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Harmonic Currency Pair Cross Index
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Harmonic Currency Pair Cross Index

  #1 (permalink)
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Harmonic Currency Pair Cross Index

Harmonic Currency Pair Cross Index:

Harmonic Trading
Custom Currency Pair Index
Harmonic Pattern Synergy (intra time-frame)
Harmonic Pattern Synergy (inter time-frame)

Hello, FXall! (pun intended)

I am going to start this thread by using my reply that was typed for Fat Tails, in the "Trading Book" thread started by Big Mike, as our dialogue about Fibonacci ratios, Constance Brown and Harmonic Patterns and the existence of God, would have take the thread on "Trading Books" a bit off track. Though this reply is written for Fat Tails, anyone on Big Mike's should feel free to join the wide ranging discussion here, from Harmonics to God!



Fat Tails View Post
The Fibonacci Series is a growth series, the golden ratio describes the ratio of two consecutive generations (of rabbits, pineapple seeds, calcium deposits in a nautilus shell, etc.). So the concept can be used to describe a two-dimensional expansion, which relies on internal feedback.

As I mentioned in my initial post on Constance, she can be difficult to follow and even difficult to interpret at times. I believe that her book in Fibonacci Analysis, would have been better frames as a more traditional text book, rather than a casual grab off the Barnes & Noble rack.

Having said that, I've actually tested and implemented some of Constance Brown's ideas on how to initiate the retracement price range and have found, just as Constance said I would, that predicting price behavior becomes easier. Though, once again, I do understand the frustrations that one might have in actually getting to the real meaning behind where Constance attempts to take the reader. A text book approach, would have been a better format for such material, given her writing style, which can be a bit ambiguous at times.


Fat Tails View Post
Adapting these ratios to expansion would mean that you no longer describe expansion, but an expansion within an expansion, as the scale that you relate to is now changed. This is not in line with the origin of the Fibonacci ratio, but really is contradiction, as Fibonacci ratios describe growth and not the growth of the growth.

The Fibonacci Sequences of numbers and its derived ratios are not only calculable to the right side of the number scale, but in fact, you can also Subtract and Divide Fibonacci numbers to derive other Fibonacci numbers. This is one of the major points that Constance was trying to make when she said that most traders forget the other side of the number line - the negative side of the number line, or the inverse of a positively derived Fibonacci ratio.

I'm not quite sure in her book that I was referring to, where she attempts to "adapt the ratios to expand." If you would help me with the page number, or chapter, then I might be able to refresh my memory with a quick re-read.

However, what I see, is the possible need for the trader to adapt their traditional view about market expansion and to include Fibonacci analysis across multiple, non-standard time-frames, with the understanding that neither the Fibonacci ratios, nor the differing time-frames are in anyway disconnected - but are in fact, very much connected to each other and to the resulting price behavior observed by the trader.

Contemplate this for a moment.

How do we define Time in the markets we trade? Well, we build a C, C++ or .Net application that contains charts with period separators. We store data in a database (flat file or relational) and we then proceed to display that data inside our charts, according to the size of the bar that we've envisioned for the purpose of giving ourselves some method of structurally accounting for the movement of price through time. We then place both Price and Time on a scale and we then lock the X;Y coordinates such that price appears to move through time. Ok, so that's what we do to visually organize our understanding of the markets. But, we also make trading decisions based on this visual interpretation of how price moves through time, don't we.

Well, the average trader gets land-locked and fixated on a specific chart that contains a specific bar or time-frame. In fact, we've even taken that a step further. We locked ourselves into what we call "Standard Bars of Data," which forces an incomplete view of what's going on inside the markets. When we typically drop a Fibonacci tool onto that same Standard Bar Chart (M1, M5, M15, M30, etc.) which means that by definition we cannot see (unless we use code to derive it) the Fibonacci ratios and their associated patterns in other connected time-frames.

1 second of time now, is no less connected to 1 hour of time later. Likewise, if we are not using the correct starting point for the retracement range, because we don't have a more complete picture of time, then we might conclude (all too easily) that 1 second of time now, has no connection to 1 hour of time later, or that the expansion of price in this time-frame has no connection to Fibonacci ratios in another time-frame.

To illustrate, here is an H1 Chart of the EUR Cross Index that I created. It is a candlestick bar chart containing all major pairs, where EUR is the Base currency:

EUR Cross Index H1
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Here is that same exact chart again, this time in the H7 time-frame:

EUR Cross Index H7
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I did not take the time to plot all the obvious harmonics, but the patterns are easily seen by the trained eye. Here we have a Standard Bar Chart time-frame of 1 hour, and a Non-Standard Bar Chart time-frame of 7 hours. I could have created a non-standard 3 minute chart; a non-standard 30 second chart; a non-standard 12 day chart, and so on. In all time-frames, you will observe the presence of harmonic patterns and if that is true, then you will also observe that they often times do not share the same point of instantiation for their respective price ranges, as Constance Brown, suggests in her book.

Of course, this opens up a window on the type and kind of research that I am now engaged in, that seeks to discover whether or not I can locate a causal link between harmonic patterns in higher time-frames, to those found in the lower time-frames. I have a theory that there is a definite ratio driven nexus that will explain the expansion and the contraction (something that Constance said should could not explain) of price through time, to derive the event horizon of the harmonic pattern itself. I'm not sure where the study will lead, but I am confident that the Harmonic Event Horizon (if it does exist and if it can be measured) will be found at the M1 or Sub-M1 level.

Essentially, I'll be attempting to find the event horizon and then track or map the associated ripple-effect that causes the vibration (expansion) in price through time that also matches or coincides with the larger and more familiar Harmonic Patterns that Larry and all the others have talked about for years. If this can be done, then I should be able to trade not only the DP leg (where, P = projection), but the AB, BC and CD legs as well. Essentially, I'm talking about mapping the Timing of the Harmonic Pattern, as well as its Magnitude, which is function of the Fibonacci expansion cycles.

So, for these reasons, I really do believe that Constance Brown, is very much on to something. In fact, I got this idea for research from her book. But, I do appreciate your disagreement and they are well noted and understood.


Fat Tails View Post
Everything she writes is influenced by a religious belief that there must be a hidden order, where there is none. in my opinion, the book is a blend of practical knowledge on how to use Fibonacci ratios with some pseudo-scientific verbiage added.

I don't believe in Religion. However, I do believe in a Relationship, and I believe the relationship is with the creator of this Universe. I'm like Einstein, was very near the end of his life when he basically said that he saw "too much order in the universe" for it not to have been the result of an infinitely intelligent mind - or words to that effect.

I don't want to turn this thread into Sunday School, but I believe that man, for the most part, has attempted to remove God from His rightful place (which is not possible) and has instead used the surrogate of relativism to explain all things, even those things which cannot be explained through the sciences. Again, this is probably not the thread to continue this form of dialogue, but I really don't know what Constance believes in her heart, because quite frankly, I've never met her.

However, in response to your statement, yes - as an engineer, I do believe that there must be meaning to life and thus, there must be meaning to the markets. It might not be the meaning that is easily detectable, easily translated, easily understood, or sitting directly on the surface of life just waiting for us to walk by and pluck it. However, I have few doubts anymore that all is not random, by chance, or that somehow, from primordial chaos, the universe organized itself - which of course would be a direct violation of the Laws of Entropy and Causation. Putting such a conclusion in direct contradiction with science itself. [of course, I later created this thread precisely for this type of conversation]


Fat Tails View Post
For me, a statement like "Harmonic Unity Within Market Price and Time" is simply nonsense. But again, I respect different views on this subject. Maybe we can continue to discuss it further in one of the harmonic trading or Fibonacci threads, as it does not belong here.

Well, in actuality - the way I would have phrased it might have been something like: Harmonic Price Pattern Synergy Across Multiple, Linked Time-Frames. But, I gather that both Constance and I, agree that out of the apparent first order randomness of the market, there exists additional orders of structure which while being in a constant state of dynamic re-arrangement, are at all times moving within a constant range of predictability.

On the matter of God's existence - which would say a lot about the financial markets in logical sequence . I have conversations with atheists before who in the end, were found to really not have a causal source for not believing in God existence. Typically, I can do that in five (5) moves, as long as the atheist remains at least intellectually honest. Now, I want to be clear about something. You cannot convince any atheist to commit their lives to Christ. That's the job of the Holy Spirit. However, I think that it is very possible to demonstrate to the atheist the logical problems that exist, as a direct result of not believing in the existence of God. It is up to the atheist at that point to conclude for themselves, whether or not they wish to continue to hold on to logic that is inherently flawed.

What I am trying to gently say here, is that when all is said and done, if one remains intellectually honest, by the end of answering the fifth (5th) question, it would be clearly irrational to conclude that God did not exist. That's all I'm saying. Not that one is going to turn their live upside down, but that one will no longer have any logical wiggle room, for excluding God from the equation.

From Harmonic Patterns to the logical proof for the existence of God. I don't know that I've seen a thread exactly like that before, but here goes. Of course, this is all based on the reply to my original post that Fat Tails authored in the thread on Trading Books.


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JetTrader View Post
To illustrate, here is an H1 Chart of the EUR Cross Index that I created. It is a candlestick bar chart containing all major pairs, where EUR is the Base currency:

EUR Cross Index H1
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Here is that same exact chart again, this time in the H7 time-frame:

EUR Cross Index H7
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I did not take the time to plot all the obvious harmonics, but the patterns are easily seen by the trained eye.


My eye is not trained enough, I am just seeing empty charts. Could you please elaborate, which of the obvious harmonics you refer to?

Technical Note: The chart cannot clearly be viewed, maybe you could use a different format to show it. There is also an option to add .jpg or .png files as attachments.

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Hello Fat Tails,

Sorry. I did not draw out the harmonics on either charts this time. I'm still in the testing phases with the trading platform the produced the charts and I've just been told by the company that made the trading platform, that they are getting ready to release a trunk version of the same platform with some of the much needed improvements and optimization that it current lacks.

I was basically trying to demonstrate (somewhat visually) that harmonic patterns exist not only on standard time-frames and non-standard time-frames, but harmonic patterns exist even across multiple, aggregated currency pairs, that have either the same Base or the same Counter.

The charts above are cross pair index charts. So, in this index, the chart is an aggregation of six (6) different pairs with EUR as the Base:

EURUSD
EURCHF
EURCAD
EURAUD
EURNZD
EURJPY

I'm using a 27 inch monitor, running a 1920 X 1080 resolution. So, by the time I get the image onto the tinypic host for conversion, the pixel resolution gets fogged up a bit. It looks razor sharp on my 27" LG, but I can't seem to find a way to get that image quality transferred to an image hosting site. I've tried just about every image resolution I can. Of course, if I let the site upload the image in its native resolution - then it looks razor sharp - but it also blows out the HTML framing on Big Mikes server and you end up with an image that's a mile wide and two miles in height.

I'll draw-out the patterns the next time - at least that way you can see what I'm referring to. Again, the real interesting part (I thought) was find out that indeed, the harmonics do exist on standard and non-standard bar aggregated cross pair index charts. That tells me that the markets are more harmonic than I first thought.

Getting harmonics on a single currency pair is one thing. Getting them to show up so vividly across multiple dissimilar currency pairs in the Price Aggregate, is quite another.

I'll do some more later. I'm trying to see if I can get ZUP or Korharmonic

In the meantime, this is a short video on the concept. It is an idea that been around for a while. But, the carts that Larry is working with are all based in a singular currency pair in his examples, which is quite different from that have posted here.

Fibonacci: 4/9: Larry Pesavento: 8/7/10 (you can also watch 5/9 through 9/9 on your own)

This link should also lay it out for you fairly well: HarmonicTrader.com - Harmonic Price Patterns
This link has other forms of harmonic-like patterns as well: http://www.traderslaboratory.com/webinars/suriDuddella_TL_Oct2408.pdf

Of course, there are books written on the subject of Harmonic Patterns that you can use to sharpen the eye:

Harmonic Trading, by Scott Carney
Trade What You See, by Larry Pesavento
Trade Chart Patterns Like The Pros, by Suri Duddella

Now, I have another form of Harmonic Pattern that I am not ready to release yet. It comes from my own research and its basic structure comes from an Indicator that I created many years ago. I never looked at it as being "harmonic" until I started to recently pay some attention to Larry, Scott and Suri. I had read Constance Brown, but the I did not connect the dots until I saw the video that I just posted for you above with Larry, and the basic Gartley pattern.

My harmonic patterns are unlike the others because they are fixed in time. In other words, you know exactly when the pattern will start and when it will end. In fact, my patterns starts with Bar [0] and ends with Bar [1]. So, harmonic pattern structure covers the span of any two bars of data. I call the pattern: Harmonic Trajectories. This is because the patterns are based on the core principle embedded within my system called the Trajectory. I'll get into some of the details on Trajectories later. There are different types of Trajectories in my system, but the two that form the harmonic pattern that I'm referring to now come from one of the indicators that I created in the early stages of system development, many years ago.

I am still working on this concept, so it is not yet fully formed, nor am I trading it right now because it has not yet been through any certification for inclusion into my system. But, I do believe it to be a brand new frontier for my system, as I had once thought that I simply had no more ideas left to improve upon the systems overall performance.

So, at this point, I am studying standard harmonics to the Nth degree, so that I can generate as many ideas as possible for the development of Harmonic Trajectories. As I develop the idea and figure out what I can release to the public and what I cannot release, I will post some examples of what they look like and how they function - to the degree that I can.

The very early summary thesis is two fold:
1) Harmonic Trajectories will always lead to the "D" point of Standard Harmonic Patterns, when the Harmonic Trajectory is Non-Conforming.

2) Harmonic Trajectories will always lead to the Dominant Trajectory, when the Harmonic Trajectory is Conforming.
[I realize that I have not defined any of these "terms" yet, but I'm just basically laying out the research path that is now before me.]

Basically, if this works out, I should be able to push my trading system's accuracy to a specified target, into the very high 90% range and keep it there. Also, if this works out, then the Harmonic Trajectory Patterns will essentially become the early warning indicator for when a standard Harmonic Patterns stands the highest probability for failure. Of course, that's my current, unfinished theory and it is subject to change.

I'll come back to define some terms and post some charts a little later.
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Fat Tails,

Four (4) of the beautiful things that I like personally about these kinds of patterns, is precisely what Larry, just stated:

1) They are leading indicators/signals. So, they do not lag the market like traditional indicators and you get near instant feedback about whether or not your entry level was good or not.

2) Their entire existence is predicated on pre-calculated price levels (Ratios) that can be known well in advance of the market's arrival at those levels. So, the trader has time to objectively note the conformity of the pattern before making an entry decision.

3) These patterns do not put the trader on the "side lines" during horizontal markets. You can trade these patterns straight through Bull, Bear and Flat markets - which leads to number 4.

4) These patterns give the trader a heads-up on whether the observed time-frame is in its Bullish, Bearish or Horizontal phase and they also indicate whether the market is Contracting or Expanding in Magnitude.

Harmonics, basically expose the flaws hidden in traditional trend trading, by showing the trader that trends are really just part of a larger Harmonic leg in one or more time-frames.

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JetTrader View Post
Harmonic Trading, by Scott Carney
Trade What You See, by Larry Pesavento
Trade Chart Patterns Like The Pros, by Suri Duddella

I think that the book by Robert C. Miner "High Probability Trading Strategies" is the best on the subject. Larry Pesavento's book is an easy read with a few well-known patterns, Carolyn Boroden's book is similar to the first but less clear. Constance Brown's book on "Fibonacci Analysis" uses an entire different approach, which is not easy to follow.

Also could you elaborate more on what is a "Harmonic Trajectory"?

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JetTrader View Post
I'm using a 27 inch monitor, running a 1920 X 1080 resolution. So, by the time I get the image onto the tinypic host for conversion, the pixel resolution gets fogged up a bit. It looks razor sharp on my 27" LG, but I can't seem to find a way to get that image quality transferred to an image hosting site. I've tried just about every image resolution I can. Of course, if I let the site upload the image in its native resolution - then it looks razor sharp - but it also blows out the HTML framing on Big Mikes server and you end up with an image that's a mile wide and two miles in height.

All images are resized to 650px wide when viewed on a thread, there is no "blown out" image problem unless your browser is really, really old on your side.

Just follow the directions here to preserve quality:
https://futures.io/help-tutorials-how-tos/10992-how-capture-upload-screenshot.html

Mike

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JetTrader View Post
Trade Chart Patterns Like The Pros, by Suri Duddella

Don't forget to signup for Suri's webinar on futures.io (formerly BMT), 10 autographed copies of his book being given away plus Q&A:

https://futures.io/feedback-announcements/11072-big-mike-trading-2-year-anniversary-prizes-webinars.html

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
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2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
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Hello JetTrader

Would it be a good idea to trade non-standard time frames or a few pairs together to ridden some of that competition while I trade very standard lagging indicators?

Because (off topic!) I am checking out DMI-/DMI+ or ADX going by an older post of yours saying that you could trade with just that.
Before I had just developed a great parabolic mechanical system but then I noticed the Parabolic SAR re positioned its dots like crazy. A mistake I will never make again. I was using the dots in relation to other dots and it alwas kept me out of the sideways market (when backtested), or in without closing. Hah well there went that dream!

I am right now just trying to pick up some experience trading the flow of the market. Using one indicator sometimes. This is because I have seen how some people on the forums just pick up on systems after systems and use them to get lots of profitable trades. Why they change systems or even use them I don't know, but they just seem to be in general good traders. Of course just making their daily 500 dollars or something. My point is I don't want to go trade harmonic patterns or some advanced stuff before I'm comfortable trading a very nooby way yet still able to make a profit.

Putting a high period ADX on the chart for direction and then me pin pointing entries myself. I think will make me much more comfortable trading in general. When a high period ADX is on, even though it lags. It seems to find the powerhouse direction so it's much more likely that any sudden spikes go in your direction. I don't like the default period because it whipsaws a lot so crossings can not be used. But waiting for a more clear + over - and it becomes irrelevant because the direction has reversed on you.

I'm sorry for being off topic. I can edit this out and leave just the question if you would like with no problem! Just pm me. I don't want to confuse anyone here.


Last edited by feelnot; June 15th, 2011 at 12:17 PM.
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Sorry for the lateness. I've been spending a lot of time lately working with ProTrader and their technical support/development team, to work out some issues that were already known, as well as some that I found in the platform during my own evaluation. Basically, while I do like the direction that ProTrader attempts to move into, the platform is simply too unstable for my taste.

I ran some Arbitrage trades using the platform and they worked exceeding well, so I was happy about that - especially after bringing a couple bugs in the Arbitrager to their attention and having them fix them within two weeks time. I like Arbitraging and I especially like the way their Source to Destination motif is set-up within the Arbitrager. But, overall, the platform is simply too unstable for me personally at this time. They are working on a new stand-alone version of ProTrader which should be lighter and better optimized, but that is a new project and so the platform won't be available anytime soon.

So, I won't be able to easily do these Harmonic Currency Pair Cross Index trades, or show them inside this thread. Of course, I have seen pics of an MT4 indicator that produces such charts, but I've never been able to get that indicator working properly on my box. The ease with which you were able to create such charts in ProTrader was unmatched.

However, we can still talk about some of the concepts to some extent, anyway.


Fat Tails View Post
I think that the book by Robert C. Miner "High Probability Trading Strategies" is the best on the subject. Larry Pesavento's book is an easy read with a few well-known patterns, Carolyn Boroden's book is similar to the first but less clear. Constance Brown's book on "Fibonacci Analysis" uses an entire different approach, which is not easy to follow.

Also could you elaborate more on what is a "Harmonic Trajectory"?

I have not picked-up the Robert C. Miner book yet, but I might as well do so. You are right about Constance Brown's book. One of the ideas that I developed for myself, came from Constance Brown's book. It is the notion of synergy among ratios in dissimilar time-frames. She does not directly deal with this relative to traditional Harmonic Patterns in her book, but the idea came to me after I read her book and then later began studying the Gartley extensions.

I can't get into the full idea that I've developed because quite frankly, I believe that once I'm finished, it will become my preferred edge. However, I can say that my observations thus far, do confirm my original hypothesis to a large extent.

A basic Trajectory is nothing more than the Delta between two data points. That's it (at least for the basic concept). So, if I take High [0] and subtract it from Low [0], I simply get the High:Low Trajectory, or High-Low Delta.

Thus,

EURUSD
High = 1.40212
Low = 1.40031
HLD = 18.1 (where, HLD = High:Low Delta)

So, out of the entire price block of OHLC, I can derive as many as five (5) Trajectories. This gives me something that trend traders cannot see. Therefore, I automatically get an edge in the analysis of first order derivative of price. I'm creating data for analysis that the majority of the market simply does not use and does not see.

If you look at ATR, you will note that it is a first order derivative of price. Yet, how many people go beyond the simple ATR. In fact, most traders scoff at ATR, or overlook it because they don't see much value in its output. This is a huge mistake. Remove ATR from the market and you have no market to trade. So, how can the single most important derivative of price, fail to have significance.

I have added to the basic calculation of ATR and created my own indicator that I call: Omega. That was more than 10 years ago. Today, Omega has become the OmegaWave indicator and its structure is rather complex mathematically. But, it is all predicated on a very simple Trajectory concept.

My trading system is predicated on what I simply call, Trading The Delta. I'm a Delta Trader. I don't trade where price has been, I look to trade where price has the highest probability of going "next." Therefore, I'm constantly buying and selling, slightly ahead of the market and letting the OmegaWave carry my position to its exit or Limit level. I only get burned, when the Delta Probability gets burned and historically, that is less than 7%-10% of the time.

A Trajectory is simply movement. I don't care what the direction of movement happens to be (up or down). I just need the market to move from Point "A" to Point "B" on a historically consistent basis. If it does that, then I can trade that Delta, or that Trajectory. I don't need to be in the market to capture the next 100 pips. But, if I can capture 17 of the next 40 pips, or 7 of the next 17, or 5 of the next 10, or 23 of the next 67 - then I can consistently remain profitable over long periods of time, while not having to worry about locating the trend.

All of my trades are Leading Edge positions. Sometimes the position is contrary to the trend, but sometimes it is with the so-called trend. My research confirms that trends don't really exist. They do however, provide nice psychological comforts in a business where uncertainty is ramped. The only thing that exists in the market with 100% certainty, is the Trajectory. Thus, every indicator in my trading system is Trajectory based, or Delta driven. The Delta is the hydrogen fuel that drives my trading system.

There are an endless number of Trajectories, yet to be discovered and explored. I've only briefly talked about the most fundamental of them all, here. However, a Trajectory can be as simple or as complex as one's own imagination can make them. In my opinion, most conventional Technical Analysis has been hindered by the Moving Average. Trapped inside an MA calculation, most conventional TA lags the market while remaining hostage to a first order derivative of price that has tremendous difficulty seeing around the corner. This is why I call Trajectories, the Undiscovered Country. It is a place where mathematically, logically and algorithmically, there are no such barriers.

I've given a simple bar [0] to bar [0] Trajectory, using the High and the Low. But, what about: [1] to [13], [2] to [7] and [4] to [5]. That's called a Trajectory Sequence, or a Transequential Non-Contiguous Delta (TNCD). The most basic of all Trajectory types is the Transequential Contiguous Delta (TCD), which was the first Trajectory type given earlier.

Using the slightly more complex Trajectory Sequence above:

bar [1] - bar [13] = Trajectory X
bar [2] - bar [7] = Trajectory Y
bar [4] - bar [5] = Trajectory Z

You derive Trajectories that output three (3) distinct Delta values. Obviously, the number of Delta values determines the complexity of the Trajectory Sequence. When I run this calculation merely one time, I get three (3) Delta values X, Y and Z. Those values in and of themselves, don't tell me much. However, when I calculate them across a sufficient number of bars in the currency pairs history and then compare their values, I might begin to see a pattern emerge from the data. Or, I might not. If I don't then I move on by selecting another Trajectory Sequence until I find a pattern. This is how I conduct some of my most basic and fundamental Delta research. These are not Harmonic Patterns. They are Delta Patterns, which are rather unique.

Now, in the above Trajectory Sequence, you can use High and Low as I did in my earlier example, or you can use any of the four (4) fundamental anchor points: OHLC. This is where the first layer of complexity comes in as the number of combinations begins to grow exponentially if you decide to push it that far. This is part of the reason why I call Trajectories the Undiscovered Country. The number of combinations (amount of research) is endless.

In the above example, I'd be looking for the Magnitude of the Delta within Trajectories X, Y and Z. Since I know that every bar produces OHLC and I know that each M5 bar (for example) lasts exactly 5 minutes, I can begin to make some educated assumptions about price action. If the historicity of price action within Trajectory X (for example), demonstrates N% activity to occur within the "next" 5 minutes - and - I know that I've seen something considerably less than N% in that same Trajectory, then (using historically calculated comparative data) I can calculate a probability for price move into Trajectory Y from Trajectory Z, and into Trajectory X from Trajectory Y. I can then monitor (or, design the system to monitor) to what extent price fulfilled some portion of N% activity in each Trajectory.

This gives me the beginnings of a Trajectory Framework in which I can start to build some rudimentary logic, in an attempt to ultimately predict the "next movement" within that framework. My advanced system has dozens of these kinds of Frameworks, each with their own set of rules that are predicated on the nature of the Trajectories contained within the Framework itself. Each Framework contains baseline Trajectory calculations that produce indicators, which in turn produce signals that then get filtered by the Framework, such that the highest valued signal is returned to the systems Signal Engine.

This is why I call it, Delta Trading and the Trajectory is at the heart of the system. A Harmonic Trajectory, is simply catching multiple Trajectories with a high probability for movement in the same direction within multiple time-frames.

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Mike

Hey Mike,

Thanks for the tip - I'll give it a shot next time.

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