Hello & Regards...fellow Traders
What I do is...myself for example..
I'm locked in a box(room) I know not what pushes/pulls on a pair.
I dont know who, what ,where ,why ,when ...how...some big wig, Central Bank, commercial trader...etc hits buy/sell button.
all I see is a pair I'm watching move up & down all day long. & I'm loosing.
So I said what can I do? This appears random(from my point of view, frame of reference)
So The idea came to me...why not asume a pair "acts" like a random variable
or a random walk! I let the probability of a move up or down be the same p=1/2. Then compute the expected value. So this is a Binomial Random Variable I'm using in this model. Next I take some time interval(since 09")
see the range over that interval ,how high & how low a pair trades.
Subtract low from high & this is the "range" for that interval.
By way of example the GBPNZD has traded(range) 4,503 pips for 09'
since p=1/2 movement up/down then the expectation(an average) is half way the range. So the expected value for GBPNZD is ...
Low + half of range i.e. 2.4444+(2251-pips) =2.6695 expected value.
I tried it on FSLR(a solar stock), The Dow
, Gold & oil...
I can do alot more but it only me & a college friend of mine working on this website & trading(for a living) at the same time.
If & when many people see that this is a valuable tool, then maybe they donate, even a penny (or more) & i'll hire more people & we can put up more tools & better the global economy!...lol
So ther farthest above(below) the better the short(buy) since one would "expect" the price to return to The Expectation.
This I feel is Stronger than the moving averages. as a frame of rederence
Home ?(Napatanpics)?
Yen-Trend ?(Napatanpics)?
FX Trends ?(Napatanpics)?
Feel free to use it....& good luck on you trades(1 & all)
Send mail anytime..
Tanutamen, Napatanpics
ps ...last fri 4/24/09 just b4 close ...I bought GBPNZD...
Sun evening I was up 300+ pips....