Dear Amit...
If the high/low of the 12.30 bar is taken out with filter ( currently 8... not necessarily by the immediate next bar),
then...
1) 80% of the time, the market does not reverse to that bar, 12.30, in opposite direction (with filter 8)
For Ex : Suppose the High and low of 12.30 bar is 3630 and 3600 resp. Then if this bar is cracked on upper side i.e 3630+8=3638 then there are only 20 % chances that the market will go below 3600-8 = 3592.
2)90% of the time, market moves by at least 13 points in the direction of the crack.
For Ex: Taking the above example, it will go to 3630+8+13=3651 for 90% time.
(This means we can very well book profit at 21 points (8+13) above/below the 12.30 bar if the trade is in our favor.)
For the above study , I have taken data from 12-03-09 to 14-05-09...40 tradings days.) The results of the study before this date is posted on 1st page of this thread which almost match with this study)
IMHO, we can utilize this information as an additional confirmatory signal along with our 30 min flow ( of course, when in doubt) for reversal /add and profit booking.
PS. This study does suggest that we should reverse at 12.30 bar crack ( as neither it is as per Miniflow rules nor it is tested for its positive results for profitability on such reversal) Mostly in my opinion we can very well utilize this information for part profit booking ( especially when the trade is in our favor but not showing enough strength to go in our favor)
Hope this clarifies your doubts. If not, please do ask.
Thanks and regards
Manoj
If the high/low of the 12.30 bar is taken out with filter ( currently 8... not necessarily by the immediate next bar),
then...
1) 80% of the time, the market does not reverse to that bar, 12.30, in opposite direction (with filter 8)
For Ex : Suppose the High and low of 12.30 bar is 3630 and 3600 resp. Then if this bar is cracked on upper side i.e 3630+8=3638 then there are only 20 % chances that the market will go below 3600-8 = 3592.
2)90% of the time, market moves by at least 13 points in the direction of the crack.
For Ex: Taking the above example, it will go to 3630+8+13=3651 for 90% time.
(This means we can very well book profit at 21 points (8+13) above/below the 12.30 bar if the trade is in our favor.)
For the above study , I have taken data from 12-03-09 to 14-05-09...40 tradings days.) The results of the study before this date is posted on 1st page of this thread which almost match with this study)
IMHO, we can utilize this information as an additional confirmatory signal along with our 30 min flow ( of course, when in doubt) for reversal /add and profit booking.
PS. This study does suggest that we should reverse at 12.30 bar crack ( as neither it is as per Miniflow rules nor it is tested for its positive results for profitability on such reversal) Mostly in my opinion we can very well utilize this information for part profit booking ( especially when the trade is in our favor but not showing enough strength to go in our favor)
Hope this clarifies your doubts. If not, please do ask.
Thanks and regards
Manoj
You are suggesting that we can use this to book part profit, which seems sensible. I am sure if one does it each day it will work for the better... let me test it myself first.
Tks again. A few such high probablity observation should add signigicant edge to our method. I do not see any drawback.