How to estimate the target price of forex

Dear friends,

I have just talked with a professional analyst. He said he could estimate 4-hour target price of EURUSD with 80% confidence. I just wonder how he can do it. What kind of tools does he use? Technical analysis??

He must have a crystall ball.

ask him why he doesn’t have 80% of his net worth tied up in that one trade.

Talking the talk is easy, walking the walk isn’t.

He could be talking about his take profits being achieved 80% of the time.

If that is the case, take a look at maximum favorable excursion and maximum adverse excursion.

Could also be regression analysis, garch, ARMA or any other modeling method and that’s his confidence interval.

Just from my basic/crude tests, those things have never worked well in the long run compared to your average discretionary trading system.

hmm 80% could estimate 4h target price EU. Confidence correct?? that mean he have what pro trader must had.

High confidence about his analysis is one of example that we must develop too as newcomers Baiting.

So, start from now to learn and learn, and reach his confidence’s state… :slight_smile:

He might apply technical analysis on his prediction by using algorithm. It is basically taking past prices to predict the future price.

Just for your information, getting the right prediction 80% of the time does not necessarily mean that he’s profitable in his trading 80% of the time.

Can you disclose his information here. Would like to know about these kind of experts. :39:

Man, you are right. He is using simple statistics, but not sure how it works.

Thats exactly what I want to learn. More surprisingly, he can predict the market trend after some important data released, especially NFP, and give whether the actual figure will be above or below the expectation.

He could be using pattern recognition as well.

For example, you can find the distance price moves after each MA crossover and look at the distribution in the sample.

80% … right :wink:
… and seriously use common sense !!!
for intra-day trades I always use ADR ( average daily range)
so if for example price in last 20 days have moved 125 pips/ day
and today we moved 115 pips —> I don’t wait any longer and just take profits quickly - it saves me a lot of money for months !

Thx, Clark. I am doing the statistics on some simple trading system, such as support line, MA and pattern recognition. But that will be huge work to do. T.T

What kind of tools does he use?

Currency range data percentage and interbank flow information.

If he can estimate the target price of USD and be 80% correct that means he uses technical analysis. Maybe he has really mastered this strategy and he so sure of himself. This is possible in a sense, but when you are 80% sure of your analysis, it does not mean you will profit all the time.