Monthly trend of EUR/USD

[ryaron]

I shall give a forecast for the end of May.

I shall be posting monthly forecasts for EUR/USD Exchange rates, monthly.
My analysis is not based on the standard methods used by technical analysts.
It based on phase space reconstruction and projection.
I predict a down trend to circa 1.44-1.45 from the closing value of end of April.

[ryaron]

Looks like my monthly trend predictions are converging as they did last month.
No fancy-schmancy indicators and pseudoscience crap.
Just plain old science.

[Enivid]

Which science? Can you give us more details?

[ryaron]

Noiseless Reconstruction of phase attractor of time series and projection ahead.

[ryaron]

The shape of the attractor is quite interesting.

[Enivid]

Different colors resemble different time period - blue is the old, red is the new data, right?
But how do you trade using this model?

[ryaron]

This model actually shows market "errors".
if today's value is outside one of the trajectories, then it is clear that market will perform "correction".

The trade strategy of such a model is to trade in options.
If the predicted correction is up then a call option is warranted.
And vice versa.

[Enivid]

But how do you predict corrections with it? Can you share some link where this model is described in details?

[ryaron]

I can refer you to the original papers by Sauer, Yorke and Casdagli.
A good review of Takens theorem is posted here (basis of embedology):
http://eprints.ma.man.ac.uk/175/01/c..._ep2006_26.pdf

[Enivid]

Originally Posted by ryaron

I can refer you to the original papers by Sauer, Yorke and Casdagli.
A good review of Takens theorem is posted here (basis of embedology):
http://eprints.ma.man.ac.uk/175/01/c..._ep2006_26.pdf

But doesn't Takens theorem concerns only deterministic systems? Markets aren't deterministic at all...