simple, tradable, awesome statistics
Posted: Sun Jul 15, 2012 6:57 pm
I wanted to start a thread which boils statistics down to their most simple tradable form. Put specific instruments aside, and lets just talk the plain numbers, their meaning, and practical application.
Any statistics should answer the following questions:
1. what makes this statistic tradable?
2. how does it help capture some of the average range (of the specified TF)
so far the only statistic that makes sense to me is this:
average wick size vs. average body and wick in direction of candle color.
Across different instruments, I keep getting the outcome of:
25% wick/50% body/25% wick
How is this tradable?:
1. after the candle retraces and creates an "average wick" there should be about 3 times as much profit to catch in the other direction.
2. On paper, this should catch up to 75% of the avg range of the candle, with a 3:1 reward/risk ratio
This is my first attempt, and I will be trying to come up with other ways as hard as I can, I truly believe statistics are what creates wins, and I am looking to deepen my understanding and application of them.
Please, if you find any flaw in this, or see anything that is flawed logic, please let me know.
Feel free to post your own findings/research for discussion.
Any statistics should answer the following questions:
1. what makes this statistic tradable?
2. how does it help capture some of the average range (of the specified TF)
so far the only statistic that makes sense to me is this:
average wick size vs. average body and wick in direction of candle color.
Across different instruments, I keep getting the outcome of:
25% wick/50% body/25% wick
How is this tradable?:
1. after the candle retraces and creates an "average wick" there should be about 3 times as much profit to catch in the other direction.
2. On paper, this should catch up to 75% of the avg range of the candle, with a 3:1 reward/risk ratio
This is my first attempt, and I will be trying to come up with other ways as hard as I can, I truly believe statistics are what creates wins, and I am looking to deepen my understanding and application of them.
Please, if you find any flaw in this, or see anything that is flawed logic, please let me know.
Feel free to post your own findings/research for discussion.