Guys, I believe that SB (SignalBender) has been around for a while and posted a lot of valuable stuff under various user id’s. Some of the main ones that he has used include 7thsignaltrader, tradernumber7, wavetop, jettrader. Often times what he says can be hard to follow or understand, but I believe he provides some extremely valuable information if traders simply took the time to read and digest his theories.
Also, I’m not claiming to be an expert on his methods or anything, but have been following his online postings for a few years now, and I feel as if I at least understand most of his terminology ha.
I know what you mean, it’s somewhat along the lines I was thinking. I’m not too much concerned with direction, but more so to see if I can figure out HOW that direction is being made.
I have some ideas on using specific sets of delimiters to organize the data the way I want. For now I’m just using each day as a delimiter. For now, I’ve managed to classify price behavior with a set of behaviors. Similar to what you did earlier in the thread. So far, I think I have the possible things that price can do given the delimiters I have defined. So far I’ve got 14 possible combinations.
Right now I’m thinking of metrics to capture with these combinations.
As always looking forward to your future thoughts. I’m going to think about what you said a bit more. But lemme explain some more of the things I was thinking. Just thinking out loud, so I can just report back to thread when I have something a bit better. I haven’t got everything sorted out in my head the way i want to track things, so just sharing some of my thoughts, not sure how much of it will make sense to anyone else, or might not even be useful, but just enjoying participating in the thread.
Does 14 seem like a bit much? Would it sound more reasonable if there are really only 7, but if I counted them as different directions it would be 14.
This idea I got from reading through some sb stuff. Similar to the way he constructed the “Falcon,” which is nothing but the H-prL, and prH-L. When you draw them on the chart, you get that trajectory… Also, you remember how he used delimiters to separate that pattern. I’m thinking along the same lines, with how I am deriving the patterns. It seems to me the 7 patterns cover all the PA that can occur span across any two time sessions… no matter what time span one uses, and no matter what price does, it can only do 1 of 7 things (I think!!!).
In the first pic, this is just a visual representation of what a chart looks like. The second pic, is the total of possible things that could happen. All those directions could be inverted btw and would cover everything else. But you see the 7 patterns there. I’m thinking those seven patterns cover all of PA that could span across two periods.
For example, if you look at the first pattern, upper left, that covers a day that moved up, and the second day made a retracement at some point, ‘somewhere’ within the first day, and [B]THEN[/B] went on to make a higher high.
The pattern directly to the right, is pa over two days where price made an upmove on the first session, and on the second session made a HH, but [B]THEN[/B] failed and made its main move next, but [B]DIDN’T[/B] take out the prior days low.
So here, I’ll be measuring retracements and expansions beyond prior day highs/lows. Does any of this make any sense, or am I just delusional?
Been away for sometime, although lurked around a bit hehe.
Just a quick question which may sound naive, but, am i correct in saying that the whole point behind classifying moves is to detect the odds of a specific move to follow it?
Say you isolate U1. Is the idea to know the frequency of U2, U3, etc occurring AFTER U1?
hi rel,
as u said that u move from a more general baseline of 20pip rule to a dynamic one of ratios and measured moves…pls tell what kind of performance boost have u achieved by doing so?
But there are
always going to be days when the
daliy range is lower (baseline
becomes around 10 pips) or higher
than average (baseline becomes 30
pips or more).
Exactly the problem i am trying to solve currently.There are days when x pip rule works brilliantly but then there are also days when i can see that if rule was x+y or x-y pips then things would have worked out better.If i could know this beforehand …x or x-y or x+y pips will work best on a given day would make the system complete i think
So how accurate you are now percentagewise …with what RR and trade frequency?
The way i see price now is either it is contracting or expanding…in what timeframe and in what magnitude it is doing this is what makes the difference.
The tool i use is a simple zig zag indicator with x points as input.
The problem i am facing is that of finding optimal x value for any given day.Thinking of looking inside each x point zig of price to get idea of what is really going on.Maybe i can find some pattern which can help me in trade selection and thus improve accuracy.
Joining in on this thread so I’ll be subscribed and get updates, but also wanted to throw this idea out there that has been sitting in the back of my mind:
Other than the daily timeframe or greater, isnt the idea of candles/bars a little bit arbitrary; especially so given this is a 24/5 market?
That is, if we’re looking at an M5 candle or bar, what significance does each 5 minute interval really have? If it’s 8AM EST and the NY market opens up, it’s significant. If it’s relevant news came out, it’s significant. But otherwise, M1,M5,M15,M30… why do we segment these into candles and bars (and more importantly then try to make trading decisions based on those candles or bars) when it’s all continuous price movement anyway?
Hope this makes sense.
EDIT:
Just saw this immediately after I posted
And this is exactly what I’m talking about. Watching some overall timeframes to get a big picture on basic trend or support and resistance is helpful, but all the price movement at the short timeframe level is all continuous, so why put significance into these broken up, arbitrary candles/bars?
Thank you for the quick response, sir! Forgive me for making you re-explain yourself; I originally posted and then continued to read the thread more (where I realized you’ve mentioned this several times).
It’s a relief to see someone who thinks this way. Price is price and it changes based on the traders/banks participating. Charting and indicators are supposed to be useful tools to sum up this price action, but I think as humans we like to complicate this to feel fancy as well as find patterns because we’re looking for them, not because they’re actually there and/or useful. However, the ironic part is the self-fulfilling prophecy aspect (which is mentioned a few times in the BP School) that because so many traders are over-analyzing with all of these indicators and programs and whatnot, there is an effect on the market because of it (albeit the impact thereof varies of course).
The use of statistics/studies/tests relieves me as well, since (as proven distinctly in human history) we can’t put full trust into different peoples’ personal accounts of their experiences for a multitude of reasons.
Given all of the aforementioned, what type of indicator do you tend to use frequently? Note that I’m not asking this from the “wats the best trading system??? i need money nao” kind of mentality. Trading is a skill set - a highly complex skill set - that requires all different aspects be covered; this I understand (though my development of this skill set is still very low, but I’m trying dammit! :P). But all in all, given the proper money management, perspective on trading, trading philosophy, trading system, etc., what do you feel is/are (a) worthwhile indicator(s)?
Exactly. I see it as a pyramid: at the bottom level you have all the most basic factors that will ALWAYS matter and without them, the upper levels fall apart. I would put the most basic things at the bottom like understanding forex vocabulary, how to open and close trades, etc. The next level would be things like understanding basic price action, the concept of retracement and fighting between buyers and sellers, basic money management (return of capital comes before return on capital) stuff along those lines. Next level would be watching market sentiment, news, etc. Next level is fancier indicators and things like that. Somewhere around there is worrying about broker spreads, dealing with automated trades, etc.
While my levels are probably off and some things would need rearranging and so forth, that’s the general concept in my head. Bottom levels need to be in place and always will be in place. Without them, the top levels fall apart and become irrelevant. And, even with the bottom levels in place, the top levels are those last few tiny bits of percentage of importance.
This is a very interesting way of thinking and I like that it’s shifting my perspective. I’ll always remember now “indicators need not always be chart based”. This is one area I definitely need to improve on. I’m going to continue reading through this thread and should be able to make some positive changes (as I already have even with a short exposure here).
Also, a quick followup here: I’ve used this wonderful Barrios Swing indicator and set the two waves to
Shorter TF wave: 5 * 12 for an hour summary
Longer TF wave : 1 * 1440 for a day summary
Of course, the market’s closed right now, but looking at where it is (if it were open), would I be doing this right?
I see a potential turnaround because the short and long term pink/downward lines both came together and a short term blue/upward line is confirming a rebound. It’s right about 20 pips away from the turning point (which, if I was understanding correctly, is the target amount). So the check mark on the picture is where I’d be purchasing, the thumbs up is take profit (20 pips upward) and the thumbs down is the stop loss (20 pips downward, also the turning point).
Alright. So long Barrios it is! The nice thing is I haven’t become a habitual user yet or anything so it’s no big deal to drop the idea now. But for where I’m at, I’m not entirely sure where to go next to keep learning here. I’m understanding that price is price, D1 wicks hold importance, short term trends are long term retracements, and that it’s important to look at volatility…more specifically the speed of change so we can judge the reactive force of certain moves. Also, comparing spread to average range to help determine pairs along with considering some basic carry trading flow and fundamentals. Watch news to further help into traders’ heads.
So where next? At this point I feel like it will be good to get some ideas going on how to apply this to making a pick. Any tips on what I should focus on next?
I’m glad I was able to inadvertently help you out a little. It’s the least I can do.
I’m really looking for understanding the true nature of the forex market so I can have a strategy to use; basically starting from scratch right now. I’m definitely committed to putting the work in of personalizing a system and making it work for me, but I’d like to have a solid basis. Basic entry and exit rules are a good place to start and I’ll have to build from there.
I’d say the truth probably lies somewhere in the middle of controlled and natural market. Extremes tend to be wrong by nature.
But as far as that diagram you posted, that’s exactly how I already think. Like I mentioned before, people already overanalyze and find patterns because they want to see them. They compound this problem by NOT seeing all the multitude of times where that same exact pattern or indicator they’ve grown to love HASN’T worked as they assume it will. That’s where true statistics come in and that’s what I’m trying to learn.
I don’t really give a damn what the charts tell me. I only give a damn because of the pretense that these things on the chart show me what to do: Make an order, close an order if one’s open, or wait. Those are really the only three options at the heart of it.
That’s why I’m after number 2, the actual order flow. Dojis and shooting stars and all of that are ridiculous. This is actually the perfect ‘indicator’ to look at because even as I’m going through the BP school (which is a great resource in general), when it came to the shooting star/hammer/whatnot I couldn’t help but laugh. They basically covered just about any possible candle formation yet somehow we’re supposed to make live assumptions about the impact of the market about to reverse? The funniest part is again breaking up these smaller timeframes into candles and that’s supposed to actually be important? If I see a doji on a M5 chart, all that means is that price moved up and down and HAPPENED to be the same at the start and end of that particular 5 minutes. Big deal.
The concept seemed sound: buyers start dying out so there’s a slight stall, then sellers take over (or vice versa) so price reverses. But in my mind it makes way more sense to look at the volume rather than just price. This is done for stocks, so why not currencies? Volume is a very helpful indicator in my opinion, I just haven’t refined this general concept to make it useful in practice.
On that note: is there a Volume-Weighted Average Price indicator? THAT seems way more helpful to me than an exponential MA, smooth MA, lagging MA, ridiculous MA, fancy MA, etc. etc. I could actually make some decent price assumptions on that.
For now, my big difference in approach is going to be simply only caring about H4+ timeframes. These summarize price a lot better and with the limited useful indicators I have, it’s all I’m concerned about.
I will follow this up with 3 useful indicators I’ve found. One is simply a news indicator. One shows me some of the stuff you’ve deemed relevant (and makes sense) like movement from the current daily open, average range to date versus ADR of a certain period (I use 21 for the past three weeks), and then (just like you mentioned very early in this thread) the spread not only in pips but in % of ADR (very useful like you’ve noted).
The final one I believe is actually useful and is shifting perspective the way it should be: it finds the strength of each currency individually. I can then choose my pairs based on matching the strongest against the weakest (and factoring the % spread).
What do we see on what I feel are the more important timeframes (H4-W1)?: The EUR surprisingly strong. The JPY is staying low. I then look at the EURJPY and see the spread is reasonable and on top of that, the ADR is relatively big compared to most other pairs. I’ll try winning some pips on the EURYJPY this week and see what happens. Noting that it’s bank holidays everywhere, I know the market will be a little wacky this next week or two, but I’ll try nonetheless. All a learning process.
Is the above quite something that you can comment on? I’ve been working with my things trying to come up with some type of delimiter to split the data into. The standard H5/D1/W1 etc seem to have at bit of inconsistency, at least with the tools I’ve been using.
To that effect, of finding a different way to view the data, I’ve been even trying to see if simple DISTANCE might be a way to separate different types of players in the market.
Well, I just mean the amount of travel, in pips/percentage… that price travels.
If the idea is that price movements are highly based on the level of participants who are IN the market at any given time… to me it seems that distance traveled could be a way to describe a timeframe/participants in the market.
Not sure if this is even useful yet, but typically timeframes are taken rather literal, in that we just usually think about it in one dimension, and that is time.
To that effect, I am trying to look at price soley based on how far it is moving. This is just something I’m testing out. But here is a pic showing such a thing. I haven’t made any connections, but all this is on the chart is the prior range and its expansion points… so one tf for the prior day range… and then inside that day, expansions of the OR.
The picture was a bit confusing, but I do understand what you’re saying. A ‘timeframe’ should more accurately be based on when there are a lot of people making trades in the market. Or more so different ‘levels’ of movement. So instead of trading based on what’s happening on the ‘M5 timeframe’ or ‘h1 timeframe’, you would instead trade based on ‘level 1’ or ‘level 2’ which has parameters based on the number of people participating.
I agree with this approach all in all, but couldn’t we simply look at volume rather than just speed/distance? Because speed/distance will only happen when all of the people participating are trading in the same direction. If they’re arguing, price will still stagnate. So knowing whether price is stagnating because of people fighting or simply because few people are participating is will be distinguished with volume. So volume should really be considered. Does that make sense?
