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Technical Analysis Fallacy

Quoting leighsww
Okay, I got the go ahead from fti to post my spreadsheet.
leigh,

ur an angel!
omg thanks so much.

regards
jest
Quoting Zoran
Hi auxesis

I've known you for quite some time and have a reasonable understanding of your background.
/
/
/
Once you learn to dance, some of the information on your dash may come to use (technical analysis) but unless you are watching through the windscreen it's nothing more than guesswork.

Hope that helps.
Zoran,

Thanks, Using a naked chart is not that big of a deal, however putting blinders on the minds eye is, as most of fib, fork, lines i see with the eyeball now, placing them only helps the memory.

The biggest hurdle i have mentally is the direction of the progression, as i was taught a fib progression but scaling into a projected entry zone with the bulk sitting at the very end, and then scaling out leaving the bulk to carry. Here it seems just the opposite. But me's a learning!

Hope your enjoying your vacation.

a
Quoting Hidhadows
I'll post later on over the weekend how I've been trading it so we can compare.
GREAT!

Quoting jest
Would leighswww or fti or any of the oldtimers in this thread care to give an example say for a 100k account?
- how would we plan the MM?
- What is the max risk?
- how do we plan our scaling (attack and rescue)
- what are the preffered sequences depending on PA.
jest ...

I noticed in a previous post you made that you had a $100k account. What I would suggest to you is that unless you are earning interest on that $100k, that you don't keep all that in your trading account.

When you study my spreadsheet, you will see that you do not need all that much money to trade efficiently, so I would recommend that you leave only $10k in your account, put the rest in an interest bearing vehicle, and enter $2,500 for your starting Account Value for the spreadsheet.

OR if you prefer, you can leave $20k and enter $5,000 for your starting Account Value.

Go ahead and change the starting Account Value in one of the "Hypothetical" scenarios and see if you aren't blown away by what you still can do with that small amount of your money, lol.

However, if you're at a broker who requires a minimum of $100k than I guess you have to leave it, but you still should only enter $5,000 for the starting Account Value in the spreadsheet.

You know what, I should figure out a #6 Lot Entry Sequence for you, cuz with your deeper pockets, that would be even safer MM, cuz then you would have TWO rescue-ONLY sequences in which you DO NOT use unless forced to (but it will give you tremendous peace-of-mind at having them available), and that would be an optimum safe/conservative MM but yet still calculating on 4 sequence Lot Entries for profit taking (so the numbers on the scenario projections wouldn't change).

With those of us with smaller accounts, we don't have the luxury of having 2 emergency rescue columns, cuz we don't have enough troops to allocate toward them, but for those, like you who do, that is really the BEST MM possible (in my opinion).

I'll create another spreadsheet for those, like you, who have deeper pockets and can allocate enough troops for a 6 Lot Entry Sequence column.

The main reason I created this spreadsheet was to assist and show the little guys (without deep pockets) how we can still make a good living trading the forex with a small investment. But, if it helps you guys with bigger accounts, too, that's great!

I know compounding is not new and others have probably gotten excited by the concept, however it's the consistency in making winning trades that was always probably the difficult part to making the compounding work as projected.

With fti's method of reaveraging, we have more chances of successful and consistent winning trades, thus it's not impossible or far-fetched to do what is projected on my spreadsheet's Hypothetical scenarios.

The Hypothetical scenarios will help to give people a goal/target to shoot for, as well as a guide for Lot Entry Sequence. If we can consistently bank a minimum of 15 - 20 pips per trade, at the end of 240 trades, we would have increased our accounts significantly ... well, you can see the numbers in the spreadsheet, lol.

I show also that if you withdraw half the account at certain intervals only (when the account hits $10K, then $20K, etc.) you can created a good income and still have enough in the account to continue the compounding effectively.

Withdrawing too early or too frequent will affect compounding significantly, but you also must take your profits out periodically, as well
Quoting Leigh
I'll create another spreadsheet for those, like you, who have deeper pockets and can allocate enough troops for a 6 Lot Entry Sequence column.
Okay, I tried to create a 6 Lot Entry Sequence, however unless you can count/add the #5 Lot Entry Sequence in the "Lots Traded" for profit taking, this won't give you a decent income.

Sorry, jest.
Leigh,

Nice work, thats a beauty.
Still waters run deep
Leighsww.

Spreadsheet looks good, you have come a long way in a short time.

Regards,

BabeFX



I am wrong until the market proves me right.
My 2 humble cents:
Last two days almost all time I played against trend
I did it intentionally to understand my abilities to dance and dance well against trend.
And You know, I survive ;-) Snowball each time was heavy to rescue scout
But I survive and made money.
Anyway to play against trend it's not that smart
But it is refreshing ;-)
Happy pips to all !!!
it's o'k to win ...
Quoting leighsww
Okay, I tried to create a 6 Lot Entry Sequence, however unless you can count/add the #5 Lot Entry Sequence in the "Lots Traded" for profit taking, this won't give you a decent income.

Sorry, jest.
Leigh,

Thats allright, your contribution here has been immense. I can't create words on how to describe your willingness to go the extra-mile. I will do as noted, like you i have an account with efx, a small one tho,(im still a little skeptical abt having my monies far away from me esp the situation with US Banks).

Will do as you suggested, say a 10k acc and let see how she grows. Im still very much practising the dance like what many here are doing. I like hypo 1 and 2.
Quoting auxesis
Zoran,

Thanks, Using a naked chart is not that big of a deal, however putting blinders on the minds eye is, as most of fib, fork, lines i see with the eyeball now, placing them only helps the memory.

The biggest hurdle i have mentally is the direction of the progression, as i was taught a fib progression but scaling into a projected entry zone with the bulk sitting at the very end, and then scaling out leaving the bulk to carry. Here it seems just the opposite. But me's a learning!

Hope your enjoying your vacation.

a
Watching naked charts is removing all blinders and allows one to connect the mind to the market. That is when we start to feel it. When you are looking at fibs and forks, you are introducing rigidity into the system. What are you expecting to happen with these lines on the chart or even just eyeballing them?

The market is a live beast and probably sees something else so might just go right through it without even a thought. As mentioned previously, indictors and systems work at times just like traffic conditions are similar at times, but unless you are looking through the windscreen and feeling the traffic, you are likely to have an accident.

The fib progression is similar to scaling in and out but it can be visualised as winding the sprial out and in (check diagrams) which also keeps the average in a reasonably safe place (otherwise you could find yourself in negative territory fairly quickly). The important thing to remember is that we are not applying fibs to price but to MM. So all those genius mathematicans out there, forget about being Nostradamus and applying complex calculations to price but instead apply it to MM and you're on the right track. This is exactly what Leigh is doing right now with her spread sheet.
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Quoting Zoran
The important thing to remember is that we are not applying fibs to price but to MM. So all those genius mathematicans out there, forget about being nostrodamus and applying complex calculations to price but instead apply it to MM and you're on the right track. This is exactly what Leigh is doing right now with her spread sheet.
Yes, yes and yes.
Zoran, you are wonderfull logical writer. I love the way you put it.

My fibo attack and rescue sequence:

Attack: 1-1-2-3-5-8 (5-8 if you are really brave. I normally stop in the 3)
Defense: That is more tricky...I do 3-9-20...but you could also use the same fibo sequence as she has in her matrix...I normally do not make it further than 3, rarely 9...Good lord, have never used 20.

why almos exponential with base 3? it is also 1-2-3 as exponent but the last one 27 is a little scary in my style...I have never gone further than 9...among the many fbi's messages there is one about beeing faster and more aggresive with the rescue...so...I ended up with my current one. Warning: nothing is fixed, there are not fixed rules but well-defined strategy.

Regard

My 2 cents.
Empty as water and soft as a facing wind mountain
Quoting BabeFX
Doremi.

If you follow luSans methods you wont go far wrong.

Remember to confirm your direction of entry with a higher time frame & don't attempt a rescue until you see an about turn (reverse).

AT this moment in time ( 08.05 GMT )I have just banked 51 pips trading EUR/USD short confirmed by hourly, I still have my scout out in the market and he is making good progress, I will average in as each small retrace takes place & average out on each stall in momentum.

Find your own way from fti's postings, he is truely a good tutor.

For myself I do use one or more the MA's mentioned in the above postings, to these I add fib levels, this works very well for me because as yet I don't have the full confidence to trade completely naked.

Take care, the market can be a beast.

Regards.

BabeFX.

I am wrong until the market proves me right. (POP Phantom of the Pits).
Hi BabeFX,

Thank you for the encouragement. I dance completely nude and beginning to like it.....no unnecessay distractions. BTW can you explain in more details as highlighted in red above? Yes, ur right.....FTI is a great tutor.

The only thing which I'm sceptical is the stop loss....There's one occassion whereby my phone line got problem and by the time it was fixed the next day my account was totally wiped out.....luckily it was a micro account. Just my opinion....for those that trade without any stop loss(Sorry, FTI, I’m not against it)…… plse ensure you've a backup connection and don't end up like me. Plse be reminded
Quoting doremi
Hi BabeFX,

.................................
The only thing which I'm sceptical is the stop loss....There's one occassion whereby my phone line got problem and by the time it was fixed the next day my account was totally wiped out.....luckily it was a micro account. Just my opinion....for those that trade without any stop loss(Sorry, FTI, I’m not against it)…… plse ensure you've a backup connection and don't end up like me. Plse be reminded
Hi Doremi,
It is not just the phone line that you can cause you a big problem. I have had:
1. Phone line down.
2. Internet Service Provider down.
3. PC crashed - Software.
4. PC Monitor died.
5. PC crashed - hardware (in my case the system board, but could just as easily been disk failure).
6. Power cut. We have had 5 in my street in the last 12 months (one just after I entered a trade) , and I live in England.
7. Broker server outage - just a brief one, but in a fast moving market that is enough.

So as well as always having my mobile phone with my broker's dealing desk number at the ready ( and a torch at night, I try to always remember to put at least a catasrophic stop loss on all trades (could be up to 300 pips or so).

Am I paranoid?
Perhaps, but only a little!

Ian
Quoting luSan
Yes, yes and yes.
Zoran, you are wonderfull logical writer. I love the way you put it.

My fibo attack and rescue sequence:

Attack: 1-1-2-3-5-8 (5-8 if you are really brave. I normally stop in the 3)
Defense: That is more tricky...I do 3-9-20...but you could also use the same fibo sequence as she has in her matrix...I normally do not make it further than 3, rarely 9...Good lord, have never used 20.

why almos exponential with base 3? it is also 1-2-3 as exponent but the last one 27 is a little scary in my style...I have never gone further than 9...among the many fbi's messages there is one about beeing faster and more aggresive with the rescue...so...I ended up with my current one. Warning: nothing is fixed, there are not fixed rules but well-defined strategy.

Regard

My 2 cents.
luSan, I admire your motivation. You seem to be a person who just goes and does what is needed to get the end result. As such you are ahead in the game.

I am still starting out so there is much experimenting to do. If I can get the right waves, I'm also looking to experiment with 1-1-2, 4-4-8. Something like that would come during a trending (and impulsive) market.

As it stands, I've only worked with the 1-1-2 sequence.

I'm still trying to understand Leighs system. She goes in small but the last one is fairly agressive. As a boxer it would be Jab, Jab, Swing, Knockout. However, if the market ducks the knockout punch, the position could be at severe risk. Leigh, perhaps you can clarify the reasoning for it?

As mentioned, I'm starting out. You guys are way ahead.
Another thing. The few times I've had to rescue the scout, I've only ever had to do it with another 1 entry. But rescue will be based on the skew and speed of the market. Once it stops bleeding the rescue team goes in with appropriate troops.
Quoting Zoran
I'm still trying to understand Leighs system. She goes in small but the last one is fairly agressive. As a boxer it would be Jab, Jab, Swing, Knockout. However, if the market ducks the knockout punch, the position could be at severe risk. Leigh, perhaps you can clarify the reasoning for it?
Hi Zoran ...

I had sorta adapted fti's sequence that he posted here --> Post 1462

That would be Hypothetical 1 in my spreadsheet --> .1, .1, .2, 1.6, (6.0) (which is just a fractional version of his sequence --> 1, 1, 2, 16 shown in his example).

For my own actual trades, I am using Hypothetical 5 --> .1, .1, .2, 1.2, (5.6)

The last number in the sequence (which I show in parentheses) is ONLY used for emergency rescues. However, the other previous sequences (#3 & #4) can also used for rescue situations.

If you look at my formulas, you will see that #3, #4 & #5 Lot Entry Sequences are always a calculation that can do a rescue of the previous troops already in the battle.

Try changing the Hypothetical # (located on the bottom of the "Lot Entry Sequence" section) on the "Actual Trades" sheet. As you change the numbers to reflect each Hypothetical scenario's example sequence, look to the right at the #4 Rescue Reaveraging and #5 Rescue Reaveraging tables. You will see how many "Pips from B/E" you will be if you needed to conduct a rescue using either the #4 Lot Entry Sequence and/or the #5 Lot Entry Sequence. I have the default set to being 30 and 40 pips away, but you can change the prices to whatever you want (like if you wanted to see how many pips to B/E at 50 or 100 pips away - hopefully, though, you can conduct the rescue earlier than having to be that far away).

You can use the farthest right "Rescue Reaveraging" table to enter both the Price and # of Lots for custom lot amounts, where the two tables to the left of that have formulas which auto-calculate the # of Lots used in the Lot Entry Sequence, so don't touch those (again, you can only enter data/input in COLORED cells, leave the white cells alone, unless you want to edit the formulas).

Depending on which Hypothetical scenario sequence you choose, the formulas calculate so that #4 and #5 sequences can conduct adequate rescues.

But, I also use the same sequence for attack mode, as well (as in fti's example post I linked above).

Again, this depends on how one dances, cuz if you put your #4 Lot Entry Sequence in and the PA ends up going the opposite way substantially, then you have one chance to rescue it with #5 Lot Entry Sequence.

This is why, everyone needs to first learn to dance well.

My sequences may seem like they are aggressive, however you have to remember that I am using fractional lots, thus it's not as bad as it may seem. Even if you have a larger capital account to work with, I would recommend using fractional lots to begin with, and I explicitly state in my instructions to always enter a starting Account Value LESS than your actual account capital for safest MM.

If you're used to using full lot sizes, then you'd have to get used to using fractional lot sizes to use my spreadsheet. I know it may seem slow and small to use fractional lots, however look at the bottom of each Hypothetical scenario and you will see that your account will grow quite substantially if you build it steadily and consistently.

Example: for Hypothetical 5, at the end of 240 trades (approx. 12 months if trading once a day), I will have withdrawn $90,000 (granted I follow my "Withdrawal" example) and still have a trading account value of $77,427.20 to keep in for compounding more trades. My total profit would be $166,227.20. What's the ROI on that having started with an account value of $1,200?

So far I am on track (actually ahead, since I am normally banking more than the minimum 20 pips used in the Hypothetical 5 scenario - 8 trades have averaged 34.63 pips each troop), so let me keep quantifying my results to see how this pans out in the end. If I can keep this up and average at least 30 pips per troop/per trade, then after 240 trades, here's those statistics:

Withdrawal = $790,000.00
Profit = $1,251,779.20
Account Value (after Withdrawals) = $462,979.20

ACK, I will faint if I do that in reality! : (so get the smelling salt ready, haha)

Since some may prefer separate attack and rescue sequences (like you and luSan), let me try and work on a spreadsheet that caters to that style/system. It's more in line with fti's teachings anyway, so for those of you with larger accounts to work with, it might work for you better (although I think fti uses more aggressive models for himself, lol).

As I am writing this, I am envisioning how I will do it, so I'll be back when I get something useful for you. I'll use the 1, 1, 2, 3, 5, 8 progression for attack, and give option to select from several good rescue sequences.

Again, I would still recommend using fractional lots (so that's what I am going to code my formulas using), cuz it's much safer and although it builds slowly in the beginning, it starts to snowball quite fast after that. Again, study my Hypothetical scenarios and you will see the possibilities/results.
Quoting jest1081
Will do as you suggested, say a 10k acc and let see how she grows. Im still very much practising the dance like what many here are doing. I like hypo 1 and 2.
Hi jest ...

You might want to use the same spreadsheet that I will be tailoring for Zoran and luSan, so once I finish it, give it a test drive and see if you might like it better
Quoting ianf0ster
Hi Doremi,
It is not just the phone line that you can cause you a big problem. I have had:
1. Phone line down.
2. Internet Service Provider down.
3. PC crashed - Software.
4. PC Monitor died.
5. PC crashed - hardware (in my case the system board, but could just as easily been disk failure).
6. Power cut. We have had 5 in my street in the last 12 months (one just after I entered a trade) , and I live in England.
7. Broker server outage - just a brief one, but in a fast moving market that is enough.

So as well as always having my mobile phone with my broker's dealing desk number at the ready ( and a torch at night, I try to always remember to put at least a catasrophic stop loss on all trades (could be up to 300 pips or so).

Am I paranoid?
Perhaps, but only a little!

Ian
In my area, I do have frequent power disruptions, ....sometimes up to 3-4 times an evening......phone line disruptions (not so frequent). If we can babysit our troops without these disruptions, it's okay without stop loss. I think it's not wrong to put at least a catasrophonic stop loss for any eventualities.....which is beyond our control.
Quoting Zoran
I did consider longer timeframes at one point but I was obviously still blind at that time.

So while I'm still on the motorway, the 5min seems to be the speed of the traffic. Our brains can process it fairly well so lets say we are doing 70mph. Go to the 1min and everything speeds up so while most others are doing 70mph we are speeding at 200mph and out reaction time will not be as good so accidents are more likely.

Now if we go to the 4hr or daily, we are now doing 1mph. Who has the patience to sit and watch at that speed? What happens if your entry comes whilst sleeping in the back seat?

So my point is to dance at a comfortable speed and that seems to be the 5min for me.
Your comfortable speed for GJ @ 5M sounds like driving at Formula One Circuit......50-100 pips movement.......not the comfortable speed for the faint hearted.
Quoting doremi
Your comfortable speed for GJ @ 5M sounds like driving at Formula One Circuit......50-100 pips movement.......not the comfortable speed for the faint hearted.
I do EUR/USD because of 0.9 pip spread. What is the benefit of GJ? It does have a much higher spread: 3 pips. High volatility has a benefit...more opportunities for entering and exit, right?
Empty as water and soft as a facing wind mountain
Quoting luSan
I do EUR/USD because of 0.9 pip spread. What is the benefit of GJ? It does have a much higher spread: 3 pips. High volatility has a benefit...more opportunities for entering and exit, right?
Hi Lusan,

I agree with you dancing naked with EU (low spread..but mine is 3 )...slow dance.....easier to learn how the market sway.....I've been watching your thread......you're a fast learner......As for GJ (9 pips spread ) is not recommended for newbie like me......more suitable for seasoned traders....
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