Tops and bottoms. The Name of the game.
You may have seen this last shot.
You have not seen some of the past history.
I worked on the bottom – projections.
Projected distance and the “Forest” are some of my oldest ideas, they were in my book, the Computer Aided Trading, and they are still relevant today.
The Forest works when nothing else does: the market is merely making steps in a direction without any conviction.
The Green lines are a version of the Forest.
What does the Forest say? Ding-ding-ding-ding ding diring – buy here & here.
In this case only the first number gets its fill – & projected distance above clips the top.
See, there are no stochastic bars below, and I can still give you the buy level.
The Pink is a warning that things may be flipping up soon – and sometimes it would turn the price without further enforcement.
Here’s the worst example I could find, where I missed the top by 30 pips (from the horizontal needle). Hmm… What does that number remind you of? Well, a fluctuation size is 32 pips for the Euro. The train never left the station, just pulled forward all the way to the end.
Let’s implement the close-to-the-other-end-of-the-station-marker then…
It would further explain this move, although the strike out was in the right place already.
So is this the smartest thing I’ve ever done? Aside from creating a hedger making use of the strike outs and considering to make a cropper with the same conditions but a bit delayed as a step two, yes.
Stochastic Bars Stripy is born.