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Technical Analysis Fallacy

  • #57,581
  • Jul 28, 2017 5:25am Jul 28, 2017 5:25am
Quoting alexandria
{quote} Have I got this right to what you are saying: if gbpusd short + usdcad short - trade gbpcad short as gbp is weakest and cad is strongest if gbpusd short + usdcad long to same amount then gbpcad is in range & dollar is strong long trade the dollar long if gbpusd short + gbpcad long - trade usdcad long as cad is weak and dollar is strongest We can use these relationships to our advantage Alex
Yes, that is what my interpretation of what fti is saying when he says using arbitrage as it core for trading.
  • #57,582
  • Jul 28, 2017 5:47am Jul 28, 2017 5:47am
Quoting CookieMonsta
{quote} Yes you got it right. The final output would be to consider the terrain of the final output pair as well.
This is how I see it although I have not yet tried to use em in rescue - so will have a look at this - thanks more tools to use.

If I was long gbpusd and it went strong against me short in m5 but h1 trend still in tact I would also consider trading the other way to minimise long bleeding - but with caution and ready to turn. I know FTI said that if it retraces > 50% it is trend weak and so he would kill it and wait for strong H&S or DB to go back long using killed guys as new scout nos. I have also seen an FTI example where he put in scout then level 1 and level 2 and then killed them all in deep retrace and later got back in same direction using level 3 and level 4.

I like RoK idea - I know Phil uses RoK to rescue in this way when it suits him.


Alex
check out the terrain - follow never lead
  • #57,583
  • Edited 6:31am Jul 28, 2017 5:55am | Edited 6:31am
Quoting alexandria
{quote} This is how I see it although I have not yet tried to use em in rescue - so will have a look at this - thanks more tools to use. If I was long gbpusd and it went strong against me short in m5 but h1 trend still in tact I would also consider trading the other way to minimise long bleeding - but with caution and ready to turn. I know FTI said that if it retraces > 50% it is trend weak and so he would kill it and wait for strong H&S or DB to go back long using killed guys as new scout nos. I have also seen an FTI example where he put in scout...
Yep, and Phil is right on it.

Alternative to simply cutting scout and L1 or 2 then reinstate them later with l3 or l4. If done correctly, you can profit on all legs too, while risk is kept low according to which currency is making its push.

In addition to this, you can choose terrain too.

That's where whipsaws help you out, if 2 pairs are neck and neck and the resultant pair is a whipsaw up and down, there would be a short timing window to profit from it as if it's a range bound trade.

This would be employing terrain and extemporaneous conditions.

One thing is I am certainly not at Fti's level to be able to reflex like that, and that is why I have a stronger preference for using ro3k for pair rotation personally since it feels more at home with me since my dancing is not up to par to reflex like fti, so it feels more relaxed to use ro3k for me. Sometimes I get confused by pa in 1 pair after deploying scout, I have an option to work into another pair.
  • #57,584
  • Jul 28, 2017 6:29am Jul 28, 2017 6:29am
Quoting CookieMonsta
{quote} Yep, and Phil is right on it. Alternative to simply cutting scout and L1 or 2 then reinstate them later with l3 or l4. If done correctly, you can profit on all legs too, while risk is kept low according to which currency is making its push.
Stopping the bleeding is great..like a relaxed approach

Alex
check out the terrain - follow never lead
  • #57,585
  • Jul 28, 2017 6:36am Jul 28, 2017 6:36am
Quoting alexandria
{quote} Stopping the bleeding is great..like a relaxed approach Alex
Actually, I believe there are more little nuggets of knowledge which fti has left regarding options in the thread even before I started reading the thread, which may allude to how he manage options positions.

Creation of synthetics on the fly is 1, needing short sword is another. Delta hedge technique. Adjusting delta on the fly. Zero cost hedging, zero cost collar is 1 form. Volatility assessment to see if overpaying for premium.


That's how I pieced the long put/call with short sword dancing mo together. There has been alot of clues, around, but the specific mo fti didn't go into but I believe even that is enough to get me started on options.
  • #57,586
  • Jul 28, 2017 6:47am Jul 28, 2017 6:47am
Quoting CookieMonsta
{quote} Actually, I believe there are more little nuggets of knowledge which fti has left regarding options in the thread even before I started reading the thread, which may allude to how he manage options positions. Creation of synthetics on the fly is 1, needing short sword is another. That's how I pieced the long put/call with short sword dancing mo together. There has been alot of clues, around, but the specific mo fti didn't go into but I believe even that is enough to get me started on options.
Too true - if I read the thread now it is so different to my earlier understandings. I think FTI () has given us lots of tools and we need to learn how to use them and when - think that is down to us - but not being rigid (not caged) and planning all the time based on new information as it comes online is the way for us to go - it is all about the book. Oh and we need to make sure we do not kill self in the process.

Alex
check out the terrain - follow never lead
  • #57,587
  • Jul 28, 2017 6:50am Jul 28, 2017 6:50am
Hi CookieMonsta

my friend you will never take out all the risk of taking positions in trading, best practice is to manage in the now within the means of your book.

long sword is for the bigger players, have done some myself you earn very little trying to remove the risks, it is designed that way, the big boys trade in £M's that is why a small % return for them works.

regards

Phil.
-be careful about what you allow to be put in your mind-
  • #57,588
  • Jul 28, 2017 6:53am Jul 28, 2017 6:53am
Quoting alexandria
{quote} Too true - if I read the thread now it is so different to my earlier understandings. I think FTI () has given us lots of tools and we need to learn how to use them and when - think that is down to us - but not being rigid (not caged) and planning all the time based on new information as it comes online is the way for us to go - it is all about the book. Oh and we need to make sure we do not kill self in the process. Alex

Accidents happen sometimes.

My way of mitigating this is splitting mo into mature mo vs experimental mo run on smaller books such that even if I lose the entire account it's only a small amount compared to the entire mature mo book.

Similar to how fti runs the bank.

He trades foreign caps for juniors to experiment, hence it's impossible for him to get into trouble

Noting ventured nothing gained.
  • #57,589
  • Jul 28, 2017 7:00am Jul 28, 2017 7:00am
Quoting phil13
Hi CookieMonsta my friend you will never take out all the risk of taking positions in trading, best practice is to manage in the now within the means of your book. long sword is for the bigger players, have done some myself you earn very little trying to remove the risks, it is designed that way, the big boys trade in M's that is why a small % return for them works. regards Phil.
Yep Phil, it's impossible to take out all risk, but I'm not taking out all risk.

There is alternative way, implement long sword only if situation is dire and need way to recover, otherwise using short sword is the most preferred way to go.

All mo when strung together is 1 fluid mo.
  • #57,590
  • Jul 28, 2017 7:09am Jul 28, 2017 7:09am
Hi CookieMonsta

i understand what you are saying on that MO, but from my own personal experience it just adds another layer to complicate things when they can be similarly managed in the spot market which does not have time decay and may even pay you interest on the trades.

i guess you and everyone else need to explore these things yourself to find out what way works best for you at the end of the day.

regards

Phil.
-be careful about what you allow to be put in your mind-
  • #57,591
  • Jul 28, 2017 7:38am Jul 28, 2017 7:38am
Quoting phil13
Hi CookieMonsta i understand what you are saying on that MO, but from my own personal experience it just adds another layer to complicate things when they can be similarly managed in the spot market which does not have time decay and may even pay you interest on the trades. i guess you and everyone else need to explore these things yourself to find out what way works best for you at the end of the day. regards Phil.
i know you mean well, but im willing to experiment more.

as i had a model from before, which i had showed here, it was posted here before.

it was a long put / long call model, which uses the dance to produce profits, with the maximum risk of premium paid. but the key was in the attack.

lets say im long 10lots put, then i long 2.5lot spot, and dance around the position, suppose i pay a premium of 40pips for a 1 day option, i need 40pips traded to recover the position, then to profit more, i would need to then trade up more, but it is also possible that instead, i spiral within spiral, say 1 1 1, so first spiral is 10lots, i trade for 40pips, but market trends, i enter 1 more spiral, 10 more lots, so long 20 to 10 puts, which makes it that i only need 20pips to recover for 20lots, and 13.3pips to recover if i put in 30 lots, but its all done with the attack mo, and spiral within spiral, but key is, in the initial spiral, if market has a sudden crash, and i am only long 5lots, i profit by default.

so in the case where it is i use 1 0.6 0.6 for the outer spiral, while the inner spiral i use a 1 1 2 or 1 1 2 3, i can finetune the exposure using the dance. so 10lots for first 1 spiral, then 6lots for 2nd spiral and 6lots for 3rd spiral. thats 22 lots, about 20pips to recover. and if current leg ATR is much higher, i am underpaying currently for premium until volatility contract, but if volatility contracts, i can try scalp 10pips to cover spread and flatten position out by selling the position away or wing into some kind of butterfly.

extending it further, managing attack and rescue on each position i have the option to simply take troopers out if i do not feel good about the position,like 1 1 2 3 is deployed, but pa is not doing well, i can take 1 2 3 out leaving scout 1, at be or so, and simply let things run.

in truth, its all fluid, to me, certain mo has certain properties i wish to utilize as it helps me, so i employ it strategically for its usage, but if other mo is more appropriate, i can always rotate to use that instead, in the example above, i am more long spot than options, which makes it more spot like than option like, so its more of its possible to have a tie inbetween mo rather than simply only options, or only spot, its in truth, possible to mix all together, and rotate into each mo if they are more appropriate for the situation.

so to me, all are but many tactics to manage out of given situations, all mo are simply 1 flexible mo, there is no barrier to mo.
  • #57,592
  • Jul 28, 2017 7:52am Jul 28, 2017 7:52am
Hi CookieMonsta

experimenting is good that is how we all learn what works and what does not.

i always run demo's to experiment with new ideas myself, it also has the benefit of keeping the trigger finger busy and satisfied.

regards

Phil.
-be careful about what you allow to be put in your mind-
  • #57,593
  • Jul 28, 2017 7:56am Jul 28, 2017 7:56am
Quoting phil13
Hi CookieMonsta experimenting is good that is how we all learn what works and what does not. i always run demo's to experiment with new ideas myself, it also has the benefit of keeping the trigger finger busy and satisfied. regards Phil.
thanks phil.

yep, the only way to learn what works for 1self is to experiment more, but also not to neglect the fact that, precisely because in experiments, there can be accidents, so due pre-caution must be taken, like as you said, demo account is a good way to do it while learning.
  • #57,594
  • Edited 11:09am Jul 28, 2017 8:17am | Edited 11:09am
just a small dance today, to illustrate ro3k rotation, since im going to stop for the day, the dance is a short one which lasted about 30mins, the i will call it a day for the entire week.

first 2 usdjpy was short trade, but pullback too strong hence taken out.

after that first deployed was long usdjpy, then i thought i was wrong, so i deploy long eurusd, then turns out i am long the exact top LOL.
so i long more usdjpy as attack and to rotate out i short some gbpusd. eurusd was leading the charge down, 20pips, usdjpy and gbpusd was lagging 10pips each, gbpusd down 10pips usdjpy up then pips, so all profits, and i guess i broke even on that, so i took out all usdjpy and gbpusd. and when time window for rescue for eurusd came in, i rescue spiral out 6units to rescue 4units, and took a small loss, overall profit for approx $9.

Just another blotter for the record, this time I really am against the trend.
Attached Image(s) (click to enlarge)
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  • #57,595
  • Jul 28, 2017 8:32am Jul 28, 2017 8:32am
Quoting CookieMonsta
just a small dance today, to illustrate ro3k rotation, since im going to stop for the day, the dance is a short one which lasted about 30mins, the i will call it a day for the entire week. first 2 usdjpy was short trade, but pullback too strong hence taken out. after that first deployed was long usdjpy, then i thought i was wrong, so i deploy long eurusd, then turns out i am long the exact top LOL. so i long more usdjpy as attack and to rotate out i short some gbpusd. eurusd was leading the charge down, 20pips, usdjpy and gbpusd was lagging 10pips...
Thanks will have a look if i can work out your timings. When you are wrong on 1 pair are you just hitting the other way on the appropriate pair?

Alex
check out the terrain - follow never lead
  • #57,596
  • Edited 9:28am Jul 28, 2017 8:37am | Edited 9:28am
Quoting alexandria
{quote} Thanks will have a look if i can work out your timings. When you are wrong on 1 pair are you just hitting the other way on the appropriate pair? Alex
yes, that is the idea, being able to narrow down specifically which currency is doing the pushing helps, as well as being able to id who is stronger than who, and who is lagging.

the timings are the done using hip and lops, the main thing i am rotating about is, direction, if it were the case where i am instead trading against sudden trend change, the rotation allows for 2 thing, mistiming as well as if wrong direction and cannot rescue, but book is BE, because other pair helped, all is well too.

the main different between mistiming vs wrong direction, is if its a retrace or reversal, sometimes, its hard to tell, until maybe after the fact.
  • #57,597
  • Jul 28, 2017 8:51am Jul 28, 2017 8:51am
In return for what I have received from my dearest mentor and friends at here, I will give back what I have discovered, the key lies in 3 kingdom, which fti did not go deeply, by looking at one pair, we will never know where it is heading, no matter which technical analysis are being used, the odds are likely to be 50-50. Instead If one use 3k, which consist most of the fx spot volume, one might be able to have an idea of the current movement.

Personally I use 7 knights (which include minors)- this will allow you to know know which support and resistance is heavy, which is likely to breach, the strength of current movement.

Besides, intermarket analysis of commodities, fixed income, stock, will allow you to have a bird eye view of what is fueling the movement in currency market. and what development in them is likely to have an effect in currency market.

Think deeply, seek and you shall find.

regards
  • #57,598
  • Jul 28, 2017 9:27am Jul 28, 2017 9:27am
Quoting CookieMonsta
{quote} yes, that is the idea, being able to narrow down specifically which currency is doing the pushing helps, as well as being able to id who is stronger than who, and who is lagging. the timings are the done using hip and lops, the main thing i am rotating about is, direction, if it were the case where i am instead trading against sudden trend change, the rotation allows for 2 thing, mistiming as well as if wrong direction and cannot rescue, but book is BE, because other pair helped, all is well too.
Thanks yes I can see the bleeding is stopped.

Alex
check out the terrain - follow never lead
  • #57,599
  • Jul 28, 2017 9:30am Jul 28, 2017 9:30am
Quoting GoldenFinger
In return for what I have received from my dearest mentor and friends at here, I will give back what I have discovered, the key lies in 3 kingdom, which fti did not go deeply, by looking at one pair, we will never know where it is heading, no matter which technical analysis are being used, the odds are likely to be 50-50. Instead If one use 3k, which consist most of the fx spot volume, one might be able to have an idea of the current movement. Personally I use 7 knights (which include minors)- this will allow you to know know which support and resistance...

Yes I watch 9 pairs. Sometimes I am good with RoK and sometimes I am not still perfecting - all the tools need careful handling.

Thanks.

Alex
check out the terrain - follow never lead
  • #57,600
  • Edited 3:26pm Jul 28, 2017 3:11pm | Edited 3:26pm
Hey All!

Pardon my interruption. I've started my 3rd or 4th read of this thread and am still in the process of putting it all together. Its funny how every time i re-read this thread i find new information and deeper understanding in posts ive read many times! i also want to thank you all for your contribution. although i am not participating in the conversation much ( as i am still learning) reading your posts are definitely helping me understand whats presented here. Anyways, Ive noticed that there were pdf's and other files given at the beginning of the thread that are no longer available. I am wondering if can acquire them from someone here who might have them? Or if they are even necessary as the information is already given in the thread?

Thanks
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