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We all automatically consider that price is on the CLOSE of the bar.
That the way we “learned” and that’s the way most indicator calculate their input/output.
Is that really the right way of looking at price/chart?
What if there is another way?
A way, that if done correctly, and compared to the CLOSE price – will tell you almost exactly where price direction “should” be.
…and on top of it – it’s not just the direction – the price will soon enough go to that exact price…
All of this without any indicator. Just a simple different view.
Example chart will soon follow.
G.
The signals are immediatly after bar CLOSE.
There are more samples in this chart, just didn’t want to clutter it, just to show the pricipal.
It works on ALL timeframes.
i often thought that the calculation methods given within mt4 will not be the best options to trade successfully. After all the closing price is nothing from real importance..its just the close of a candle within a timeframe.
I´m really not a math guy, so i always wondered but never really got my thinking really deep into it.
So i´m really interested in how you came up with this different view and further explanations .
"A dream you dream alone is only a dream. A dream you dream together is a reality." (John Lennon)
The signals are immediatly after bar CLOSE.
That’s surely true for nearly all bars on a chart. IMO, the only exception is current bar. If you’re working on H1 and it’s 3:30 pm then current price will usually be closer to Close[0] than on Open[0].
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
I think what he means is that he is getting the signal at the current bar close and not a few bars later.
Is that really the right way of looking at price/chart?
No. Of course. That’s why people lose money.
Price close on an candle just a illusion of timeframe.
Time is itself relative in relative theory.
I think it must be group of bar. A zone.
Because there are millions of trader. So we can not get fixed price.
I think renko or range bar or tick chart have potential.
Interesting idea gg53! I suppose it is a simple method of calculating fair value based on a single bar! Thanks for posting this.
It’s simple, really…
Compare current bar CLOSE price to other representations of “current price”.
You’ll find signals that the “CLOSE” is actually not representing current market sentiment.
In most cases “CLOSE” price will correct itself, move to the “right” direction and hit the already known “correct” price on his way.
G.
Oh no I’m bad at seeing obvious things :(
What are other representations of current price? Open, High, Low? Some kind of correlation?
I think what he means is that he is getting the signal at the current bar close and not a few bars later.
Yes, the signal is at current bar close.
G.
GG53 I am happy to see you here on this site. You posted so much great material back on FF.
Back in the FF days Ullen and Hepsibah developed effective ways of spotting mis-pricing. They both kept their methods secret so they were not banned. I have been working on this myself and divergence is the best I have come up with.
So the idea is that the close of the bar represents mis-pricing and the middle of the closed bar represents where price “wants” to be and where it will usually go?
drloyd,
The “Close” of a bar is an artificial stop-watch or snap-shot of the current timeframe.
Sometimes it doesn’t correlate with the market “sentiment” and direction at that time.
Think “out-of-the-Box”, find the market sentiment for that bar and where it “diagree” with the direction and CLOSE price.
G.
I am working on that….
This may be off topic but i think it is related in regards to not using the close to calculate the price. I believe in Kiads SS indi, the reason all the levels have >95% chance of clearing is because its calculated using OHLC/4. If you use the C or HL/2 HLC/3 you wont reach 100%. Or at least this what I found when working with xux99 to recreate it before he released the indi. When didnt use OHLC/4 only about 85-89% of the levels would clear and when we used OHLC/4 it went to 99%. Just something very interesting to think about.
-Life’s Good & Why Wouldn’t It Be? I’m a Pirate After All!GG, are you using one of your tick indicators for “market sentiment” ?
What do you think to create a private group to discuss this?
This may be off topic but i think it is related in regards to not using the close to calculate the price. I believe in Kiads SS indi, the reason all the levels have >95% chance of clearing is because its calculated using OHLC/4. If you use the C or HL/2 HLC/3 you wont reach 100%. Or at least this what I found when working with xux99 to recreate it before he released the indi. When didnt use OHLC/4 only about 85-89% of the levels would clear and when we used OHLC/4 it went to 99%. Just something very interesting to think about.
I remember that i was into this thought too (OHLC/4) , but because of my lack of coding skills i failed in even modifiying an normal Moving average to use the complete bar data . :(
Kiads made me wondering about it with a picture he posted at ff.com
"A dream you dream alone is only a dream. A dream you dream together is a reality." (John Lennon)
I’ve done some cursory strategy testing of this simple “idea” or “concept” and wish to report some rough results. For me and for my definition, the basic concept can be defined by how gg53 drew his undefined red lines. You can clearly see the start point of each line and the end point as a sort of entry/target. You can also easily figure out what price the start point corresponds to, and by deduction what the end point corresponds to.
IMHO this concept is closely related to the slightly more sophisticated concept of VWAP. Search if you don’t know what that is. VWAP isn’t particularly practical in forex due to no reliable volume information so gg53’s concept of fair value can serve as a simple proxy. Also see this short Investopedia article for how you might apply the idea of fair value.
While there are many ways to roll this concept into a strategy, it seems that a multi-lot version is profitable out of the box with little effort. It’s always nice to know when looking at an idea if there is any advantage there. The simple multi-lot strategy does have problems due to the multi-lot nature leading to large drawdowns, so to make it into a viable strategy effort would need to be made to manage trade size and open risk and thus drawdown. Also, which signals you filter out and which you take will make a big difference in results as well.
drloyd, The “Close” of a bar is an artificial stop-watch or snap-shot of the current timeframe.
I am working on that….
@drloyd, just imagine I had the idea to create a chart with an M57 timeframe. It wouldn’t be very handy to work with, but basically it would work, and CLOSE levels obviously were at different prices compared to H1. The timeframes we’re used to work with are the result of arbitrary conventions.A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
I remember that i was into this thought too (OHLC/4) , but because of my lack of coding skills i failed in even modifiying an normal Moving average to use the complete bar data
@Bartleby: I can provide some coding skills. Like to give it a try?A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
sure , i just think i´ve messed the code pretty much.. i should definately try to learn coding….I´m just trying to modify with some basic understanding of the code… I just don´t where i should get the time from to learn it
"A dream you dream alone is only a dream. A dream you dream together is a reality." (John Lennon)
sure , i just think i´ve messed the code pretty much
Ahhh – the MQ standard. So what exactly do you want to modify? If you think it might be off topic here just send me a PM.
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
drloyd, The “Close” of a bar is an artificial stop-watch or snap-shot of the current timeframe. Sometimes it doesn’t correlate with the market “sentiment” and direction at that time. Think “out-of-the-Box”, find the market sentiment for that bar and where it “diagree” with the direction and CLOSE price. G.
“Sometimes” the direction and closing price do not agree with market sentiment. That is what we need to determine.
drloyd, The “Close” of a bar is an artificial stop-watch or snap-shot of the current timeframe.
I am working on that….
@drloyd, just imagine I had the idea to create a chart with an M57 timeframe. It wouldn’t be very handy to work with, but basically it would work, and CLOSE levels obviously were at different prices compared to H1. The timeframes we’re used to work with are the result of arbitrary conventions.
Or an H1 chart with the end time shifted….
Or an H1 chart with the end time shifted….
Sure!
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
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