HEX: Gaussian Channel (Part 2)

HEX: Gaussian Channel (Part 2)

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00:01
all right welcome back to the channel everyone who's returning welcome in to all of those of you who are new and here for the first time my name is gerardo we're going to be talking about hex and more specifically this gaussian channel that we started developing in yesterday's video and it's coming to fruition quite nicely as you can see here i've color coded it with its respective regions all right respective colors similar to the regression rainbow right and it slightly ties into that model as well so we'll touch on all of that in this video do a little bit of ta and
00:33
then finish off for something like a 10 15 minute video probably so that's the target okay if you are familiar with the regression rainbow you can go ahead and skip ahead a little bit a couple minutes but to those of you who are not familiar what we did to obtain this model is pretty pretty simple i guess if you can do a linear regression so all we did was we took this region over here we pretty much took a bunch of a local minima right which means bottom regions
01:04
so we took this region right here one two three four and and we got multiple data points in each little region so we had clusters which we fit a line through on a log scale and when we do that we get a set of a set of lines depending on on how far extended we were above that fit right so we got an extension from fit as you can see here it's simply price normalized to the model and shows how it pretty much stays within um and other than that we also underlayed what eath did relative to its
01:35
regression rainbow but staying on track right we got this extension from our fit chart and this is what's important because this is where the actual fair value end day moving average model came from right and i let you know one and i think two videos ago that we were going to revamp that model and what's the word uh make it more robust mathematically due to some things that were pointed out i don't won't get too much in depth into that but
02:06
that's what we went ahead and did we took the extension from our exponential fit right so our exponential fit is this red red line right so our extension from that is this white curve so we took our average on any given day it's for example on day 100 it was 100 day moving average on day 500 it's a 500-day moving average so it's a dynamic moving average that increases in length every single day right
02:37
i hope you're following and then what you do from there is you do some statistics on it so that's what i went ahead and did and we got the stats we got the stats boom we got our sigma value which is our standard deviation and the way i define standard deviation here is slightly different than the usual definition where you usually get a difference between the actual and the expected here we got a ratio because we're on a log chart i explained this in yesterday's video how if you do it with a traditional
03:07
difference of actual minus expected and you do all your squaring and all that you you get curves that diverge right versus something clean like this which actually is useful so we use a ratio instead of a difference in that sense we got our standard deviation defined via ratios which is about 1.7 1.7 x so that's the factor by which everything here is is spread out if that makes sense so what was traditionally
03:37
our fair value was actually our you know dynamic moving average from from our on our fare extension or our dynamic moving average on our extension from exponential fit that's this green curve and when you do this whole sigma business right you get that 1.7 which i just described it's like 1.69 then you get and you can do the math yourself like just multiply for example the green curve by 1.69 ish and you'll get the blue curve you can also just divide them to find that ratio yourself and so they're spaced by that ratio and
04:08
it's shown on a log chart here and i like this chart because it actually does a you know it what is it called you do a statistical method on it which is finding your sigma finding your your variance all of that and you're doing it on an actual average which is what you're supposed to do right versus we were doing it on a regression model which i don't know if you're actually supposed to do that again it's less tied to the regression model now it still is because we're doing it on our extension from our fit
04:40
right we're doing the math on that in the first place but it's less dependent if that makes sense i'm not sure if that's the right terminology you know this is a model that's developing obviously that's why it's kind of a mini series part one part two but this is what we have so far and to get into the actual usefulness of it right i don't want to bore you guys with the math i mean just look at the points where we've hit right when we hit um blue over here it seemed to be resistance came down to yellow hit blue then we found nice support on green and then it blasted off into pink right and then it came back road to the green a
05:11
little bit fell back down came back to the red actually touched the red here on this one occasion so it's not exactly like the exponential rainbow uh but it's it's similar right it's similar actually came to the red zone once then it's it was bouncing around here and you can see that it found this nice re-accumulation and you can kind of just see that for the last wow yeah for the last like 100 days or so it's simply been between yellow and green just oscillating nicely right up to the green down to yellow to green
05:42
down yellow up to green down to almost yellow back up to green i like the fact that it didn't quite reach yellow that's a little more bullish in my opinion all right like notice over here it reached red and then not quite red then even farther away somewhere over here we reached beneath yellow basically on yellow a little above yellow and then a little more above yellow so i like the fact that it's getting more bullish relative to these models as well yeah this looks this looks good to me i like it it reminds me of a long really long extended version of something like this right here where we you know we're
06:13
breaking our all-time highs found some consolidation broke all-time highs this is uptrend consolidation type i mean this is just like one of the best charts i've ever seen if not the best chart alright so i like this i mean what did it take back here to actually blast off was finding support on green which is interesting it's like finding support on your midline your your your mean right so in that sense you'll be finding support on the 20 cent level which technically speaking that'd be amazing right finding support
06:44
around the 20 level it's similar to what we're seeing now because a nice bullish consolidation above all-time highs that'd be even more bullish we had a further move and then extended or we extended a little farther in this move came back down and maybe consolidated around the the green level over here that would give me a signal that we might be headed to potentially cyan purple or even pink which currently stand at approximately 33 cents 67 cents in a dollar
07:14
it's kind of nice right a nice uh little spread there but but we're gonna update the the website right we're gonna get rid of this fair value model and more or less just make it better because it's gonna use this what we're calling fair value just renaming using some different naming conventions we're going to be getting rid of this midline which you can already get in the regression rainbow anyways right it's this green line it's the same one so you can get it there anyways so instead of recycling the
07:46
model we're kind of making it a little more independent uh so yeah i mean we'll probably find some more stuff to um i actually don't want to say anything on that end right because we have three charts here so we'll just have one right so we're kind of cleaning things up a bit and you'll probably get this within i would say within 24 hours or so it's pretty easy to update so i'll do that for you right now and what is the actual i should have touched on this we touched
08:16
on it in yesterday's video but the actual kind of meaning of a gaussian distribution is simply that the majority of your data should be within like plus or minus three sigma in this case times were divided by three sigma where sigma is your standard deviation defined by ratios and yeah so for the most part you should have what is it 99.73 percent of all of your price action should be with within red and pink and it seems about right yeah like we only had slight
08:48
action outside of pink we had maybe a little bit of action beneath red right here for a day or so but for the most part we're we're just in here and then 95 of your data should be within um orange and purple right and it looks about right it looks about right for the most part you only have certain regions down here where you get beneath um orange a few times and you only have like one region over here we actually
09:18
got above purple interesting yeah so this this works this works quite nicely and then you can also say that 68 of your data will be within um the blue and yellow right so it's kind of like a probable probabilistic model you could look at it like that so that's the model for you we can do a little bit of ta i really wanted to actually do some ta on this bull flag right here um so let's do that i haven't done this yet so this will be kind of real time i've been meaning to get to this
09:48
you could probably do it from the wick and then also just from the candle so let's do it from the wick first wick to wick a nice move from 8.7 cents to about 20 cents it's pretty good and if assuming this is a bull flag right some consolidation after a poll then if it broke out it would put us at around 30 cents in september right sometimes these play out slower than the actual first poll so maybe not september 9th but deep into september perhaps but 30 cents
10:20
would be the target if this is a bull flag wick to wick if we just take it from body to body then it'd be something a little more conservative putting us closer to just the 27 cents right as opposed to 30 cents so 27 to 30 not bad not bad at all if it does get there what i like about these bullish targets is that it coincides with the targets where we said okay we did the same thing here right wick to wick
10:50
after our breakout assuming this is a bull flag which we were looking at for the longest time we even tweeted out when it broke out to the upside someone's excited about bull flags but we said if it breaks out then our target looks something like 27 cents so it coincides nicely with these targets these don't necessarily predict time so you kind of have to yeah it's harder to predict when and i know people say like what is what good is a price prediction if you don't include the time component
11:21
and that's true that's true you'd have to do a little more analysis and say okay in previous bull flags for example this one how long did it take compared to what we thought it would take to get to these levels right we thought it would do it in 15 days based on this poll but it actually took an extra you know almost uh it's almost three weeks so over 2x time to actually reach that 12 to 24 centary that we were talking about
11:51
right um let's see just rough math about 16 days and then from there to there about 21 days yeah it's a little over 2x so in this case a little over 2x of time from here ah 7 16 7016 yeah put us into like late september late september so those are kind of your your targets right and these are conservative targets like 27 to 30 cents late september if we do what we have a habit of doing which is doubling our technical targets then
12:24
you know that could be anywhere from you know 25 to 60 cents right because this target is 30 cents so 30 times 2 is 60. and our least bullish target was when we did just candle to candle on this move right here i believe and place it at the breakout actually this is 21 so i guess you could say 20 cents to 60 cents would be your kind of range to look at with actual targets kind of like 27 to 30
12:58
cents as kind of like the mid-range of that big range i mean i wouldn't trade on this data this is what i think is going to happen i have no clue what's going to happen obviously um probably no one does but hey we can we can speculate and have fun right so i appreciate you watching that's pretty much all i wanted to cover in this video go join the telegram group i'll leave a link to that down below we're almost at 300 members and you guys are having good discussions in there and you get the first um notification when we drop new videos so yeah go ahead and join that group and um
13:28
i will catch you guys in a future video peace

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