Ali, thank you so much! I think this might be my favorite video you have made yet! I'm blown away by the simplicity of thinking about these strategies in binary terms, yet don't think I would come up with that myself in a million years.
Vix is mean reversion short using one of the 8 patterns. Its not important, i just want convey the idea to start with market edge and then choose strategy style and direction. So you can easily use any oscillator to short the vix and it will work.
you take the weekly profit and loss of every strategy and if every week strategy A and strategy B are winners then they are positively correlated and vice versa. low correlation means that their win/loss are not happening at the same time, when measured on weekly basis. you can do this on any timeframe, but these strategies don't trade everyday of the year.
The example patterns doesnt make any sense. Are we talking standard candles here? Where the open of a candle = close of the previous candle? How can you have 2 bullish bars in a row, where the close is lower than the previous? That simply doesnt make any sense.
I think you are a forex trader and used to see the open=close In all other markets there is a gap (up or down) between the open and the close. If you want to find those patterns in forex then you can build custom sessions. For example you can track New and Europe only and the asian session will show gaps
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Ali, thank you so much! I think this might be my favorite video you have made yet! I'm blown away by the simplicity of thinking about these strategies in binary terms, yet don't think I would come up with that myself in a million years.
Glad you like it, Simple works 😊
I agree. It is probably his best video. Simple and succinct.
Thanks. I'm not sure to understand the Vix strategy short breakout though.
Vix is mean reversion short using one of the 8 patterns. Its not important, i just want convey the idea to start with market edge and then choose strategy style and direction.
So you can easily use any oscillator to short the vix and it will work.
Thanks.
So simple yet so effective. Should help with risk of overfitting too. Excellent!
Thank you! I'm glad you found it helpful. Keeping strategies simple can indeed reduce the risk of overfitting.
Ali, isn’t it the same all Larry 3 down bars?
This pattern only compares the close to previous close.
Larry compare high to previous high and low to previous low
Amazing stuff.
Glad you enjoyed it
Hi Ali,
You said the strategies are not correlated.
But how is this calculation done? Could you explain?
Thanks.
you take the weekly profit and loss of every strategy and if every week strategy A and strategy B are winners then they are positively correlated and vice versa.
low correlation means that their win/loss are not happening at the same time, when measured on weekly basis.
you can do this on any timeframe, but these strategies don't trade everyday of the year.
The example patterns doesnt make any sense. Are we talking standard candles here? Where the open of a candle = close of the previous candle?
How can you have 2 bullish bars in a row, where the close is lower than the previous? That simply doesnt make any sense.
I think you are a forex trader and used to see the open=close
In all other markets there is a gap (up or down) between the open and the close.
If you want to find those patterns in forex then you can build custom sessions. For example you can track New and Europe only and the asian session will show gaps