Nice things Tom. :--RRB- I will see what it is you are doing and it is logical to me.Originally Posted by ;
The reason I believe statistics plays out in your favour when studying the longer timeframe in a nutshell is this.The fundamental unit of data on a Foreign Exchange pair is the tick. This comprises an indeterminate order quantity; When you scale up to this M1 chart, the summation of those ticks produces a normal price on M1 which comprises those market orders during an interval of a minute. There is not much sense to be gathered at the microlevel where coordinated price action is acting. At this level, market noise rules supreme due to the varying objevtives of this participant but produces patterns that we believe are repeatable and represent non-random price motion. When I talk of'arbitrary' here it really isn't arbitrary but a trader lacks perfect information of all of the different goals surrounding every particpant in creating their trading choice during this minute. Some are reasonable market participants whereas many others are irrational. Some are associations that have risk management goals at the back of the mind, a few are speculators like us ....some are traders who are forced to liquidate due to bankruptcy:--LRB- As you step out in timeframe you get a better sense however of where collective agreement is occurring through market participants simply due to the summation of a huge quantity of price data to gain an understanding of where price is jointly dring towards. This is simply due to the fact that as we scale up we progressively collect more price action of those participants in an attempt to forecast where price will proceed. Clearly the highest timeframe therefore should describe where consensus is in regard to price management. That timeframe for practical purposes is the MN timeframe and theoretically this is really where fundamental economics principles as opposed to the objectives of the individual market participants. Participants who are looking to play a game of death against the MN timeframe (the huge shorts for instance ) have balls of steel. It would be a gesture to try to go against this collective price directional bias. Of course you are able to use methods of undersold/overbought to perform a retracement game in this timeframe, but not to recognise the direction in the grand order of things is simply folly if you want to remain in the game quite a while. #8203;If those assumptions have some merit, then within this overall price management of the MN period in your mind, you will find better points than other people to try an entrance to make the most of this collective price bias and typically this happens at retracements in the greater order timeframe. If you revert to the H1 or D1 timeframe on entrance you only have to accept that there is a fair bit of noise at the level but the balance of probability is in your favour that provided you take heed of this macro timeframe and trade in that way, you should be more times than wrong and this is where a Martingale entrance system may be used to magnify returns provided you don't go mad with it.
Your egy above is applying those princiles, so I'm totally on board with what you are trying to achieve here:-)