Last weeks I have been playing around a bit with historical data. I thought it would be interesting to share some of the results with you guys on correlations, or more interesting the lack of. The information is meant for educational purposes and to help you save some time as you don’t have to do it yourself…
First message will be on the odds that tomorrow will close in the same direction as today, for EURUSD.
Regards,
Toekan
Okay, my first posting…
What are the odds that tomorrow close in the same direction as today, and what will the day after do?
#days—occurences-------cumulative
2--------1055-----25%----25.10%
3--------471------45%----11.20%
4--------204------43%-----4.90%
5--------96-------47%-----2.30%
6--------48-------50%-----1.10%
7--------22-------46%-----0.50%
8--------13-------59%-----0.30%
9---------5-------38%-----0.10%
10--------3-------60%-----0.10%
11--------0--------0%-----0%
Data: ALPARI - EURUSD Daily January 12, 1993 � February 25, 2009
Explanation:
Tested what the odds are that consecutive days close in the same direction. No distinction made between higher or lowers, I may do that later on.
The third column tells us what the odds are that the next day will close in the same direction as the day(s) before. The first line tells us that there is a 25% change that the second day in row closes in the same direction as the first day. The second line tells us that there is a 45% change that the third day closes in the same directions as the second day. And so on.
So what are the odds that tomorrow closes in the same direction and the day after as well. There is an 11% change that that will happen (25% * 45%). Well, in theory that is…
The forth column tells us how often it occurs that such a sequence occurs. So in theory it happens 50 times a year that tomorrow will close in the same directions. It happens 18 times a year that three days in a row will close in the same directions. Once every 5 years there will be a sequence of 10 days.
So it depends on how you look at it. I thought this may be of interest for you to informs you of the correlation between today�s and tomorrows close, or maybe more interesting, the lack there of.
Do what you like with this information, but don�t trade on it. It is just to provide you some statistical information so that you know what your odds are and is meant purely educational.
Toekan
How often does the RSI/5 peak and how often does it peak at a recent high/low.
Period: June 16, 2004 - March 13, 2009, 1233 days
Symbol: EURUSD
Chart: Hourly chart, derived from Alpari min1
Price: period close
Count RSI/5 bottoms: 2919
Count RSI/5 highs: 2622
Count RSI/5 bottoms at candle with low in +/- 3 periods: 973
Count RSI/5 highs at candle with high in +/- 3 periods: 788
RSI/5 was 33% accurate with predicting a recent low
RSI/5 was 30% accurate with predicting a recent high
Interesting for the highs is that 33% of the RSI highs below RSI 70 captured a recent price high agains 23% of RSI highs above RSI 70. So there is a greater change to capture a high when the RSI’s high is below 70. But don’t trade on it. It is just an observation.
Cya later
Toekan
Interesting stats Toekan. If you give me your email address I will let you know if I find a way to turn these stats into money.
People,
Sorry for the spam today. But if you look at my post count. Today I was close to 1,000 (FX-men Honorary member) and I wanted post 1,000 to be a reply on my first post as Toekan on this forum.
Well here it is!
After those years I am still very found of excel and paper trading analysis. I like the numbers, but I also automated a lot since then. At that time I was sitting behing the screen scalping the M1 EURUSD. I still do, but automated. Actuallly my strategies have bene improved but are still based on the principles I discovered in those beginning days. They still work.
Wiith regards to trading. I am not keen on showing everybody my results. This is not because they suck, but I trade as a more seasoned trader and how I trade can be bad advice to novice traders. Since my start I am still having my first account, never blew one up. I made big losses and big gains. I had the change to go fulll time and I did, but did not like it. Being home gave stress for my wife and myself, and I missed the interaction with my co-workers. So I decided to trade less so that I can work.
Looking back I still see myself sitting behind my desk. I actually still have the same desk and chair. My tradestation is also still the same, just with better hardware.
I love fx and will be doing it as long as they allow me.
It is fun to be with you guys. Learn something from my first post because it still applies.
I will stop spamming today…
Younger Toekan, you did great! Hang in there dude, keep tweaking those numbers and don’t care about what other traders do because that will give you grief. You know what you are doing! I know that you felt unsure at those times (it was not easy) but as a hard headed Dutchman you just have to stick to your game. I give you the respect now that no-one else gave you back then. No-one understood what you were doing and all were sceptic. I wish that I could give you the confidence that I feel now. You are a good lad!
Love. Older Toekan.
Congratulations Toekan on your 1000th post and related promotion to Honorary Member!
That is an incredible contribution to a forum and shows your dedication to FX.
It was interesting to read your career summary and, I’m sure, very encouraging to many newbies to hear that it is indeed possible to succeed in FX
I hope the next 1000 posts will be just as helpful!
