NexusFi: Find Your Edge


Home Menu

 





Random Line Theory


Discussion in Traders Hideout

Updated
      Top Posters
    1. looks_one Big Mike with 58 posts (218 thanks)
    2. looks_two Fat Tails with 41 posts (172 thanks)
    3. looks_3 trendisyourfriend with 36 posts (38 thanks)
    4. looks_4 bobwest with 14 posts (75 thanks)
      Best Posters
    1. looks_one bobwest with 5.4 thanks per post
    2. looks_two Jigsaw Trading with 4.5 thanks per post
    3. looks_3 Fat Tails with 4.2 thanks per post
    4. looks_4 Big Mike with 3.8 thanks per post
    1. trending_up 231,205 views
    2. thumb_up 835 thanks given
    3. group 117 followers
    1. forum 367 posts
    2. attach_file 100 attachments




 
Search this Thread

Random Line Theory

  #31 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,399 since Jun 2009
Thanks Given: 33,175
Thanks Received: 101,541

Now the session has closed.

What we can clearly see is how the first line predicted the day high within 1 tick, the third line the day low by 5 ticks, and the second line predicted the "point of control" as it were, where price battled against support and resistance all day.

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Attached Thumbnails
Click image for larger version

Name:	12-28-2010 1-39-49 PM.png
Views:	966
Size:	41.4 KB
ID:	27409  
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote

Can you help answer these questions
from other members on NexusFi?
NexusFi Journal Challenge - April 2024
Feedback and Announcements
Better Renko Gaps
The Elite Circle
ZombieSqueeze
Platforms and Indicators
Futures True Range Report
The Elite Circle
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
60 thanks
Funded Trader platforms
43 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #32 (permalink)
 
Dragon's Avatar
 Dragon 
Bellingham, WA
 
Experience: Intermediate
Platform: Ninja
Broker: Zen-Fire
Trading: 6E, CL
Posts: 491 since Aug 2009
Thanks Given: 747
Thanks Received: 259


Big Mike View Post
Correct.

What I posted in post #1 are lines on a chart from last session. Now I want to see how those lines "react" to price on todays session (ie: predict).

Mike

Ok but to be fair you can't use the R1, R2, Open, Close of the last session. I think those lines are still good

Visit my NexusFi Trade Journal Reply With Quote
  #33 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,399 since Jun 2009
Thanks Given: 33,175
Thanks Received: 101,541



Dragon View Post
Ok but to be fair you can't use the R1, R2, Open, Close of the last session. I think those lines are still good

I didn't, they were random.

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
  #34 (permalink)
 Eric j 
NY
 
Experience: Advanced
Platform: Esignal, MBT navigator
Trading: Currencies
Posts: 2,507 since Jun 2009
Thanks Given: 1,396
Thanks Received: 2,576

The lines I plotted with my eyes shut were tradeable today .

Attached Thumbnails
Click image for larger version

Name:	Random1.jpg
Views:	1017
Size:	59.0 KB
ID:	27416  
Visit my NexusFi Trade Journal Reply With Quote
  #35 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,399 since Jun 2009
Thanks Given: 33,175
Thanks Received: 101,541


Eric j View Post
The lines I plotted with my eyes shut were tradeable today .

Awesome, thanks for sharing

I find this topic fascinating (hence why I created the thread). I hope others are finding it as interesting, and maybe some eyes are opening...



Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
Thanked by:
  #36 (permalink)
 Eric j 
NY
 
Experience: Advanced
Platform: Esignal, MBT navigator
Trading: Currencies
Posts: 2,507 since Jun 2009
Thanks Given: 1,396
Thanks Received: 2,576

Heres tomorrows lines . Now heres the thing - if a sample of say 100 trades off these levels produces a positive result what would it take to consider this a methodology ? What would it take to prove its not a methodology ?

Attached Thumbnails
Click image for larger version

Name:	Random2.jpg
Views:	680
Size:	59.4 KB
ID:	27417  
Visit my NexusFi Trade Journal Reply With Quote
  #37 (permalink)
 sharmas 
Auckland
 
Experience: Advanced
Platform: Ninja Trader
Broker: Zen-Fire
Trading: CL and ES
Posts: 778 since Apr 2010
Thanks Given: 3,822
Thanks Received: 750

Team

fantastic thread

wonder if these lines are similar to instituitional bands/lines

sharmas

Visit my NexusFi Trade Journal Reply With Quote
  #38 (permalink)
 
Fat Tails's Avatar
 Fat Tails 
Berlin, Europe
Market Wizard
 
Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker: Interactive Brokers
Trading: Keyboard
Posts: 9,888 since Mar 2010
Thanks Given: 4,242
Thanks Received: 27,102


Eric j View Post
Heres tomorrows lines . Now heres the thing - if a sample of say 100 trades off these levels produces a positive result what would it take to consider this a methodology ? What would it take to prove its not a methodology ?

It can not be a trading method by definition.

"Random" means that there is no edge.

It is just a method to show how easy it is to fool our minds.

Reply With Quote
  #39 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,399 since Jun 2009
Thanks Given: 33,175
Thanks Received: 101,541


Eric j View Post
Now heres the thing - if a sample of say 100 trades off these levels produces a positive result what would it take to consider this a methodology ? What would it take to prove its not a methodology ?

If you expect your method to encompass an edge, then it would seem basing the method on a truly random line is not beneficial except from the psychological side.

Maybe @Fat Tails or someone else can explore the methodology aspect. My intention was simply to demonstrate that a lot of traders put faith in their indicators, they seem to assign value to these indicators (like prediction). Now here we are in the process of demonstrating that a purely random line can be assigned those same values. What does that do to your belief that your own indicators are useful in the way that you once believed they were?

Imagine for a moment the title of this thread was "The Next Holy Grail?" and in the first post I told you that I labored for the past two years and have created this indicator which consists of 2,000 lines of code that I labored over day and night. Then I proceeded to post the same screen shots as you see in this thread, saying "Ok, here is what the indicator is showing for tomorrow". You could substitute "showing" for "predicting".

It wouldn't be a stretch. The thread would resemble many others. The thread would resemble what some vendors claim, for instance. The trick is seeing past that. You know the truth here -- they are random lines. How do you determine the "truth" for something else?

More to the point, some traders (myself included, although I hope I am learning) have a tendency of assigning after-the-fact properties. For example, pivots are a good candidate. I use them in my own trading after all. If price moves to a pivot, stops, and reverses, then I could easily say "that pivot was resistance". The difference naturally is the pivot is used by other traders. That exact same pivot. Enough traders that it becomes a sort of self-fulfilling prophecy. Just like if thousands of traders suddenly started using the exact same random lines I post in this thread (exact to the tick the same), then price is likely to react on those lines.

We assign these properties thinking the line somehow carries weight or importance. Given what is shown in this thread, how do you feel about that?

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
  #40 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,399 since Jun 2009
Thanks Given: 33,175
Thanks Received: 101,541


Oops I see Fat Tails beat me to it

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
Thanked by:




Last Updated on September 26, 2019


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts