One of the methods of quantitative analysis, where the coefficient of change was initially fixed, but with Arab creativity, it was made variable, to adjust to the price changes that occurred. Here is how to use it in detail:
Regression equation: It is a method of quantitative analysis with an Arab production patent that is relied upon to determine the behavior of the candle for the next 4H based on previous data, as well as determining the body of the candle for the next day according to yesterday’s data and the price behavior that the candle took yesterday;
Note: Its accuracy in determining is more accurate with the frames mentioned above 👆
A simplification of the mechanism of the equation = it is a premise within the premise that gives us a result / thus, in brief, an explanation of it.
Let us now begin to explain what it does:
The first thing we will retrieve the data for any digital currency has a candle (LOW); As well as the closing of the candle (CLOSE).
After I downloaded the data, I will calculate the change coefficients according to the data of the first candle as shown before you in yellow 👇
High factor ▶️ A factor of upward change
=(high-open)/open
————
Low factor ▶️ A factor that changes downward
=(open-low)/open
—————-
Close factor▶️ A factor that changes towards closing
=(close-open)/open
👇👇👇👇
Now that I have calculated the forecast coefficients for last night, based on that and based on the opening of today’s candle only OPEN (marked in blue) I will calculate 👇
Forecast high ▶️ The expected rise
=open today +( open today * H.factor)
——-
Forecast low ▶️The expected decrease
=open today -( open today * L.factor)
——-
Forecast close ▶️Forecast close
=open today + (open today * C.factor)
👇👇👇👇👇
Important note: According to the regression equation, I determine the trading range ✅
Warning: If the price exceeds the expected high, I can enter a purchase deal with him due to the possibility of breaking the rule set for him, and we will detail in the rest of the post where my limit is with him✅
Are we finished?
Of course not. To make the matter more accurate, I will calculate the difference between the real high and the expected high, and also the difference between the real low and the expected low, and I will use the [ABS] function to neglect the signal ✅
Why did you use the ABS function? : To deal with fixed values and marginalize the sign (-+) because sometimes the market draws a higher than expected, sometimes less than expected, and sometimes in accordance with others.
The process will be as follows:
=ABS (HIGH REAL - FORECAST HIGH )
=ABS(LOW REAL -FORECAST LOW)
👇👇👇
Now that I have calculated the ABS function, I will calculate the average for the entire period. The benefit is to measure the amount of dispersion that occurred over this period of years between the difference between the real and the expected, where Low and High are; Where it will be calculated as follows:
=AVERAGE (full duration)
I will mislead the AVERAGE calculation in yellow for the difference between the actual and expected High and the same for Low.
👇👇
After that, I will calculate the deviation for the previous month from now using average, where the process will be as follows:
=Average(previous month)
I use it to add to the expected High for the next candle, and the same applies to Low, to know if it breaks the rule of the expected High where its rise will be, I will mark the Average calculation for the period of the previous month with blue for HIGH and yellow for LOW 👇👇
I will add it to the expected value even if they assume the flatness of the price above where its limits could be, where, the value of AVERAGE represents the standard deviation of the price,
where :
=Average 30 day + Forecast high
(Green, I thought it was as in the picture)
———-
=forecast low - Average 30 day
(In red, I thought it was as in the picture)
👇👇👇👇👇
Why I didn't calculate ABS here is because I can't know it until it is realised;
Is that okay? of course not !!
To build a trading strategy with him, we will make some additions:
First sign:
Where we will use the IF function and calculate it as follows:
=if ( forecast close > Real open; “ buy ; “sell” )
The result will be as follows 👇👇
The second sign:
We calculate:
Distance 1: =(forecast high-Real open)
Distance 2: =(Real open-forecast low)
As shown below where their account is in purple 👇👇
According to the process that we carried out by calculating the difference between 1 and 2, I will use the IF function, where:
=IF(Indistance 1>Indistance 2 ; “buy” ; “sell”)
Will the decision be made on her? No, of course. Using the data you have and comparing the two signals;
Very important notes:
The match is as long as it is between high real and forecast high, and also between low real and forecast low; While its position with close real and forecast close is less identical ✅
Here there is a match between high real and forecast high 👇👇👇
Here is the match between low real and forecast low 👇👇👇
Here we have finished. I hope that the article has benefited you with an upcoming explanation, God willing✅
