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How do participate in this thread :
There are 2 requirements for participation.
1-Required reading of 2 books
Nature of Trends by Ray Barros
Evidence-Based Technical Analysis by David R. Aronson
2-Ability to code your own indicators, minimally to code the basic swing indicator which will form the foundation of everything else in this thread. I will not provide any of my swing indicators.What will this thread generally compromise :
1-Key components of MMLC v12 broken down and explained in detail
2-Methodology of finding edges via Frequency Distribution and Probabilities
3-Continued research for continuous improvementThe idea is to ensure #1 and #2 can be easily replicated by other independent individuals. Why did I decide to take this approach? I realized that if #1 and #2 cannot be easily replicated by other independent individuals, it simply means a part of my trading logic is actually not logical at all and is subjective. This opens up to the possibility either …
A-weak point which can be a blind side
B-strong point which is still stuck within the subconscious
… in which the The Scientific Method attempts to reduce down objectively, in order to improve accuracy and encourage truthfulness. Both A and B needs to be unlocked, broken down and properly dealt with.This is also an advantage for myself. It becomes a failsafe should I be ever be physically/emotionally/mentally down, and my work would be able to succeed/outlive me and trading results will still continue with or without me. To being near 99% mechanical. Which is the scientific ideal anyway.
Basic Swing Indicator Construction :
A-RAW STAGE
1-On a M30 chart, draw boxes worth 7 M30 candles on a rolling basis
2-For each box, there is a ‘major move’ within the box. It is the highest high and the lowest low extremes of the box. Mark them with a swing. It is ok if the highest high and the lowest low extremes of the box are of the same candle.
3-Eliminate swings that do not have their end at the end of the box, but keep a marker at the opposite side on all end of box, regardless if their swings are accepted or not.
4-Hide the boxes
B-STAGE 1
1-For successive raw upswings, keep tracking until you get a raw downswing. Sum up the entire upswing by a single line. Continue the process, down->up->down…etc. Raw swings here are thinner, Stage 1 swings are thicker, hopefully you can see them
2-Hide the raw swings.
C-Stage 2
Backtrack as much as possible, code up (obvious) logic to join up these gaps. Simple thumb of rule is always maintain the lowest/highest extreme and adjust the ‘wrong’ swing.
D-Stage 3 (final)
There are 6 types of swings
-Down Retrace = previous swing is up and current swing is down, previous swing low NOT broken by current swing
-Up Retrace = previous swing is down and current swing is up, previous swing high NOT broken by current swing
-Down Trend = previous swing is up and current swing is down, previous swing low IS broken by current swing AND current swing’s end candle did close beyond previous swing low
-Up Trend = previous swing is down and current swing is up, previous swing high IS broken by current swing AND current swing’s end candle did close beyond previous swing high
-Down Reject = previous swing is up and current swing is down, previous swing low IS broken by current swing BUT current swing’s end candle did not close beyond previous swing low
-Up Reject = previous swing is down and current swing is up, previous swing high IS broken by current swing BUT current swing’s end candle did not close beyond previous swing high
Classify them and color code them any way you like.
FYI sorry for using so many images. I not sure if this site supports inline images thou, but I think this is the best I could do without cluttering up screen.
I wrote this in forexfactory :
Ok, I will stop here and give this thread a rest until the following happens :
Someone else is able to follow the swing construction instructions and send it to me via PM for verification. Please do not share it here as it would defeat the overall purpose. I can still post whatever I wish to share, just that without this happening, it would be difficult to continue this thread. I’ve stated in the 1st post that the construction of the swing is foundational. Its not quite blackmail (haha) Admittedly, this is indeed the scientific ideal : replicate-able results from independent individuals.
The reason for construction of the swing is simple. It would facilitate gathering of statistics later. If you are the one who did the construction, then the rest gets easier for you. However, if you get the indicator from someone else, you would have a harder time in the later stages. Trust me on this, the kind of statistics I intend to look at is not for anyone who wants an easy job.
*sits and waits*
However, I’ve decided I would make the conditions looser here. So far what I see here is a good forum, so I might want to continue posting here (plus on another forum-you can google and perhaps you should see it), if there is sufficient interest from the members here, along with some kind of discussion. I would love to post more if there is someone who understands and appreciates it on moderate levels.
…”
Evidence Based Technical Analysis rejects all subjective, interpretive methods of Technical Analysis as worse than wrong, because they are untestable. Thus classical chart patterns, Fibonacci based analysis, Elliott Waves and a host of other ill defined methods are rejected by Evidence Based Technical Analysis . Yet there are numerous practitioners who believe strongly that these methods are not only real but effective. How can this be? Here, Evidence Based Technical Analysis relies on the findings of cognitive psychology to explain how erroneous beliefs arise and thrive despite the lack of valid evidence or even in the face of contrary evidence. Cognitive psychologists have identified various illusions and biases, such as the confirmation bias, illusory correlations, hindsight bias, etc. that explain these erroneous beliefs.
…”G.
Attached…
G.
Hi gg53 but I don’t seem to see anything attached…
Hi gg53 but I don’t seem to see anything attached…
I tried to attach the relevant PDF’s (books you mentioned, I have them) but it failed, as you can see from the system message.
I’ll try again later.
G.
Interesting! Reminds me to some extent of our transient vs. recurrent zones discussion which have mostly subsided by now, although the concept seems to be totally different.
I don’t know whether I will have the time to participate in detail, but at least I will follow.
simplex
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)
Interesting! Reminds me to some extent of our transient vs. recurrent zones discussion which have mostly subsided by now, although the concept seems to be totally different. I don’t know whether I will have the time to participate in detail, but at least I will follow. simplex
Well yes the concept is totally different. This is because the baseline formula of the swing construction is already different from transient/recurrent zones. What I really wanted to do is IMO beyond what transient/recurrent zones could offer, or perhaps I understood it wrongly.
I was very very interested in transient/recurrent zones for a while, because the overall formula for transient/recurrent zones is actually IMO very close to basic construction of Barros Swings (without the 10% of the adjacent 1-period swing + 2 additional rules), so I could somehow relate. Therefore I tried finding the optimal value H and optimal variable K, in a objective manner and without success.
I wonder what would happen if transient/recurrent zones traders look carefully into Barros Swings. Perhaps they would be able to find the optimal value H and optimal variable K, I don’t know.
You are researching and posting this in many forums since at least 2011.
What’s your actual purpose in this?
G.
Here’s a sample implementation:
The “rules” or recommendatio are completly wrong and in opposite direction.
The ABCD points resembles kind of Elliot & Fibonacci “patterns”, which in your other book, the author said:
…”
Evidence Based Technical Analysis rejects all subjective, interpretive methods of Technical Analysis as worse than wrong, because they are untestable. Thus classical chart patterns, Fibonacci based analysis, Elliott Waves and a host of other ill defined methods are rejected by Evidence Based Technical Analysis. Yet there are numerous practitioners who believe strongly that these methods are not only real but effective. How can this be? Here, Evidence Based Technical Analysis relies on the findings of cognitive psychology to explain how erroneous beliefs arise and thrive despite the lack of valid evidence or even in the face of contrary evidence. Cognitive psychologists have identified various illusions and biases, such as the confirmation bias, illusory correlations, hindsight bias, etc. that explain these erroneous beliefs.
…”G.
Relativity, You are researching and posting this in many forums since at least 2011. What’s your actual purpose in this? G.
I had been researching swings and waves for years and the single 1 thing that frustrates me is having a very good swing indicator that;
1-follows price very well
2-can be used as a lead indicatorMMLCv12 is the latest version and also the final version of the swing formula. It will serve as the foundation of everything else I do and I wish to show the edges it can find can be replicated by someone else. If you can code it, you win and I win too.
Here’s a sample implementation:
The “rules” or recommendatio are completly wrong and in opposite direction.
The ABCD points resembles kind of Elliot & Fibonacci “patterns”, which in your other book, the author said: …” Evidence Based Technical Analysis rejects all subjective, interpretive methods of Technical Analysis as worse than wrong, because they are untestable. Thus classical chart patterns, Fibonacci based analysis, Elliott Waves and a host of other ill defined methods are rejected by Evidence Based Technical Analysis. Yet there are numerous practitioners who believe strongly that these methods are not only real but effective. How can this be? Here, Evidence Based Technical Analysis relies on the findings of cognitive psychology to explain how erroneous beliefs arise and thrive despite the lack of valid evidence or even in the face of contrary evidence. Cognitive psychologists have identified various illusions and biases, such as the confirmation bias, illusory correlations, hindsight bias, etc. that explain these erroneous beliefs. …”
G.
Yes I understand the books are in opposite direction. There is a reason for the required reading. It is to lay a mental foundation of the overall approach of my work. I disagree with a lot of things in the books, but also agree with majority. There are specific chapters that are relevant and some that are not. I would quote them as we go along. Nevertheless, reading the books will give an insight to what I do, without me explaining the long story.
As for coding implementation and using their trading rules, this is one of the things I would disagree with the Nature of Trends book and you showed just that. Relax, we are just getting started. I am not looking at ABCD points, Elliot & Fibonacci “patterns”, but good job for the coding up, its simple isn’t it? Now you have something, I would post more and ‘guide’ you out a bit on how I work on these swings, step by step.
gg53,
1st, please do either of the following, for cross verification :
-Post 4 screenshots of the swing applied on M30 EURJPY dated
29 Oct 2015 to 6 Nov 2015
19 Aug 2015 to 27 Aug 2015
your choice of date range #1
your choice of date range #2OR
-Send in the swing indicator via attachment, if you are using MT4Pass this verification and we can go on the next (big) step, which is how to use frequency distribution to find edges with these swings. Various chapters of the books will be quoted.
Sorry, but I’m not into “following price” or its action.
Price is a “shadow”, or result, of other things (or causes).
G.
Sorry, but I’m not into “following price” or its action. Price is a “shadow”, or result, of other things (or causes). G.
Yes thats true, but at least to be able to find a proper way to objectively measure the results, why not? Its only after objectively measuring the results and finding that many of the results occur over and over again on a statistical basis, then perhaps one can say ‘ok there’s perhaps something behind this, since it repeats way too much’.
Attached is 29 Oct 2015 to 6 Nov 2015.
My choice of date range #1 is same as above.
My choice of date range #2 is also same as above.
I’m not in the proper mood to “Pass this verification” or any other “verifications” for that matter.
G.
The results look close enough. There are slight differences that IMO don’t matter too much, perhaps due to …
1-minor differences candlestick data between brokers (I use FXpro)
2-I missed something within the steps for construction of swingsWell, its your choice to try this out, but I would do my part. I just would like to make things as clear as possible before the next step. Its a slow and tedious process but I say necessary. To at least ensure the other party is on the same page. If the results are not properly replicated, then I would actually be the one who needs to do more work.
Sorry, but we are NOT on the same page. I have no interest in this “method” or “investigation” or “research”.
I can count and specify many reasons, but I’ll explain just one:
Most, if not all, peaks & troughs are a simple overshoot of “fools money”, trying to follow and ride the previous, already finished trend.
And I can prove it with diminished and lack of Volume and Activity prior to the Peaks & Troughs.
Yet Barros and your “method” are counting heavilly on those “points” and “gaps”…
If you are interested in hidden frequencies, go to Ehlers and such.
G.
O dear haha goodness I had just typed up a draft of the next step and you jumped in like this. Ok, fair deal since you now claim you have no interest.
I haven’t even explained anything yet and you seemingly jump onto the conclusion that I am counting heavily on ‘points’ and ‘gaps’ or trying to go for fools money. Thats what I wanted to disprove Barros in this sense. He’s good, he earned his keep, still, I have to disagree with him.
I also understand about diminished and lack of Volume and Activity as you claim and I too, would love to show you my side of proof which can coincide with yours.
But now, guess we are either at some kind of stalemate and/or disagreement. Ok, so what should I do really? Not to be emotional but I am initially excited that I could share something of actual value here…. and now….
not good in English so not able tp participate but I M following..
“Most, if not all, peaks & troughs are a simple overshoot of “fools money”, trying to follow and ride the previous, already finished trend.
And I can prove it with diminished and lack of Volume and Activity prior to the Peaks & Troughs.”
Excellant statement there G – to be seen every day
Pip
skype : pipatronic
Great Discussion Brothers..
I can count and specify many reasons, but I’ll explain just one: Most, if not all, peaks & troughs are a simple overshoot of “fools money”, trying to follow and ride the previous, already finished trend. And I can prove it with diminished and lack of Volume and Activity prior to the Peaks & Troughs.
Hahahaha.. nice one Brother G, all of it.. all of it are fools money to caught..
==============
I try to read and read again but because I’m noob, my brain burning.. and when i look to example charts , my old brain always make me remember Donchian Channel, Psar, and Zig-zag.. so please forgive me
MTH
Intuition, Experiences and Common sense..
http://www.binaryoptionsedge.com/
If you are interested in hidden frequencies, go to Ehlers and such.
I have studied a lot of Ehlers’ papers and books, and coded a number of indicators following his proposed algorithms.
Yet I totally failed in extracting ‘any’ frequency in price movements that would last long enough to be first analyzed and then traded.
On the other hand: what I love about Ehlers’ work are his wonderfully simple IIR filters – but this is a different topic.
s.
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)
If you are interested in hidden frequencies, go to Ehlers and such.
I have studied a lot of Ehlers’ papers and books, and coded a number of indicators following his proposed algorithms. Yet I totally failed in extracting ‘any’ frequency in price movements that would last long enough to be first analyzed and then traded. On the other hand: what I love about Ehlers’ work are his wonderfully simple IIR filters – but this is a different topic. s.
You should view some of his works in MTF, one on top of the other.
If you use 3 TF’s, you will see 3 different sine-like “waves” – and watch when they coincide.
G.
You should view some of his works in MTF, one on top of the other. If you use 3 TF’s, you will see 3 different sine-like “waves” – and watch when they coincide.
Sounds very reasonable. I tried a similar approach by stacking several Ehlers’ Roofing Filters, each one responsible for only one octave in bandwidth, instead of more than 2 octaves which was Ehlers’ default suggestion. I found some coinciding events, but also false signals.
Sorry – this is off topic in this thread! If somebody is interested it would make sense to start a new thread.
s.
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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