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Random Line Theory


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Random Line Theory

  #41 (permalink)
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Here are five random lines for tomorrow. I used random.org and you can see I put 8800 to 9400 as my range (88.00 to 94.00). I then hit the button five times and plotted the lines. This is exact same as I did for todays range this morning. I am picking the 88 and 94 but I think any number of things could be used to set an outside limit like the one I am inventing.

I just want to reiterate that the lines I am showing here (89.22, 90.76, 91.38, 91.97, 92.48) are for the Wed Dec 29 session (tomorrow).

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  #42 (permalink)
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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 ?

Volume is absent and by leaving behind half of the equation of what makes price move you can't achieve the full potential of the information or clues the market is providing. A car is useless without gasoline so are random lines of support/resistance without volume information. Eric J, i am afraid to tell you that your experiment is pure coincidence.

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  #43 (permalink)
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trendisyourfriend View Post
Volume is absent and by leaving behind half of the equation of what makes price move you can't achieve the full potential of the information or clues the market is providing. A car is useless without gasoline so are random lines of support/resistance without volume information.

I think you may have missed the point of this thread?? We aren't trying to trade the random lines.

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  #44 (permalink)
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I want to test something. It's simple. Place some random lines on your chart prior to the day opening, and see if at the end of the day you feel like those lines were important (try to imagine they weren't random, but some expensive or complicated indicator instead).

Here is my 5m CL chart with my other stuff removed. This is before the open, so what you are seeing is from last week. But the blue horizontal lines are what I have added just now.

I picked the lines as randomly as I could. I only saw what you see on my chart (I didn't look at historical data).

Let the test begin... I will post again at the end of the day. If you guys want to participate please post a clean/empty chart prior with your random lines on it prior to the day's action, then make a second post after the fact so we can see if the lines had any "impact".

Mike

how about this.....just one random line. Buy or sell as price cuts through it.

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  #45 (permalink)
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Rassi

great thinking and i bet Fat Tails is already considering that.

Thanks Mke for starting this thread

How does Free Market Studies
work it out

Euro FX Futures (Z10 CME) intraday: the upside prevails. Pivot: 1.3185
Our preference: Long positions above 1.3185 with targets @ 1.3275 & 1.3325 in extension.
Alternative scenario: Below 1.3185 look for further downside with 1.315 & 1.311 as targets.
Comment: the pair has struck against its resistance and is pulling back on its support ahead of a rebound.

sharmas

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  #46 (permalink)
the congo
 
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its an interesting exercise that illustrates the importance of how to manage a trade. has much more to do with profitability than entry!

edit...

heres another one...pick a direction at the open and trade it. all done to where you set the stops and limits.

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  #47 (permalink)
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Big Mike View Post
I think you may have missed the point of this thread?? We aren't trying to trade the random lines.

Mike

You're probably right, by commenting and analysing the way you did, you appear 'AS IF' you were trading them. If you don't trade them then what is the purpose, if any, of this exercice. If you don't trade them then why putting lines on your chart ?

A practical exercice would be to fade a second test of a random line and see how much you could make by doing so over a certain period of time.

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  #48 (permalink)
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trendisyourfriend View Post
You're probably right, by commenting and analysing the way you did, you appear 'AS IF' you were trading them. If you don't trade them then what is the purpose, if any, of this exercice. If you don't trade them then why putting lines on your chart ?

A practical exercice would be to fade a second test of a random line and see how much you could make by doing so over a certain period of time.

I commented that way to be consistent with how I or others would comment on a chart with such lines without knowing the origin of the lines. I've discussed already in a few posts what the point is. Sorry if there is a language barrier but I am not sure how else to explain it to you, perhaps someone else can rephrase it.

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  #49 (permalink)
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my lines were randomest none got hit.

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  #50 (permalink)
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cory View Post
my lines were randomest none got hit.

Try again tomorrow. I think what @Eric j has shown and my lines make it quite interesting.

For the benefit of @trendisyourfriend and probably others, I will attempt again to try and describe the point of the thread or my thinking behind such a thread.

I want people to look at these charts, look at the post analysis after the fact, and then ask themselves if they make similar analysis or rationale with any of their indicators -- seemingly assigning properties like predictive values to an indicator.

Then, knowing that what I am posting here is 100% random (proven), take a step back and ask yourself how that impacts your beliefs. What changes in your perceptions of your other indicators?

On this very forum you can find all kinds of indicators that plot lines on panel 1 of your chart. Lines for support and resistance, regions for price range, etc. When price does something with one of these lines, we tend to assign value to that. Should we? Look at the charts posted so far in this thread. Price "did something" with these lines, too. Imagine for a minute you did not know the lines were random. What would be so different from the charts in this thread compared to the charts in other threads?

The point is simply to get people to approach things from an angle they may not have previously considered, and hopefully in doing so they will benefit in some way and improve their trading.

Mike

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