My new chaos findings implemented in forex trading

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noushina
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Postby noushina » Mon Jan 24, 2011 2:03 pm

flinux wrote:I think there is much difference between 3.566 and 3.5!
You have to remember that we are on a non-linear chaotic system and even a small variation creates big differencies.
Yes but the price exceeds or sometimes does not reach the 3.566 and 4.677 lines. And the difference between using 3.5 and 3.566 is in most cases only a pip or two.

Thus for practical purposes one would want to draw the target a bit low.

Of course the real issue is how to get that consolidation range in the first place. then if you multiply it by 3 even and the price goes to 3.566, who cares. Your target is hit and you take a profit.

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Postby PIP'S FARI » Mon Jan 24, 2011 3:58 pm

I'm guessing in the long term of multiplying a higher number that the .5699 and .669 does matter
Last edited by PIP'S FARI on Mon Jan 24, 2011 7:35 pm, edited 1 time in total.
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Postby PIP'S FARI » Mon Jan 24, 2011 5:10 pm

Question for Pual can the Triggers be consider as Momentum from support resistance to a retrace? how are the borders of Choas determine? are the borders of Chaos or fundamental multipliers only 3.566 4.669 and 14.208?
"Whether you believe you can or not, you are right" Henry Ford

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Paul&Paul
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Momentum

Postby Paul&Paul » Mon Jan 24, 2011 9:43 pm

Momentum is a conserved quantity meaning that the total momentum of any closed system (one not affected by external forces) cannot change. (Wikipedia). Note that financial markets are not closed systems. Any multiplier/constant/ratio employed could be made useless when new external forces come into play (who may have targets of their own, not corresponding to any existing targets).

Yet, it is intriguing to recall Noether's (first) theorem which states that any differentiable symmetry of the action of a physical system has a corresponding conservation law.

It may seem that something similar to conservation law is being observed with triggers. If a physical experiment has the same outcome regardless of place or time, then its Lagrangian is symmetric under continuous translations in space and time; by Noether's theorem, these symmetries account for the conservation laws of linear momentum and energy within this system, respectively. The problem begins when you are to explain why the system conserves the information about various independent "momenta" in the same direction or in the opposite directions and the "momenta" are independent, they do not interfere with each other, they do not sum up or swallow each other.

Triggers are not momenta. Triggers, on the other hand, resemble solitons (3 properties ascribed to solitons):
1. They are of permanent form (stable);
2. They are localised within a region;
3. They can interact with other solitons, and emerge from the collision unchanged, except for a phase shift.
In mathematics and physics, a soliton is a self-reinforcing solitary wave (a wave packet or pulse) that maintains its shape while it travels at constant speed. Solitons are caused by a cancellation of nonlinear and dispersive effects in the medium.
The link below is very useful.
http://paws.kettering.edu/~drussell/Dem ... itons.html
Solitons can help explain certain odd behavior of the market (like why farther targets can be reached quicker than nearer targets - see the animation under Collision between two solitons traveling in the same direction - while nearer targets are marked after a retracement).

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Several attempts by GBPJPY to break 3.5699=132.33 failed

Postby Paul&Paul » Tue Jan 25, 2011 8:34 pm

Several attempts by GBPJPY to break 3.5699=132.33 failed. One pip shy of 132.33, who would believe it? I suggest going back to January 18. The trigger down @131.98 was a harbinger of a fall to the region marked with 4.669 and a UPO@130.21. That is where it plummetted to. Overall you may observe that rejection of 4.669 and 3.5699 meant stability upside and a very serious instability downside.
Several failed attempts to break through 132.33 meant a growing instability downside.
For clarity I left the chart unupdated, so new triggers are not marked there.
Note that 130.41=3.5699 is a significant resistance now. The precision of these multipliers is truly amazing.
It is not possible to follow each trajectory when a steady build-up of new information is taking place. So we will never be able to utilize everything what is there in the system. It is important to be precise and patient. To some an extent these analyses with ellipses drawn from triggers to their targets resemble mind maps or mind mappings.
A mind map is a diagram used to represent words, ideas, tasks, or other items linked to and arranged around a central key word or idea. Mind maps are used to generate, visualize, structure, and classify ideas, and as an aid to studying and organizing information, solving problems, making decisions, and writing. (Wikipedia)
On a price chart, prices rise and fall. From the point of view of topology (and chaos), the market squeezes, stretches and folds. Folding causes some similar prices to be really very far away from each other but we do not see it in candlesticks.
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GBPJPY amazes again

Postby Paul&Paul » Sat Jan 29, 2011 9:18 pm

Richardson 1926 asked Does the Wind Possess a Velocity? The question at first sight foolish, improves on acquaintance.
In the case of GBPJPY price changes may be studied with no mention of their velocity.
In physics, velocity is the measurement of the rate and direction of change in position of an object. It is a vector physical quantity; both magnitude and direction are required to define it.
The heuristic evidence is that chaotic systems like GBPJPY can show a sudden change of direction of change while retaining the rate of change which is never disturbed by other market movements.
Recall GBPJPY was strongly rejected at 3.5699 of trigger 1 several times and it plummetted below the trigger in a significant way. Nevertheless, GBPJPY completed its chaotic cycle by an enormous rise to 4.669 and again dropped below that trigger.
The system conserved the trigger's energy for about 10 days paying no attention to other market developments.
The dynamical system reacts to certain information (external) or to certain conditions (internal) with a lag.
Were there new triggers after trigger 1 during that 10-day period? Yes, many.
Did they carry a portion of energy of their own? Yes, they did.
Did they disturb the determinism of the system resulting from trigger 1?
Not in the least. The limit values 3.5699 and 4.669 we saw as very important local boundaries. It doesn't matter how. It matters that the market did go there and reacted sharply.
We will never be able to follow each trajectory the system creates. Trigger 1 picked for this experiment shows a clear trajectory while all the others remain obscure to you.
As mentioned before, 3.5699 and 4.669 are important to determine in which direction the manifold is stable or unstable. It is a local property, though the phase space is dense with such orbits and never distributed uniformly. No order has been observed in the series of triggers' energies. But, there is again heuristic evidence that some triggers contain energies just "enough" for the market to return to a UPO-repeller which turns into a UPO-attractor.
Unfortunately, computer images are limited in size. I attached a new chart with 4.669 marked but the trigger from January 19 is not seen.
Updated GBPJPY with latest insight is to follow.
I would like to share some thought of general kind as well. I am of the opinion that whoever thinks of trading seriously, must not limit himself to analyzing the market. You must force yourself to take down important observations and your personal conclusions should be drafted in a clear way and referred to for some time onwards. It is a very important mind work which cannot be skipped or substituted.
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Postby TheRumpledOne » Sat Jan 29, 2011 10:38 pm

"I would like to share some thought of general kind as well. I am of the opinion that whoever thinks of trading seriously, must not limit himself to analyzing the market. You must force yourself to take down important observations and your personal conclusions should be drafted in a clear way and referred to for some time onwards. It is a very important mind work which cannot be skipped or substituted."

Price goes up. Price goes down. The only thing that matters is whether or not you enter with or against price movement. Accurate observation of what price is doing, IN THE MOMENT, will result in profit.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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GBPJPY completed 4.669 counted from trigger B

Postby Paul&Paul » Sun Jan 30, 2011 10:50 am

GBPJPY completed 4.669 counted from trigger B.
The target 130.18 is identical with the target resulting from trigger A.
Trigger B is near the local top. Trigger A occurred earlier and much lower than B. Yet at that place trigger A was also near a local top. Trading trigger A and trading trigger B brought different results in pips and A would have probably been stopped somewhere on the way to 132.67. The system did 4.669 in both these cases anyway. It was important and it is important. There is no sense speculating for whom. Better think about it in terms of a system.
What we see at the end of the week is the fact that the market is more stable upwards than downwards. Instability means susceptible to run farther away.
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Future determines the present?

Postby Paul&Paul » Sun Jan 30, 2011 1:53 pm

The present is determined by the past and also by the future. Targets belong to the future. The paradox of the time disappears if you treat the targets like places to which different roads lead. On the map you have places and roads. There long and winding roads. You look ahead but you do not peep into the future. The places are already there, and the roads are there. What changes to some an extent is the topology of the road. It may become bumpy, with an obstacle or very very steep. It may be wise to take a sideway to avoid the difficulties even when it is going to deviate you from the main route in a significant way. Sometimes moving backwards on a sideway is the only possible way to move ahead. A longer road may be the fastest road to reach the goal.
You will look back into the past perhaps only if you mull reversing your direction. Once you have given up, you realize that the past changed. The way back is never the same in its topology.
The question is who is on the road, you or maybe something else. It depends from what angle we will consider the problem. From the angle of market participants it will be you on the road. From the point of view of a chaotic system it will not be you but an abstract entity, an abstract pinball moving on a manifold full of topological complexities. Should the pinball escape to infinity, the game would be over. In simple words, the system would collapse and never resurrect.

There is no one suitable way of trading chaos. There are many ways leading us to a whole class of possible and feasible strategies. Remember that non-linear dynamics is counter-intuitive. The idea of not using stoplosses, for example, is counter-intuitive as well. Chaos is too complex to be treated in a traditional way. The most important observation is that the market can be stable in one direction and unstable in the opposite direction. When you trade in the stable direction you may expect 4.669 to be your profit. When you trade in the unstable direction you may expect 14.208, for example, and it may not be the final multiplier. This clearly shows why your 4.669 profits may be quickly marginalized if you stick to the stable direction only. 3 to 1 loss to profit ratio is not what you wished to accomplish.
Last edited by Paul&Paul on Tue Feb 01, 2011 11:19 am, edited 1 time in total.

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GBPJPY exact as usual

Postby Paul&Paul » Tue Feb 01, 2011 11:17 am

GBPJPY reached 4.669 from two triggers C and D which are almost in the same place. Trigger D yielded exactly 131.96 which is pip-to-pip 4.669.
More to come...
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