ODDS MAP
The following tables are what I refer to as the ODDS MAP .
Download it here: ODDS MAP
Despite the odds of each single pattern, the map shows with a matrix, where each vertical column represents the number of bullish patterns triggering and the horizontal lines show the number of bearish patterns triggering.
As an example, if 1 bullish pattern (column 1) and 11 bearish ones (horizontal line 11) are triggering for the same night, the result is: 1,23 50 6
The first number is the Profit Factor. The second one represents the % of winning trades (considering being always long) and the third number shows total occurrences.
Red color highlights bearish values and green color highlights bullish values. When profit factor is equal to 100 it means we have all winnings nights (it should be an infinitely high number).
It is evident that the highest number of occurrences is on the top-left corner of the table. The lower the number of patterns triggering, the higher the occurrences detected.
The general bullish bias of the overnight market is clearly outlighted by the difference between the bullish and the bearish patterns numbers: on the same night we can see up to 42 bullish patterns triggering at the same time but only 18 for the bearish ones (almost half).
Firstly, contrary to expectations, if we don’t have any patterns triggering (0 0), the night shows a solid bearish bias. This means I have an excellent set of bullish patterns collected in my patterns library, but I cannot say the same for the shorts. They are not enough to collect all the bearish edge that still affects the “no patterns” nights.
In fact, I would have liked to see a White Noise behaviour: profit factor equal to 1 and % of winning trades equal to 50%. Bearish edges still lies out there on the historical data set, and I need to focus more on new bearish patterns research.
Secondly, it results that to rely on a solid bullish bias for the night, at least 4 bullish patterns need to be triggered.
Finally, even when only 1 bearish pattern is triggering, trading long becomes risky and good bullish situations must be cherrypicked by the Odds Map.
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Marco Simioni
NIGHTLY PATTERNS - Overnight Trading 