The most banal trading strategy - page 43
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So, what you don't realise is that you are working with a price distribution with M = SMA. The vicinity of the distribution forms the channel in which price moves.
If the SMA is moved backwards, the channel you are talking about will form. On the "present", which is the SMA - there is no channel for price relative to the SMA, price is still (as always) free to go in any direction by any amount (and for any such move the SMA will also calculate everything in the standard way, no restrictions on the amount of difference between the price and the SMA - that is "channel limits" - exist, and cannot exist).
Limited only by the probability distribution. You wrote about going back to the average yourself the other day. No?
The probability distribution has no boundaries. The tails go to infinity. Which is what it's all about. I'm glad you brought your thought to this simple concept (probability distribution). It makes it easier for you to understand your wrongness.
Another thing is the distribution relative to the SMA shifted in the past by the value of its lag. By contrast, there are no infinite tails, the price is rigidly limited in its possible deviations from the SMA (well, that's because we have already looked into the future when calculating it, if it is shifted). Since I didn't talk about a shifted SMA, we cannot talk about any channels either.
I read the last pages of the branch and did not understand something, the fact that the price crosses the MA is clearly not an opening - for forex on 15 minutes I use 128 for this purpose, I used 176, it has also good results, but the crossovers are less frequent. I make linear forecast, I tried different methods, one of them can be seen in my signal(PP in the name just means that volume of position is calculated taking into account price forecast of MA crossing), as well as the whole trailer of trade to MA.
But, it does not say at all when exactly the price movement vector will change, deltas may be very different in size and duration and the average value is not enough for building a TS, we should also take into account other nuances.
And yes, the price may go flat and the correction to the MA will not be enough for the order set (by the delta of the MA, as an option) to breakeven.
Or have you discovered a method that allows you to detect with high probability the trend reversal point without taking into account the average price amplitudes relative to the MA on the history?
I read the last pages of the branch and did not understand something, the fact that the price crosses the MA is clearly not an opening - for forex on 15 minutes I use 128 for this purpose, I used 176, it has also good results, but the crossovers are less frequent. I make linear forecast, I tried different methods, one of them can be seen in my signal(PP in the name just means that volume of position is calculated taking into account price forecast of MA crossing), as well as the whole trailer of trade to MA.
But, it does not say at all when exactly the price movement vector will change, deltas may be very different in size and duration and the average value is not enough for building a TS, we should also take into account other nuances.
And yes, the price may go flat and the correction to the MA will not be enough for the order set (by the delta of the MA, as an option) to breakeven.
Or have you still got a method that will help you to detect with high probability the point of a trend reversal without taking into account the average price amplitudes relative to the МА on the history?
No, he has not discovered a method for predicting a point.
He claims that it can predict price on the basis that quotations always cross their mean.
Bullshit, of course, but the spring escalation is an objective reality.
Yes, the incremental formula for calculating the SMA is not known to everyone here.
SMA[0]=SMA[1]+(PRICE[0]-PRICE[PERIOD])/PERIOD. (In MQL terms, on timeseries). That is, each new value of SMA depends only on the previous one and the difference between the current and the previous period.
The channels originate from the same place. PRICE[0]-PRICE[PERIOD], the increase/decrease of price in the period, just by narrowing it down, is also the indicator used by market regulators. No global regulator(s) will allow excessive rise/fall.
That is, the channels are just physically there, you may not think about them, you may not name them, but they are there and they are the ones being traded
I read the last threads and did not understand something, the fact that the price crosses the MA is clearly not an opening - for forex on 15 minutes I use 128 for this purpose, previously I used 176, it has also good results, but crossings are less frequent.
The suggested approach, in spite of its primitiveness, has nothing to do with trading based on crossovers with SMA. I do not suggest opening to sell if the price is higher than the SMA or opening to buy if the price is lower. The point is quite different. Trading on crossovers with SMAs is a dead end, because SMAs are lagging.
Yes, the incremental formula for calculating the SMA is not known to everyone here.
SMA[0]=SMA[1]+(PRICE[0]-PRICE[PERIOD])/PERIOD. (In MQL terms, on timeseries). That is, each new value of SMA depends only on the previous one and the difference between the current and the previous period.
The channels originate from the same place. PRICE[0]-PRICE[PERIOD], the increase/decrease of price in the period, just by narrowing it down, is also the indicator used by market regulators. No global regulator(s) would allow excessive rise/fall.
That is, the channels are just physically there, you may not think about them, you may not name them, but they are there and they are traded
If it were that simple and everything depended on regulators - there would be no market.
What would a channel on the Euro from 0.9000 to 1.9000 give you?
Yes, the incremental formula for calculating the SMA is not known to everyone here.
You can calculate SMA as you want, of course, when implemented as a program on a computer, it makes no sense to search the whole amount at each step. The point doesn't change. There are no channels here and there cannot be any.
Of course, there must be channels in this sense :-). If it's about such a channel, I think I can agree.) In any normal sense, however, there are no channels in what has been presented.
The proposed approach, despite its primitiveness, still has nothing to do with trading based on crossovers with SMA. I do not suggest to open to sell, if the price is higher than the SMA or open to buy, if the price is lower. The point is quite different. Trading on crossovers with SMAs is a dead end, because SMAs are lagging.
And who said that the signal is formed by crossing the MA? No The signal is just by the delta from the MA towards the MA, and it is clearly ahead by nature, since we believe that price will move towards the MA and mostly flop there after the trend.
So please explain, in words not for a mathematician, what is the essence of the idea? And where is it detailed? And what prevents us from programming it as an indicator?