My new chaos findings implemented in forex trading

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dirk
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Postby dirk » Sun Jan 16, 2011 7:15 am

Hi Paul , welcome back......do you remember me ?

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Paul&Paul
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GBPJPY on agenda

Postby Paul&Paul » Sun Jan 16, 2011 11:00 am

GBPJPY exhibits exemplary properties of a chaotic system.
The trigger's value is 1, marked in red. The border of chaos is @ 3.5699.
F = 4.669 is the Feigenbaum's value. These are fundamental multipliers when prices exponentially run away from a repeller. Prices never escape to infinity. Like trees never grow infinitely to the sky.
Seeing is believing.
What should strike you is that these multipliers are quite different than the well known Fibonacci ratios. Yet, there is a unique link between them. Hence, the theory of chaos never contradicts Finbonacci tools. It merely glances at them differently.
The basic idea of controlling chaos can be understood by considering classical logistic map.
x(t+1) = rx(t)[1-x(t)]
where r is the Malthusian parameter that varies between 0 and 4 and x(t) varies between 0 and 1. The period doubling bifurcations continue to a limit point at r = 3.5699 at which the period is 2 to infinity and the dynamics becomes chaotic. The series of period-doubling bifurcations says that close enough to 3.5699 the distance between bifurcation points decreases by a factor of F = 4.669... for each bifurcation. The complex fractal pattern got in this way shrinks indefinitely.
However, what I actually showed you is not a shrinking fractal pattern but an exponentially expanding fractal pattern.
It does not mean that I have discovered a reversal of the time vector.
What I have discovered is the transition from chaos to order, and as a result, the decreasing entropy of the system.
We have come to the point where control of chaos is a great challenge for market makers as well as price makers who are responsible for stability of the financial markets. Now you may start believing that since it is possible to control chaos for the sake of stability, it is also possible to ignite a controllable crash. You will never ever see the market in the same way after these disclosures of mine.
Transitions from chaos to order and from order to chaos are frequent. They happen every day. Everywhere you look be it GBPJPY or S&P500 or
gold or oil.
You cannot have chaotic behavior and stochastic behavior at the same time. It is one of the reasons why stochastic indicators fail as a rule. Make the market stochastic and you will earn millions with stochastic tools.
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Paul&Paul
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Fibo applied to the trigger

Postby Paul&Paul » Sun Jan 16, 2011 11:45 am

Fibo applied to the trigger yields the result seen on the chart.

Kindly notice that following the trigger a typical 5-Elliott wave pattern developed. Wave1 at 423.6, wave2 at 161.8, wave3 at 3.5699 and wave5 at
4.669.

But first comes energy.
A trigger is energy.
An Elliott wave pattern is matter.
Energy is transformed into matter.
And the new matter creates new energy. Another Elliott wave pattern develops.

But first comes energy. One can anticipate new things develop before they are physically created.
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The nearest UPOs for GBPJPY

Postby Paul&Paul » Sun Jan 16, 2011 1:30 pm

The nearest UPOs for GBPJPY are 132.16 from the upside and 130.21 from the downside.
132.16 dated back to December 15.
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Evidence of chaos in gold charts

Postby Paul&Paul » Sun Jan 16, 2011 4:48 pm

Just a glimpse at gold charts and how 3.5699 and 4.669 works here and sets important targets.
The trigger is marked in red colour.
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Re: GBPJPY on agenda

Postby gfg1 » Sun Jan 16, 2011 7:48 pm

Paul: what is the method you are using to determine your trigger value of 1 marked in red? TIA

Paul&Paul wrote:GBPJPY exhibits exemplary properties of a chaotic system.
The trigger's value is 1, marked in red. The border of chaos is @ 3.5699.
F = 4.669 is the Feigenbaum's value. These are fundamental multipliers when prices exponentially run away from a repeller. Prices never escape to infinity. Like trees never grow infinitely to the sky.
Seeing is believing.

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GBPJPY on agenda

Postby Paul&Paul » Mon Jan 17, 2011 10:49 pm

A new trigger down is marked in red colour. GBPJPY touched 3.5699 and was rapidly lifted higher. The reaction is important to us. In tolopogy it means that the manifold is locally stable downwards. In trading it shows that buyers are strong and they may not allow GBPJPY to fall too much. Please remember that the same reaction we observed at 3.5699 for the trigger up which occured earlier. Combining the two events, we are in a region of stability in both directions. The market may go sideways now. However, it bound to hit both 4.669s.

Roughly speaking stability means that in phase space the trajectories group into bundles without any significant changes as time passes, or with an at most linearly growing spread with time. You have to compare it with instability in which prices run away from a repeller at an exponential rate.

Markets are locally stable in one direction and unstable in the other. Markets can be locally stable in two directions at the same time. Imagine holding a manifold with a pinball on it. The stability of the pinball depends on the bumpiness of the surface and on how you are holding the manifold.
The idea is never to let the ball go to infinity, never to let it fall off.

Chaotic systems can be controlled for stability. And they are.
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gfg1 asks

Postby Paul&Paul » Mon Jan 17, 2011 11:18 pm

The trigger is obtained from symbolic dynamics as a method to study general dynamical systems which have found significant applications in many fields like data storage and transmission, the motions of the planets and other areas. The distinct feature in symbolic dynamics is that time is measured in discrete intervals and at each time interval the system is in a particular state. Each state is associated with a symbol and the evolution of the system is described by an infinite sequence of symbols. On the surface it looks like
a decoder, you are breaking down a code.
Ordinary candle charts are excellent for symbolic dynamics.
The multipliers come from a fractal model.
For simplicity wherever it can be done, a unit value is set because it is more important to see the multiplier of 1 than some number of pips, besides the lines mark price levels and these can be referred to on the right side of the chart. You may never see any pattern unless you operate unit values, not pips. That is the essence of all mathematical modelling.

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You have most probably seen it the first time

Postby Paul&Paul » Tue Jan 18, 2011 12:45 am

You have most probably seen it the first time.
An absolutely amazing example of a runaway of gold prices from a repeller at an exponential rate.
And the rate is 14.208.
It is not a random number. It is as important as Feigenbaum's value 4.669. This is a pioneer discovery in forex. Call it my number (MY). :wink:
Did Mandelbrot know it? No.
Does Feigenbaum know it? No.
Is it related to the Fibonacci ratios? Yes.

Nobody has ever shown you an example of such significance as this one.

What you see in price charts is a mere shadow of a complex n-dimensional non-linear dynamical process. Depending from which dimension you look at it, you may see a different thing. But all of those things are actually the same thing.
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GBPJPY on agenda

Postby Paul&Paul » Tue Jan 18, 2011 1:12 pm

GBPJPY hit UPO@132.16.
It is clear how significant 3.5699 was for the future behavior of the system.
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