Looking for patterns - page 53
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Forum on trading, automated trading systems and trading strategy testing
Looking for patterns
Vitaliy Maznev, 2020.02.20 21:54
Basically, there is one detail that has not been considered here yet: trend lines. But there is an opinion that the trend does not exist. Assuming that opinion, these are schizophrenic lines.
Purely canonical. No nonsense. Below is a chart with the Eurodollar. Will someone argue that after the crossing and fixation of the price above this line of schizophrenia, if we draw a grid of galucinacci lines on the obtained segment of the non-existent trend, the probability of reaching the level of 23.6 of this grid will be over 50%? And if the price also consolidates above that level, the next step would be to move to 38.2, etc.?
Many would describe the future in those terms. And it is not uncommon for such predictions to come true. But there are huge doubts.
You could of course add a few conditions on the standard indicators, then if a few of them coincide, the probability of the scenario increases.
I will ask those who deny technical analysis, Fibonacci levels, trend lines and the ability to predict future scenarios to comment. Above I have given only a typical and basic example of technical analysis from the category of basics. Below is a picture less than 24 hours later, showing the scenario discussed earlier:
Chingiz Project Extremes 3.0 indicator
We continue to develop Chingiz's project. I should say right away that in the future we will try to use the idea of this indicator to determine the trend direction, to separate trend from flat, as well as to find favourable entry points. It can become an auxiliary tool for estimating any other possible patterns.
So, we said earlier that if we combine two copies of this indicator but with different size of distances between extrema into one, we will be able to find pullbacks in a trend where the chance of an entry correctly following the trend direction increases. We have obtained a new indicator with two input parameters. These are distances for finding local and global trends, in points.
Arrows mark reversals of a trend. That is, these arrows are not yet a call to buy, but drawing attention to favorable locations.
Also on the histogram we can see when extremums are updated (darker colour bars) - these are the places of a possible counter-trend, if the trend is not significant. And there are long periods of temporary flatness (light bars) when price fluctuates in a range without giving new extrema. There is a lot to observe and think about.
Basically, there is one detail that hasn't been addressed here yet: the trend lines.
I am interested in this direction.
The situation here is that 2 points are needed to construct a trend line: the first extremum and the next pullback. The total turns out to be two waves. However, since Forex is more of a flat market, the trend mostly ends up with these two waves. Thus, it is too late to build by two points. Of course, there are long trends with a large number of waves, as it is now. But, they are rare and unpredictable moments of happiness to ride these waves or, vice versa, to suffer a loss.
There is a solution to this issue. As a rule, trends develop at a rate that is not very high. Thus, it is possible to draw a line from the first extremum at a certain angle, or to be more correct, at a certain speed. This speed can be calculated based on statistics of speeds of previous trends. The chart can show velocity bounds, median velocity, and average velocity.
Of course, there is a chance of making a mistake, but the advantage of this method is the speed of plotting. Virtually one point at a time.
I can't say anything about Fibonacci, you have to check it out. There are real levels, which are some obstacles to price movement. If you look closely, you can see them on the chart. The distances between them do not look much like a grid of these numbers. The levels even coincide more with round numbers, not always of course. It's like this:
On trend lines, I saw a mention of Chuvashov's fork somewhere. It may have been in this thread or in one of the other. In my opinion, he showed the way to use trend lines in the most obvious way. However, I myself do not use his systems. I do not use his systems myself. On Chuvashov, you can find a great many videos on google, and other stuff.
From my own observations I have deduced that trend lines are observed at any intervals and any TF. Certainly, the older the TF, the higher is the probability and the rebound or continuation of the movement (in case of breakdown) is stronger and more significant in terms of number of points. Sometimes trend lines are also ignored by price movements. Everything is the same here as with any other instruments. But the regularity is ironclad and sometimes there are levels defined through the trendlines that stop and reverse even the movements in case of force majeure.
Fibonacci levels, yes. Here you need to watch. Moreover, you need to learn how to use them correctly. In skilful hands Fibo can work wonders. And someone has already given such an example somewhere here. It was Konstantin L. whose post was deleted for some reason. All that remains are the copies of the pictures I posted from his post - https://www.mql5.com/ru/forum/332765/page32#comment_15024354.
I am interested in this direction.
The situation here is that you need 2 points to build a trendline: the first extremum and the next pullback. The total turns out to be two waves. However, since Forex is more of a flat market, the trend mostly ends up with these two waves. Thus, it is too late to build by two points. Of course, there are long trends with a large number of waves, as it is now. But, they are rare and unpredictable moments of happiness to ride these waves or, vice versa, to suffer a loss.
There is a solution to this issue. As a rule, trends develop at a rate that is not very high. Thus, it is possible to draw a line from the first extremum at a certain angle, or more correctly, at a certain speed. This speed can be calculated based on statistics of speeds of previous trends. The chart can show velocity bounds, median velocity, and average velocity.
Of course there is a chance to make a mistake, but the advantage of this method is the speed of drawing. In fact, it is based on a single point.
You have a misunderstanding of the use of trend lines. Trend lines are not drawn to trade in their direction. They are usually used to catch the moment of their breakdown. Often this breakout is connected with trend reversal, and thus we have a chance to catch the moment when a new trend emerges.
Trend lines are not drawn in order to trade in their direction. They are usually used to catch the moment of their breakout. Often this breakthrough is connected with the change of trend direction, and thus there is a chance to catch the moment of new trend emergence.
One can trade from the trend line either on a breakout (preferably after the retest) or on a rebound.
But all this is also not true.
From the trend line you can trade on a breakthrough (preferably after the retest), as well as on a bounce (return).
But all this is also wrong.
Yes, we can, but asAleksey Stepanenko rightly pointed out, it's true "... Inmost cases the trend finishes at these two waves".
Vitaly, Khorosh and Grigory! You are each right in your own way. Both can be done this way and that way. The whole question is the accuracy of determining the entry point. Trend lines, or channels are a good tool to improve accuracy. Share your experiences, suggest an idea, subtleties, nuances and we will develop the system and make an indicator. Then we will test it, improve it, check it some more, come up with ideas and thoughts.
Join us, Baron, join us.
Vitaly, Khorosh and Grigory! You are each right in your own way. Both can be done this way and that way. The whole question is the accuracy of determining the entry point. Trend lines, or channels are a good tool to improve accuracy. Share your experiences, suggest an idea, subtleties, nuances and we will develop the system and make an indicator. Then we will test it, improve it, check it some more, come up with ideas and thoughts.
Join us, Baron, join us.
I am not good at expressing conditions for technical problems. But I have given two examples of already comprehensible trendline systems. The first is Chuvashov's fork. The second one is in a separate thread where a man is asking for help in writing an Expert Advisor on Trendlines - https://www.mql5.com/ru/forum/333223.
I am also interested in such an advisor, by the way. It's a great idea.