Theory on the first creation of indiors
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thread: Theory on the first creation of indiors

  1. #1
    Member
    33

    Theory on the first creation of indicators

    Lets presume that at the beggining, a few traders decided to play with prediction of future price movements based solely on price.

    After not long, they knew the methods calling changes of factors in the future dependent on the factors themselves already exist. They found them in meteorology, predicting earth quakes, rain etc.. .

    People forecasters uncovered it is possible to expect the most likely changes in a variable based on the closest past states of the variable.

    Why did those approaches work from the markets ? Its somebody was buying or selling. It was only that the nature has correlation in changes between factors.

    Now supposing this did occur, what exactly did those traders perform ? What was available to them ? Formulas and concepts from maths and figures. After the changes in price have been not anything more than a data set.

    What exactly did they use ? We could crack this .

  2. #2
    Member
    33
    Thanks allot for your replies))

  3. #3
    Price Action vs Indiors;

    from a mathematical point of view; everything comes from price; even OHLC bar is indeed an indior; it's derived from your tick by tick data, and time.

    Indiors do operate; and I am making a living from them myself.

    Take for example; moving average; the most simple indior of all of them. It only works. You just have to design a system with few guidelines; and play them until you discover something that is right for you.

    See that thread for the egy rules

  4. #4
    Lets assume that from the beggining, a few traders decided to play around with forecast of future price movements based solely on price. They understood that methods calling changes of variables in the future based on the variables already exist, after long. They discovered them in meteorology, calling earth quakes, rain etc.. . Those forecasters uncovered that it is possible to anticipate the most probable changes in a factor based on the nearest states of the factor. Did those methods work from the markets ? Its...
    Hi Max. The way I tend to take care of this issue is comparable to some issue with thermodynamics. The activities of participants in a complex system such as the markets gives rise to GROSS features of the markets themselves such as the overall volatility and market construction. It is not the individual buy/sell and trade size choices of every participant that gives rise to the Gross characteristics of this market but rather the collective actions.

    This collective activity gives rise to gross features of price such as divergent and convergent momentum exactly like the waves at the sea and these features tend to become more 'lasting' when participant behavior becomes coordinated....but more frequently than not, the huge differences in player behavior give rise to obvious characteristics that are just no more than a arbitrary collective summation of these activities. Indiors inherently rely on a particular set of conditions to unfold in relation to price to indie that a future predictive outcome....but they are frequently overly prescriptive in nature. Features of price action can take many forms.

    It is more a game of constructive and destructive interference when you sum up all of the activities of the participants because the overall features of a cloud are governed by the summated activities of the mechanisms of it's individual water molecules. Market structure is anergent' characteristic of participation. More often than not the price action is a pure arbitrary outcome based on the summated constructive and destructive impacts of these participants....but sometimes the emerging characteristic has 'actual' material that persists for an protracted period and reflects overall participant behavior. Price action itself holds no value to me as a trader.

    If we base our commerce forecasting conclusions on price action alone we'll find it extremely hard to achieve a result that is anything apart from a random outcome....but if we base our forecasting conclusions on the mechanisms of all participants within a time period represented by Gross features, then it is more probable that we'll have the ability to jump on board the enduring characteristics of this market whenever they are present. That consequently provides a means to capitalise on the gross features by taking part in a trade when these activities are more likely to be more coordinated than the chaotic behaviour that is everyday. I would steer clear of the standard times and just trade throughout the storms if the gross ensemble are more likely to behave in a coordinated manner. Some of these storms will turn out to be cyclones/hurricanes and this is where your bread and butter is going to be borne. All activity will be a churn and arbitrary outcome.

    Now everyone knows when a storm is upon them and these storms take many forms and shapes....but it is nearly an impossible task to predict them. That's why I prefer to 'follow price' rather than 'predict it'....but I just input a situation if a storm is right along with me. When it is weather, I do not have a long standing position. I rely upon the principle that the storm has persistence and durability for a time period of unknown scope. The path you choose when riding the storm could be diverse so you need to scope the limits of that price path to make certain you remain with the storm. Those limits specify the characteristics of this storm itself to have the ability to specify what is 'from the storm front' and what is 'out of this storm front'.

    Meteorologists base their forecasts on gross statistical measures such as pressure, humidity etc rather than the individual inner workings of the air molecules....and at the exact same manner for those markets we should be taking a look at gross statistical measures such as volatility, momentum, market construction etc compared to the infinite ways price action can unfold.

    To have the ability to ride the storms you need to be gift for those unpredictable rare chances. To be in this situation be diversified and you need to safeguard your funding base. This usually means that you need to be very discerning once you trade since your capital will be progressively chipped away at by the chaos.

    Randomness means that simply with luck alone some may be profitable and some may not but with all the Law of Large numbers and the frictional costs of gambling, time will get you in the long run. To be a trader you must accept that the markets aren't Gaussian and that they possess fat tails. If you do not believe this doctrine then you may as well pack your bags and join a new profession. The fat tails that exist in price distributions happen in any timescale and it is your task to spot when there's the best likelihood that tails will arise outside their churn.

    The way I handle this issue is as follows:
    1. Identify intervals when it is probable that player behavior is coordinated. This will be when market conditions aren't normal. Use gross statistical instruments such as volatility, market structure and momentum to specify these zones rather than price action. Start looking for zones outside normal volatility limitations or periods when major news events will trigger a major coordinated move. By avoiding the 'normal' churn you will tend to avoid 'random features' that don't have any durability of calling potential;
    2. Then treat every sign in that zone as legitimate whenever you have defined the zone inside which player behavior is likely to be coordinated than not and take them all. Steer clear of the propensity to predict as emergent characteristics in these zones can take many forms. Take every trading signal employing a systematic egy to ensure that you do not miss the potential whales;
    3. Abnormal market requirements are by definition events so diversifiion is your secret to raising trade frequency to lift your commerce activity. Rather than pursuing local storms, become a storm chaser of this world to bring home the bacon; and
    4. Strictly manage any risk but leave your profit goals open to allow for yield that is infinite.

    I hope this helps a bit mate and hope I haven't taken your thread off trail :-)

  5. #5
    Junior Member Oxscoty's Avatar
    17
    They probably said...

    I wonder if it's above or below its average price...

  6. #6
    Member Rocky's Avatar
    83
    And can it be above or below the body of the candle.

  7. #7
    Lets presume that from the beggining, a few traders chose to play with forecast of future price movements based solely on price itself. They knew the methods calling changes of variables in the future dependent on the variables already exist after long. They found them in meteorology, calling earth quakes, rain etc.. . Those forecasters uncovered that it's possible to expect the most likely changes in a variable based on the nearest states of the variable. Why did those methods operate from the markets ? Its...
    interesting question maxd !
    I see it this way: any indior including candlesticks is a means to smooth the sounds. Tick data is too large hard to interpret !

    Yes only statistics are used to predict the weather in the very long run.

    Except that the market changes so frequently. . That we're more like pioneering instead of making predictions.

  8. #8
    Junior Member ahorameves's Avatar
    17
    quote Hi Max. The way I tend to take care of this problem is akin to some problem with thermodynamics. The actions of participants in a intrie system such as the markets gives rise to GROSS statistical features of the markets themselves such as the volatility and market structure. It is not the individual buy/sell and trade size decisions of every participant which gives rise to the Gross features of the market but instead the actions. This collective activity gives rise to gross features of price...
    I enjoy it.

    Putting theory to practice. Have you made your first million trading fat tails?

    My Econometrics professors use to always tell pupils they called this and that wreck through their modelling but made no money.

    I fell from the courses



  9. #9
    Member
    33
    quote Hi Max. The way I tend to treat this issue is comparable to some issue with thermodynamics. The activities of participants in a intrie system like the markets gives rise to GROSS attributes of the markets themselves like the general volatility and market structure. It's not the individual buy/sell and transaction size choices of every participant that gives rise to the Gross attributes of this market but rather the actions. This collective activity gives rise to gross attributes of price...
    Thanks allot for your answer)
    The analogy is golden.
    I just don`t have anything to add since you covered it by a to z

  10. #10
    Member
    33
    They probably said... I wonder if it is above or below its ordinary price...
    Exactly why the typical exactly though ? And never the median by way of instance or mode. Can it be because it's the most easy to calculate, or since it was ?

    Also is there an exact term or method used in statistics which deals with above/below ordinary ? I'm a newbie at it sadly.
    The problem I'm facing with the typical is that at least to my understanding its generally near the median. And is affected by extreme values, and adheres. I assume there's something much like correlation coefficient but anchored into the typical.





    and then, can it be above or below the body of the prior candle.
    Why only the body though ? Are the wicks ignored ?
    And I guess the body of the previous candle might be easily a reference range. Movement could be measured using percentage as an indior.

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