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Vaerah Vahrokha
Vahrokh Consulting
4475
|
Posted - 2013.10.30 15:36:00 -
[301] - Quote
Extremely illiquid markets
I have faced some very illiquid EvE and RL markets. These are very hard to trade as a swing trader because they basically don't show visible swings (duh!).
Then a little lamp light turned on in my little brain: what if I am just looking at the market with a wrong pair of glasses?
Because markets are rarely wrong, therefore the fault is on my side.
So here you go, in my never ending experiments I found out that just by changing time frame or axis linearity (i.e. from standard to logarythmic) I get those tasty price bars and swings back!
Example taken TOTALLY from a random situation: today I was reading an Italian finance forum (surprise!) and a guy replied to a very nice trader (even in RL!) called Briga73 to go check an illiquid security: steel.
Being a curious muppet, I promptly went to check the CME Group steel security. I got shown a table. The table shows a series of months, with some stats and each row got a button to open a chart. Nom nom!
So I click October 2013 and what do I see? The typical illiquid market!
Look at this screenshot: doesn't it really look like to those "out of the way" or "rare-ish item" EvE markets? Some hardly connected dots - lines and that's it!
Now let's change our pair of glasses: change just a few options so that they look like this second screenshot.
TA-DA! Instant sense in the chart! Even the least trained eye who read some of this thread will immediately spot the double bottom to the right.
Now comes the unavoidable question: would we have traded this setup with a profit? That is, does this method apply even to this "worst case" kind of market?
Well, the only way to know, is to actually backtest it. Let's draw a couple of lines to show the relevant market structures and thus learn WPD (What Price is Doing). They are quite obvious: past swings "peaked" at those lines. The RM (double bottom is a Range Market aka RM) resistance itself comes from a previous swing low. The double bottom is a bullish inversion pattern (a bullish information) and then we see the often "retracement" back to it. I remind readers that RETracements are price doing always its same mechanic: it breaks a line, goes up a bit then comes back down to hit said line and then "uses" it as support to later proceed upwards. This process whose acronym is RET, gives us a second information about the new trend direction. What do we miss is just the "smoking gun", that is the evidence also known as confirmation.
Informations = clues Confirmation = evidence confirming the clues.
Where's confirmation or evidence that the trend now is bullish? And what about WPG (Where Price is Going)?
Simple, che confirmation is a suitable price action pattern sitting exactly at that RET and the WPG is... "Price is Going up! Price will meet and react to those levels I have drawn in the first charts".
Why do those price action patterns even appear? They appear because buyers leave a mark where they have won against sellers (bullish market). Many of these marks have been studied and given a name: pin bars, bullish outside bars, double bars low higher close and a couple others. When we spot these markes we know with good statistical confidence that price will indeed go a certain direction. Notice that those marks ONLY AND EXCLUSIVELY have sense in a precise context, that is when price hits levels. When left to "run free in the middle of nowhere" those marks have no predictable meaning at all.
Back to our chart, we look for such mark / price action pattern and we indeed find one: a two days bullish pin bar, exactly sitting in the "valley" created by the RET. This is the confirmation or evidence we were looking for!
What is one nice pin bar property? That it tells us where price will go immediately past it. Price will go to the first met of these: - the previous bar high (September) - the price level immediately above.
In our case we have no price level sitting immediately above, so we set our first target at the high of September's bar. The next targets will be the tips of the nearest important swings. This is the resulting trading plan. We are just following the old: "plan the trade then trade the plan".
So in our backtest (there are specific software to do those backtests) we setup the buy order right above the 2 days pin bar top, the stop loss right below the 2 days pin bar tail(s) and wait. And the next bar activates the order and goes to our targets.
This is that simple and works in RL like in EvE.
And as you can see, it works even in those nasty illiquid markes!
This completes my study on some T2 and PI markets I have started when I announced my 100B investment funds thread: the T2BSK and PIBSK baskets. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
OllieNorth
Recidivists Incorporated
245
|
Posted - 2013.10.30 16:38:00 -
[302] - Quote
I have no farking idea what you are talking about, but I love you for saying it. Keep up the awesome analysis! |
Vaerah Vahrokha
Vahrokh Consulting
4475
|
Posted - 2013.10.30 16:58:00 -
[303] - Quote
OllieNorth wrote:I have no farking idea what you are talking about, but I love you for saying it. Keep up the awesome analysis!
Thank you for the appreciation!
If you wish to get these things explained in a different way that would give you "the idea" please tell me and I'll try to reply any questions. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Jdestars
Stars Research systems Incorporation
4
|
Posted - 2013.11.04 14:02:00 -
[304] - Quote
I am really in a hurry to see a technical analysis financial for the market planetary Items basing on reliable statistical tools |
Vaerah Vahrokha
Vahrokh Consulting
4478
|
Posted - 2013.11.04 15:28:00 -
[305] - Quote
Jdestars wrote:I am really in a hurry to see a technical analysis financial for the market planetary Items basing on reliable statistical tools
Which ones? I don't really track all the markets, I focus on those I do my trading into. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
OllieNorth
Recidivists Incorporated
253
|
Posted - 2013.11.04 19:05:00 -
[306] - Quote
Vaerah Vahrokha wrote:OllieNorth wrote:I have no farking idea what you are talking about, but I love you for saying it. Keep up the awesome analysis! Thank you for the appreciation! If you wish to get these things explained in a different way that would give you "the idea" please tell me and I'll try to reply any questions.
Nothing personal VV, but as you know, I am eternally broke ingame, so I mainly like to read through your stuff for the education. I appreciate the offer, however. |
Jdestars
Stars Research systems Incorporation
4
|
Posted - 2013.11.05 08:08:00 -
[307] - Quote
Vaerah Vahrokha wrote:Jdestars wrote:I am really in a hurry to see a technical analysis financial for the market planetary Items basing on reliable statistical tools Which ones? I don't really track all the markets, I focus on those I do my trading into.
before id tracked all material involve in production mechanical for my own price evaluation price item but with irl activity i kept this now I track only all market in high sec and all Planeteray Item product for same reason and some 'trade activity' |
Vaerah Vahrokha
Vahrokh Consulting
4672
|
Posted - 2013.11.16 19:03:00 -
[308] - Quote
Since posting an analysis about Nitrogen Isotopes was not enough for a day, I have decided to also post an update to PLEX.
PLEX
Montly chart
Chart link
WPD
Price is still running above a massively strong trend line started back in 2011. The day it'll get broken downwards, we'll see fireworks. And tears, many, many tears.
But as of now price is rising and heading towards the all time high of October / November 2012. If / when it'll get to the high of that bar, that is up to 663M, then we'll see fireworks as well. Price tends to strongly react at those critical places. I am not saying it'll go up or down but that it'll do it with great momentum, so keep on your toes!
P.S. like for Nitrogen Isotopes, I'd invite Mynna to tell what he thinks about this trend line. Is it possible that it's always "random" stuff that creates those price features?
Weekly chart
Chart link
WPD
This is a very interesting scenario. It's easy to see that price broke the large RM (yellow rectangle) upwards and now is currently reaching a second top close to that short red horizontal line.
If price will go above that line, it'll invalidate the first top and will setup to go to the next target, which is the all time high of mid Oct 2012. Passing that level would be like Rubicon motto: alea iacta est (the die has been cast). Also, while we are in latin mottos mood, we'll get into uncharted territory, where ancient Romans would write: "his sunt leones" (here be lions, general "unknown territory" description for interior Africa lands).
Needless to say, holding stock at those levels will be for the strong of heart!
Daily chart
WPG
Daily chart
We are in a yellow RM whose support is provided by the purple monthly level @592M ISK. Resistance, of course, is provided by the high swing of late October. Price will therefore do its stuff inside the RM and will have to break it before we know what's its next target. In particular, we'd not be surprised at all seeing price return to re-test 600M BRN, because the more trained among you will certainly have spotted that double bottom-alike structure. And price loves to retest those structures. Actually, if it does that, price will get the needed liquidity fuel needed to try break the rectangle. If it does not, it will have more difficulty doing that, as buyers will get "tired" when they'll meet the resistance. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Quinn Cooke
The Scope Gallente Federation
1
|
Posted - 2013.11.16 19:31:00 -
[309] - Quote
Vaerah Vahrokha wrote:Jdestars wrote:I am really in a hurry to see a technical analysis financial for the market planetary Items basing on reliable statistical tools Which ones? I don't really track all the markets, I focus on those I do my trading into.
I would love to see an analysis on Robotics. Part of the Planetary Material / Specialized Commodities group. |
Vaerah Vahrokha
Vahrokh Consulting
4673
|
Posted - 2013.11.16 20:03:00 -
[310] - Quote
Quinn Cooke wrote:Vaerah Vahrokha wrote:Jdestars wrote:I am really in a hurry to see a technical analysis financial for the market planetary Items basing on reliable statistical tools Which ones? I don't really track all the markets, I focus on those I do my trading into. I would love to see an analysis on Robotics. Part of the Planetary Material / Specialized Commodities group.
I am quite sure I have some large holes in my data for that commodity
Sadly the data gets only cached for max 1 year so even if I check those items every now and them, it's easy to lose the history for vast amounts of time. I'll check what I have but I can't assure anything. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
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Vaerah Vahrokha
Vahrokh Consulting
4673
|
Posted - 2013.11.17 11:25:00 -
[311] - Quote
Vaerah Vahrokha wrote:Quinn Cooke wrote:
I would love to see an analysis on Robotics. Part of the Planetary Material / Specialized Commodities group.
I am quite sure I have some large holes in my data for that commodity Sadly the data gets only cached for max 1 year so even if I check those items every now and them, it's easy to lose the history for vast amounts of time. I'll check what I have but I can't assure anything.
I have great news for you!
It took me two hours of research but in the end I managed to dig up some ancient data I had in a backup.
Then I found a number of Robotics market data CSV files and slapped all together, the resulting dataset is not only accurate but also it did not lose a single day!
The full analysis is posted on my website.
Enjoy it and please rate it! Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Quinn Cooke
The Scope Gallente Federation
1
|
Posted - 2013.11.18 17:34:00 -
[312] - Quote
Vaerah Vahrokha wrote:Vaerah Vahrokha wrote:Quinn Cooke wrote:
I would love to see an analysis on Robotics. Part of the Planetary Material / Specialized Commodities group.
I am quite sure I have some large holes in my data for that commodity Sadly the data gets only cached for max 1 year so even if I check those items every now and them, it's easy to lose the history for vast amounts of time. I'll check what I have but I can't assure anything. I have great news for you! It took me two hours of research but in the end I managed to dig up some ancient data I had in a backup. Then I found a number of Robotics market data CSV files and slapped all together, the resulting dataset is not only accurate but also it did not lose a single day! The full analysis is posted on my website. Enjoy it and please rate it!
TY VV!! |
Vaerah Vahrokha
Vahrokh Consulting
4698
|
Posted - 2013.11.19 19:27:00 -
[313] - Quote
I want to link a series of very informative and constructive information and criticism for the posterity.
It's been provided by some posters, expecially by Rthor.
Thanks to his debate we have covered a series of topics starting from this post of him.
- Validity of charts and why would they apply to RL trading and not just EvE.
- Validity of looking at past prices despite EvE gets profound patches effects every 6 months.
- Validity of trends
- History, references, books.
- RL trading vs market efficiency and random walk theories.
- The very foundations about how the whole method works: not Voodoo but just "best practices" learned through the years.
- The very important reason why many traders flee scared and lose: markets usually reverse in their face (to form a swing) before prices takes off in the intended direction.
- The meaning of preparing a trading plan: what's it and how it works. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Vaerah Vahrokha
Vahrokh Consulting
4733
|
Posted - 2013.11.25 15:07:00 -
[314] - Quote
Zydrine analysis
Posted on my website at first, as per the input coming from another thread.
Monthly chart
What Price is Doing (WPD)
Price reached an all time low, hit support and rebound up. Price re-entered above the monthly level 756.43. If this will stay true till the end of the month, then price will have confirmed a bullish move. In that case, the level will become a support and price will try and reach the next monthly level, 844.10.
Chart link.
Weekly chart
What Price is Doing (WPD)
Unlike the monthly bar, the weekly bar has closed already. It closed above the monthly level by a small margin. Why GÇ£small marginGÇ¥? Look at the big upper tail (in the circle), itGÇÖs due to some number of sell orders being triggered at the tip of the bar. Guess what could cause such effect? A resistance level I did not draw. Which resistance level? The eye does not take long to see the tip GÇ£suspiciouslyGÇ¥ hit BRN 800. WeGÇÖll see more of that effect on the daily chart.
Another peculiarity is the big bearish channel that is enclosing price between those two red trend lines. If price will go hit the one at the top, then it will react to it. I have drawn small arrows showing what bars determined the monthly level right above price.
Chart link.
Daily chart
Where Price is Going (WPG)
The daily chart shows some interactions between price and other market structures. At first price slowly went down, supported by the lower red trend line. Look at the lots of small arrows showing how price reacted every time it hit the trend line. ThatGÇÖs the definition of (dynamic) support at its finest.
Then price described a range market (RM), in blue and recently broke it upwards. Arrows show the contact points. A problem with price beaking so hard is that it enters a so called GÇ£hyperbolic phaseGÇ¥, that is, it rises a lot but with no real solid foundations. This is typical of bubbles. Big rise with no foundation and then a crash. Therefore unless you are in the market already, itGÇÖs very, very dangerous to enter at the current price. ItGÇÖd be better to wait for the monthly bar to close and see if it closed above the 756.43 monthly level.
Price trend frailty immediately got shown as it hit BRN 800. Price had not formed any swing to gain energy and thus it easily got beaten by sellers into submission. However after being pushed down, it still closed above the monthly level. Since itGÇÖs close to the BRN, price will tend to bounce between the two, forming GÇ£battle barsGÇ¥, like dojis, spinning tops and similar. This means, entering here is not advisable. Assuming price will go up there, the next relatively safe place where to buy (after price putting a confirmation too) is above the swing connected by a grey line. It will also get rid of the upper trend line at the same time. It will still be well worse than having bought at the blue RM though.
Chart link.
Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Kirkwood Ross
Golden Profession
75
|
Posted - 2013.11.26 05:51:00 -
[315] - Quote
I don't agree with any of this. CCP devs dictate trends directly at their discretion through their game design. |
Nedly Stark
Caldari Provisions Caldari State
2
|
Posted - 2013.11.26 06:44:00 -
[316] - Quote
In regards to this chart:
ZYDRN
Why is it not advisable to enter now at the current price? Will there not be enough support to continue its bull? I mean, can you go into more detail as to why you believe the upward momentum can't continue?
Love the thread though +sub'd |
Vaerah Vahrokha
Vahrokh Consulting
4742
|
Posted - 2013.11.26 13:56:00 -
[317] - Quote
Nedly Stark wrote:In regards to this chart: ZYDRNWhy is it not advisable to enter now at the current price? Will there not be enough support to continue its bull? I mean, can you go into more detail as to why you believe the upward momentum can't continue? Love the thread though +sub'd
These are the two and interwined fundamental traders laws:
1) Aim to capital preservation.
2) Buy low, sell high.
It's perfectly possible that price will rise to whatever heights. However you have to avoid being greedy (markets are also based on greed and fear).
A very safe place to buy is above the blue rectangle at the bottom, that is at about 670. Then you have a good run to 800. Or you can see to buy at above 850, if and only if price puts in a price action pattern as I have explained many times in the past.
If price is within the two violet lines, however, it is subject to an harsh fight. The very fight is what created those two levels. Levels are nothing more than the "tires tracks" left on the floor as a testament to past (and often future) fights. At a minimum you risk getting stuck within those two levels for a while. At worst, price gets rejected down and you lose big time. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Vaerah Vahrokha
Vahrokh Consulting
4802
|
Posted - 2013.12.10 00:56:00 -
[318] - Quote
Cold birds are chirping!
Nov 6, 2013. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Vaerah Vahrokha
Vahrokh Consulting
4820
|
Posted - 2013.12.20 00:06:00 -
[319] - Quote
Vaerah Vahrokha wrote:Cold birds are chirping! Nov 6, 2013.
They are shouting now! Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Vaerah Vahrokha
Vahrokh Consulting
5243
|
Posted - 2014.02.22 19:06:00 -
[320] - Quote
It's a long while I don't post, and for a reason.
My interest in EvE has dipped since I have basically "won the game" and can get any amount of ISK I want just by repeating the same thing. It sounds so good until it becomes true and then you suddenly don't have new (financial) goals ahead to aspire to.
I know I could "diversify" on other goals but this is a topic for another thread.
What's relevant to this thread instead is:
- Now that I have proved to myself that RL finance and EvE are similar and thus the experiment can be classified as successful, I have made another, "unconventional" move.
What if I could copy to RL another EvE concept? That is, what if I could do like in EvE, that is setup a network of AFK activities that bring in periodic money with nearly no effort?
That's what I am doing right now in RL. I have started some initiatives that lead to recurring subscription based services about stuff I only have to update every now and then.
So far I am making about 200 euros a month with it, pure passive income that gets in even if I do nothing at all.
I am looking forward to expand it past this first attempt and then achieve a life that does not depend on any active effort, where I can focus on my studies, hobbies and ... other pleasant activities.
Is it a dream? Is EvE <> RL? So far it looks like it isn't. The coming years will prove me right or wrong, but it's worth trying.
EvE is too much of a grand humanity social experiment to not take the challenge.
Imagine that, an internet guy who makes a living out of what he learned in a game, with no effort involved. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
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Vaerah Vahrokha
Vahrokh Consulting
5246
|
Posted - 2014.02.23 17:52:00 -
[321] - Quote
This is for everybody, even those who don't believe a single word of what's written here.
Please perform this:
1) Open your market window.
2) Click on the "Price history" tab.
3) Make sure you have the chart enabled and not the table (the table works too but you need hawk eyes to notice what I want to let you see).
4) Make sure it's set to "Year" (the last two options are to the bottom of the window).
5) Now, leave the market window open and also open your in game browser (IGB). Only using the IGB will work.
6) Enter this URL:
http://www.vahrokh.com/vahrokh/static/pages/eve-online/market-loader/market_loader.html
7) Click all the options one by one except the PI related ones (they require more advanced training) and then press "Stop" when they have cycled once.
In example, you pick "minerals", wait for the minerals markets to finish cycling and return back to Tritanium then press "Stop" at the bottom of the page, next to the "Stop the updates" description. Then you go to the next buttons.
8) Have you ever seen those old style "cartoons" where a guy has drawn hundreds of different paper sheets with a slightly changed image, then stacked those sheets and shows them rolling and give you the feeling of motion? In a certain way you are now seeing the markets unfold before your eyes in a similar way.
And they all show the same behavior. And you have just seen an EvE Economy Report which is most updated and more precise than those that Estimated Dr. Ejyo has published for years.
Now draw your own conclusions over what you have seen. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Claire Voyant
146
|
Posted - 2014.02.25 02:48:00 -
[322] - Quote
That's pretty cool, but unfortunately I will never be able to get the image out of my head of you getting-off to hands-free Eve market chart-p0rn. |
Vaerah Vahrokha
Vahrokh Consulting
5252
|
Posted - 2014.02.25 14:19:00 -
[323] - Quote
Claire Voyant wrote:That's pretty cool, but unfortunately I will never be able to get the image out of my head of you getting-off to hands-free Eve market chart-p0rn.
Well,
1) The markets it reads are pre-set and hard coded. Basically you know the markets **I** look at, while you are not feeding any "markets choices" information.
2) It's a totally basic page, you can check its source and you'll see there's nothing implemented except some bare bones minimal stuff copied from CCP's API specification.
3) You can download the HTML on your computer, study it at leisure, then upload it on your own server and be sure I won't see anything. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Vaerah Vahrokha
Vahrokh Consulting
5252
|
Posted - 2014.02.26 01:04:00 -
[324] - Quote
Updated PLEX market analysis
I have posted an updated PLEX market analysis. While price is not telling anything new, looking at the current scenario may give some insights about what's going to happen next or how to be in a profitable position when the next moves will happen.
There's some "real pin gar" theory explained as well. In fact, not all the pin bars are "good stuff". Only good ones are:
- those that sit on top of an important level / range market level (such as its support or resistance).
- they also have to be in an appropriate location: bullish pin bars must sit at the bottom of higher low swings (that is, small "valleys") while bearish pin bars must sit at the top of lower high swings (that is, small "price peaks / roofs").
Finally: for the "less than believers": that diagonal bullish trend line is now years old. I have drawn it... I don't even recall how long ago. Still convinced that levels (dynamic in this case) don't exist? Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
Twitter channel |
Nanatoa
511
|
Posted - 2014.02.26 14:09:00 -
[325] - Quote
Vaerah Vahrokha wrote:Finally: for the "less than believers": that diagonal bullish trend line is now years old. I have drawn it... I don't even recall how long ago. Still convinced that levels (dynamic in this case) don't exist?
I went through all your blog posts regarding PLEX. The earliest you drew that line (that I could find) was in October 2013 - 4.5 months ago. I did find a post from May 2012 where you drew a trend line and I've taken the liberty of drawing that line in your most recent chart. See here.
Now that doesn't really overlap, does it? In fact, it's way off. I've also highlighted the most important BRN of the last two or three years. The BRN is 592210414.15. That's big, but not exactly round. Also have a look at the previous swings. In 2012 it happened at BRN 500000000, in 2011 in the 360 range and in 2010 in the 380 range - not at any BRN you marked.
This whole exercise looks like an exercise in confirmation bias to me. "Look I drew this line a really really long time ago" (in fact 4 months). "Look swings happen at BRNs" (in fact just once). Do you ever try to look at things which might disprove your theory? This recent Veritasium video might be relevant. "Stay the course, we have done this many times before." - (CCP) Hilmar, June 2011
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Vaerah Vahrokha
Vahrokh Consulting
5252
|
Posted - 2014.02.26 17:44:00 -
[326] - Quote
Nanatoa wrote:Vaerah Vahrokha wrote:Finally: for the "less than believers": that diagonal bullish trend line is now years old. I have drawn it... I don't even recall how long ago. Still convinced that levels (dynamic in this case) don't exist? I went through all your blog posts regarding PLEX. The earliest you drew that line (that I could find) was in October 2013 - 4.5 months ago. I did find a post from May 2012 where you drew a trend line and I've taken the liberty of drawing that line in your most recent chart. See here. Now that doesn't really overlap, does it? In fact, it's way off. I've also highlighted the most important BRN of the last two or three years. The BRN is 592210414.15. That's big, but not exactly round. Also have a look at the previous swings. In 2012 it happened at BRN 500000000, in 2011 in the 360 range and in 2010 in the 380 range - not at any BRN you marked.
You actually made some very clever questions that give me the opportunity to talk about some practical stuff that usually does not get written.
First the direct answer: here's a May 2012 analysis showing that trend line. There *was* also a March 2013 analysis as testifyed by this post on this thread. Sadly, as some might still recall (and perhaps find in Google's cache) that link points to my website's forums, which died a terrible death and could not be recovered even with a backup. So I lost dozens of analyses (including a lot of RL ones) in one hit . Here are the pictures I had saved from that analysis: Monthly, Weekly 1, Weekly 2 and Daily chart.
Expecially take note of the purple level found in Weekly 2 as it'll be covered in the following text.
Plus there are "less public" or just less known charts like this one which were made for clients or research (in that screenshot, testing other trading platforms). Does not change the fact I studied them, so they stick to my memory.
The deviations you can see on trend lines come from 2 main sources:
1) The change of scale 2) The amount of available points.
1) Is one of the main reason traders do the possible to only trade horizontal lines. Changing time frame but also just changing zoom causes visible differences even when dealing with identical data.
To see this in action, download a free copy of Metratrader 4 and install it. Now find a diagonal line anywhere and look at it by changing time frame and / or zoom. What you'll see is utterly blatant, possibly more than on the charts you have seen. Traders learn to deal with it over time and to move the trend line(s) when they switch time frame so that they follow the bars tops (bottoms). I *don't* always move the trend lines as I could forget to put them back in place on the monthly time frame for the next round of analyses and this will cause (even visible) discrepancies.
2) In the beginning I had all of 2 points to base an estimate upon. As more get added, the line finds more confirmation and precision. It's still the same line talking the same price story though. The fact it may change by some degrees (in addition to the above) is meaningless, as it's what price "says" that matters: that a sequence of swings are orderly following each other in a ramp.
3) BRNs are never a 100% exact thing, as you know, they are defined by humans not robots. Whereas in RL markets we have many more traders and the average of their orders comes closer to the BRN (see a BRN as a Gaussian of orders spread around it) than in EvE. Actually the delta between a "perfect BRN" and a "near miss" is useful to understand more advanced stuff like i.e. the market sentiment, but that's really too much to discuss to cover it here.
You noticed I have drawn a purple level exactly where you say price hit. That purple level was put there for a reason. That's the top of a swing.
It's the same concept of trend lines: the "story" price talks is that it went up to a BRN. That's the "quick fact check". Then when you want to actually do a trade you have to have precision and draw the purple line because that's where price really went, despite the "story" says price reacted to a BRN.
Another factor, a MOST important factor: look at the weekly chart. The purple level and the BRN have been pivotal in this market. The previous swing hits the purple line and took liquidity from the BRN (see the bars' "tails"). Then price closes above the BRN and the BRN became support and the purple line became it's liquidity source.
This process is called "flip" and is one of those that MUST immediately pop to the trader's eye. The "liquidity" instead is part of a concept that often happens in the markets, to the point there's been written a little "rule": "liquidity levels become effective levels and effective levels become liquidity" as it's fairly frequent to see such kind of "swapping" between the levels roles like that.
A liquidity level is where the large blocking orders sit. It's usually a bit shifted from BRNs because those orders are usually not put at an exact BRN but put as a "barrier" near it. I.e. those 10B buy / sell orders placed on Trit or Nitrogen Isotopes (and many more) when ... Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
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Nanatoa
511
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Posted - 2014.02.26 21:04:00 -
[327] - Quote
You know I prefer short posts over long posts, so here goes:
- On the scale issue: you're basically saying more data came in and you changed your mind. That's fine. In fact, that's more than fine. It's great. But it doesn't change the fact that the new line is significantly different from the old line and that the "super powerful trend line acting as support since 2011" [quoting one of your pictures now; AfNfiS3.png] wasn't identified until well into 2013.
- On the BRN issue: sure stuff happens near a BRN. (It makes me think of the fact that a majority of deaths happen within 1 week of a full or new moon.) You see something happen, pick a number nearby and call it BRN. If 10M off from a 100M BRN counts as near, you've covered your ass in fully 20% of cases even if stuff is random. And you're right it isn't random because the trader's psychology is involved. But you don't need TA to know that prices will stick to round numbers for a bit. There's more orders at round numbers, Sherlock. It takes longer for the market to chew its way through that. "Stay the course, we have done this many times before." - (CCP) Hilmar, June 2011
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Vaerah Vahrokha
Vahrokh Consulting
5252
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Posted - 2014.02.26 23:44:00 -
[328] - Quote
Nanatoa wrote:You know I prefer short posts over long posts, so here goes:
- On the scale issue: you're basically saying more data came in and you changed your mind. That's fine. In fact, that's more than fine. It's great. But it doesn't change the fact that the new line is significantly different from the old line and that the "super powerful trend line acting as support since 2011" [quoting one of your pictures now; AfNfiS3.png] wasn't identified until well into 2013.
- First of all I don't see difference between the 2012 one and the latest. I have made a "collage" and joined the two charts. Please tell me where's this HUGE trend line different angle.
Nanatoa wrote: - On the BRN issue: sure stuff happens near a BRN. (It makes me think of the fact that a majority of deaths happen within 1 week of a full or new moon.) You see something happen, pick a number nearby and call it BRN. If 10M off from a 100M BRN counts as near, you've covered your ass in fully 20% of cases even if stuff is random. And you're right it isn't random because the trader's psychology is involved. But you don't need TA to know that prices will stick to round numbers for a bit. There's more orders at round numbers, Sherlock. It takes longer for the market to chew its way through that.
We are apparently on different pages. I wish I had such a clear and simple situation when RL trading. If you are expecting for markets to do what you want, hit a BRN by the triple decimal digit and so on, you are in for a world of hurt.
BRNs are guidelines to understand what price is doing (WPD), the only place where you even have to care about a BRN being hit is the daily (WPG). The daily bars are those that form the weekly (and in turn the monthly), and they form the liquidity on the weekly and monthly chart. So, even if you just see a bar tail hitting a BRN, it's already (more than) enough!
I have drawn a chart where I have circled where the BRN had effect on price. It's not little. In particular, the bar in a blue rectangle is a doji. Dojis are "long legged, small body" bars that delimit a range market on the lower time frames. Doji represent an hard battle around a level. Where does that doji sit? Exactly across the BRN.
Now look at the daily chart I have posted in the latest analysis. TONS of bars grab liquidity from the purple level and sit above or below the BRN. Look at the double bottom at the beginning of the year: it shows a 2 days pin bar sitting on the yellow RM support, taking liquidity from the purple level and closing above the BRN to show the buyers have won (the "close above / below are very important informations). The next 2 bars are 2 more pin bars sitting on the BRN. All these have been a safe buy opportunity.
I repeat, I really hope you'll always find such a simple BRN situation because it's actually quite rare to see one like that. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
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Nanatoa
511
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Posted - 2014.02.27 01:59:00 -
[329] - Quote
Vaerah Vahrokha wrote:- First of all I don't see difference between the 2012 one and the latest. I have made a "collage" and joined the two charts. Please tell me where's this HUGE trend line different angle. That's your May 2013 graph, not the 2012 one...
Vaerah Vahrokha wrote:I have drawn a chart where I have circled where the BRN had effect on price. Now make one where BRNs didn't have an effect on price. If you only look at places where your theory is confirmed, you will find your theory confirmed whatever it is.
"Stay the course, we have done this many times before." - (CCP) Hilmar, June 2011
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Vaerah Vahrokha
Vahrokh Consulting
5252
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Posted - 2014.02.27 14:54:00 -
[330] - Quote
Nanatoa wrote:Vaerah Vahrokha wrote:- First of all I don't see difference between the 2012 one and the latest. I have made a "collage" and joined the two charts. Please tell me where's this HUGE trend line different angle. That's your May 2013 graph, not the 2012 one...
You are right for some reason I had put some 2013 pictures in the 2012 folder. That means that *in the worst case* I "only" predicted the market for the next 8 months. That is, an achievement many economists and traders would not even dream of.
But no, it's not just that. I am specifically "feeling" your:
Nanatoa wrote:You know I prefer short posts over long posts, so here goes:
- On the scale issue: you're basically saying more data came in and you changed your mind. That's fine. In fact, that's more than fine. It's great. But it doesn't change the fact that the new line is significantly different from the old line and that the "super powerful trend line acting as support since 2011".
Here are the rules to draw trend lines, not written by me:
Trend lines
Draw trend lines below bars in uptrend, above in downtren. May only adjust lines to be more horizontal, never more vertical. Need >= 2 points. Uptrend = from low to first time a bar fails to make an higher low. Downtrend = from high to first time a bar fails to make a lower high.
I have just applied it. With 2 starting points plus the (both) time frame and platform zoom induced imprecision that's what you are going to get. The trend line is that one and like all things markets, it's constantly changing and evolving and all we can do is to refine it as time goes on. Adapting to market dynamics and following the rules by the book <> "change my mind".
Nanatoa wrote:Vaerah Vahrokha wrote:I have drawn a chart where I have circled where the BRN had effect on price. Now make one where BRNs didn't have an effect on price. If you only look at places where your theory is confirmed, you will find your theory confirmed whatever it is.
It would be quite hard finding a place where BRNs have no effect on price, since it's the locations traders choose to put more orders in there than in the middle of nowhere. Once again, you talk it like it's me inventing some funny exotic stuff, when I am applying well known and long time practices. Auditing | Collateral holding and insurance | Consulting | PLEX for Good Charity
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