Analysis of MATIC price action with respect to volume profile and 80% since 5/5/21
Controls:
- 15 minute chart
- Value area set from previous day's volume profile
- Study is exclusive to days where opening price was below the Value Area Low
- 80% Rule: if price moves into the value area and closes 2 consecutive periods (30 min) then price should move up to Value Area High 80% of the time.
Results:
- Price opened below value 13 times
- 80% rule invoked 9 times
- Success rate (price moving across value area): 6 trading days for 67%
- Semi-success rate (price moving above point of control): 8 trading days for 89%
- Failure rate (trade stopped out at 5% stop loss) - 1 for 11%
Conclusions:
- Need more data points for study
- Need to study other instruments with same controls
- Integrate into existing value area decision trading tree which would not take a trade if price opens below Value Area
Sample trade for today.
Entry: $1.05 - enter trade after 3rd bar which was the 2nd consecutive 15 min bar to close in Value Area
Exit: $1.13
Stop: $1.00
Potential Profit: +7.62%
Potential Loss: -5%
Based on study, there's a 67% change of making profit of +7.62% and 11% chance of being stopped out and taking a loss.
Will expand on decision tree at a later date.
Lemme know where I went wrong.
Controls:
- 15 minute chart
- Value area set from previous day's volume profile
- Study is exclusive to days where opening price was below the Value Area Low
- 80% Rule: if price moves into the value area and closes 2 consecutive periods (30 min) then price should move up to Value Area High 80% of the time.
Results:
- Price opened below value 13 times
- 80% rule invoked 9 times
- Success rate (price moving across value area): 6 trading days for 67%
- Semi-success rate (price moving above point of control): 8 trading days for 89%
- Failure rate (trade stopped out at 5% stop loss) - 1 for 11%
Conclusions:
- Need more data points for study
- Need to study other instruments with same controls
- Integrate into existing value area decision trading tree which would not take a trade if price opens below Value Area
Sample trade for today.
Entry: $1.05 - enter trade after 3rd bar which was the 2nd consecutive 15 min bar to close in Value Area
Exit: $1.13
Stop: $1.00
Potential Profit: +7.62%
Potential Loss: -5%
Based on study, there's a 67% change of making profit of +7.62% and 11% chance of being stopped out and taking a loss.
Will expand on decision tree at a later date.
Lemme know where I went wrong.
Comment:
Cannot figure out how to edit the "idea" but this study is in regards to the 80% RULE. I left out "rule" above.
Comment:
Trade never closed as planned. Price did not move to Value Area High. Traders choice to stay in the trade.
For simplicity sake we will say movement across value area is "win", stopped out is "loss", invoked but not completed PLUS wins is "draw or better"
Updated Date:
Win - 60%
Lose - 11%
Draw or Better - 90%
More to come hopefully. Lots of work.
For simplicity sake we will say movement across value area is "win", stopped out is "loss", invoked but not completed PLUS wins is "draw or better"
Updated Date:
Win - 60%
Lose - 11%
Draw or Better - 90%
More to come hopefully. Lots of work.