Synchronicity in philosophy is regarded as experiencing two or more events that are causally unrelated but are experienced as occurring together in a meaningful manner. It was first described by Carl Jung in the 1920s. There are various definitions and interpretations of the theory and in places opposed or dismissed but as usual it is best to let the reader decide if and when the theory is applicable or not, naturally based upon their own experiences and lines of thought.
For me at least, Synchronicity does occur if a person was to learn to look for it and directly linking to Forex, the specifics and the importance of targeting this in Price action pattern trading for the Foreign Exchange Markets is a given, i.e A reversal followed by another reversal and a reversal followed by a continue will alter the directional flow.
The suggestion could also be; to not only find synchronicity in the analysis of Time Frames but to make sure this forms a major part of the Trading Methodology. Whether a trader is lacking in syncing time frames, has limited or even no Synchronicity at all, this will be detrimental to the trading account. For example, certain types of events or market movements like to cluster together at particular times but the problem lies within the individual's own timing and thinking.
Far too often, incorrect interpretation of Price Action in the markets and lack of experience in recognising patterns and when to trade or not trade. This fact actually passes unnoticed and can be dismissed but not at Forexmospherians.com where it is recognised as a vital part of knowing how to Trade FX successfully. Any Traders finding themselves in the market at the wrong time know this results in mistakes and inappropriate trades causing losses.
Good trading days will naturally follow when the Trading syncing and methodology will work but more over, will work better when the individual thoroughly understands and starts using synchronised Multiple Time frame analysis to map, trigger and manage the trade. Fair to say, when the trader has not learned to watch for these patterns or coincidences and make them meaningful in relationship to Trading set ups, these will be lost opportunities which will hamper a Traders progress until they are fully resolved.
Below is an example of Synchronicity in the current Forex Markets demonstrated by the currency pair GBPAUD and the current Bull Market conditions.
The Trader may decide the Daily GBPAUD has Patterned for a treble bottom but at the very least Horizontal support and resistance has been identified.
GBPAUD 3 Hour Synced to the Daily Chart could identify horizontal resistance along with rising support.
3 Hour Time Frame under the spotlight could be seen as 123B followed by Bull Flag with Horizontal Support breaking long in the direction of the 3B. Again, followed by an MC with a mind to find an entry in the synchronised move to long. Final patterns in the current conditions could be a rising channel break long and followed again by an MC suggesting hold the trade.
The 1 Hour Time Frame could be seen by the Trader as a rising support, with the Price Action Corkscrewing its way to continue the long. In the final stages of this chart, the idea of seeing an Inverted Head and shoulders @1.7100, followed again by a bull flag and an MC , giving rise to think of an entry Long. Needless to say, everything Synced to the Time Frames above.
GBPAUD 1 minute synced as above for some traders, so below; Inverted followed by MC also known as an Ascending Triangle break long with entry identified using the Synchronicity of the aforementioned Time Frames and Forex Market Technical Analysis.
Current GBPAUD Trade is hold and 228 Pips.
Hope this helps.
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Forex Technical Analysis with Chart Patterns, Support and Resistance, Multiple Time Frame Analysis.
EURUSD Daily and M15 Foreign Exchange Charts
EURUSD break long Daily Rising Wedge Pattern - Support 123b 1.0400, plus support 123b plus support 123b, soon after patterns for flat line = NSC in minor TF and breaks long again. Looking for scalp entry long in the minor frames and found through horizontal resistance on daily along with M15 entry pattern.
Current PA breaks the Daily wedge to indicate long.
The Flat line mentioned above was NSC in M15 TF, soon after re-patterns for Symm Triangle, Broke Long and entry. Current hold 57 pips long. Stop Loss @ISSL
Current Price Action in the Minor Frames: M1 = Bear, 5 Sec = Bear
M15 Symm Triangle Entry, as above so below.
M15 Symm Tri
Forex Technical Analysis with Chart Patterns, Support and Resistance, Multiple Time Frame Analysis
GBPJPY break long 1 Hour Channel - Support INV, MC plus MC PLUS DC and support from 139.00 entry on the bounce. Soon After Pattern Ascending Triangle breaks Long again and considered as Long continue.
Patterned for potential Bull Horns at resistance, Support found off previous resistance for Ascending Triangle.
Breach Bull horns = Continue Long
Current hold 300 pips long.
We double topped within this NTZ on the 13 April just below 1.0850 and had 4 attempts to push past the lower bound of the double top (market with pink line on 1 hour chart).
I realised we had a AuD red news event which had the possibility to fuel the move I had already entered.
Entry was taken via 5 sec Head and Shoulders EPR at the previous lower bound of the 1 hour double top (pink line). A sharp move down after the H&S took out some key short term levels on the 1min and 5min, this gave me my entry as shown with the downwards arrow.
Attached are 3 hour, 1 hour, 5 min and 1 min charts. (I wanted to attach the 5 sec chart but for some reason I can't scroll back enough to screen shot). Currently around the 90 pip area.
Currently long this pair from earlier on in the day. The 2 white arrows at the double top area had bears sighted with EPR. I Was looking for a push down past the yellow line in the sand and a failure of the triangle support.
This idea was scrapped and the pair was back on the shelve for a while until I had a clear view. Once we broke out again and retested the 2 arrows price did not reverse hard and make a charge for the last support area. We formed a bull flag, once the EPR of the flag came in my thought we're a test higher and a run of the stops above the white arrows. I had a break out order Buy Stop in place for this move.
Lets see how it plays out.
All the best forexmospherians, Jr.
AUDJPY shorted this Forex currency pair twice @85.27 on 31st April and @83.56 6th April and holding.
Strategy to trade with the H1 Market Trend. Sell on break of swing.
Market Analysis is most Aussie pairs are in a down trend and holding both trades at 305 pips and 134 pips.
Thanks to Sir Gissachance who gave the heads up to short Aussie pairs in his last video. Anyone who pays attention to the detail in these secret Forex coded videos will know what to look for once studied.
EURCAD 240 pip short and EURUSD 290 Pip short
EURO it really was T.I.M.E. for the mortals to pay.
Forex Live Technical Analysis for this EURCAD currency pair:
M30 Timeframe and a Rising Market = Bull Market
123B = Support Identified = Bulls in the Market
Ascending Triangle Break = Continuation of Bull Market
Bull Flag Break in favour of the Bulls = Continuation
Bull Flag Break in favour of the Bulls = Continuation
Deep Continue = Bulls still in the Market
123T = Reversal Sighted = Bears in the Market
Median Break = Bears Continue and the entry here correlated from a minor timeframe
M5 Breaks with a minor 123T at resistance but soon found support with a 123B pattern, this reversal long ran into declining resistance and again held with another 123T which allowed another entry short.
EURUSD 290 Pip Short
EURUSD M60 = Short
The second was today as things were not improving for EURUSD and patterns remained down with no surprise spikes or retracement, so held the short again.
The latest Trade off resistance after EURUSD had patterned as a Symm Tri, this soon evolved into a NSC and shorted off resistance.
Long (sim) EurAus. Longer term Inv H&S at the low. A larger H&S highlighted in the blue triangle will of brought shorts into the market and stops placed at the traditional right shoulder or above the head. With the failure of this pattern in the triangle (stops getting run) allowed for a decent push higher and good ground covered by the longs.
Currently running 2 positions (sim) long on GbpAus, Inv H&S at the low with a break long, mc and continuation for bull market. The break long in the GbpUsd has helped fuel the push higher.
Got long (sim) after seeing a very aggressive bounce back after breaking the previous swing lows. Classic Inv H&S entry on the break of the neck line. For me if we can breach 138.94 area and hold, this could be a fantastic bear trap on our hands.
A trade that Im currently in (sim) is 2 positions short on the aussie (Day trade - more if I believe it will go). We have come in double topped at key resistance. This resistance in question has been hit many times and I don't really like trading off levels which have been struck numerous times but, we had a decent push down from the double top and my first position was placed @ 7713 and the second on the break of the highlighted box. Good trading folks
hour and 1 hour look at the Jpy, H&S formed on the 1 hour and great moment created by the fed announcement, mc and continuation. On the 4 hour it looks like we might have a bear flag forming. A break below the bear flag and continuation would indicate bears in control. Waiting and looking on this pair at the moment.
I missed this trade on the break above the last low 0.08692 previous to the lower test of the channel, could we say this double bottomed here on the 15min? The arrows are not trades, just for me to reference back to. EurGbp has been on a mission of late, especially the choppy rally up which got top pickers stopped out in a good way on the break above the rising channel. A break of this bigger EPR ( bull flag possibly) I will be trying to get long.
Got long on the retest of the NSC looking for the larger double top around the 1.0808 mark to be tested. Previous double top area will be hiding a pool of stops above if this rally can penetrate. Obviously in a much larger down trend on the larger time frames. Lets hold and see
I worked at this as my semestral project in econometrics. I know predicting the market sucks, but that's what econometrics is all about so I could not avoid it :o) and so, here we go!
Quant Trading: Averaging Point Estimates of Linear Regressions as a Way for More Accurate Predictions
The goal of this article is to find out whether using average of more point estimates of different linear regressions will lead to smaller value of RMSE. (root-mean-square error - the lower the value, the better predictions we have). All is programmed in Python3.5 and can be shared upon request. I used AUD/JPY 1-minute data for this estimations, just randomly chosen to avoid any prejudice of research.
First way of realisation of this project was to use multiplies of probability density function (which for our predictions should be of student‘s t-distribution, but for bigger data samples can be aproximated by normal dist.) of normal distribution, but it has not met success because of the data with heteroskedasticity and so our model would not be BLUE anymore (just LUE). And so that is why the point estimates are used.
Most of the classical assumptions are not met, but as long as we use point estimates we are fine, because the model will not become biased. If anyone were interested more about this topic I can add more. :)
The Economic Model:
There is not much to write about here because if you read this, you are probably experienced forexmospherian (if not, start reading all the great articles around here) and so you know the background of ideas and fxmospherians philosophy.
The way of calculations explained in one simple picture:
Simple regression with deterministic trend is used for every prediction.
Yt = α + δt + εt
And for decision making which model is the best one RMSE is used.
We will move every model n-times (which is equal to number_of_data – max_lin_reg_len) and before moving forward, p predictions will be made (for time T+1 to T+5) and its errors calculated into RMSE1 ... RMSEp. In any data window before moving forward, predictions of m models will be made with different linear regression lengths.
Mm1 – Model with the longest linear regression. Reffered as T = 100, in the 1st pic.
Mmm- Model with the shortest linear regression. Reffered as T = 50, in the 1st pic.
M0: Naive model, where the value of prediction is equal to last close value of given time series.
M1: Model with average of two predictions. For p-th predictions equal:
AUD/JPY, from 18th to 23rd December.
Testing model defined as M1
It is described in more details in my project, unfortunately in Czech, so if you were interested I can send original version. So just briefly in English.
This graph shows the robustness of choosing average of two models as a better point estimator. It goes through all parametrs combinations of the length of linear regression. If M1 is better than the two predictions it is calculated from, it wins and is calculated into our graph lower.
In conclusion the average of estimates of two regressions is reasonable when we want to predict the market behavior for time T+3 and further. For T+3 it is better estimater in more than 50% combinations, in T+4 it is better estimator in more than 80% combinations and for T+5 over 90%.
Testing model defined as M2
The same approach as used in previous chapter. But instead of using 2 linear regression, m of them is used and their predictions averaged.
The conclusion here is that using average of m models as a better prediction method does not pays off. Two was optimal.
Comparison with naive Model
Our expectation from what we have been working at is that we will beat the RMSE of naive model.
For our big surprise, I was not able to beat the naive model :o) Functions trying to do so were implemented in code (check_if_beta_stat_signif, check_all_betas_direction, check_for_mean_rev_trading), tested, but without any success.
We found out that predicting behavior on currency pairs for time T+3 is better to use the average of two point predictions of two linear regression with different length.
Estimates based on average of more than two linear regression showed up as useless.
Naive model rulez. hehe
I hope you enjoyed this article. You can also check my latest about interventions on EUR/CZK. Everything You Need to Know About Peg on EUR/CZK and How to Trade it Afterwards
EDIT: Some fonts are not drawn correctly, so sorry for that.
Share some Market Analysis with the community but try to avoid just simply posting a link or video and saying this is great. Explain what makes it great or how this was useful. Sometimes things are simply entertaining and so say what you enjoyed about it. Describe why you made that Trade, came to that Market Analysis and set of results.