My new chaos findings implemented in forex trading

forex live trades, setups, charts

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Paul&Paul
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To sts

Postby Paul&Paul » Wed Feb 22, 2012 6:31 am

...then the indicators that we use should be adapted to the chaotic nature.
You are absolutely right.
Such an adaptation involves two major issues: the necessity of rewriting some formulas and new modes of graphical presentation.

In the example attached there is an important indicator which does not show anything readable at a glance. It looks very smooth due to a very large sampling.

However, it contains a special code visible only in a reconstructed attractor. There are the hidden ripples of the pond.

Some people use short sampling just in order to see something is changing in the graphical representation.

Sampling is like a lense. It can magnify, it can diminish. You cannot live long if you tried to cross the street with magnifying lenses on.
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sts
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Postby sts » Wed Feb 22, 2012 3:15 pm

Dear Paul&Paul,

Thank you once again for the answers...
I gave the RSI example mostly because it is more famous than MACD and a little bit less than Madonna.
By the way I don't use indicators in any sort especially with the default values.
The default values are simply "social control myths" rather than science.
Anyway, you have already mentioned that issue in the past.
I get the point about how the chaotic-indicators should be constructed.

Actually, in the root of my question there lies the suggestion that
"less energy does more work as the chaos evolves"... is that right?
I know that sentence is handicapped in many ways,
So I'd better stop suggesting and directly ask what is in my mind:
As the critical levels crossed one by one towards an extreme of 14.208...
For example as the Goldman share walks...100,02 --> 107,80 --> 116,66...
If I want to stop Goldman's uptrend where should I fire my gun?
If I want Goldman to keep on walking where should I fire my gun?
So that I get the best efficiency out of my ammo?
At which point(s) a butterfly can do the job, while an elephant is needed on others?


NOTE: (Obviously you are a busy person and I don't want to throw away too many questions.
All these above have a practical purpose and I will be happy to share it
As soon as I don't feel like I am asking idiotic questions : -)

Paul&Paul
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To sts

Postby Paul&Paul » Wed Feb 22, 2012 6:00 pm

it is a sort of question to which the theory has no answer.
I will replace your question with an easier one. Why do you want to go against an expanding fractal in the first place?
Of course no trend lasts forever and some reversal will take place sooner or later.

Chaos says go with the direction of the energy.
There will be triggers in the opposite direction after some time. In order not to open prematurely in the opposite direction some guidance is needed from semafor3 or study other markets very carefully.

When I think about butterflies and elephants, or their energy, it would be quite natural to think that it is much more difficult to trigger off than to continue and expand beyond for example 5.8664 or 9.1299. So the beginning perhaps belongs to some heavier arms than butterflies.

Why do I think so?
For two reasons.
The second reason is that traders really enjoy contrarian trades when some decent movement has been completed (it seems so to them) and going farther through their stoplosses enhances fractal expansion in the hitherto direction. Closing some trades near a chaotic border is not the same as opening reverse positions.

The first reason is more complicated, when there is a battle to break out of a range.

Paul&Paul
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NZDUSD as on 23.02

Postby Paul&Paul » Thu Feb 23, 2012 2:30 am

NZDUSD is below 9.1299 and not far from 14.208=8243.
Recently sold @ 8323 and below.
Tried to recover one time but failed at 8304/08.
Again trying to recover from a lower low.
Needs to close firmer than 8304 to believe the new attempt is viable.
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Paul&Paul
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Large samples are more precise than small samples

Postby Paul&Paul » Thu Feb 23, 2012 2:44 am

This statistical observation applies to a variety of situations with no discrimination.
Why do we tend to rely on a small sample volatility then?
Because traders have a wobbly understanding of sampling effects.

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Traders who pick too small a sample

Postby Paul&Paul » Thu Feb 23, 2012 2:48 am

leave themselves at the mercy of sampling luck.
Simply luck.
Now go and look at the default settings.
By chance you have noticed that you are told to try your luck.

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If you chose a small sample

Postby Paul&Paul » Thu Feb 23, 2012 2:55 am

you exposed yourself to a 50% risk of failing to confirm even the truest hypotheses! No researcher in his right mind would accept such a risk.

As a result some traders discard certain ideas and strategies simply because they cannot be confirmed with a small sample.

The current platforms effectively prevent using large samples.
Thus they effectively prevent using science and making headway.

They force to use luck. They are meant for lucky losers.

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Few people realize

Postby Paul&Paul » Thu Feb 23, 2012 3:16 am

that the lack of sampling tools is a simple way to be killed in the long run.
It is probably their intention no matter what they say.
It looks like a giant casino rule.
No regulator talks about it.
No regulation deals with it.
Do you need a regulated market or a decent market?

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The Greek story

Postby Paul&Paul » Thu Feb 23, 2012 3:37 am

What?s historic about the 15th rescue of Greece?
From a statistical point of view historic is the growing sample of rescues.
Are we any closer to some science or truth?
I doubt it.
Because a shave and a haircut have so little to do with rescues.

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The law of small numbers is strongly manifested

Postby Paul&Paul » Thu Feb 23, 2012 3:58 am

in the rescue plans invented by Merkel and Sarkozy.
They favor certainty over doubt.
They focus on the story rather than on the reliablility of the results.

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