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Technical Analysis Fallacy

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  • Post# 41
  • Quote
  • Nov 27, 2007 1:26am
  • leighsww
    Joined Mar 2007 | 851 Posts | Status: xoxo
Quoting fti
They have this big chief, brainspan (used to be the cigar chewing...paul )
LOL, wait a minute, isn't it now Bernanke? I think you've been retired too long, fti :
  • Post# 42
  • Quote
  • Nov 27, 2007 3:53am
  • Green_David
    Joined Nov 2007 | 785 Posts | Status: Big trend, big money
Quoting fti
Hi All,

A little info for those actively trading.
read
BOJ Governor Fukui Speaks
http://www.forexfactory.com/ read calendar
Fed activity sighted.
http://www.forexfactory.com/news.php?do=news&id=57753

looks like the BOJ and the Feds are getting ready to defend the usd, in any eventualities.
this funding exercises, are meant to give mkt lip service,so warning have been issued.
warning that you may see them in the mkts, if the usd drop gets out of control.
be careful, you may be walking into minefields.
looks like usd would still be soft, but watch out for the volitility.
could be a downhill rollercoaster ride for the greenbag.

who died , why's it so quite in the mkts?

regards
Yes. So at this moment reward/risk of opening E/U long positions is not good.
  • Post# 43
  • Quote
  • Nov 27, 2007 5:20am
  • belekas
    ars longa, vita brevis | 5,706 Posts | Joined Sep 2007
Thanks for your thoughts mate
  • Post# 44
  • Quote
  • Nov 27, 2007 8:36am
  • Mr demark
    Joined Apr 2007 | 453 Posts | Status: Dont get greedy. Dont be too shy
it took me a while to understand the structure of the market. Darkstar was the one responsible for shedding some light on my darkness
100% of traders are losers. Just that some win more than they lose!
  • Post# 45
  • Quote
  • Nov 27, 2007 6:52pm
  • Zoran
    Joined Mar 2007 | 2,493 Posts | Status: Pip pip
Hi FTI

I greatly appreciate the time your are spending here to enlighten those like myself. Can you please explain, as a technical analyst, what you consider to be the important indicators. In other words, what do you look for when analysing.

I can understand your point about the market being a battlefield. I view it in the same way, however, there are still some things I don't get so I am all ears at the moment and I'm looking forward to gaining from your wisdom.
  • Post# 46
  • Quote
  • Nov 27, 2007 9:47pm
  • fti
    Joined Nov 2007 | 10,185 Posts | Status: member
Hi All,

@ Leighsww,

i think you're right,was it 2006 they change the guards?
Goota catch up on the mkt agin.lol
I guess an apology to the chair is in order.

Thanks for the info, much obliged.:-)

@ Green_David
Don't think that way.
Think this way.
With this new devellopments, the volitility and wid swings should become more pronounced.
To the nimble , it'll present more opportunities.
To the rigid, the swings may pose a nusance and increase sufferings.
One things for sure, markets gonna get more intense and fast.


@ belekas, Mr demark,
Hi, thanks

@Zoran,
In answer to your question,
To me the most important indicator is price.
The market's sigma, which is the speed of move.
The Vega, which indicade the volitility factor in its trend and the time it consumes in it push.
You can determine all this from bare bar or candle charts.

the other indicator is true average,
with that you can determine if the volitility is out of line for your risk tenure,
you can best understand this by studying the original Dow theory.
Unfortunately there're many mutations of the Dow theory.
And those that are being used by conventional chartist today differs from my cup of tea.
I think you may get a good grounding of that from the book by R.Edwards/J. Magee.
I cannot remember the title of the book, but I can check for you when I return to Sg probably middle jan 2008. pls remind me.

the other improtant, read, is the market form.

I try to recognise the compounded formatioms in the bar charts.
A good reference to forms study wasdone by a researcher, by the name of John R.Hill,
I'm not sure if his studys are available to the masses.
They read compound chart formations.
An understanding of Hip and Lop patterns is foundational requirement.

A complimentary methodology is by complex candle chart formations.
I find the books (in english) on this too elementary.
I used to have an understudy who had a copy of the "secret" readings by rice traders in nihongo.
Unfortunately I've no contact with him for a long time since and my development on that has stalled.

I must stress, "never ever play god to the markets."
always stay in the "dance", feeling its moods and tempo,
using technical accrument to read the dance.
Implementing damage control when out of step.
That's actually money management.(another time)
Many analyst, behaves like fortune tellers, that is wrong.

All an analyst can master, is the art of dancing along with the market,
and recognising its behaviour as the dance progresses.
It is an on going process, not one read and you khow all, that cannot happen.
The markets are alive.

In a nutshell, There are other components necessary, other than technical analysis skills,
mindset, money moneymanagement are equaliy critical.

Thank you every one for your indulgence.
I am very tired, danced with the market yesterday the whole day and night,
what a ball.
So if you have questions just post them here and I'll get back to it after a good rest.

regards
  • Post# 47
  • Quote
  • Nov 27, 2007 9:47pm
  • JodyOng
    Joined Jul 2006 | 419 Posts | Status: I'm lovin it
Great posts FTI! What you've said definitely hit the nail on the head. For dealers working in the dealing room of banks, they have a rather clear idea of where stops gather and many techniques of the dealers evolved from this instead of how normal people like us trade.

Furthermore, if i'm not wrong FTI, dealers normally trade intraday and rarely do they carry a position over night? So in that case, a dealer has just to see the over all trend of the market and use his gut feel to buy and sell.
  • Post# 48
  • Quote
  • Nov 28, 2007 12:46am
  • Maseyw
    Joined Jan 2007 | 24 Posts | Status: Member
Hi FTI

Thanks for spending the time to try and assist others.

Looking forward to your next round of information.

By the way.....what time frames do you generally trade - ie 1 hr candles, 15min candles etc?

Thanks again
  • Post# 49
  • Quote
  • Nov 28, 2007 1:10am
  • opie999
    Joined Jun 2007 | 2,676 Posts | Status: Know that you don't know.
Hello, fti.

I appreciate and thank you for your time and effort.

Just a few questions, if I may.

Quoting fti
To me the most important indicator is price.
The market's sigma, which is the speed of move.
The Vega, which indicade the volitility factor in its trend and the time it consumes in it push.
You can determine all this from bare bar or candle charts.
If speed (time) is of such great importance then what are your thoughts on point & figure charts?

Quoting fti
the other indicator is true average,
with that you can determine if the volitility is out of line for your risk tenure,
you can best understand this by studying the original Dow theory.
Are you referring to the Average True Range indicator developed by J. Welles Wilder in 1978? Curtis Faith emphasizes the importance of this indicator in his book "Way of the Turtle".

Quoting fti
I think you may get a good grounding of that from the book by R.Edwards/J. Magee.
I cannot remember the title of the book, but I can check for you when I return to Sg probably middle jan 2008. pls remind me.
"Technical Analysis of Stock Trends", currently in its eight printing. With over 700 pages it's quite a tome. Glancing through the table of contents, it appears to be very comprehensive. I've added it to my list. Are there any other books you'd recommend for us, perhaps a "top five" list?

Quoting fti
the other improtant, read, is the market form.

I try to recognise the compounded formatioms in the bar charts.
A good reference to forms study wasdone by a researcher, by the name of John R.Hill,
I'm not sure if his studys are available to the masses.
Are either of these the one you're thinking of?

"The Ultimate Trading Guide"
Wiley; 1st edition (January 15, 2000)

"Scientific Interpretation of Bar Charts"
Commodity Research Institute, Ltd (1979)

Quoting fti
An understanding of Hip and Lop patterns is foundational requirement.
?????

Quoting fti
A complimentary methodology is by complex candle chart formations.
I find the books (in english) on this too elementary.
I used to have an understudy who had a copy of the "secret" readings by rice traders in nihongo.
Unfortunately I've no contact with him for a long time since and my development on that has stalled.
That is unfortunate.

I believe Steve Nison takes credit for introducing candlesticks to western traders although I'm unable to confirm that claim.

Quoting fti
I must stress, "never ever play god to the markets."
always stay in the "dance", feeling its moods and tempo,
using technical accrument to read the dance.
Implementing damage control when out of step.
That's actually money management.(another time)
Many analyst, behaves like fortune tellers, that is wrong.

All an analyst can master, is the art of dancing along with the market,
and recognising its behaviour as the dance progresses.
It is an on going process, not one read and you khow all, that cannot happen.
The markets are alive.
Both analogies seem apt but I think I prefer "dancing" with a beautiful woman (albeit dangerous and temperamental) over "waging war" with a dark and sinister enemy.

Quoting fti
In a nutshell, There are other components necessary, other than technical analysis skills,
mindset, money moneymanagement are equaliy critical.

Thank you every one for your indulgence.
I am very tired, danced with the market yesterday the whole day and night,
what a ball.
So if you have questions just post them here and I'll get back to it after a good rest.

regards
Sleep well.

Cya on the flip flop. (US trucker lingo)



  • Post# 50
  • Quote
  • Nov 28, 2007 2:26am
  • Green_David
    Joined Nov 2007 | 785 Posts | Status: Big trend, big money
Quoting fti
Hi All,

@ Green_David
Don't think that way.
Think this way.
With this new devellopments, the volitility and wid swings should become more pronounced.
To the nimble , it'll present more opportunities.
To the rigid, the swings may pose a nusance and increase sufferings.
One things for sure, markets gonna get more intense and fast.


The market's sigma, which is the speed of move.
The Vega, which indicade the volitility factor in its trend and the time it consumes in it push.
You can determine all this from bare bar or candle charts.

regards
Thank you very much for your kind and patient explanation.

So, for volatility and wild wings, that, you mean when central banks interfere there would be huge price movements, right? I experienced once this year July, when New Zealand central bank intervened.

And, for the speed of the move, in my opinion, that is, traders should notice the strength of the move, say, 100 pips just in 15 minutes or a 300 pips drop a day for a pair which normally has only 100 pips movement for a day.

Thank you very much. We highly appreciate your share with us your knowledge and experiences.

David
  • Post# 51
  • Quote
  • Nov 28, 2007 4:39am
  • fti
    Joined Nov 2007 | 10,185 Posts | Status: member
Hi All,

@ JodyOng

In a way you are right, the core function of dealkers is to manage market risk , during their operational time zone.
Their over night activety is normally about one tenth of their normal risk appitite.
It's like inverse of the male ego, which is ten time bigger at night to its daylight.:-)

Sorry forgot I was speaking to a lady. :-O

In terms of their trading, you may have the impression that
they fly by the seat of their pants,
but in reslity, it is so intenerlised that the decision process are so automated.
If you remember the analogy I gave earlier, about driving a car.
That's how well drilled they are, that risk managing becomes a reflex action.
You may percieve that it's gut feel, but there's a lot more to it than gut.

@ Maseyw

Thank you for your kind words.
I normally keep the daily OHLC bar charts visable for
the EUR, cable, yen.(naked, term borrowed from leighsww)
chf is a bit of a wild lady, so i don't look at her much.
then I have the the short charts of the market I am actively trading.
normally sighting the 5min candles ,15min candles
and I keep hourly candles at the back of the screen just in case
the short charts becomes choppy then I refer to the hourly for direction.
On short charts, I have the hourly sma plotted to measure volitility.
I tend not to put studies on charts to distract proper reading of market form.
if the lady have long, trendy legs, I normally put the 15mins charts to the back as well,
so as not to clutter the screen.

@ opte999
Thank you for your kind words.
Point and figuring is a very nice way to plot charts , if you are a long term trend rider.
As this technique,neglates time as a charting component it cannot read form.
If you are not trading close to market pulse,
P&F would help you filter out the counterswing "noise".
The Achillies heel of this charting method is that most traders
choses the reversal boxes sizes to compliment their financial capacity
and sometime to their risk appitite, instead of the markets volitility.
Being a rigid form of trend trailler, the choice of the reversal boxes is critical
and requires much trial and error to get it right.
This method of charting is most suited for traders who
are long term trend riders who have difficulty with position discipline.


On your question about ATR,
Firstly I go on record to say that I have very high esteem for Curtis Faith
and most of Richard's turtles with the exception of the renegade.

The ATR introduced by W.Wilders is an important component
for determining market's volitility. This is a powerful tool for system styled traders.
But to use it as a decision tool, tends to create rigid mindset in decision making.
Having said that, I myself do use it in a different way,
In that it is visually indentfiable from bare bars in volitility reads as I have mentioned.

W. Wilders and Jake Bernstein were my trainers in 1980, I believe he has moved on,
since the publication of his findings, to a more nimble technique.
The new style of trading , if I am not mistaken is still classified until this day.

Yes, you are correct. the R.Edwards/J. Magee. Dow Theory book is titled
"Technical Analysis of Stock Trends"

Yes, I think John Hills research papers was titled "Scientific Interpretation of Bar Charts".
Is it being published? I ask because mine is in research paper format.

Hip & Lop patterns was Wilders initial research studies,
if you search his writings you should find it.
I am sorry that I am not at liberty to publish his writings as it is copyrighted.

The two Nison's books can be used as an introduction to basic candlecharts.
The rice manual which I had the opportunity to view is of much advance levels of interpretation of the compound formations.
In the words of my understudy who taught me,
" individual candle readings have insignificane value compared to the compound reads."
I am sorry that I cannot be of much help in the interpretations
because my education was stalled when he returned to Japan.
There is however another way to use candle charts, introduced in the mid 80's ,
I believe Morris called it "Power candles"
You may like to research on that.

Ah, I see you like the dancing analogy better.
It is hard for me to shake the war analogy due to my training
in the disciplines and money management style adapted from Sun Zi Bing Fa.
which is the core of my dealing style. If I had been distasteful, I apologise.

Thank you, friend for helping. You must be quite experienced.
Quoting Sun Zi, and with the above read,
I would suspect that you are Technical Analyst yourself.
Do share some knowledge with us, where suits.

regards

PS: @ Green_David,
You may be withnessing the power of CB in the markets, be cautious

regards
  • Post# 52
  • Quote
  • Nov 28, 2007 5:00am
  • fti
    Joined Nov 2007 | 10,185 Posts | Status: member
Desiderata

Go placidly amid the noise & haste,
And remember what peace there may be in silence.
As far as possible without surrender, be on good terms with all persons.
Speak your truth quietly & clearly; and listen to others, even the dull and ignorant;
They too have their story.

Avoid loud & aggressive persons,
they are vexations to the spirit.
If you compare yourself with others, you may become vain & bitter;
For always there will be greater and lesser persons than yourself.

Enjoy your achievements as well as your plans.
Keep interested in your own career, however humble;
it is a real possession in the changing fortunes of time.
Exercise caution in your business affairs;
For the world is full of trickery.
But let this not blind you to what virtue there is;
Many people strive for high ideals; & everywhere is full of heroism.

Be yourself.
Especially, do not feign affection.
Neither be cynical about love;
For in the face of all aridity & disenchantment, it is perennial as the grass.
Take kindly the counsel of the years, gracefully surrendering the things of youth.

Nurture strength of spirit to shield you in sudden misfortune.
But do not distress yourself with imaginings.
Many fears are born of fatigue & loneliness.
Beyond a wholesome discipline, be gentle with yourself.
You are a child of the universe, no less than the trees and the stars;
You have a right to be here.

And whether or not it is clear to you, no doubt the universe is unfolding as it should.
Therefore be at peace with God, whatever you conceive Him to be,
and whatever your labors and aspirations,
in the noisy confusion of life, keep peace with your soul.
With all its sham, drudgery and broken dreams, it is still a beautiful world.
Be careful. Strive to be happy.
  • Post# 53
  • Quote
  • Nov 28, 2007 6:17am
  • Maseyw
    Joined Jan 2007 | 24 Posts | Status: Member
fti

Thanks for your reply.

So you would use the daily charts for trend and candle formations to indicate possible changes in movement. Do you use the hourly similarly? It seems from your answer that if the market is trending you may stick more with the hourly or if the market is more choppy you go to the shorter time-frames. Is this correct?

Do you also use the 1-2-3 or V patters?

Do you use trend lines, fibs and pivot points?

I am also interested in how else you read the market movement. The less clutter on the screens the better.

Thanks again and look forward to your feedback.
  • Post# 54
  • Quote
  • Nov 28, 2007 6:57am
  • Maseyw
    Joined Jan 2007 | 24 Posts | Status: Member
Hi fti

One other question -

You mentioned trading the standard four pairs (although you tend to leave swissy alone more so)

- Do you ever trade G/J ?
  • Post# 55
  • Quote
  • Nov 28, 2007 7:41am
  • Zoran
    Joined Mar 2007 | 2,493 Posts | Status: Pip pip
Thank you for your response FTI.

As already pointed out, the book by R.Edwards and J.Magee is "Technical Analysis of Stock Trends". I have read that book and I can only highly recommend it. In fact, I've had it listed in my profile as my favourite for a while now. Even in it's 8th edition, it is little changed from the original. The major changes are those to do with technology. So instead of using ticker tape and charting on paper as they once did, we now use computers. Thank you for your book recommendations, I have ordered "Paper Money".... most were used but this particular one was listed as new (though I have my doubts).

I'd like to clarify my view of the market. I can see that there is certainly a battle in play between the bulls and the bears and I look for the historical battle lines. I expect those that can read it will be dancing with the market, sometime with the bulls and other times with the bears.

Can you please clarify your use of stops. I don't tend to use them when entering a trade but I will use them to lock in profit once the market has moved in my direction. I trade the larger timeframes and use the monthly/weekly charts to determine potential trend reversal points - so far with reasonable success. That is also what slightly confuses me about trend traders, do you continue to follow the trend even when you have come to a potentially significant and historical turning point?

Also, generally being a short term trader (holding for days to weeks), I have no problem with holding trades overnight. At my level, the market moves slowly and I would not expect a move to take me out unless I am already in profit. Are you referring to trading off the shorter timeframes when advising not to hold trades overnight?

Can you also clarify your point about "never ever play god with the market". I understand that to the point that the market will do what it wants, not what you want - so do what the market tells you. Do you have any examples of your view?

All the best

Quoting fti
Hi All,

@Zoran,
In answer to your question,
To me the most important indicator is price.
The market's sigma, which is the speed of move.
The Vega, which indicade the volitility factor in its trend and the time it consumes in it push.
You can determine all this from bare bar or candle charts.

the other indicator is true average,
with that you can determine if the volitility is out of line for your risk tenure,
you can best understand this by studying the original Dow theory.
Unfortunately there're many mutations of the Dow theory.
And those that are being used by conventional chartist today differs from my cup of tea.
I think you may get a good grounding of that from the book by R.Edwards/J. Magee.
I cannot remember the title of the book, but I can check for you when I return to Sg probably middle jan 2008. pls remind me.

the other improtant, read, is the market form.

I try to recognise the compounded formatioms in the bar charts.
A good reference to forms study wasdone by a researcher, by the name of John R.Hill,
I'm not sure if his studys are available to the masses.
They read compound chart formations.
An understanding of Hip and Lop patterns is foundational requirement.

A complimentary methodology is by complex candle chart formations.
I find the books (in english) on this too elementary.
I used to have an understudy who had a copy of the "secret" readings by rice traders in nihongo.
Unfortunately I've no contact with him for a long time since and my development on that has stalled.

I must stress, "never ever play god to the markets."
always stay in the "dance", feeling its moods and tempo,
using technical accrument to read the dance.
Implementing damage control when out of step.
That's actually money management.(another time)
Many analyst, behaves like fortune tellers, that is wrong.

All an analyst can master, is the art of dancing along with the market,
and recognising its behaviour as the dance progresses.
It is an on going process, not one read and you khow all, that cannot happen.
The markets are alive.

In a nutshell, There are other components necessary, other than technical analysis skills,
mindset, money moneymanagement are equaliy critical.

Thank you every one for your indulgence.
I am very tired, danced with the market yesterday the whole day and night,
what a ball.
So if you have questions just post them here and I'll get back to it after a good rest.

regards
  • Post# 56
  • Quote
  • Nov 28, 2007 8:26am
  • skyline
    Joined Apr 2006 | 1,011 Posts | Status: Metatrader Programmer
Quoting fti
Desiderata

Go placidly amid the noise & haste,
....
This is the same poem used by Jacko as signature. He is also a veteran trader as you. Maybe when (and if) I'll be a veteran I have to learn it too
MT4 coder since 2006. Feel free to contact me to develop your EA!
  • Post# 57
  • Quote
  • Nov 28, 2007 3:23pm
  • leighsww
    Joined Mar 2007 | 851 Posts | Status: xoxo
Quoting fti
Implementing damage control when out of step.
That's actually money management.(another time)
This is the one I am waiting for you to discuss here for everyone . After you answer all the questions posed you, please go into this one as soon as you can (or at least when you are ready and see fit )

LOL, on my last trade (USD/CHF) I think I did it incorrectly (put the rescuer in too fast, haha), but it actually worked out well anyway to bring my average basis up a little to cover better my 1st position, so still turned out good (made pips that I'm happy with on that trade ). Also, I was doing a little longer-term trade (4hr chart with feb's V-Formation method) and not your intraday one, but I still think your money management methodology can still work for that, no?
  • Post# 58
  • Quote
  • Nov 28, 2007 10:00pm
  • opie999
    Joined Jun 2007 | 2,676 Posts | Status: Know that you don't know.
Quoting fti
This method of charting is most suited for traders who
are long term trend riders who have difficulty with position discipline.
Thanks for confirming my suspicions re P&F charts. I don't think they're suitable for my style. I'll concentrate on candles.
Quoting fti
The ATR introduced by W.Wilders is an important component
for determining market's volitility. This is a powerful tool for system styled traders.
But to use it as a decision tool, tends to create rigid mindset in decision making.
Having said that, I myself do use it in a different way,
In that it is visually indentfiable from bare bars in volitility reads as I have mentioned.
Ok, I'll devote a little more study to the ATR.
Quoting fti
Yes, I think John Hills research papers was titled "Scientific Interpretation of Bar Charts".
Is it being published? I ask because mine is in research paper format.
It's no longer in print but used copies appear to be readily available online at reasonable cost, for now.
Quoting fti
Hip & Lop patterns was Wilders initial research studies,
if you search his writings you should find it.
I am sorry that I am not at liberty to publish his writings as it is copyrighted.
This is proving more elusive. Deeper research will be needed.
Quoting fti
There is however another way to use candle charts, introduced in the mid 80's ,
I believe Morris called it "Power candles"
You may like to research on that.
I'm on it like hair on a gorilla.
Quoting fti
Ah, I see you like the dancing analogy better.
It is hard for me to shake the war analogy due to my training
in the disciplines and money management style adapted from Sun Zi Bing Fa.
which is the core of my dealing style. If I had been distasteful, I apologise.
Lol! Please, no apologies necessary! Both analogies are appropriate in context.
Quoting fti
Thank you, friend for helping. You must be quite experienced.
Quoting Sun Zi, and with the above read,
I would suspect that you are Technical Analyst yourself.
Do share some knowledge with us, where suits.

regards
You're quite welcome sir, but make no mistake...I'm all flash and no cash. Come to think of it, I'm not much on flash either! Lol!

I've been seriously studying and demo trading forex (spot retail of course) for only six months. There are a few things I have to my advantage, however. I'm highly motivated; I'm a quick study; but most importantly, I stumbled on this forum early in my initial research. The vast storehouse of experience and knowledge here has helped me avoid a multitude of potentially costly n00b errors.
  • Post# 59
  • Quote
  • Nov 28, 2007 10:10pm
  • fti
    Joined Nov 2007 | 10,185 Posts | Status: member
Hi All,

@ Maseyw,
Thank you for your patience,

"...So you would use the daily charts for trend and candle formations to indicate possible changes in movement. Do you use the hourly similarly? ..."

Yes I use Daily Chart studies to indicate trend,
I use short charts to indicate form.

Ponder this,
On the daily EUR/USD now we see possible topping formation, correct.

We may be right, So tell me where is it going?Should be Down, right?

When will we know if it is going down?
What if on the short charts, its going up?
So do we still want to go short?
So when should we go short?
When the short chart shows you that it topping out, right?

So if this market continues to go up. Then You miss the bus ( borrowed from leighsww) ,right?
You missed the bus going north, why?
because you were at the bus stand waiting for the south bound bus, right?

Thats why I, said.
Bull makes money, Bears make money, Pigs get slaughtered.

You see, when bulls are making money, Bears are not.
When bears are making money bulls cannot.
But the one whos trying to catch both buses will sooner be dead. Crossing the road from one bus stand to another,
Because he could be at the north stand when the south bus comes, or the south stand when the north bus comes.
or mostly in th middle of the road, when both bus comes.

Do I make any sense?

For dealers, its a different game, because when markets are going up in a BEAR market, customers keep making them short,
their book keeps getting bigger short, but their average cost of being short keeps going up.
all they have to do is to wait for the trend to enforce and
when the market returns to the point where the buying started ,
he would make nearly the amount of money that made him short in the first place.

For this to happen, he has to have a book big enough to accommadate the customer base.
AND as the market swings back towards the start point, he has to ascertain that his book of shorts, be kept constant.
This is because on the way down the customers will be making him long.
So by constantly covering back to back on the way down he maintains his book short.
So for the dealer, as long as he maintains his poise in the direction of the markets major trend,
he will always make "scalp money", guanranteed.

His modus operandi, is to "duck and move quickly"
so as to have a better average on the up swing towards stops to maximise his shorting near the top of the swing.
This scenerio is most effective if there are stop near levels where he las a large order to sell,
where he can help the customer sell OB and "kill the sitting duck stops" in the same blow.
Another senerio is where by the heavy selling is CB levels or specific sell zones,
where many teir 1 are ready to pounch on the buyers.
You must understand that only tier 1 and some big tier 2 will have this advantage.

This is the reason, why you have rubber band snap backs in the direction of trend directions,
and slow puffy moves counter trend.
Am I making any sense to anyone here?

So we use daily trend as the direction to build book size and short charts to make market for retraces.
Do discuss this on this trread, no questions are silly, just discuss until it becomes clear.
Don't understand !, argue until you understand.
Fight if you must, I will not complain.

YOU MUST GET THE CONCEPT OF MARKET STRUCTURE RIGHT TO UNDERSTAND THE CHARTS.

I didn't wnat to get into this first, but since it is being asked here we go.
I wanted to get across the basic foundations right first,
cos if your foundation is slopy you will get a slopy structure built on it.
not so unlike building a house.
Nevertheless this is also the advance level of foundation and is an acceptable direction togo.

regards

PS: Maseyw and Zoran 's other questions, I will answer in another post.
Leighsww, sorry MM gotta come later. Foundation first, ok.

thanks ppl for the effort to learn.
regards.
  • Post# 60
  • Quote
  • Nov 28, 2007 11:13pm | Edited Nov 29, 2007 12:27am
  • fti
    Joined Nov 2007 | 10,185 Posts | Status: member
Hi ALL,

A little get to know me as we go along.

One thing you will not be getting from me is, this crosses that and go buy or go sell, or
this is overbought/oversold wait for divergence then go do this or that. Or do this and you will make millions.
If thats what you are looking for, then sorry you're on the wrong bus. (again borrowed from leighsww, fine naked lady if I may add.)

To understand me, picture this,
I have two brains.
My bicameral mind is fast like lighting, due to training.
My other mind is a little boy trying to cope with the bicameral mind.
Half the time it keep asking the bicameral mind,
What did you just said a moment ago.? What was your instructions again?
could we replay that segment pls?
And he gets the, "shit i forgot, I am on something else already, Bloody pay attention."
And this goes on day in and day out between them.

My body is under the charge of the little boy mind,
it works like an apple 2e living in the world of super computers.
"Burnt the candle both ends" and all worn out.
The bionics are all rusty.
Can't type fast, got "fat fingers".
can't speak well, normally in pieces,
cos' the little boy lost some parts of the message which the bicam mind passed down.

apart from that, most parts are old and rusty,
work for a while, gotta rest, otherwise overheat and fail.
If you asked a tech specialist, probably recommend that this piece of machinery be scraped.

But the bicam mind, being the optimist it is, thinks the system can still cope,
if we allow the system to accept its ineffencies, it should get by.
It lives on the motto, "Live every moment as if it was your last"
and one day, this would be true.
For now "be the best you can be"

Please do not imagine and old and sickly man.
I am not young and vibrant, but far for old and sickly.

With this out of the way, lets get on with it.
If I forgot, remind me.
If I misquoted, correct me
If I don't make sense, ask again.
If I am wrong, teach me.
If I err, forgive me.
But most important , don't sit there staring at me.

regards

PS: before I forget.
The emotional control.

When I trade. I listen to music. all sorts.but the one that, gives me oum, is my setup of
in sequence, recently
Enya "May it be",
Charlotte Church & Josh Groban "The Prayer",
Joan Sutherland & Jane Berbie "The flower Duet, Lakme",
Josh Groban "You raised me up" & "To where you are".
Hope it doesn't make RIAA richer.
Makes serene feel, for me. I wonder if it can do the same for you.

When I wheeling & dealing, when much younger, normally had pissed drunk sessions a lot, \
I guess you know, how brokers throw liquor at dealers, on drink outs.
Walk back next day to dealing room, still a little sober, tend to read trends better.
Don't know why, for me it works. You may like to try that.
I know its naughty influence, but it somehow works, don't know why, but it does.
So before I teach anymore "unbecoming influences, I stop there.
Just thought that I should iiform you.

regards

PSS: Plus I am a very very heavy smoker, thats the one that "ill probably switch off my lights.

regards
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