Re: Chaos theory made simple - for trading

#61
interesting
I have some thoughts...maybe...
at least,
market is dynamic, it is a live, lol (volatility indicator?)
market has boundaries (bollinger bands?)
zigzag is price without noise
buying and selling moves price (money flow with 3 points?)

...


Re: Chaos theory made simple - for trading

#64
FBI wrote:
Sun Oct 14, 2018 8:17 pm
interesting
I have some thoughts...maybe...
at least,
market is dynamic, it is a live, lol (volatility indicator?)
market has boundaries (bollinger bands?)
zigzag is price without noise
buying and selling moves price (money flow with 3 points?)

...
I think what you have said is essentially brilliant in its truthfulness. I have been away basically because I was developing a chaos and fractal geometry based EA. I have now returned and thinking what is the best format for sustaining this thread. Once I have worked that I hope you will continue to participate with your incredible insights here - a few lines you wrote but unless those who think like you few will appreciate how profound and powerful your insights are really. I have a whole lot of materials that broaden those few lines of yours into an entirely different (from "fundamentals" and "technicals") way of looking at the market and profiting by that perspective. Lets see if I can find a way that communicates same here to make enough meaning in a site that is frequented mainly by highly intelligent and experienced traders. Cheers

Re: Chaos theory made simple - for trading

#65
nathanvbasko wrote:
Fri Nov 09, 2018 1:09 am
I am still in Chaos after reading the thread so far
Was away in an attempt to automate the trading system based on my understanding chaos theory and fractal geometry. The thread of course went cold and now I am thinking how best to not just revive interest but to get people to directly benefit in trading by the exchanges we have here on this thread. Have not yet worked it out but I am working on it. Cheers


Re: Chaos theory made simple - for trading

#66
Here are the test results of the EA I mentioned in my last 2 posts as having kept me away from this thread all this while. Why have I posted it here? a) It contains some interesting thoughts (in my opinion) on how we have adapted chaos theory and fractal geometry to work in the system in that it describes both the trading system and the money management system in the preamble. b) it shows very good results and indeed passed walk forward analysis exceptionally well c) but my entire experience taught me one thing - Man can trade better than machine (i.e. I can beat the exceptional results reported in the attachment) trading the same chaos based system manually. d) I would like to demonstrate that here from this point forward, showing what considerations go into such manual trading. I, however, would be trading Gold in the main, though the system can trade anything that is electronically traded. e) my hope then is that by posting issues and considerations around my trading we can share more practical insights on the application of chaos in trading and especially show how this view of how the market works is different from so-called "technical" and "fundamental" analysis. As such, generate topical questions and discussions about trading by chaos in general. f) Finally, I would like to make the following disclosures i) I am NOT selling anything to anyone (anything at all) now or ever, ii) I am here to share experience and insights from a perspective I think might be useful to other experienced traders and that is my sole purpose iii) the hope is to give back something (especially to a site that contributed immeasurably to the development of my ideas given I owe so much to people like Mladen and mr. tools).
The BSF Combinator EA-Strategy Tester Report.pdf
(536.31 KiB) Downloaded 87 times

Re: Chaos theory made simple - for trading

#67
The market I am trading right now, can be described using the "technicals" sense, the "fundamentals" sense or (for me) the chaos sense. I prefer the chaos sense because it describes a complex dynamical system - the market (i.e. exactly what I am interfacing with), in dynamic terms. Which is to say in the natural sense of its existence. That is, in the way a human trader actually experiences it in real-time. Because the science comprehends the system (market) fully, and describes and explains it in the way I experience the market, the chaos sense reduces my confusion in reading the market and therefore assures my emotions are in check. In other words, it allows real-time knowledge of what I am seeing, I therefore gain incredible confidence making trade decisions. Which means it allows me to make rational decisions in an environment constantly defined by a high degree of uncertainty.
To give some context, how do I know the state of the system (market) when I sit at my console to trade? Like everyone else, by observation. But my understanding and therefore reaction to the market I am watching, is guided by the sense in which I read the market. For instance, I observed a while back that price had been making fast transitions from "lows" in range to higher "highs" in range with frequency. In other words, the system (market) had been marking that behavior at an increasing rate of increase. That brought to mind the phenomenon of topological mixing associated with chaotic variables. Because the chaotic variable (price) was exhibiting the behavior described at the time, we can assume the constancy of explosive intermittency at its lowest possible resolution (with a northerly bias). This is like saying, price is set up (in microstructure) as would an active volcano engaged in serial eruptions, each more intense than the one prior. Of course that made clear to me not to take dips for granted in Gold and to enter fast and with the assurance that because of the noted behaviour of the system, the system (market) supported such trading (and for good range too). That is what I have been doing since, AND WHY.

Re: Chaos theory made simple - for trading

#68
It is important to note that in trading by chaos, so-called "fundamental" backdrops are not at all important and are totally irrelevant to trading decisions. So no time is wasted considering such or market news, or the events calendar, as they are clearly exogenous when it is considered that we are only interested in the mathematical properties and behaviour of a single point constantly agitated by the simple and binary buy/sell activity of market participants - as such we are interested in understanding and exploiting a self-governing mechanism of the market. In this view, the market maintains a self-governing mechanism and will process incoming impulses by that mechanism and that mechanism alone. The immediate outcome ahead, is therefore, unpredicted by anything else imaginable. That mechanism is best modeled as a densely nested system of spot pivots (market clearing prices in range) complexed to infinity. Orders are paired over a range and once the paired array in direction exhausts (market is cleared at a point), the market turns depending on the next available paired array (tiny or large). In such an environment even tiny changes can evolve into a sequence that ends up to be a very large move (hence the so-called "butterfly effect.") Therefore, what accounts for (causes and sustains) any sequence actually seen on trading charts (what "technical" people think of as "trend"), cannot be known, even in hindsight (simply impossible). What is more, such attributions are not important or necessary to trade the market. The idea of attributing movements to event prints and or news, etc as causes of the movements seen, is simply ignorant as a result because everything, regardless, reduces to either a buy or sell impulse. This, of course, is not to argue that people do not "research" such factors or trade with the intent of responding to such environmental stimuli in mind, as many most certainly do. But that does not excuse the reality that such behavior relies on a false model of the market with no benefits and plenty of drawbacks for traders. People want to feel rational and in control of their investment decisions at all times, which is fine, but that is not possible in the sense they imagine within a chaotic system underpinned by a fractal structure. The market is unpredictable and unpredicted by anything known to man, even in the shortest possible interval, as a result. To read the market one simply reads the sequencing of emergent spot pivots in range irrespective of often bogus (as in apophenic and random) analytic backdrops.

Re: Chaos theory made simple - for trading

#70
Yesterday (25/06/2019), by the spot pivot at 1436.28 (Alpari data), Gold reversed its erstwhile uprising intra-day. I will aim to take trades from circa 1424.73/1431.18 later today (26/06/2019), toward circa 1381.19. There is, of course, no reason at this point to conclude a reversal in the unitary uprising. By the system of spot pivoting we read currently, the down turn is most likely temporary (pullback). Of course, the market is unpredictable so this is not an extrapolation of anything but an interpolation of spot pivoting behavior which updates in real-time as the market evolves. This implies a change of sequence (and the rules of recursion) in range and reads on the intra-day scale which makes it immediate to the Daily Gold chart and all its fractures to the left of the feed. Good luck if you trade Gold (-_-)


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