Formalising common approaches to trading - page 6
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Then let's keep in mind that we are witnesses in the market and events happen without our participation or presence, we always have to investigate what is in the form of numbers before they happen, nothing more.
Definitely without our involvement).
Then, we should behave accordingly and we should not philosophise, but look for possible patterns missed by the perfect market.
Then, we should behave accordingly and we should not philosophise, but look for possible patterns missed by the perfect market.
yes, the only question is where to look and what is realistic from what we find ;)
Our task is to jump in and get off the train, and the rest of the time we can philosophize about the technical characteristics of the train.
Yes, there are two ways to enter and exit - either limit or market (stops are also market). If you enter/exit using limits, you should do it before support/resistance levels - a high concentration of other people's limit orders. If you enter/exit using the market, you should enter/exit during the initial moments (or at the beginning of stop concentration zones) when a significant number of orders are thrown to the market. We only need to learn to identify these zones on the basis of past prices :) There are elementary price actions such as extremums, impulses, etc. that tend to form certain liquidity/drive zones. The issue here is not only psychology/stereotypes - people are used to speculation, but the trading organization itself.
I have a toy script that uses some simple rules (looks at 1-3 bars) and models accumulation/absorption of frames at different levels. Here's a video with an example of it working:
Basically and classic TA with its figures like double tops or head and shoulders are configurations of certain order accumulation zones. And their trade is an attempt to use them. Such zones are of course quite local and their use is better within more global forms of position accumulation/fixation often called a centime. In the classic TA also such zones can be used, but in a rather primitive form: such as reversal or continuation figures, which means filtration by the trend preceding the occurrence of the figure. Then the pattern or more exactly the order concentration zones become a trigger for the beginning of the change from the global process of accumulation to fixation or continuation of accumulation.
And of course, the specific character of certain markets imposes certain peculiarities on this process. For example, the time of day on FX strongly influences the liquidity distribution and the release of market orders. And the schedule is especially changeable and specific.
>By the way, what do you think of this approach: you need to separately consider the order volumes of intraday traders, mid-term traders and investors.
I think it is an excellent model. And most importantly even more accurate than the top. If you have information on such volumes you can probably make a fortune, but the problem is there is no such information.
The model is a good one, but it is not a good one, it is not a good one.
Well, I do not see any problem here. The ratio between the change in open interest and the traded volume of the day will show the relationship between intraday speculators and mid-term traders/investors. It is more difficult to separate the medium term from the long term, but why do it?
Also, to equate intent to buy/sell with actual sentiment (i.e. where which group of traders actually holds positions), is a big assumption. IMHO, it is better to base it on who actually sold and bought how much and where.
I agree, it is more reliable to have sanction related to the accumulation of open positions and their subsequent closing than to have sanction in the form of intentions to open positions.
Finally got to the subject! In my opinion, Slava's general formalization is successful, there is not much to add to what has been said without going into the maze of personal experience (of theanalysis, everyone develops his own rules and methods, everyone has his own approach and his own opinion). Personally, I stopped using Time(periods) in analysis, I analyze price only. I never paid much attention to the volumes but in connection with that topic I reconsidered the relationship between the volume and the price and noticed that the volume trend and its comparison with previous values at the moment of breaking through the local extremum may affect the further price movement, i.e. I can determine with high probability if the price has made a false breakthrough or not. My TS does not take any liberties, that is why a false-break or not is a breakout.
I work out: I break the price into waves (I obtain nesting), each level corresponds to a specific target group and the same rules are applied to each level. It turns out that I am trying to interact with several target groups.
Our harvest is the limiters! No need to spare the spread for it. Hooray comrades)...
the same rules apply to each level