Technical Analysis Fallacy

there are many ways to use it, 1 of it is to train the mind to judge when is rescue good and when it is not.

Hello CookieMonsta,

Some sugar or salt to your reflection...
Well, when literally babysitting in order to respond when "chaos" starts. Then, what if your trading platform get frozen at the moment of the start? How would you respond being leveraged, overtrading (multiple positions with several pairs)? Do you have, e.g., reliable backup response then? It's not about a Tzunami scenario (recent GBP pairs 700 pips panic setup - open positions should stand for such a sudden spike), just some chaotic moves in all open positions.

E.g., used to get in such frozen scenarios however and fortunately just lightly leveraged...

One cannot be trained accordingly unless being in live battle.

Best regards,

Exnav

Hi, exnav, thanks for the heads up, I'm currently using the rotation live, the one where all 3 scouts are deployed is for demo training purpose, to hone and train response and thinking in real time.

But I do employ the rotation only when needed in order to be more capital efficient, if position is in trend there is really no point rotating to another pair, just a strong attack in and out would be good enough, but the case where rotation is needed, it would be done.

I will post a sample dance of today's dance where the rotation is used, this is done on a small account of $2000 live.

as for the 700pips panic setup, if it really hits, i will either lose my account with a margin call, or if i have a larger account i will probably be looking to implement contingency resting stop with options. this is the reason i want to employ options, and am researching into it.

also i will only at any one point in time allow for a maximum of 1% networth to be risk capital, as i assume that no matter what, even if i were right on the trend with the 700pip drop, the broker could go down and i am unable to withdraw the money.

this implies that i would trade with leverage, and allow broker to margin call me, but keeping money that was never meant to be speculated, to be kept not even with the broker, because of broker liquidity risk and such, hence even if i were to lose the entire account, it is no big deal to me, and also i will be regularly withdrawing money from the account so that even if i were hit, the profits are safe. the first goal of all new accounts is to trade the book to 2x and withdraw that 1x out and keep it as back up for mobilization in-case something like this happen, outside of the broker, in a savings account.

these are fail safes which are implemented outside of the trading mo, but are meant to handle extreme circumstances like these.

if you see the final segment where i was long eurusd, i was caught out in a bad position, market just rush downwards, i was lucky i short gbpusd and attacked into gbpusd and had kept risk low, and managed to rescue into eurusd and came out with the profits from the gbpusd short intact. hourly and daily is up on eurusd, but the sudden counter impulse just slammed strongly into it.

the goal is to make money, but if the situation is as dire, i have much doubts that anything can be done unless one is trading in a professional setting, where there is much more facilities and avenues for one to access. but if 1 is retail, best to just not even put money one cannot afford to lose inside, keep them away from the broker.

thats mainly why i have always kept my account small, being a good trader doesn't make me immune to brokerage failure. always better to hide silver bullets all over the place.

AOW mindset here, one secures oneself from defeat by making no mistakes. in this case, defeat is losing all of 1's net worth, the account should only be a small minuscule size to one's net worth, such that losing everything in the account doesnt impact him/her at all. also, when things get so dire, i doubt there is much 1 can do except just accept fate, and restart all over with a new account, so when in good times, always withdraw and save the money for a 2nd backup account.

these are things which can be done which are not part of the trading mo.

it is because i have answered all those questions you asked, that is why my pursuit for options, as well as the 3 legged animal.

All these safety failsafe must be considered before putting money at risk in the markets.

Hello CookieMonsta,

Thank you for comprehensive feedback. In fact, I'm doing something similar.
Differences. At the moment, as I wrote, I never engage with more than 2 pairs simultaneously. Not looking at the long sword yet.
Can see that you may go with (reach) leverage more than 1:20. Since January I switched not to exceed 1:7 of trading deposit even on the last resort rescue. Also careful on a total amount of open positions. However all this stuff is individual.
A couple of things to share: I may operate 2 -3 trading accounts, i.e., 2 - 3 trading platforms. As a technical back-up I may rely on a phone comms in case of frozen platform (surely, it's nothing new, and the phone line must be reliable as well).
The most important for me is YOU or Healthy Mindset. First question before any engagement and buttons pushing, I'm asking myself: is my mind indeed ready for a real battle (rescue/attack), am I focused and apt for nimble actions?
Wishing you success in your challenges and keeping AoW mindset!

Best regards, Exnav

P.S. About Focus. Once I was driving a car and stopped by a crosswalk letting a young family to pass. Suddenly got a hit at my back by another car. Police arrived and asked two youngsters at that car: "Why? Where were you looking at (when approaching the pedestrian crossing and having a car ahead)?" The youngster driver answered: "At beautiful girls around..."

Hey why do you not start up another thread to take this away from FTI thread.. tell us where you are and it can move away from here and FTI basics.

Just a thought.

Alex

Hello Alexandria,

Entirely agree about the FTI basics.
At least, IMHO, the Long Sword is something rather not for a modest FX retailer. Neither would be a high leverage nor MC considering (e.g., MC with one of my brokers is 150% of depo).
Still, there is some development spirit that CookieMonsta does. Maybe for more advanced or brave vs reckless ones. I think that traders should make their own deliberation in a transparent discussion. For newbies, it might mislead. As I can see, Phil has already tried to redirect this one from TAF to his journal.

I also should specify my "In fact, I'm doing something similar." That's more about my pulse feeling and necessity to respond in a fast and agile manner. As I described before, I could engage with a second/ different pair only if my original is already in green.

Somehow to ponder on the point where to go if evolving from the Basics... and where indeed it may finish eventually...


Best regards,
Exnav

Hi Alex, noted.

However I will not be starting any new thread unless I obtain more data further from live testing.

Because I am unwilling to stake more capital down, what I am currently doing is to bring my account up to an acceptable size, then split it in half, where 1 half of it is to be used for testing out the strategies live, the other half will continue trading the mo provided here. It will probably take some time.

Then when I am able to fully substantiate my theory on options then will I release it out.

However your suggestion will be duely noted.

Hi

Cool - heard anything re FTI recently?

Alex

Not really, my only source of contact with fti is from this thread so, I'm not sure about fti since he last replied on this thread

Hi all

Have been asked by priceaction1 to advise all his friends here that he has had a heart attack and is on rest.

Gosh I have heard of a few peeps recently who have gone through similar - wish all well.

Praying FTI doing well also.

Alex

Hope he recovers fast and rest well.

It's good to see peeps still actively sharing thoughts and experiences here but I noticed most topics discussed were very opinionated way off course from what my understanding this thread is all about. I sense misguided, misinterpretation or purely wrong mindset and MO - one will be dead when starts to massage own ego, market will show.

see picture below, all fti's MO-attack sequence shows - let picture speak for itself. to me is painting a good picture of the trenches, terrains and condition of market.

ok let's recap, this i copied eons ago from this thread and used as my reference:

-------------------
This is fti chat:
-------------------

Normally I want to start with a blankmind,
but when I have over-nights, I would continue from there.
Don't thinmk its a walk in the park, sometimes esp when markets get confused, it can get very scary.
esp whrn the book gets very large. and it keeps snowballing on you.

When I was a young dealer, they used to comment that I had balls of steel.
But mostly after the trades, I feel very balls broken ,
and used to recover by intense wiskey sessions.
If you ever sat with positions where your hand are shaking and you mind have to hold steady and steadfast ,
then maybe you may understand.

For new traders you may be going to the little boys room more often than necessary.
I have had experiences where new dealers, vomitted on the desk before.
I am the type of trainer that throws them into the deep ends.
Ultimately their books are mine, so if they get into trouble, I have to take over.

The trick is to hold very steadfast to the position allowing the snowball build on you,
the maxim is to be able to take the punches first,
once the rubber band swings back, whack them like theres no tomorrow,
within your capacity and keep taking profits along the way untill the frenzy slows off
then square down for the next attack.
Important thing is to know your limits, if you have been snooked out of step,
once you you get the chance bail out, log stock and barrel.
Try not to turn, if you do, you may become a pig.

Now if anyone goes bankrupt doing this don't take it out on me.
I m just trying to tell you how its done. Like the WWF ppl say" don't try this at home".
We train and train to be able to reflex like that and to hold with our limitations.
Remember its not easy.
Tailor it for yourself within your risk appitite and limits.
Don't kill yourself over it. Never risk more than10% of net worth on any battle.

Stop loss are for suckers (oops sitting ducks)
Sure it gives you peace of mind , thats because you're not watching after your babies,
but at what price?
Dance the dance.
If you cannot take the heat, stay out of the kitchen,
If there's a problem. Chances is either over leverage or over trading, or undercapitalise.
These mkts you are trading in, are killing fields,
and there's lots of calm on the surface,
in the undercurrents, theres lots of killing going on.
And I kid you not.

Don't for one moment hink that, just because you learned something fromme.
You can go out with your guns blazing.
There's lots more than meets the eyes. So be cautious.
Ultimately at the end of the day, its all YOU.

If your plan is to piranya bits and pieces from the market.
Remember, that Hansel and Gretel got themselves in a cage by picking uo bread crumps.
If you are picking up crumps, try not to take on the entire market swings.

here's another:

Jun 11, 2008 10:59am
fti
member

Member Since Nov 2007
4,091 Posts


Quote:
Originally Posted by Zoran
Ahh, I have been wondering about that. Reversing but I am not certain. If my rescue point is 100 or 200 pips away, do I wait, perhaps unload a bit and rescue or do I reverse?
Hi Zoran ,

I say again,
小艇怕風浪 , 大船難轉彎

( Small Boats are afraid of wind and waves turbulence, Big Ships have difficulty to to turn.)

When you are scout mode, turning is easy ,
when you are in rescue , turning leaves too much resources behind.
Turning is an option for sudden change of impulse,
and only when in scout mode or early level rescue.

when you are in rescue or attack mode , then you are committed,
for good or bad, in sickness or health, till d do you part.
therefore turning is no-longer an option.

Note that when you decide to turn.
you have to move to the next spiral within the spiral,
therefore you move to stage 2 of the preceeding stage.
This is very cap intensive protocol.
Quote:
Originally Posted by Zoran
You see, what confuses me is that bulls make money and so do bears, but pigs get slaughtered. Is this restricted to congestion areas or can we break the rule otherwise?

Maybe fti can clarify?
When in congested band , stay with the scout ,
either in bull or bear mode never both. Never be a pig.

When in trend mode, stay with trend, if scout mode turn on wind.
If committed, first rescue then after successful rescue, try to turn on wind.
(remember that by now it should mid trend levels [probably wave 2 or 3 ]therefore skew down the risk, to accommodate attack.) . Similarly Again never be a pig.

sigma & vega... explained... try to analyse fti's words here... a lot of hidden treasure... for you to decipher and find... and see attachment!

..............................................



fti
member

Member Since Nov 2007
4,086 Posts




Quote:
Originally Posted by ksl
Hope you are in soaring spirites fti.
When I am trading I have this voice inside me which some times stops me from taking a trade even if i think I should or asks me to wait, and if i dont heed this advice I find my self in trouble, is this the feel we talk about, also can i read more about market's sigma and Vega you had mentioned much earlier?

Thanks
Hi ksl,

Sorry with late reply, was caught in discussion with property brokers. Its nice time to sell some props in Sg, Market very hot.

The voice you are talking about, it can be a voice of reason and good sense , if you have good experience then its voice of reason. It all depends on you, it could also be greed,or fear if that was the predominant frame of mind.However that s all you got to work with, and with some safety parameters you have to work it. I am afraid no one can tell you exactly how to deal with it, it all depends on your mindset.

Sigma is speed of move, you can determine that from the gradient or slope of price movement. The Vega is the volitility or rate of gyration of the market and you can determine that from the range (or Average true range) of the bars. Both can be guesstimated from the chart and must be read in relative to its historical characteristics. If you want to understand this in empirical formulation, you will find the treatment from a study of how options are priced and how they impact the premium pricing of the underlying instrument. They are sometimes refered to as "the greeks" as that is how they are empirically written. I use it in analytical visual method, so I deal with the guesstimates of the changing environment more than the formulation. For me its the impact that I watch out for (whether its thrust is intact or if its stalling), and not in absolutes. A lot of experience and time spent on the pair helps in the ability to recognise "the change" that is happening. I usually analyst on in the USD perspective and then relating to 3 kingdoms to determine the carrier currency.

I believe that your understanding is good as you are asking very performance critical questions.

For your questions on Hip and Lops, well many analyst use it in many ways, You may have come across it in some technical studies, Wilders has some specific on it but I am not at liberty to publish it, due to my respect and agreement for his teachings. In some circles, it is known as "High Point" and "Low Point". Sorry that I cannot be more specific.

regards




Member Since Nov 2007
4,086 Posts




Quote:
Originally Posted by ksl
" Never do this, never ask for other's views neither make predictive assumptions.
ASSUME= makes an ASS of U and ME. "

Another life lesson we all can use... when we are by nature a meaning making machine. Thanks.

When you say "I try to recognise the compounded formatioms in the bar charts."
I have studied steve nison's book Beyond Candlesticks and patterns from http://thepatternsite.com/
is there any other source we can use because when you say some thing like
" if stall was in shape of "C"(saucer shaped) then rounding would suggest bottoming distribution.
However since distribution was in shape of "B" likely to be down."

I know that I am missing out a lot.
Thanks

ksl
Hi ksl,
What I highlighted is basic continuation and reversal characteristics of bar charts. This is bare basic, so any tech analyst can spot it on the big picture patterns,

Distributions are very hard to decipher, whether if its continuation or reversal. The trick is to use scout positions. From experience, I find that the pulse becomes clear if having positions, whereas without exposures it seems harder to feel the form thats developing. But of course the scout can be wrong, then you know what you must do.
The key is in the consistency, your scout can be consistently wrong or consistently right. It depends on your skill & experience in the markets. No matter if you are either, you can formulate good strategies to handle the market. And of course your MM helps a lot, in cases where you are mostly wrong.
Your exposure coupled with your attention on the volitility of the distribution will que you into the "form" readings.
It is very difficult to describe. Once you tune into it from practise, you can actually "feel" it.

regards

PS: Some of my trainees (at banks)had ever asked about having deployed scouts numerous times and still be on the wrong side of the impulse. In these instances , it is very clear that you will be against the major trend. So you must formulate careful exit strategies as you are not supposed to trade against the trend. Under these situations ,the exitings can become painful and labourous.

Rule of thumb is to risk enter positions quickly and when the feel is discovered, to exit the positions slowly with masterful strategems, for book preservation.

Romance Of 3 Kingdoms... i guess you all need to reread it, it's all about correlations of majors... and understand when pair is tearing... how to capitalize and profit from this... are you gonna check crosses in relative with the tearing pairs or you gonna wait for majors to do its thing/ move. these are nuggets and could be your AHA moments when understand fully. but must be coupled with nimbleness, strong mindset and a well tested MO.

knowledge of market structure is very important!

must discuss market structures, chart patterns, MO's and the DANCE regularly here


... alright girls and boys back to hibernation mode. good luck and happy pipping or pimping or whatever DANCE responsibly.

Thanks for quote - I constantly review his chart it is on my desktop - here is how I read above:

Trade with main trend - pullbacks are where you can barter for better price - if it just runs jump on board is best you can do - range scout it.

Price goes against you in weaker pullback < 100% : hold to main trend position until it turns back with strong move - I do know if trade pulls back >50% FTI will bail out as trend weak and reinstate later when/if trend comes back so he does not always hold the live positions open. Might depend how many he has in play. His reinstated positions will recover prior loss and make profits as he hits em hard. Attack here is VIP skill.

If impulse against you happens get out as you in wrong direction and will need to turn if new trend continues - he has said in thread if impulse hits you close down last attack level and flip at next level when get chance - not sure why he says close last attack level only - after all I guess we could get a strong push in opposite direction that still does not turn out to be new trend reversal. What do you think?

If you are in rescue/attack mode- he says you wedded and it will be painful to rescue- but is that true - can you not minimise bleeding by going with new trend and then rescue the big guns later - assuming you can cope with this financially/emotionally and have skills? Else your big guns will cause huge losses and better to kill dead in waters so why let them build to that? Is lesson not you need to trade low % of your funds so that you can turn even if you have attacked. Low % gives you more options and flexibility.

I think FTI is highly expert in top/bottom turns but harder for newbies skills and too many spend too long thinking well it must be over (or maybe just me) - said this before on thread. FTI also says if it goes long forever he will too. Patterns and RoK and news impact need much study.

Thanks again for nice slapping (and Jupiter).

If peeps doing sth different to thread we do need to take it away from here.

Alex

Hi Alex

for me, what is suggested in your post by our friend fti is the fact that we have many many options available to us during any trade we start (but we restrict ourselves by the way we have been taught to think ...or should i say copy), the break even of the overall trade is just one part of the bigger picture of opportunities the market and our entries into it that allows us to exploit this for an advantage if done in a tactical and strategic way, survival and profit is what matters not beating the pair we are trading, all forcing usually achieves is something breaking (and it will not be the market here). we need to open our minds up to the way things flow and learn many ways to manage them to try to give us an advantage of skewing risk towards our favour in the only time frame we experience... the now.

nothing sums it better for me than AOW...


ENERGY
1. Sun Tzu said: The control of a large force is the same principle as the control of a few men: it is merely a question of dividing up their numbers.
2. Fighting with a large army under your command is no wise different from fighting with a small one: it is merely a question of instituting signs and signals.
3. To ensure that your whole host may withstand the brunt of the enemys attack and remain unshaken this is effected by maneuvers direct and indirect.
4. That the impact of your army may be like a grind stone dashed against an eggthis is effected by the science of weak points and strong.
5. In all fighting, the direct method may be used for joining battle, but indirect methods will be needed in order to secure victory.
6. Indirect tactics, efficiently applied, are inexhaustible as Heaven and Earth, unending as the flow of rivers and streams; like the sun and moon, they end but to begin anew; like the four seasons, they pass away to return once more.
7. There are not more than five musical notes, yet the combinations of these five give rise to more melodies than can ever be heard.
8. There are not more than five primary colors (blue, yellow, red, white, and black), yet in combination they produce more hues than can ever been seen.
9. There are not more than five cardinal tastes (sour, acrid, salt, sweet, bitter), yet combinations of them yield more flavors than can ever be tasted.
10. In battle, there are not more than two methods of attackthe direct and the indirect; yet these two in combination give rise to an endless series of maneuvers.
11. The direct and the indirect lead on to each other in turn. It is like moving in a circleyou never come to an end. Who can exhaust the possibilities of their combination?
12. The onset of troops is like the rush of a torrent which will even roll stones along in its course.
13. The quality of decision is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.
14. Therefore the good fighter will be terrible in his onset, and prompt in his decision.
15. Energy may be likened to the bending of a crossbow; decision, to the releasing of a trigger.
16. Amid the turmoil and tumult of battle, there may be seeming disorder and yet no real disorder at all; amid confusion and chaos, your array may be without head or tail, yet it will be proof against defeat.
17. Simulated disorder postulates perfect discipline, simulated fear postulates courage; simulated weakness postulates strength.
18. Hiding order beneath the cloak of disorder is simply a question of subdivision; concealing courage under a show of timidity presupposes a fund of latent energy; masking strength with weakness is to be effected by tactical dispositions.
19. Thus one who is skilful at keeping the enemy on the move maintains deceitful appearances, according to which the enemy will act. He sacrifices something, that the enemy may snatch at it.
20. By holding out baits, he keeps him on the march; then with a body of picked men he lies in wait for him.
21. The clever combatant looks to the effect of combined energy, and does not require too much from individuals. Hence his ability to pick out the right men and utilize combined energy.
22. When he utilizes combined energy, his fighting men become as it were like unto rolling logs or stones. For it is the nature of a log or stone to remain motionless on level ground, and to move when on a slope; if four cornered, to come toast and still, but if round-shaped, to go rolling down.
23. Thus the energy developed by good fighting men is as the momentum of a round stone rolled down a mountain thousands of feet in height. So much on the subject of energy.

regards

Phil.

Reference to FTI's post No. 44369:
Best regards, Exnav

Hi

I have written up how I saw yesterday on eurusd as best as I can remember my thoughts dancing around news - not sure if it was well done or not - my attacking may be clumsy and often I am too early I feel : I saw bottoming in a potential buying zone and potential spring (I usually call springs abcdef (as FTI did in chart) or abc123). Of course it worked out fine.

Happy for any comments. Thank you.

Alex

Thank you my friend as always.

I have a copy of AOW against which I make notes but in truth much of it I could not see at first how to follow its guidelines - I am gonna revise it again as I can better see how to think about things thanks to you, Jupiter and Donsky and of course FTI. Cookie and Jacque challenge me to think about everything too. I used to think this thread was a bit nuts TBH but it is an amazing piece of work. My dad was a soldier and I have been well trained so easy for me to be rigid but I sure am brave (sometimes wrongly) and changing all that. I am learning about me who'd have thought it. I already know what my views on money are and these do come into trading... it's a fascinating journey.

I get what you are advising ... many skills to either help us or kill us.

Basic of this thread vital.

Alex