fayq,

Thanks!

I think this is a great point, especially with AI being able to process a million times faster than our brains when looking at all the indicators. And it puts all that together to come out with a % chance of being successful based on all the other times when the same pattern existed.

In chess, the computers do the same thing. They've been getting better and better as they have stored millions of chess games and millions of different options and their potential outcomes to choose from. 

The best grand masters have incredible photographic memories that recall tens of thousands of previous great chess matches and previous board situations to draw from when choosing moves with the highest probabilities of being advantageous. 

Computers on the other hand have several orders of magnitude more information to choose from stored in their memory that mean, even chess programs loaded on your electronic device are capable of beating the best chess players in the world today. 

Chess computers have been using AI since the late 1990's.

Human–computer chess matches

https://en.wikipedia.org/wiki/Human%E2%80%93computer_chess_matches

Regarding trading, for sure AI trading programs like this are likely to crush even the best traders using past trading methods if they're purely technical in nature. There are some elements, however that humans are still better at processing with insight. 

As a weather trader, I think that one of them is in extremely weather sensitive markets but might be wrong if the computer is hooked up to a weather data sources that are coming out as fast or faster than the market sources.

This great post of yours  is our "post of the week". Thanks, fayq!

thnx try to share other part too like this Quantitative Pattern Recognition with ICT  

QPR Application on ICT Concepts

You can quantify ICT setups too.

Thanks, fayq!

I know a little about advanced analytics indicators but not enough to actually use it and not enough to educate people here. 

Mikempt uses indicators that are similar to this and might have enlightening comments for us.

I can see why they would work much of the time. However, many times, markets react to news, especially the stock market. Weather markets react to the news about weather.   Markets often react ahead of time, anticipating the news. When the news comes out, if its important then we have a reaction. It can be buy the rumor, sell the fact-ish.  Or it can be news that exceeds or disappoints expectations which add or subtract to the reaction.

Trading weather is trading news about the updated weather forecasts. That's my game, though I love technical analysis that tells us alot about what has been happening up to the last tick on the price chart. 

For sure there is potential predictive value too and using historical data for every situation would allow one to have some skill at increasing the odds of being successful for certain markets at certain times/prices.

I would think that if a person limited their trades to only the ones with the highest %, it would increase odds.

But the thing is that the past often featured dynamics that were different. A trader has to dial in whats different right now to properly access the value of using the past. 

Maybe this is the take home point. Wyckoff described the "Composite Man" as an entity that represented all the traders combined acting in unison based on everything they know. Just watching the market will tell you what the Composite Man thinks and these advanced analytics can measure that, so its a way to understand what the market is thinking. But to make money, you often have to be smarter than the market if you're a weather trader. 

You can trade trends and let them be your friend. 

It's been said that the market is always right based on how the Composite Man values the price of items at any point in time based on buyers and sellers agreement.

I think, instead that the market is usually WRONG...........about the future(and we are trading FUTURES-Joe K, who traded strictly by Wyckoff principles would say "We're trading FUTURES not PASTures!).

 If the market was right all the time, the price would never change. A traders objective is to just figure out, when the market is wrong if its because the price is too low or the price is too high and put on the position to exploit that understanding when the market adjusts closer to the right price in the future.

Wyckoff lived at a different, simpler time that could never have envisioned what our computers do with advanced analytics and data.  

He was not a day trader either.  But he was a genius at understanding market action.

Some of these principles are constantly violated in the markets. The only one that matters at any point in time is whether the vast majority of active traders that PLAN TO BUY OR SELL,  think the current price is too low or do they think its too high. 

Composite Man.

https://medium.com/@Blocksavant/composite-man-ca18c9d2d5a5

Wyckoff’s first rule tells traders and investors that the market and individual securities never behave in the same way twice. Rather, trends unfold through a broad array of similar price patterns that show infinite variations in size, detail, and extension, with each incarnation changing just enough from prior versions to surprise and confuse market participants. Cryptocurrency traders would call this a shapeshifting phenomenon that always stays one step ahead of profit seeking.

The second rule: Market relativity, tells us traders and investors that context is everything in the financial markets. Thus, the only way to evaluate today’s price action is to compare it to what happened yesterday, last week, last month, and last year. Analyzing a single day’s price action in a vacuum will elicit incorrect conclusions.