My new chaos findings implemented in forex trading

forex live trades, setups, charts

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Paul&Paul
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NIKKEI 225

Postby Paul&Paul » Mon Mar 14, 2011 9:55 pm

It will take a little time. You had better sit down. Draw from your breast-pockets
a small magnifying glass and wipe it carefully with your handkerchief. I am quite ready. Are you?

I am amazed at the discord between the shallow optimism of the day and the real facts of existence. It was not the mystery but the suffering that struck me; its absolute uselessness. The contrast between the behavior on NIKKEI 225 and the behavior of the rest of Japan struck me more. Far more. Seeing investors fleeing the market at that pace before the earthquake, well... I do not know what to say. I would not like to say too much.

Still you had better be seated and think for a good while. How it started, when and where it started. What was the magnitude of changes.

The trigger occurred on the 21st of February. Before first tremors took place NIKKEI had dived to 3.5699 of that trigger. Today it plummeted to 9145, a little more than the dive before the earthquake. Now it is set by the fractal expansion that NIKKEI is going to 8900 some time in the future.

Yet, forget about the next day and concentrate on the changes before the earthquake. I dare not ask questions more down-to-earth than science. My hours are from 3.5699 to 14.208 and I make a reduction for families. Who and why could be so sure about that?
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Paul&Paul
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NIKKEI 225

Postby Paul&Paul » Tue Mar 15, 2011 4:41 am

My hours are from 3.5699 to 14.208 and I make a reduction for families
NIKKEI 225 has done 14.208=7935.
Anything below is out of control. NIKKEI is balancing on a thin line. It merely reflects the aggrevating situation. Explosions at a Japanese quake-stricken nuclear plant have led to radiation levels that can affect human health.

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The battle of GBPUSD to take 1.6246 is underway

Postby Paul&Paul » Thu Mar 17, 2011 6:38 pm

GBPUSD has been knocking at the door of sellers who occupied their positions in Selling Street on March 8, the International Women's Day. Actually the street is crammed with them. Selling the cable at such a dear price and to so many, my fair lady. And now they have five houses but not a single castle. Comfort and modern improvements in the houses built by chaos with a roll of toilet paper dangling from a UPO@1.6246.
It is determined by the system that GBPUSD is going to take 1.6246 before all toilet paper is used and water flushed.

The current situation is plotted in another chart. The three UPOs from the downside are repellers now. Keep a note of them. 1.6066, 1.6047 and 1.6009. Some time in the future GBPUSD is going to quietly descend there. Perhaps when the smoke is gone. GBPUSD looks unstable upwards. The nearest target is 1.6219 but there is more than that in the cards.
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Paul&Paul
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NYSE LIFFE London FTSE100 index futures based CFD

Postby Paul&Paul » Thu Mar 17, 2011 7:01 pm

NYSE LIFFE London FTSE100 index futures based CFD.
FTSE100 completed 4.669 of the trigger down. There is a trigger up setting the nearest target at 5745.
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Paul&Paul
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Alert on CHFPLN

Postby Paul&Paul » Thu Mar 17, 2011 7:15 pm

Recall my first post on CHFPLN.

CHFPLN is on the agenda now. This is something very important for those who took mortgage credits in Swiss francs and face the problem of the foreign exchange risk.
CHFPLN completed 3.5699 of two triggers up. These two very similar targets are 3.1351 and 3.1430. From there CHFPLN slumped to 4.669 of a small trigger down, located at 3.0935.
What should be expected next?
It is the matter of time when CHFPLN goes to 4.669 of those triggers up (3.1580/63). Not immediately, yet these targets are already on the table.

Now, let us see what is there in the history of CHFPLN. The new chart shows that the targets of the triggers up are in the region of a UPO@3.1384. CHFPLN revisited 3.1384 and pierced the line of the UPO. It means that at least one more time CHFPLN is going to cross 3.1384 in the near future, at least 200 pips higher. What else is there? Another UPO@3.1719. The system shows that we should expect another bout of weakness of the Polish zloty against the Swiss franc. Those who can do it, should think about buying CHF while it is still retracing. Actually anything below 3.1351/30 is ways better than 3.1719. Besides, the market may stay relatively high before breaking through 3.1719 in a protracted way. I suggest buying CHFPLN while it is still relatively cheap.
[B]

The current situation is self-expalanatory on the new chart. CHFPLN soared from 3.0900 to 3.2900.
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EURGBP not quite took 8723

Postby Paul&Paul » Thu Mar 17, 2011 7:38 pm

EURGBP not quite took 8723.
Retraced to 4.669 of a small trigger down.
Once 8723 is taken it is going to take to 8804.
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USDCHF

Postby Paul&Paul » Sun Mar 20, 2011 6:52 pm

USDCHF plummeted to 8983 and 8943 of which the former is more important near term. USDCHF looks unstable downwards. On March 18 USDCHF was lifted by rumours of an intervention. It is first time since 2000 that G7 countries have jointly intervened in the currency markets. 8983 is a temporaty base line. Actually from there USDCHF rose to 4.669 and to a UPO@9086. Being a dead cat bounce it retraced those gains completely. The important trigger down is in the left top corner. Together with a massive selling area marked with blue. Last trigger is down with its 4.699 target at 8904. Selling pressure is still there, confirmed by the reaction at the UPO@9086.
Prediction can be made on the basis of market's behavior, not behavior anywhere but near or at some price levels which are important, and those are determinants of a chaotic system. From the point of view of topology we rely on the invariants of the system. An invariant is a property of a class of mathematical objects that remains unchanged when transformations of a certain type are applied to the objects. In informal words we say that no matter what happens on the market we are going to see preset targets taken and we are going to see returns to UPOs-repellers (which eventually turn into attractors). The system does not care about the sizes of various margins applied, hence with small margins some targets and some UPOs may not be the most suitable solutions in trade. In principle, those targets and UPOs fit more big margins, capable of handling many open positions at the same time, rather than small margins which can handle just few.
Non-linear dynamical processes are counter-intuitive as a rule. We cannot state with certainty that we will manage better and perform better by reducing the size of the sample, by reducing the number of trades. An arbitrary reduction of trades may not increase the profit-to-floating-loss ratio in the near term. However, longer term it really does not matter at all, as we use only what is 100% certain. Because the occurrence of triggers is a non-linear process in itself as well, we cannot spoil the game by doing wrong trades. Adx there are no wrong trades. No trades are wrong, if you know those determinants, those invariants of the system. Why? Because the system shows incredible stability. Because prices never escape to infinity, not even in a "crash" (vide NIKKEI 225).
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Last edited by Paul&Paul on Mon Mar 21, 2011 8:49 pm, edited 1 time in total.

Paul&Paul
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The essence of stability of financial markets

Postby Paul&Paul » Sun Mar 20, 2011 9:57 pm

Reference may please be made to the Mandelbrot set.
http://en.wikipedia.org/wiki/File:Verhu ... cation.jpg
I mentioned it earlier that we are actually seeing fragments of the Mandelbrot set as there is a unique correspondence between the Mandelbrot set and the logistic map. Fractal expansion of a trigger develops from left to right.
A complex number, c, is part of the Mandelbrot set if, when starting with z0 = 0 and applying the iteration repeatedly, the absolute value of zn never exceeds a certain number (that number depends on c) however large n gets. Financial markets deal with bounded fractal expansions.
http://en.wikipedia.org/wiki/File:Mande ... ot_set.jpg
All the time we are having a galore of triggers forcing the prices to go inside the big part of the Mandelbrot set.

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CHFPLN

Postby Paul&Paul » Sun Mar 20, 2011 10:32 pm

CHFPLN rejected at 3.2293 set a negative mood for CHF. Last trigger was up with its 4.669 at 3.2400. 3.5699 of the same trigger lies at 3.2275. There are two UPOs to which CHFPLN is bound to return. One at 3.2182 and the other at 3.1351. CHF is dearer for Poles who make Swiss franc credit repayments. Nothing reassuring for them from USDCHF at the moment.
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The anatomy of an intervention based on GBPJPY

Postby Paul&Paul » Sun Mar 20, 2011 10:45 pm

The world's richest nations have carried out coordinated action in the currency markets to try to stabilise the Japanese yen. It is first time since 2000 that G7 countries have jointly intervened in the currency markets. The yen weakened after the intervention, recently trading at 80.94 against the US dollar.
Earlier this week, the yen hit 76.25, its strongest since World War II, adding to fears over Japan's recovery.


Let us examine the anatomy of that intervention to begin with GBPJPY. It clearly started above 126.04. The conditions for an action were excellent from the point of view of chaos control. Looks it happened 30 minutes before Europe opened on March 17. GBPJPY had dropped 500 pips in a short time during a very illiquid hour a day before and triggered an avalanche of stop losses. Last time such a drop I saw in 1998. In that sense we have had the biggest instability of GBPJPY since 1998.
Europe actually was busy with book-keeping all day long and New York did not invent anything waiting for further news. However, and this is distinct, the market stayed away from creating a decent trigger down. Certainly it was not a coincidence but a whispered rumour. The rest goes without saying.

GBPJPY left a repeller behind @128.36.
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