Trading with Market Statistics XI. HUP

[Trading with Market Statistics XI. HUP]

Every bar on your chart has a high and a low, each of which is a HUP.

 

According to this, and the fact that we can create bars in infinitely many ways (5 seconds bar, 7 seconds bar, or 23.5 seconds bar... etc.) can we say that in fact every price can be a HUP?

 

The question then comes down to which of the HUP's do you wish to trade against. The SD values are useful in that they represent a quantitative measure of minimal market movement. So if you enter a trade at SD1.5 say, your expectation is that the market should move at least one standard deviationa HUP.

 

Then... here can we say that any point from SD1 to SD3 are possible entry points as we can expect price to move at least one SD from there? So SD1.3 SD 1.7 SD 2.4 all work (as good as SD1 or SD2?) ?

 

I may be way off and missing some important points. Please forgive me if I sound rude or challenging, I just wish to understand this fascinating subject (I like maths!). And as English is not my first language, I couldn't express very well.

 

Thank you.

[Trading with Market Statistics XI. HUP]

It depends on what you mean by working, n123. The standard deviation points above and below the VWAP represent the volatility of the price data over the period for which you computed the SD, nothing more. It thus represents the amount you should expect the price to fluctuate. It's a quantitative measure of volatility.

How you use this information is of course up to you. I do not think of this as support/resistance. In fact I don't like that term since it suggests a point of reversal which in fact it is not. Rather I prefer to describe it as points where the market slows it's motion for a time before deciding what to do next. I thus call them HUP or hold up prices rather than support/resistance.

 

Thank you for your reply Jerry. Oh I should not confuse hold up price with support and resistance, sorry about that.

 

I understand that SD quantitatively measures the volatility. But I still wish to know why SD1 and SD2 are hold up prices but not SD1.5 or SD 1.3 or anything in between? Is there some discontinuity in the distribution in the SD1 and SD2 level so that when price goes there it tends to hold up or slow down? Basically, why those particular points?

[Trading with Market Statistics XI. HUP]

Thank you Jerry for introducing this interesting topic! I have read all your threads and watched all the videos. I have a fundamental question about HUP.

 

I am very curious to know why do HUPs work. Why are they support and resistance? For example, if SD1 is a support/resistance area, why not SD1.5 or SD 2.3? What is so special about them?

 

To me, support and resistance work because people around the world use them, like fibs... why do 50% or 61.8% retracement often rejects price? because many people watch them and use them. So the reason for them to work is self-fulfill prophecy.

 

I am sure they work well for you, but I am just curious why they work.

 

Thanks again!