Predicting future FX support and resistance levels using mathematics

gka

Established member
561 3
#1
Hi Everyone, My name is Graham and I am a mathematician here in Canada.

There are lots of different technical analysis methods to determine future support and resistance levels. They can be subjective and depend upon experience. I have been wondering whether support and resistance levels can be determined mathematically and now have a working algorithm I call the Volatility Response Model (VRM).

The VRM calculates future support and resistance levels either one day ahead or one week ahead, together with short and long term trend channels. These predictions are not extrapolations from the past. I attach a white paper describing the algorithm.

I am looking for FX traders for feedback, discussions and opinions on the VRM predictions. To this end I will post predictions in this thread as markets progress.

Here is the first set of predictions for GBPUSD in chart format starting 5 pm New York time tonight. The second attached paper describes the format of these predictions on the chart. They are essentially 24 weekly levels and 24 daily levels. The latter will last until 5 pm New York time tomorrow night. Tomorrow night after the close in New York I will post the GBPUSD market price action and the VRM levels on the same chart.
 

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counter_violent

Legendary member
9,224 2,331
#3
Hi Everyone, My name is Graham and I am a mathematician here in Canada.

There are lots of different technical analysis methods to determine future support and resistance levels. They can be subjective and depend upon experience. I have been wondering whether support and resistance levels can be determined mathematically and now have a working algorithm I call the Volatility Response Model (VRM).

The VRM calculates future support and resistance levels either one day ahead or one week ahead, together with short and long term trend channels. These predictions are not extrapolations from the past. I attach a white paper describing the algorithm.

I am looking for FX traders for feedback, discussions and opinions on the VRM predictions. To this end I will post predictions in this thread as markets progress.

Here is the first set of predictions for GBPUSD in chart format starting 5 pm New York time tonight. The second attached paper describes the format of these predictions on the chart. They are essentially 24 weekly levels and 24 daily levels. The latter will last until 5 pm New York time tomorrow night. Tomorrow night after the close in New York I will post the GBPUSD market price action and the VRM levels on the same chart.
Hi Graham, looks very interesting.

Could this methodology be applied to Stock indices? Have you done any work in that area?
 

gka

Established member
561 3
#5
Hi Graham, looks very interesting.

Could this methodology be applied to Stock indices? Have you done any work in that area?
Yes I believe that it can be applied to stock indices. Which stock index are you interested in?
 

gerryg

Established member
900 6
#11
Hi Everyone, My name is Graham and I am a mathematician here in Canada.

There are lots of different technical analysis methods to determine future support and resistance levels. They can be subjective and depend upon experience. I have been wondering whether support and resistance levels can be determined mathematically and now have a working algorithm I call the Volatility Response Model (VRM).

The VRM calculates future support and resistance levels either one day ahead or one week ahead, together with short and long term trend channels. These predictions are not extrapolations from the past. I attach a white paper describing the algorithm.

I am looking for FX traders for feedback, discussions and opinions on the VRM predictions. To this end I will post predictions in this thread as markets progress.

Here is the first set of predictions for GBPUSD in chart format starting 5 pm New York time tonight. The second attached paper describes the format of these predictions on the chart. They are essentially 24 weekly levels and 24 daily levels. The latter will last until 5 pm New York time tomorrow night. Tomorrow night after the close in New York I will post the GBPUSD market price action and the VRM levels on the same chart.
Have you made any upgrades to this public algorithm or is it custom-built version from you? I mean what you find from public is dead thing, as profitable methods are already price in and eliminate earning opportunity.
 

gka

Established member
561 3
#12
Have you made any upgrades to this public algorithm or is it custom-built version from you? I mean what you find from public is dead thing, as profitable methods are already price in and eliminate earning opportunity.
The VRM algorithm is built from scratch by myself using a new approach to extrapolation that is effectively interpolation using historic high, low & close data. After the end of the New York close tonight I will show you an example of the FX pair GBPUSD.
 

gka

Established member
561 3
#13
Following yesterday's VRM predictions for the support & resistance levels of GBPUSD here are the results as New York closes. I attach two 30 minute charts showing GBPUSD price action. Top chart shows yesterday's predicted weekly levels. Bottom chart shows yesterday's daily predicted levels. Both charts also show an EMA channel of (4,7). Time is GMT-4. The high for the day was at the weekly predicted level 1.3416. The low for the day started at the daily level 1.3319. The market was unable to pull the EMA channel through the VRM level 1.3401. Did anyone predict the daily high resistance level? What methods are other using? Feedback appreciated!
 

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gka

Established member
561 3
#14
I attach the VRM predictions for GBPUSD for tonight and tomorrow finishing 5 pm in New York. A description of the algorithm and format of the attached chart can be found in the first post of this thread.

For anybody interested in predictions for other FX pairs just follow the link at the end of these two documents.
 

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gka

Established member
561 3
#15
Last night I attached the support and resistance levels of GBPUSD of the Volatility Response Model (VRM) for Tuesday. Here are the results. Weekly levels in the top 30 minute chart, daily levels in the bottom 30 minute chart. Times are GMT-4 . EMA channel (4,7) included.

Weekly VRM level 1.3397 featured as the day's high. The market then fell to VRM daily level 1.3347. There were some large gaps between VRM levels.

Did anyone find a resistance level about 1.3397 using other technical analysis techniques?

Predictions for tonight and tomorrow to follow shortly.
 

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