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 231,227 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

  #201 (permalink)
 
Bermudan Option's Avatar
 Bermudan Option 
Chicago, Illinois
1% better Daily
 
Experience: Beginner
Platform: TradingView
Broker: ThinkOrSwim
Trading: Forex, Stock & Options
Posts: 673 since May 2011
Thanks Given: 838
Thanks Received: 471

please tell me I am not the only one who sees the irony of this thread being bumped when a certain journal on the forum giving eight numbers chosen by a special indicator and the advice for the futures.io (formerly BMT) members is, "I don't know what number is going to be important, but I know it is one of them will be important intraday"

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
NT7 Indicator Script Troubleshooting - Camarilla Pivots
NinjaTrader
Are there any eval firms that allow you to sink to your …
Traders Hideout
Better Renko Gaps
The Elite Circle
NexusFi Journal Challenge - April 2024
Feedback and Announcements
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
44 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #202 (permalink)
 uexkuell 
Pt Vala
 
Experience: Advanced
Platform: Proprietary
Trading: CL, EUR, DAX
Posts: 58 since Apr 2010
Thanks Given: 12
Thanks Received: 31


Bermudan Option View Post
please tell me I am not the only one who sees the irony of this thread

+1

Reply With Quote
  #203 (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



Bermudan Option View Post
please tell me I am not the only one who sees the irony of this thread being bumped when a certain journal on the forum giving eight numbers chosen by a special indicator and the advice for the futures.io (formerly BMT) members is, "I don't know what number is going to be important, but I know it is one of them will be important intraday"


Random lines are only valid, if you carefully select them at midnight while watching the Full Moon.

Reply With Quote
Thanked by:
  #204 (permalink)
 
trendisyourfriend's Avatar
 trendisyourfriend 
Quebec Canada
Market Wizard
 
Experience: Intermediate
Platform: NinjaTrader
Broker: AMP/CQG
Trading: ES, NQ, YM
Frequency: Daily
Duration: Minutes
Posts: 4,527 since Oct 2009
Thanks Given: 4,171
Thanks Received: 6,018


Bermudan Option View Post
please tell me I am not the only one who sees the irony of this thread being bumped when a certain journal on the forum giving eight numbers chosen by a special indicator and the advice for the futures.io (formerly BMT) members is, "I don't know what number is going to be important, but I know it is one of them will be important intraday"

You should take these lines seriously. Some people sell them at a high price $550 for the US equity index (4) per month, no joke. To be sure, check this site: JS Product Overview

Also, this site: ToTheTick | [AUTOLINK]Support and Resistance[/AUTOLINK] Trading - Futures and Forex

And this last one: Pivotfarm | The Home of [AUTOLINK]Support and Resistance[/AUTOLINK] Trading

These lines are a precious commodity for some traders.

Reply With Quote
Thanked by:
  #205 (permalink)
 
jayminho's Avatar
 jayminho 
hell de janeiro
 
Experience: Intermediate
Platform: ninjatrader
Broker: mirus + zenfire
Trading: guitar
Posts: 54 since Mar 2011
Thanks Given: 7
Thanks Received: 22


Bermudan Option View Post
please tell me I am not the only one who sees the irony of this thread being bumped when a certain journal on the forum giving eight numbers chosen by a special indicator and the advice for the futures.io (formerly BMT) members is, "I don't know what number is going to be important, but I know it is one of them will be important intraday"

i wish i knew where to shove those numbers..
i never got them..
anyway

random lines rule!!!!!! )

Follow me on Twitter Reply With Quote
  #206 (permalink)
 
Bermudan Option's Avatar
 Bermudan Option 
Chicago, Illinois
1% better Daily
 
Experience: Beginner
Platform: TradingView
Broker: ThinkOrSwim
Trading: Forex, Stock & Options
Posts: 673 since May 2011
Thanks Given: 838
Thanks Received: 471


Big Mike View Post
But if people/traders are making trading decisions at random (which one could argue the majority of retail traders are), does that mean that since those decisions were random that the result ("the market") is also random? What I mean is that a lot of retail traders seem to have a plan or a system, a method, in place, but if you actually look at either what powers that method or at how the trader is actually executing on that method, I believe the results would be random. Maybe chaos is better than random.



Thoughts?

Mike

I learned that:

1.) The more lines you plot on a chart, the more probable one of them well become a factor. That is like playing Russian Roulette with 5 bullets in the chamber. You are increasing the chances your odds significantly with each additional line

2.) Lines on charts in themselves are already victims of our attempts to seek out patterns. For example, when traders look at resistance, we are taught that sometimes the price action might shoot beyond the resistance level before retracing. Also, we are taught that price action might fall short of the resistance level before retracing. yet we are also taught that price action sometimes directly touch the resistance level before retracing. So if we are looking at a stock about to break $5, any intraday/daily hesitation between 4.95 and 5.05 can be deemed as resistance coming into play. That is a 10% price range where no matter what happens, we will assume that the price is 'reacting' to resistance. In other words, resistance on a chart might be a line taking up 1/100 of a trading screen, but the way we use it as traders, it can sometimes represent 5-10% of the intraday price action.

3) Also, we need to take into account the fact that with every candlestick at resistance, we have four potential ways to confirm that the resistance level is true: the open, the low, the high or the close. If ANY of those interact with a random line, we assume that the resistance has played a role. From a probability standpoint, those are the kind of odds we want to take to Vegas with us.



I think one thing to remember is that the lines may be random because where the market starts and stops is arbitrary imo, but once a line is 'hit' it no longer is random as traders give it meaning. As a group once we give a certain area meaning, we base our future expectations on it, so a place that started off as a place where buyers and sellers convened becomes symbolic and a breach below that level means that the bulls have disappeared and vice versa.

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #207 (permalink)
 
kbit's Avatar
 kbit 
Aurora, Il USA
 
Experience: Advanced
Platform: TradeStation
Trading: futures
Posts: 5,854 since Nov 2010
Thanks Given: 3,295
Thanks Received: 3,364


trendisyourfriend View Post
You should take these lines seriously. Some people sell them at a high price $550 for the US equity index (4) per month, no joke. To be sure, check this site: JS Product Overview

Also, this site: ToTheTick | [AUTOLINK]Support and Resistance[/AUTOLINK] Trading - Futures and Forex

And this last one: Pivotfarm | The Home of [AUTOLINK]Support and Resistance[/AUTOLINK] Trading

These lines are a precious commodity for some traders.

Just happen to notice your mentioning pivotfarm...I have spent a lot of time studying thier method....actually I figured it out before discovering them and when I found them it was nice for me. They essentially did my homework for me...that is until they wanted money for thier #s then I walked away. Anyway I guess I am off topic here but thier #s are definitely not random. The #s they provide work best for the 6e (and eur/usd) which was the same as what I came up with, also can be used with some sucess on tf...the rest, forget it. I don't really focus on that anymore because trades are infrequent and happen in the middle of the night most of the time but it does have a high success rate.

Reply With Quote
  #208 (permalink)
 gg80108 
Castle Pines N, CO.
 
Experience: Advanced
Platform: NinjaTrader
Broker: Amp Futures/Zen-Fire)
Trading: ES
Posts: 201 since Jul 2009
Thanks Given: 196
Thanks Received: 132

Seems like Elliot Wave is similar to random lines, except the random lines in Elliot are created real time patterns, u 12345, abc ,, until something works.. Then say see it works...

Reply With Quote
  #209 (permalink)
 
Bermudan Option's Avatar
 Bermudan Option 
Chicago, Illinois
1% better Daily
 
Experience: Beginner
Platform: TradingView
Broker: ThinkOrSwim
Trading: Forex, Stock & Options
Posts: 673 since May 2011
Thanks Given: 838
Thanks Received: 471


gg80108 View Post
Seems like Elliot Wave is similar to random lines, except the random lines in Elliot are created real time patterns, u 12345, abc ,, until something works.. Then say see it works...

Ambiguity is a key element behind all cults, con men and incorrect reasoning. A lack of a solid answers allows people to constantly shift the goalposts whenever a prediction comes up short.


Wikipedia entry on Elliot Wave
The premise that markets unfold in recognizable patterns contradicts the efficient market hypothesis, which states that prices cannot be predicted from market data such as moving averages and volume. By this reasoning, if successful market forecasts were possible, investors would buy (or sell) when the method predicted a price increase (or decrease), to the point that prices would rise (or fall) immediately, thus destroying the profitability and predictive power of the method. In efficient markets, knowledge of the Elliott Wave Principle among traders would lead to the disappearance of the very patterns they tried to anticipate, rendering the method, and all forms of technical analysis, useless.

Critics also warn the wave principle is too vague to be useful, since it cannot consistently identify when a wave begins or ends, and that Elliott wave forecasts are prone to subjective revision. Some who advocate technical analysis of markets have questioned the value of Elliott wave analysis. Technical analyst David Aronson wrote: [17]
The Elliott Wave Principle, as popularly practiced, is not a legitimate theory, but a story, and a compelling one that is eloquently told by Robert Prechter. The account is especially persuasive because EWP has the seemingly remarkable ability to fit any segment of market history down to its most minute fluctuations. I contend this is made possible by the method's loosely defined rules and the ability to postulate a large number of nested waves of varying magnitude. This gives the Elliott analyst the same freedom and flexibility that allowed pre- Copernican astronomers to explain all observed planet movements even though their underlying theory of an Earth-centered universe was wrong.

Also it reminds me of:

Wikipedia entry on Sharpshooter Fallacy
The Texas sharpshooter fallacy is a logical fallacy in which information that has no relationship is interpreted or manipulated until it appears to have meaning. The name comes from a joke about a Texan who fires some shots at the side of a barn, then paints a target centered on the biggest cluster of hits and claims to be a sharpshooter. [1]

The fallacy does not apply if one had an ex ante, or prior, expectation of the particular relationship in question before examining the data. For example one might, prior to examining the information, have in mind a specific physical mechanism implying the particular relationship. One could then use the information to give support or cast doubt on the presence of that mechanism. Alternatively, if additional information can be generated using the same process as the original information, one can use the original information to construct a hypothesis, and then test the hypothesis on the new data. See hypothesis testing. What one cannot do is use the same information to construct and test the same hypothesis (see hypotheses suggested by the data) — to do so would be to commit the Texas sharpshooter fallacy.

The fallacy is related to the clustering illusion, which refers to the tendency in human cognition to interpret patterns in randomness where none actually exist.

and also

Wikipedia entry on Data Dreding
Data dredging (data fishing, data snooping) is the inappropriate (sometimes deliberately so) use of data mining to uncover misleading relationships in data. Data-snooping bias is a form of statistical bias that arises from this misuse of statistics. Any relationships found might appear to be valid within the test set but they would have no statistical significance in the wider population.


Data dredging and data-snooping bias can occur when researchers either do not form a hypothesis in advance or narrow the data used to reduce the probability of the sample refuting a specific hypothesis. Although data-snooping bias can occur in any field that uses data mining, it is of particular concern in finance and medical research, both of which make heavy use of data mining techniques.


The process of data mining involves automatically testing huge numbers of hypotheses about a single data set by exhaustively searching for combinations of variables that might show a correlation. Conventional tests of statistical significance are based on the probability that an observation arose by chance, and necessarily accept some risk of mistaken test results, called the [I]significance[/I]. When large numbers of tests are performed, it is always expected that some will produce false results, hence 5% of randomly chosen hypotheses will turn out to be significant at the 5% level, 1% will turn out to be significant at the 1% significance level, and so on, by chance alone.

If enough hypotheses are tested, it is virtually certain that some will falsely appear to be statistically significant, since every data set with any degree of randomness contains some bogus correlations. Researchers using data mining techniques can be easily misled by these apparently significant results, even though they are mere artifacts of random variation.

When you sit down and really think about it though, trendlines are the exact same as well though..

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #210 (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



Bermudan Option View Post
When you sit down and really think about it though, trendlines are the exact same as well though..

Trendlines are exactly the same as other areas of support and resistance. They are meeting points watched by many technical traders and work as self-fulfilling prophecy. They can either hold or break, and this is interpreted as the continuation or the reversal of a trend. Works as long everybody interprets the price action in a similar way.

Reply With Quote




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