London Trader Blog

London trader blog is a new project and has a group in the trader's social network beathespread,  dedicated to beat the spread in Forex and Commodities trading.

This is a blog dedicated to the current market analysis. It agregates information from many different sources.

I wish to ask london and londotrader good luck in this project and it is definitely in my watch list.

BPNN Predictor plus

There is a library with mods for the BPNN Predictor Plus.The library allow to use different inputs for the neural net.

beathespread.com

The BPNN Predictor uses for training algorithm the

Improved Resilient back-Propagation Plus (iRProp+).

The method is described on this address:
http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.17.1332

The idea is to use as inputs different averaging algorithms. One of the mods includes as inputs the Singular Spectrum Analysis. In fact I use two types the normal one and the end - pointed version. 

You can choose from many different averaging algorithms.

List of MAs:

MA_Method= 0: SMA - Simple Moving Average
MA_Method= 1: EMA - Exponential Moving Average
MA_Method= 2: Wilder - Wilder Exponential Moving Average
MA_Method= 3: LWMA - Linear Weighted Moving Average 
MA_Method= 4: SineWMA - Sine Weighted Moving Average
MA_Method= 5: TriMA - Triangular Moving Average
MA_Method= 6: LSMA - Least Square Moving Average (or EPMA, Linear Regression Line)
MA_Method= 7: SMMA - Smoothed Moving Average
MA_Method= 8: HMA - Hull Moving Average by Alan Hull
MA_Method= 9: ZeroLagEMA - Zero-Lag Exponential Moving Average
MA_Method=10: DEMA - Double Exponential Moving Average by Patrick Mulloy
MA_Method=11: T3 - T3 by T.Tillson
MA_Method=12: ITrend - Instantaneous Trendline by J.Ehlers
MA_Method=13: Median - Moving Median
MA_Method=14: GeoMean - Geometric Mean
MA_Method=15: REMA - Regularized EMA by Chris Satchwell
MA_Method=16: ILRS - Integral of Linear Regression Slope 
MA_Method=17: IE/2 - Combination of LSMA and ILRS 
MA_Method=18: TriMAgen - Triangular Moving Average generalized by J.Ehlers
MA_Method=19: VWMA - Volume Weighted Moving Average 
MA_Method=20: JSmooth - Smoothing by Mark Jurik

Anyway you may see that the predictions varies a lot and it changes from time. There is nothing you can do about that. In fact the Forex time series have a lot of local optima and the neural net may constantly bounce from local optimum solution to another. 

Elliott Wave software the contrarian way

There are some news posts about Elliott wave application in the machine learning software.

This approach is completely different from the common Elliott wave applications. The common Elliott wave software and applications are trying to put the market action in a set of predetermined rigid rules. This is quite the opposite we are using manual Elliott Wave count or even we do not need to count the waves.

What we need to do is to identify segments. And in those segments we are going to use a predictive software.
Unfortunately this is not a grail because many things are not in the price, e.g. accumulation of open orders.

http://beathespread.com/discussion/view/229

BPNN Predictor with JJMA smoothing

Hi today I uplodaded some new BPNN Neural net mods in the the trader's social network site beathespread.com

The innovation is to use the JJMA smoothing in order to smooth the time series before we apply the neural net.
The second new thing is to make a hybrid neural net cycle indicator. This is achieved when I combined the the cycle analysis with JJMA jurik smoothing and neural net prediction.

Elliotware: How it works?

This is how Elliotware works:

1. I identify an Elliot Wave structure. This is MANUAL we do not use software. And this is the fundamental difference between this approach and the other approaches. They try to use a machine to force an Elliott Wave analysis.

2. I set the training range to the Elliot wave structure.

3. I apply my machine learning algorithm:  And I have a prediction.

Beat the Odds in Forex Trading: How to Identify and Profit from High Percentage Market Patterns

I really appreciate this book, that is why I decided to write a review in my blog.  This is a book from the so called russian school of technical analysis.  No you cannot find this term, I call this like that.
The first question that comes to my mind is:

Is it just another book of technical analisis?

-This is a book about Forex

This is something very important. In fact the forex market is different from the stocks and the commodities. There are some specifics. It is 24 h market. And I think that all the stuff written about the stock market does not apply authomatically in the Forex market.

There are some volatility patterns that are typical about the Forex markets and those matters are not adressed in the technical analysis books written about the stock market. For example the increase of volatility in the beginning of the European and London cession are typical for the Forex market. If you read a book about the stock market and you are not awared about that you would learn this market knowledge on the hard way.

It is very important to know that there are not many good technical books written specifically about Forex.

-The patterns are explained in a very interesting way

This is something very important. The author brings his own experience about the pattern trading. This is very valuable and he shares his proprietary way of managing pattern trading.

This is the most important thing in the book. The author prepares different strategies based on specific patterns. In those strategies he prepares a Trading plan. Every technical analyse sheet is linked with a concrete trading plan.

The bad thing if I compare it with a traditionnal book abouk patterns The Encyclopedia of Chart Patterns by Thomas N. Bulkowski there is not any evaluation of the success for every different strategy.
In fact I cannot vblame the author because everything is very dynamic in the market however, the author does not offer a methodology for backtesting of every single strategy on the current market conditions.

-There is a big public thread based on the information from the book Beat the Odds in Forex Trading

That is an important question because we are submerged by information about technical analysis. Everybody knows: Head and Shoulders, Triangles, Pennants etc.

One of the most important things is that his author I. R. Toshchakov also known as igrok has a thread in the forex factory forum. There are discussed a lot of things about his book. And this is very important because I think that the public discussions are part of the value of the book.

You can find the thread on this link: Igrok Method. Q's & A's. Comments, thoughts and ideas
http://www.forexfactory.com/showthread.php?t=21887

Today this thread has 468 pages and is very popular and it is very active.


Some ideas
I really like the intellectual approach of the author of the book Beat the Odds in Forex Trading: How to Identify and Profit from High Percentage Market Patterns.

It is very important to back test every strategy on the current hystory. Do not trade blindly. Do not take anything for granted. Test everything.

It is a good idea to use this book together with artificial technical analys patterns software.
The pattern recognition software is a good choise. Here you have a statistical evaluation of every pattern. That is a very good complement.

http://www.ibfx.com/Tools/PRS

Read the book and do not hesitate to join the technical analysis communities.
As far as I know the autor has a private community.However I do not know him personnaly so I cannot give any credentials

http://www.igrokforex.com/index.php?page=chif

The ordres at 1.37 have been ativated

Here I add the picture to show how this level has been activated.

Stop major level: 1.3700

Here on this shot I want to show the use of Oanda open orders. The hypothesis is that:

1. These orders are statistically significative for the whole retail market

2. Even if not significative 300 millions in one second are able to move the market. 

OK here the idea is that the market in EUR/USD has a structure. There is an accumulation of orders every 100 pips. 

New Forum

Hi here is my new network. You are welcome to join.
beathespread.com