good morning everyone, my name is David,I have been interested to see your posts for the last few
days since I joined this board. I don't have a lot of experience with boards,
so please excuse me if I don't understand at times or am impolite etc.
(for example I did not know when I joined that capitals mean shouting, and did not mean to
imply I was shouting my name at you)
i have been working on a GBPUSD (Cable you call it I gather), trading system based on historical data using a programmable database system. The results have been encouraging so I started using it working out the bugs etc and trying to find some refinements. as a result I set up a probability framework which has helped me to refine my system and also i am getting indications that it helps manage the trade as the day progresses. The crux of this is the (theory) that I start the day with a starting framework of probabilities for different price levels to be achieved, then as the day progresses the probabilities
of the targets collapse in one direction or the other and the probable close compared to the current price can be calculated.
I trade from Tasmania so I am in the Asian session, I use CMC and they post the times as GMT i think,which may not not be your daylight saving time?
I will use yesterday as an example and then tell you where I am today , using CMC's times on the chart.
Starting probablities Pre open Oct 12
1.8642 .378
1.8607 .62
1.8562 .893
1.8547 .882
1.852 .66
1.8492 .44
open was less than 1.8547, this is unusual, probabilities of higher targets collapse
eg 1.8607 now around .5 , 1.8492 target comes up to .55 or so.
Then at 8.30 (30min bar) price spikes to 1.8613.
probability shift 1.852 drops to .6
1.8492 .3
now calculate the pbty of the close (pbty=probability)
close<1.8562 .2 or so
close>1.8607 .4 or so
at 13.30 (CMC 30min bar) new low 1.8535, so new pbtys
close<1.8562 .21
close>1.8607 >.4
my system had put me long at 1.8562 at your 13.30 (CMC 30 min bar) at 1.8550 or so
I wanted to go to bed, based on the close pbtys I sat on my long. (better pbty
of closing in profit). My system target was in fact much higher, so my system
had me sitting on the long position anyway, but if the pbtys were against i probably
would have closed my long.
(because the open was low against the pbtys I had a smaller set of data so more
volatility in the pbtys, the principle can still be seen.) close was 1.8592 so good to hold.
Starting probabilities Pre open Oct 13
1.8666 .378
1.8635 .62
1.8601 .893
1.8584 .882
1.8538 .66
1.8554 .44
1.8524 .36
open at 1.8592
spike low 01:30 1.8580
spike high 02:00 1.8624
new pbtys
close<1.8601 .41 ] implies stay long ?
close>1.8635 .366 ]
close<1.8584 .27 ]
new high 4:00 1.8626
close<1.8601 .401 ] implies stay long ?
close>1.8635 .38 ]
close<1.8584 .26 ]
it is now 5:00 bar and 1.8616,i am soon to post this.
my system has asked me to exit and go short at 1.8601
i held out for 1.8606. the pbtys so far indicate a hung decision i think.
i have followed my system though.
The reasons i am posting this;
if u are interested, i am hoping to post the pbtys i have derived
from the asian session each day. u can make of them what you will.
i hope they may assist at times. i am not intending to stay up all night
following the UK session but i hope to post an update in my late evening.
If it seems to make sense and have some validity please let me know
and ask me questions. it is a totally new way to approach it for me, i would be interested
to know whether anyone has seen anything like it before.
to paraphrase bob dylan " i'm just a trading expeditionary"
David
