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Technical Analysis Fallacy

Hi all,

Well my dancing has been terrible thus far in the new week. I was off to a late start due to other priorities that took precedence. So far I have started with 5 trades of which 4 had to be rescued, with a profit. Although there have been no losses, it is not the ideal situation, it does however build confidence in the AOW style planning the trade execution and the rescue if required (which it has)...MM is everything indeed. I feel the market is the "Shuai-Jan" indeed not I. I am however working both directions now on the GU. Now I will try and get in tune with the market pulse and pick some proper directions.

Hope the rest of you are successfully in tune with the market.

NP
Quoting fti
HapaSasa,
Do it slowly.
Most important , so it small while you are learning.
You will know when to do the bigger game , when you have sharpen yourself.
try to survive boot camp.

regards
Hi fti,

Thanks for your comments.

I have been on the move the last couple of days and am catching up on the news and posts.
For a short time tomorrow and then Friday I´ll be treading the edge of the dancefloor again.
regards
Quoting Northpro
Hi all,

Well my dancing has been terrible thus far in the new week. I was off to a late start due to other priorities that took precedence. So far I have started with 5 trades of which 4 had to be rescued, with a profit. Although there have been no losses, it is not the ideal situation, it does however build confidence in the AOW style planning the trade execution and the rescue if required (which it has)...MM is everything indeed. I feel the market is the "Shuai-Jan" indeed not I. I am however working both directions now on the GU. Now I will try and get in tune with the market pulse and pick some proper directions.

Hope the rest of you are successfully in tune with the market.

NP
northpro ,
So you started off on the wrong foot, part of the dancing is an occasional fall in the wrong direction isn't it? We just pick ourselves back up or rescue and keep going. I would feel pretty good about not losing what could have been lost. To tell you the truth I kind of look forward to a rescue so I can perfect it.
How far did you have to go for the rescue?
What are you using for the trend ?
Quoting lilpip
northpro ,
So you started off on the wrong foot, part of the dancing is an occasional fall in the wrong direction isn't it? We just pick ourselves back up or rescue and keep going. I would feel pretty good about not losing what could have been lost. To tell you the truth I kind of look forward to a rescue so I can perfect it.
How far did you have to go for the rescue?
What are you using for the trend ?
Yes I did indeed get off on the wrong foot. I have been preoccupied with work issues so my attention to trading details is not 100%...but thats just an excuse.. Last week was a great week where this week has started off not as good as I would have liked as I am trying to improve my dancing on different TF's...the rescue is an amazing revelation to my trading and the variance of skews is definitely intriguing as it is effective. I quite love that aspect.. The point of telling all of my recent dance stumblings is to indicate that even poorly entered trades do not have to be a lost trade if proper MM and a rescue plan are formulated when the initial trade is executed. As a matter of fact they are all possible winners. I have executed 15 trades in the last 10 days and only had 1 loss that I had to take on an early close out, due absence. Not all these were well timed trades, on the contrary, but they were all profitable except 1. The power of a plan and the AOW mindset. Simply amazing!

NP
  • pipal
    Joined May 2007
Quoting fti
But I need good ECN platform, and good chart platform.
Of course tight spreads and reliable broker.
Seems not an easy task to sieve thru those available.
Hi FTI,

I am really happy to know you find it helpful. You know I have been feeling sorry for just learning from you and many others in this thread and not being able to contribute in any way.

I have paid much (time/money/effort) for my experience in searching a reliable broker. As I aim to trade forex for a living, a reliable broker that allows you to make money day by day, month by month is a prerequisite.

Back to 2000/01, I started to trade as a hobby with a broker. For a few times (at least 3 as far as I remember) I set a stop loss before going to bed, and then the next day, I was happy to see it moves in my direction nicely but then found that I was stopped out by abnormal spikes (exactly at the level of my stop loss). I checked with other data sources, all confirmed that there was no a such movement. I was very suspicious so I didn't trade with them after those inccidents happened again and again. The broker ceased to operate after 1 or 2 years, and it's said it's a child company of a well known European bank.

During 2005-06, I became a sucker again trading with a MM broker which uses MarketMaker as its platform. I traded semi full-time and used MT platform for better charting. For my own trading, I have experienced reqouting, platform freezing, slippages etc. That sounds pretty common and acceptable realities for MM brokers especially during quick movements. But I have also seen for a few times that they did have abnormal spikes for up to 100pips before moving on to the original direction. As I was also using MT platform, I realised that they may be running stops on their own clients, stopping them from making money (I knew a bit more about Forex at that time). I thought the broker would never let me to make money so I just closed my account. I personally know a guy here making money consistently and the broker just refuses his orders over internet. He is required to call the broker for qoutes. I guess that means the broker just wants him to go away.

I thought if the broker just let me to lose, or good to you / reliable only when you are losing money (or when you are trading mini lots), why should I continue to spend my money, time and effort with them without a hope to make money at some day when I become a successful trader for real money? Then my search for a relaible broker at all time goes on.

The post becomes too lengthy. Shall be back later.

Regards,
pipal
There are many points in this chapter that I'm still thinking of how to implement it into the trading realm. For now, this is how I interpret it:-

5. The general, unable to control his irritation, will launch his men to the assault like swarming ants, with the result that one-third of his men are slain, while the town still remains untaken. Such are the disastrous effects of a siege.

Don't over commit. Impatience, greed and ego will cause us to over-leverage.

17. Thus we may know that there are five essentials for victory:

(i) He will win who knows when to fight and when not to fight.

Know when to enter a trade and when not to. This depends on the volatility and market trendiness.

(ii) He will win who knows how to handle both superior and inferior forces.

Money management & Position Sizing. Use superior force during loss recovery and inferior forces to test the market.

(iii) He will win whose army is animated by the same spirit throughout all its ranks.

Maintain Discipline.

(iv) He will win who, prepared himself, waits to take the enemy unprepared.

Preparation before the trading starts. Have a trading plan.

(v) He will win who has military capacity and is not interfered with by the sovereign.

Have sufficient Capital including day-to-day expenses to avoid any abuses from the wife or girlfriend!!

18. Hence the saying: If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.

Know the markets well - learnt to dance with it, have a good trading plan & MM and know our comfort levels and emotions.
Quoting fti
Thanks Alexfot,
Oanda was one of the first demos I tried.
Didn't fancy their platform, will give them another go soon.
Now on Efx which leighsww recommended. Its less frustrating compared to MT4 broker structure.
Their quotes are respectable, only problem seems their platfom abit dated, and they charge brokerage for trades. I like their allowing traders to trade into the spreads but I was told next week they will be introducing new platform. I ll see how it goes.
I will keep Oanda KIV for now.

regards
Hi Alexfot,
Since markets were slow, I spent some time on the oanda platform.
Firstly, the platform has horrible colour scheme.
Nevertheless I gave it a go.
Using it is very cummbersome, would surely get killed in fast markets.
Orders book was also cummbersome.
Charting is non versatile, probably designed by one trick pony.

Conclusion, if I use this platform, If the markets don't kill me.
The frastration of using it definately will.
OANDA for me = OUT! NO WAY.

regards

PS: one good thiny is they seem to pay interest for depos.
Quoting pipal
Hi FTI,

...

I personally know a guy here making money consistently and the broker just refuses his orders over internet. He is required to call the broker for qoutes. I guess that means the broker just wants him to go away.

...

Regards,
pipal
Hi Pipal,

May you disclose what broker are you talking about (if this is allowed by the forum rules and if you don't mind)?

I have been using InterbankFX for 2 years. I think it is not ECN so doesn't suit FTI's needs, but it is working fine for me. In the 43% lucky "spike" in my favor related before I could close the order 1 minute after opening it. No problem thereafter. I have been making frequent trades (average few minutes), being lucky so far . Biggest problem are some requotes during fast moves. But I think this is normal. Would appreciate other's opinions. Thank you and good trading.
Hi fti

I'm curious about this report of a rogue trader. I thought there would be measures in place to prevent this type of activity. It sounds more like the bank took some risks to balance books instead?

http://news.bbc.co.uk/1/hi/business/7206270.stm

Any comment?
Quoting fti
Hi Pipal,

really EFX, they charge $50 per mio. Didn't realise that as only second day on it.
Been making $$ so didn't pay too much attention on the bro yet.
Thats highway robbery, LOL

the search continues, any specific suggestions?
So far MT4 seems best charting platform. A lot like Metastocks.
FXCM's charts comes close second.

But I need good ECN platform, and good chart platform.
Of course tight spreads and reliable broker.
Seems not an easy task to sieve thru those available.

at US$50/mio I think I shall not waste time on EFX then.
Thanks for info , pipal

regards

PS: I checked , Yes you are absolutely correct.

"Commissions are based on total dollar amount traded: $5 per $100,000 traded."

Absolutely unacceptable, gotta inform Leighsww.
Thanks again pipal.
Hi FTI,

Sorry to interrupt the conversation.

I have worked my way through many brokers and charting systems.

MT4 is certainly adequate if you choose the right broker to support it, like MIG investments in Swizerland for example.

If you choose to pay for extra accuracy, CQG is the best you can find in the charting world - not cheap.

If you want an ECN, I use Lava with Marex Financial as a broker - mostly 1 tick spread on the majors with full book depth, hidden orders, time slize orders, you name it - and execution is second to none. Marex charges $25 per million us$ traded with minimum lot size of £250K. So if you have enough leverage to put away 10Mio as standard size, they are your people.

Marex offers Lava, HotspotFX and Currenex as execution platforms.

Regards
Daytrading
There are lots of differences in these dealers, and there are a many, many misconceptions out there. When I first started trading, I called the dealing desk of many different companies, and I got different answers to the same questions. It was really hard to find the correct answers.

Couple that with leverage differences, execution differences, charting packages, and picking a dealer really is a nightmare. I keep 3 accounts, so I can utilize the strengths of some, and try to avoid the weaknesses of some. Plus, when they call me, I can mess with them and tell them I just opened a new account at another dealer, then watch them slobber around trying to make me stay.

BTW: There is a great explanation of how everything works behind the curtain in the news section right now that's spot on (great put, eh?):

http://www.pfxglobal.com/index.php?o...966&Itemid=117
  • pipal
    Joined May 2007
Quoting Jairo
Hi Pipal,

May you disclose what broker are you talking about (if this is allowed by the forum rules and if you don't mind)?
Hi Jairo,

I think it's not so appropriate to name those brokers just from what I heard or guess what they are doing. But most traders can easily notice those wired things if they happen to encounter. Some may even accept that as it's said it's legal for the MMs to quote any price as they wish.

Now I use ODL demo for MT charting. The prices are basically very closed (if not identical at all times) to the price feed I have from my ECN broker (Currenex). Not a single abnormal spike after using it for months. I have tried quite a few MT brokers' demo. ODL seems to be the best among others in terms of price feed and connection reliability.

regards,
pipal
may be off point bt folks i just heard about the futures trader in one of France's fin. institutions that lost $7b; as it goes he was trying to save his intial bad positions that resulted in a catastrophic last attempt to save his positions that failed. My question is hw the hell did it get so bad; werent there experinced supervisors(seniors)? was there nothing they cld do with all their experiences?
Quoting Zoran
Hi fti

I'm curious about this report of a rogue trader. I thought there would be measures in place to prevent this type of activity. It sounds more like the bank took some risks to balance books instead?

http://news.bbc.co.uk/1/hi/business/7206270.stm

Any comment?
Hi Zoran,

I am not privy to what happened at SocGen.
I try to ponder about many questions from reading that report you linked.

The bank said the fraud was based on simple transactions, but concealed by "sophisticated and varied techniques

Aren't P&L reporting "marked to market daily" by back office operations?
Doesn't the director of back office operations report on abnormal losses or positions to the Board of directors or the EXCO?

Is the Credit & Limits Dept functional?
If so how, come he 's trading line is so large.
Is he "blue eye" boy?
Is the compliance and risk management Dept functional?
So who's managing banks "greeks"?
Is the internal auditors functional?
So how come from 07 to 08 and no management intervention?

the trader was a Frenchman in his 30s who joined the bank in 2000 and earned a salary and bonus of less than 100,000 euros.

He seems only middle manager, why are his trading & overnight lines ,so large?
For a moment I thought he was CEO/ED
Whos's his supervisor? Who's comptroller?

the trader's name is Jerome Kerviel, a 31-year-old trader who worked in the bank's Delta One products team in Paris.

He was responsible for betting on the markets' future performance, bank executives said.

directional positions in 2007 and 2008

trader may not have sought personal gain from the fraudulent deals.

[/b]

So he's member of Strategic Trading ,not dealer probably proprietary trader, so how many were in the team and how many teams were there? Surely cannot be a one middle manager trader team. Smells like lamb.

I'm convinced he acted alone," said Jean-Pierre Mustier, chief executive of the corporate and investment banking division, who interviewed the trader after the fraud was uncovered.

What?
Sure, Tomorrows headlines "CEO says Lone gunman assassinated teir2 bank"

The transactions which involved the fraud were simple - taking a position on shares rising - but hidden using extremely sophisticated and varied techniques," chief executive Daniel Bouton said in a letter to the bank's customers

yeah, OK , who was monitoring the greeks, its obvious who the real culprits are when they did deep enough.


"I am sorry but I have a hard time buying the fact that a trader was able to set up a 'secret trade' of 4.9 billion without anybody finding out," said Ion-Marc Valhi at Amas Bank.

I am in full agreement.

勝子為王, 敗子為寇 (The victor is king, the defeated the bandit.)

regards
Quoting daytrading
Hi FTI,

Sorry to interrupt the conversation.

I have worked my way through many brokers and charting systems.

MT4 is certainly adequate if you choose the right broker to support it, like MIG investments in Swizerland for example.

If you choose to pay for extra accuracy, CQG is the best you can find in the charting world - not cheap.

If you want an ECN, I use Lava with Marex Financial as a broker - mostly 1 tick spread on the majors with full book depth, hidden orders, time slize orders, you name it - and execution is second to none. Marex charges $25 per million us$ traded with minimum lot size of £250K. So if you have enough leverage to put away 10Mio as standard size, they are your people.

Marex offers Lava, HotspotFX and Currenex as execution platforms.

Regards
Daytrading
Hi daytrading,

Thanks for the updated info.
Will check it out.
Someone should wake oanda up, huh?LOL
USD25 still seems high to me.
When I was retiring, the bro was going to single digit dollars. Would be expecting much lower bros now.

One question.
Does the swiss party allow customer to join into price spreads?

Thanks again.
good fortune
regards.
Quoting forexluvr
There are lots of differences in these dealers, and there are a many, many misconceptions out there. When I first started trading, I called the dealing desk of many different companies, and I got different answers to the same questions. It was really hard to find the correct answers.

Couple that with leverage differences, execution differences, charting packages, and picking a dealer really is a nightmare. I keep 3 accounts, so I can utilize the strengths of some, and try to avoid the weaknesses of some. Plus, when they call me, I can mess with them and tell them I just opened a new account at another dealer, then watch them slobber around trying to make me stay.

BTW: There is a great explanation of how everything works behind the curtain in the news section right now that's spot on (great put, eh?):

http://www.pfxglobal.com/index.php?o...966&Itemid=117
Thanks forexluvr for the link.
But seems like retailer trying to describe the wholesale business.
Having said that, Well, he's not all wrong, just not having being there.

regards
Quoting pipal
Hi Jairo,

I think it's not so appropriate to name those brokers just from what I heard or guess what they are doing. But most traders can easily notice those wired things if they happen to encounter. Some may even accept that as it's said it's legal for the MMs to quote any price as they wish.

Now I use ODL demo for MT charting. The prices are basically very closed (if not identical at all times) to the price feed I have from my ECN broker (Currenex). Not a single abnormal spike after using it for months. I have tried quite a few MT brokers' demo. ODL seems to be the best among others in terms of price feed and connection reliability.

regards,
pipal
Pipal,
Your advisement is appreciated.
thanks
regards
Quoting jku
may be off point bt folks i just heard about the futures trader in one of France's fin. institutions that lost $7b; as it goes he was trying to save his intial bad positions that resulted in a catastrophic last attempt to save his positions that failed. My question is hw the hell did it get so bad; werent there experinced supervisors(seniors)? was there nothing they cld do with all their experiences?
Hi jku,
just my 2 cts.
Socgen is a "good name".
From my sparing with them in my days, they do have layers of safeguards and structural risk infrastructure in place to protect reckless risk.
Somehow, it seems to have failed. The question is WHY were the safety net circumvented.

I cannot see that a middle manager have the clout to do what he did. The truth is not out.

regards
Quoting fti
Hi daytrading,

Thanks for the updated info.
Will check it out.
Someone should wake oanda up, huh?LOL
USD25 still seems high to me.
When I was retiring, the bro was going to single digit dollars. Would be expecting much lower bros now.

Thanks again.
good fortune
regards.
Hi FTI,

another member just sent me a PM with similar content.

You should really think about whether you want to go down the institutional or retail road. I dealt for years through the corporate platform of a retail broker because a few ticks in the spread didn't bother since trading was free of commissions. Its really a question of making a thorough calculation.

Scalping with roundtrip cost of up to 50 bucks per million us$ can be very costly over time. On the other hand, if you need to wash through 50 to 100 million dollar on a single trade that lasts for days and weeks, I guess $2500 fee is not much to pay for smooth and instant execution in those amounts.

regards
daytrading
FTI,

...sorry, I forgot to answer your question.

I only know that the swiss retail broker has a good reputation - I don't use them personally. You'd have to enquire directly with them.

Sorry I could't be of help.

regards
daytrading
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