sorry, time is running out.
Hello, dear contributors. Earlier I mentioned https://www.mql5.com/ru/forum/43014 that, I am developing a market theory. Finally, I think it has been developed! It describes in a single formula all types of markets, both monopolistic with free pricing, i.e. an ordinary market for goods and services, where everything is based on price competition and governed by the law of supply and demand, and monopolistic, where prices are dictated by a limited number of market players. I suspect that the abovementioned theory has also embraced Forex, moreover, in this case the nature of market can easily change from the first to the second type, but in general it does not differ from the usual market. I am not going to give away all the secrets of the development yet, but I will show the final results of the research to the best of my ability. Ask questions, do not rush to understand everything at once, I have been thinking for years, before I started to understand something. The entire theory is built around the patterns of profit in the market. The type of this relationship indicates the type of market that is operating at the moment or the time period in question. The convex (like the top of an egg, sorry for the platitude) shape of the calculated curve indicates a competitive (conventional) type of market. If the relationship is convex downwards, it is a monopoly market. There will be a graph of the level of the various prices operating in the market:
1. Price1 is the first break-even point;
2. Price2 is the second break-even point;
3. RR - market price (so far I have called it that);
4. Tsopt - the optimal price, which allows you to get the maximum profit;
5. Tspr - the marginal price when trade stops due to its unattractiveness.
6. Cf - actual price inside or outside the above price levels.
The analysis was performed on weekly opening prices from 11 05 2014. in chunks, by 12 weeks on the Euro/Dollar pair. Let's see what we get:
From 11 05 14 to 27 07 14:
ConclusionsY
1. The market at this stage is competitive, when the price deviates from the settlement line, it promptly returns to the settlement line, and the market tries to return to breakeven (equilibrium). Forex initially does not give a chance for profit. But, now, knowing the state and desire of the market, it may be possible to guess profitable actions. One can see how the market tried to return to the equilibrium (break-even) with one spurt, crossed it, and hit the equilibrium line exactly with the second movement. And the levels show that the market first entered and then, broke through the allowed levels. The next leg will show where it came to.
Where is C2 on the first chart?
1. Ts1 is the first break-even point;
2. C2 is the second break-even point;
It must be a level, not a point, if you are drawing the horizon.
Theoretically, there is also a breakeven point for the market as a whole. It is a volume-weighted average of open positions. And practically, the price at which the average profit on all longs and all shorts is zero. The problem is that
1. We do not know whether a specific trade is the opening of a new position or closing of an old one.
2. Not all trades and price changes are caused by speculative trades (which will necessarily close). Moreover, prices can change on FX without any trades
And the break-even point of the whole market is not particularly interesting. Because there are too many traders of different horizon and sensitivity to its deviation. The return may not happen. It's like with the MA, it seems to catch up to the price, but it's not the price that usually returns to it, but vice versa))
1. the volumes are needed if I want to make a profit in dollars by investigating the pattern of income in dollars depending on the selling price of the commodity on the market in dollars. Since I operate in pips, I also make profit or loss in pips. The two break-even points are obtained as a solution to a quadratic equation that is part of the profit equation. Moreover, the discriminant turns out to be the difference between the squares of the market price and the optimal price. Therefore, the optimal price can never rise above the market price. These are the patterns of breakeven point formation for both a small shop and a huge forex market. So far, so good, to make a long story short.
Then it is not clear how a break-even point can exist at all, we can make profit at any price.
Yousufkhodja Sultonov:
2. It is not for me to teach you that the variable cost of a commodity is determined by multiplying the income by the ratio of the purchase and sale price of the commodity. Forex variable costs are found similarly, and the income (loss) is taken as the difference of the opening price of the current week versus the previous week in pips.
Strangely, I thought variable costs was a different economic term.
For example, the purchase price is 100, the selling price is 200, the sales volume is 50, so the total revenue is 10K and the purchase cost is 5K. Therefore, the income is also 5K. If we multiply the revenue by the ratio of purchase price to sales price, we get 2.5K - but this is not a fact at all, we can have any variable costs, from 0 to 5K. Or do you mean by variable costs - the full cost of purchase? Then not "revenue multiplication", but "revenue multiplication". And we have variable costs and equal total costs. There are no fixed costs.
But, again - it is unclear how you get these costs without knowing the volume of purchases.
Then it is not clear how there can even be a break-even point; we can make a profit at any price.
Strange, I thought variable costs were a different economic term.
For example, our purchase price is 100, selling price 200, sales volume 50, so we have a total revenue of 10K, with a purchase cost of 5K. Therefore, the income is also 5K. If we multiply the revenue by the ratio of purchase price to sales price, we get 2.5K - but this is not a fact at all, we can have any variable costs, from 0 to 5K. Or do you mean by variable costs - the full cost of purchase? Then not "revenue multiplication", but "revenue multiplication". And we have variable costs and equal total costs. There are no fixed costs.
But, again - it is not clear how you get these costs without knowing the volume of purchases.
1. 100/200*10K=5K. By income, I mean total receipts. This is in the trade accustomed, for some reason, to understand revenue minus the cost of acquiring the goods sold, which is fundamentally wrong. Profit = Revenue - product costs - other variable costs - fixed costs. The other interpretation is not correct! From this premise is also derived the formula for profit depending on the selling price of the commodity, which does not fail, as already noted, for any type of market...
2. I have to go back to the basics of trading: Volume = revenue / realised price, if you are so interested in volume, I don't need it.