My new chaos findings implemented in forex trading

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Paul&Paul
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AUDUSD did 0.9976

Postby Paul&Paul » Tue Jan 18, 2011 4:46 pm

AUDUSD did 0.9976.
New developments will be discussed soon.
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Paul&Paul
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GBPUSD smashed shorts

Postby Paul&Paul » Tue Jan 18, 2011 5:15 pm

If you look back a little farther you notice that 1.5904 from November 23 was very heavily sold. To force those positions to close we needed a sharp movement to 1.5979. That was another UPO waiting to be revisited and a good bite to take, expecting a stampede of stoplosses.
Price makers crushed shorted traders in a decisive way. The length of the M30 candle shows stoplosses triggered. In the nick of time margins suffered tremendous losses. We are not closing below 1.5879 now.
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Paul&Paul
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New developments on GBPUSD

Postby Paul&Paul » Tue Jan 18, 2011 5:34 pm

For clarity I will build up the picture gradually in a few steps.
A trigger up is marked in red colour. Kindly notice that 14.208 was done precisely pip to pip and a sharp denial followed (hefty 76.4%).
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Paul&Paul
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GBPUSD with a next trigger up

Postby Paul&Paul » Tue Jan 18, 2011 5:48 pm

I have marked a next trigger up in red colour along with its 14.208 target.
Would you believe it?
Two triggers yielding 14.208 in each case, and sharply denied.
Also notice that UPO1.5873 turned into a repeller. In simple words was a strong support.
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Paul&Paul
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GBPUSD has potential to retrace to 1.5769/75

Postby Paul&Paul » Tue Jan 18, 2011 6:20 pm

Now the mood is downward.
The targets are simple but the path to them can be very complicated. There is no question of a straight downfall.
These targets are: 1.5949
1.5902
1.5875
1.5769/75.
The most important is the last one.

And now we have 1.5949 done.

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Paul&Paul
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Gold

Postby Paul&Paul » Tue Jan 18, 2011 10:25 pm

A stochastic process is the counterpart to a deterministic process, and is also the counterpart to a chaotic process. In a stochastic process there is some indeterminacy in its future evolution described by the probability distributions.

For chaos, the irregularity is part of the intrinsic dynamics of the system, not random external influences. Usually, chaotic systems are predictable in the short-term. The meaning of the short-term is different for different systems. So it will be a couple of days in weather forecasting. It will be a couple of targets in financial markets forecasting.

Have you ever thought that financial markets forecasting can be short-term accurate in relation to targets, not in relation to time?

Whoever tried to apply any Fibonacci projection, or any Elliott wave projection should understand this problem. There is constant uncertainty what is going to happen first and when we can expect an extension or a local extreme to materialize. Today? Next week? A month after? Six months after?

Chaotic systems of financial markets very often disregard time axis completely. For example more important is knowing what price levels are going to be hit instead of when they are going to be hit. Look at option players who care for striking prices not at any particular date but during the life of their options.

In the world of uncertainty it is important to be able to effectively utilize what is certain and forget about the rest.
No price ever goes to infinity or becomes zero. Markets are stable in general but can be unstable locally.
Similar events in a sequence as they occur can be separated by time of different lengths. Similarities may not pertain to time patterns or price patterns at all. Even if you find some time & price patterns, they may play an insignificant role in effective forecasting.

If you agree that markets can be chaotic (as there is evidence they are chaotic most of the time) placing stoplosses becomes a complete nonsense. Stroplosses are weapons of margin destruction (WMD). For one very simple reason. You can be sure about the targets. You cannot predict a whipsaw. You can set take profit levels. What stops you want to set? You will toss a dice? Or ask your mum?
Below find another interesting gold chart giving evidence to chaos. It looks beautiful and unbelievable. 4.669 is the Feigenbaum's value. But again, if you can refer F to any bifurcatrion tree (search in googles), you will notice that here the trigger is multiplied by F. Which means that I am showing you a transition from chaos to order and a decrease of entropy. It is possible only for open systems.

Now think about the market when it hits a chaotic target like 4.669.
You are big and powerful, and some smaller names flood you with queries. Hey, pals, what are going to do now? You can tell them: do nothing or buy strong or sell strong. You can actually work towards more stability or to destabilize the market for some reason.
In the case of gold, 4.669 hit again sends a very clear message: we are not interested now in pushing the prices higher. You get the message on different price levels. The sentiment correctly sensed can yield you a fortune.
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Paul&Paul
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GBPJPY touchdown @ 3.5699

Postby Paul&Paul » Wed Jan 19, 2011 5:08 pm

GBPJPY touchdown @ 3.5699 shows the same border of chaos again.
Global warming activists won't like it, you bet.
GBPJPY failed above 132.16. What can happen next, is to come.
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Paul&Paul
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GBPJPY updated

Postby Paul&Paul » Wed Jan 19, 2011 6:38 pm

Now you will be able to understand what is the meaning of my statement that the market can be rising and falling at the same time.

The far left hand trigger down initially pushed the prices to 3.5699.
Then a new trigger up yielded 4.669 pushing the prices much higher to 132.33.

Only now the market plummetted to 4.669 of the first trigger! It realized its 4.669 target though in the meantime it diverted 130 pips from the downward path!

Both target levels 132.33 and 130.86 were determined by triggers detected in the chaotic system. Magnificent is that unlike matchsticks, triggers do not burn out.
Triggers do not interfere. They do not amplify each other, they do not compress each other. They stay in the system independent and active.
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Paul&Paul
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AUDUSD updated

Postby Paul&Paul » Wed Jan 19, 2011 8:46 pm

Two basic triggers yielded precisely 3.5699.
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Paul&Paul
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Several targets determined by chaos on EURUSD charts

Postby Paul&Paul » Wed Jan 19, 2011 8:55 pm

Each time the market retraced a little, an evidence of transitions from order to chaos, from chaos to order.
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