macdulio3

Mean Perversion

I heard the other day that robot was a Hungarian word, and it meant slave. From what I remember, robot meant the peasant bartering work for stay during feudalism, and to me, that isn’t slavery.

This one is gonna have some segments, if you want the meat, go to the third block.

Segment 1

Here is a feature I did not know the lift button indicator could do:

The lift buttons are the circled RSI2 prints (when there are enough diamonds mined in the opposite direction), resulting in a lift station (green rectangle), and the last one gets a far-end highlight with the horizontal line plot.

What was bearish on buying the lift station, a brief fake out of the closing line, and a V-bottom?

Segment 2

About the mean reversion prompts on the daily.

We are talking about the little green arrows pointing up.

What do you know, yet another RSI2 signal.

 ///lift & first day rejection
      if (RSI2[i+1]<7 && RSI2[i]>RSI2[i+1] && RSI2[i+1]<RSI2[i+2]
      && High[i+1]<High[i+3]){
         ObjectCreate("Brachta"+DoubleToStr(i), OBJ_TEXT, 0, Time[i+1], Low[i+1]-50*Point);
         ObjectSetText("Brachta"+DoubleToStr(i), CharToStr(241), 32, "Wingdings", clrDarkGreen);  
         if (Low[i+1]>Low[i+2]-50*Point) ObjectSetText("Brachta"+DoubleToStr(i), CharToStr(233), 32, "Wingdings", clrBrown);

Briefly about the 42 signals received.

There were only 2 that did not result in instant mean reversion (circled); they were followed by inside days, so your confirmation towards a sure shot mean reversion after the plot appears is that the next day makes a higher high.

Since we are talking Eur/USD, mean reversion means the return inside the 9-day EMA Band. Obviously, in an uptrend, the reversion is just the first part of the move up, in a downtrend, it is a fade, and in a mixed market, some reaction is likely there.

The typical length of a mean reversion is 48-52 hours. 15 hours was the shortest I saw. In 4 days, the EMA itself may catch up with the highs.

If you want an analog based on the mean perversion, this is what I think may happen next:

I considered before surrendering a rent that yielded me not much in return, meaning £140 less yearly pay, and all of this blog, all of its content, erased. It was nice to hear myself out loud sometimes and catch some flawed thinking, but there were stretches of no visits, particularly last year. Now I have random people scattered around the world, 3-4 typically per day, intermittent outbursts of interests, and if I manage to prevent some self-harm or a loss of life by providing something tangible, something real, I have done my job.

There are 4 people that I individually tag with every article. One is in India, he is a programmer, he appreciates what I am doing, but of course would by default want to trade Gold.

There are 3 other guys on WhatsApp, 2 Hungarians, one Lithuanian, and none of them cares to click on my goodwill, trying to provide them with what to trade and how. They buy Bitcoin and or trade Etherium (Ether = Nothing).

Segment 3 – the end of a Wave.

A mean perversion is a painful (a mean, not clean, hurdy-jerky move back to the mean, if you know what I mean).

The ref line is the median of the 9-day EMA. The lows were tagged already.

An End Of A Wave has 3 components. A failed auction (blue rectangle), 2 snake ladders (blue lines), and likely a squiring phase.

Let’s look at the last 4 examples, and just take my word for the rest.

The squirting may not result in higher high / lower low during extreme volatility compression (BB120), but a shortfall from the high/low by mere 3-4 pips. The snake ladders are the 30 to 70-zone slide through on the RSI2, but on the upside, I would allow for a little shortfall on the second, as long as it made a second higher high first beyond the failed auction. The downside displacement I use for the squirt box is 20-36 pips.

Every counter move until an End Of A Wave sequence plays out is a mere setback.

There was 0% chanche of anyone ever figuring out what I just told you. I guess I beat the odds.

This is June, with 2 more days left to go. I am worth listening to.

Made some new Sting songs and a critically acclaimed album, and today I would be finishing a Disco LP.