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Technical Analysis Fallacy

  • #57,681
  • Edited 6:32am Aug 16, 2017 5:02am | Edited 6:32am
Quoting Exnav
{quote} Hello Cookie, I have visited your "Journey" and would like to share my thoughts on your last post there on yesterday's trading. That would not be of a critical sense but if it were my dance, as I made it. Then, it recalls two interrelated thingies: a human being ability and adequate response in Focus. Am I able to be concentrated and focused, observant and nimble enough while engaging simultaneously in more than one or two currency pairs? Yesterday I made quite easy pips dancing with USD/JPY and honed counterattacks with GBP/USD. At this...
Hi exnav, thanks for the reply.

Mistakes are all part of the learning process, so as I commit mistakes, it's the markets showing me where I could improve more, and I will gladly accept it and improve my trading.

As for dancing the 3legged animal, it's because i can achieve more strategic advantage, than just dancing 1 pair, which is why I am very interested in the 3 legged animal.

"A general who has not fully mastered the art of extemporaneous responses may know the terrain like the back of his hand, but will not be able to exploit this to his full advantage."

The general who can impose his will in his opponent is the one who can gain a decisively advantage against his opponent, hence, the 3 legged animal, allows me such advantage, except that alot more skill and focus is needed.

It is the above quote which makes me very interested in the 3 legged animal, because of the way the 3 legged animal is quoted in relation to each other, the implication is that I can adjust to favourable terrain after the fact, which increases my adaptability any kind of market terrain as it unfolds, many folds, i can not just manage trades in different kinds of terrain, I can even choose the terrain I want to engage in, and setup traps to my advantage after being hit by market, that is alot of advantage which I want to incorporate into my mo.

The idea was learnt from the above AOW quote, which is why I think even if I were to have been considered to have diverged from the mo in this thread, I would still pursue this direction, as this is what my conclusion in studying the AOW led to.

Essentially I will want to have a lot of tricks in my bag to handle various situations the markets throw at me.

When you embark on your journey in Forex, you will inadvertantly have to ask yourself, what exactly are you looking for?

What I am looking for may not simply be profitability, but ability to appropriately handle and trade out of any kind of situation by sheer strategic thinking and ability to trade, so in a way I guess I'm not there yet, I have not reached my ideal way yet. Because everyday I seek to be better than yesterday.

No pain no gain my friend, it's the same as learning a rigid mo at the start, then encountering taf, essentially, isn't it a distraction to the original rigid mo? But what you get out of moving away from the rigid mo is definitely worth it.

Your very best is limited by yourself. The main core principles I do not diverge from are adaptability, and strategic thinking and money management and market structure.

But in any case, I have created the journal so as not to bring my own experiments into the taf thread, so if you are interested in carrying on, we can carry on in the journal.
  • #57,682
  • Aug 16, 2017 8:48am Aug 16, 2017 8:48am
Quoting CookieMonsta
{quote} "A general who has not fully mastered the art of extemporaneous responses may know the terrain like the back of his hand, but will not be able to exploit this to his full advantage." The general who can impose his will in his opponent is the one who can gain a decisively advantage against his opponent, hence, the 3 legged animal, allows me such advantage, except that alot more skill and focus is needed. But in any case, I have created the journal so as not to bring my own experiments into the taf thread, so if you are interested in carrying...
Hello CookieMonsta,

Thank you for inviting me to your Journal.

I might be wrong but still suppose that we may discuss TAF related general matters here. Also admitting my rigidity being within the TAF thread only.

Understanding your evolving pace and necessity, respecting your brave and honest Journey, I would like to specify that my post was not to criticise, rather to try the situation on myself. E.g., one may be able to effectively observe and act on 20 screens at once, that's where I'm of rigidity too - or my physical ability/ constraint at this stage.

To clarify more I would also like to refer to two posts, namely: FTI's 44235 regarding Individuality and GRO's 5980 concerning Commander and General within a Personality. You might like to reread them.

Best regards,
Exnav
Not to Advance is to Fall Back
  • #57,683
  • Aug 16, 2017 8:49am Aug 16, 2017 8:49am
Hi friends,

the 3 legged animal you guys are talking about is legging to cross when the currenct pair is not moving as expected? if that is the case, just be extremely cautious as I personally find tearing the hardest to trade.normally my MO is not to trade tearing if I am unaware what is developing for that pair, if fact I like to fade it especially after it hit stop zone, I find the best money are made when 7k are all in sync as everything that stand ahead will be crushed.

I am wondering did anyone monitor cross chart? IMHO cross chart provide details about stop zone especially when one pair is tearing and also info about what is the strongest and weakest currency. Does anyone find any other benefit besides these two? Many thanks

Regards
  • #57,684
  • Edited 10:10am Aug 16, 2017 9:17am | Edited 10:10am
Quoting Exnav
{quote} Hello CookieMonsta, Thank you for inviting me to your Journal. I might be wrong but still suppose that we may discuss TAF related general matters here. Also admitting my rigidity being within the TAF thread only. Understanding your evolving pace and necessity, respecting your brave and honest Journey, I would like to specify that my post was not to criticise, rather to try the situation on myself. E.g., one may be able to effectively observe and act on 20 screens at once, that's where I'm of rigidity too - or my physical ability/ constraint...
Hi exnav, understood.

Everyone will have to find their own niche, of which they can specialise in and call it their style, and that is their learning curve, unique to them.
  • #57,685
  • Edited 10:20am Aug 16, 2017 9:30am | Edited 10:20am
Quoting GoldenFinger
Hi friends, the 3 legged animal you guys are talking about is legging to cross when the currenct pair is not moving as expected? if that is the case, just be extremely cautious as I personally find tearing the hardest to trade.normally my MO is not to trade tearing if I am unaware what is developing for that pair, if fact I like to fade it especially after it hit stop zone, I find the best money are made when 7k are all in sync as everything that stand ahead will be crushed. I am wondering did anyone monitor cross chart? IMHO cross chart provide...
Hi golden finger, it's not simply legging into the cross.

That was the part I was wrong about initially in my first attempt to use it, what you have mentioned above is the 2 legged animal. Which fti had warned about. Because when you are wrong in 1 pair and you leg into the cross pair, you have not rotated away the currency which is moving against you.

What sparked this thought was, I realized and was corrected by fti, that interbank does not buy EUR sell USD, they shift from holding USD to holding EUR, that is dealing with the physical. Fti had mentioned in one of the post before. The implication was, looking at eurusd if you are long, and it seems like EUR is devaluing against the dollar, so the pair eurusd is moving down, but gbpusd does not seem to be moving, and seems like it's strength night be holding, and if that's the case, market makers might move eurgbp instead, and rotate from eurusd and eurgbp into gbpusd, and make it into a tight range instead. In this case, if you legged into the eurgbp you still did not rotate away EUR which is the problem currency.

That is why the 3 legged animal is eurusd gbpusd and eurgbp.

And when I understood that, I understood that the original way I viewed ro3k is faulty.

It brought me deeper insight into ro3k that USD is only at the core driving things, in the past, as it was the biggest, hence everyone was following it, but these days, USD is so dormant, that it felt like it's the other majors moving, that now the crosses feels like they have nicer flow. If that's the case, it would also account for the fact that if USD stop becoming the world reserve currency, then the ro3k relationship with USD as the driver will have to be changed as we know it, say for example if instead, the Chinese yuan came to become the world reserve currency instead.

Ro3k at its core is the relationship of each currency with each other, that's all, how it moves is decided by world politics as well as their trade partnership, and the country's policy and situation.

It's from this that I figured out the 3legged animal. The triangular arbitrage relationship of the 2 major and it's cross pair, given that brokers will quite consistently such that you can't arbitrage them. Hence their holding the triangular arbitrage relation ship will force all 3 pairs to have a defined relationship dictated by the 3 pairs movement.

If you looked at 2014 to 2016, the Chinese market crash had crashed the Chinese yuan, and because the Chinese government bought alot of us treasuries, the yuan became very correlated to USD, and when it crashes, USD would be affected in some way too, depending on how investors act, and when there is a major outflow to safer havens from the Chinese yuan, other currencies would all reshuffle too, that's partly why when you see all 7 majors line up for a push, it's usually something big, and rescues against that are suicidal. Because in order to move all 7 pairs together, the amount of money has to be huge, very huge in fact, and everyone is scuttling that's why the strength when ro3k lines is so strong.
  • #57,686
  • Aug 16, 2017 10:51pm Aug 16, 2017 10:51pm
Quoting CookieMonsta
An example usage of the 3 legged mo, is for example, I was long gbpusd, and I think market is retracing, but hourly leg range is 100pips, 1 straight-line up and now it's retracing, or so I think, abit too much in my opinion but I am still vested long, but price is still moving against me with little to no rebound, very persistent move, no chance for rescue at all. At the same time, usdcad seems to be bottoming, and gbpcad seems to be in a pullback, so I could buy into usdcad, create a synthetic pair, gbpcad, driver seems to be usd and cad seems...
Hi cookie,

I find you have a lots of interesting thoughts, it is good as we can discuss our findings and see what works or not

ok I try to understand what you mean by 3 legged animal, from the example u posted, when you long GBP/USD, it drop against you and u see usd/cad bottoming, this indicate that cad is the strongest, usd second, and gbp the weakest. You see a potentially support in u/c and try to long while also holding your g/u, this mean you expect usd gain strength, but since you are also long g/u, long u/c which effectively long g/c, for you to come out in profit, gbp must also be stronger than cad.

besides, after long u/c is entered, g/u might go back in our way, which have a drag down effect on u/c and if they go in sync, we will have loss in long u/c
if we were to gain in this two position mean pound strong and usd strong, effectively the strength in pound is actually not that strong as there is only one side pound strength.

the odds of winning are 1/3 against us, from my understanding not only 3 legged anaimal require us to time the tearing right, but also the relative strength of the tearing, which make position management even harder to manage, however that is only my humble opinion as I might not fully understand how to utilize it

regards
  • #57,687
  • Edited 12:45am Aug 17, 2017 12:34am | Edited 12:45am
Quoting GoldenFinger
{quote} Hi cookie, I find you have a lots of interesting thoughts, it is good as we can discuss our findings and see what works or not ok I try to understand what you mean by 3 legged animal, from the example u posted, when you long GBP/USD, it drop against you and u see usd/cad bottoming, this indicate that cad is the strongest, usd second, and gbp the weakest. You see a potentially support in u/c and try to long while also holding your g/u, this mean you expect usd gain strength, but since you are also long g/u, long u/c which effectively long...
the odds of winning are 1/3 against us, from my understanding not only 3 legged anaimal require us to time the tearing right, but also the relative strength of the tearing, which make position management even harder to manage, however that is only my humble opinion as I might not fully understand how to utilize it

Hi goldenfinger,

What in essence you described above is correct, and is not limited to that, that the nature of the spread can change for example after hitting stops, mm may change stance again.

However, you do not have to constraint yourself to legging from gbpusd and usdcad to produce gbpcad, you can move from gbpusd and gbpcad to produce usdcad as well. If GBP is the one with the impulse thrust, you can see if usdcad is coiling, and use gbpcad to spread into usdcad, as the rescue in a coiling market may be slightly more effective, then unwind you position down and see if gbpusd is salvageable.

The key to this, is in the terrain of the 3 pairs, how 1 pair leads, the 2nd one responds and the 3rd is being pushed around. The one that has the nicest leg is usually the leader, the one who is barb wired or low volatility is usually the 3rd pair.

Then after awhile when the leaders move is over, the other pairs take over as mm try to trade out of the acquired position of the synthetic pair.

In truth, the mo to capitalize on it, is the same rescue and attack mo, the read of ro3k is the basic read of ro3k as introduced by fti, only difference here is I'm not simply reading ro3k to get a feel of terrain, but actively using their relationship to change my portfolios nature and skewness on which currency holdings. It is but a natural conclusion and result of studying ro3k plus the dance.
  • #57,688
  • Aug 17, 2017 4:33am Aug 17, 2017 4:33am
Yes knowing where stops are for each pair so that we can estimate which pair is leading and lagging can be helpful to time the attack on lagging pair while our initial position get caught.

However, isn't cut and enter on other pair though USD pair a better option given the lwoer cost?
For example, I long g/u however the market drop against me, but I see u/c coiling which mean someone is buying cad, as supposely U/C should go up if gbp are used to buy usd. so I cross out to short u/c by selling gbp/cad. so effectively now I have short USD/CAD through cross legging and close my gbp position, but isn't it better if I directly close my GBP/USD and enter short USD/CAD, this way I dont't have to pay higher spread on GBP/CAD?

the fact that I cross out to short usd/cad mean I expect tearing of CAD strength and GBP weakness, however what I don't understand is when the downmove happen on GBP/USD, the dealer cross hedge his long gbp to long cad, this way he is hoping to trigger sell stops on usd/cad so that it would have a prop up effect on GBP/USD. After usd/cad hit sell stop, the dealer close his profitable USD/cad buy selling cad and buying back his USD, this way he is no longer caught short of USD. The buying of USD will then push up U/C after dealer finish hedging, and every pair now go in line on strong USD again.

What I don't understand is why short usd/cad, especially when G/U went down, possibly indicate USD strength. because isn't what fti mentioned about pair moving in turn based mean some pair might lag in the thrust but nevertheless they are still in the same direction, as oppose to tearing?
If moving in turn based means they move in the same direction albeit different timing, isn't it better to long usd/cad and cut G/U given that gbp/usd has already provided us an early signal of possible usd strength

thanks

regards
  • #57,689
  • Edited 9:49am Aug 17, 2017 6:21am | Edited 9:49am
Quoting GoldenFinger
Yes knowing where stops are for each pair so that we can estimate which pair is leading and lagging can be helpful to time the attack on lagging pair while our initial position get caught. However, isn't cut and enter on other pair though USD pair a better option given the lwoer cost? For example, I long g/u however the market drop against me, but I see u/c coiling which mean someone is buying cad, as supposely U/C should go up if gbp are used to buy usd. so I cross out to short u/c by selling gbp/cad. so effectively now I have short USD/CAD through...
Sometimes, all 3 pairs are really just stop hunting in all positions, and because of that, non of them have follow through, and if you simply cut loss, there is really no guarantee that just cutting loss will ensure the next trade is going to be successful and recover everything. Consider this, if you are long and trend suddenly counter impulse short, you cut and flip, only for price to counter impulse up again, which is a assassin formation, what happens? You are wrong twice, and each cut and flip you expand your mm by rescue skew, once you hit the breaking point of 30% book account size, you are left with 1 last move, failing which you are better off just taking losses and resetting your book.

Maybe it's just me who can't seem to grasp the cut and flip, part of the reason I want to use the 3 pairs relationship.

When dealers cross hedge, is not because they simply want trigger stops, is markets force them take position, they are mandated by law to take other side of trade, part of their market making job. So when it's not feasible to quickly exit said adverse selection portfolio, then rotating it out is a next best solution, because, crosses are quoted from majors, but we do not have to restructure ourselves only to the major pairs because of the above mentioned pit fall, legging into a wrong spread, say gbpusd, you assumed USD is driver, while GBP is the real driver, you will be legging into a 2 legged animal, which is what fti warned about, do you have to sense exactly which currency is doing the pushing, you can't assume USD is the one always leading, sometimes it's the other currencies and not USD.

As for the last paragraph, there is an assumption inside which leighsww made, which is automatically assuming USD will strengthen or devalue, sometimes the movement are really only because the dormant pairs are stop hunting, that's all. In this case, you have to factor what if, GBP is dropping, USD and cad is dormant and all other kinds of scenarios. For this particular scenario, since, gbpusd is dropping, gbpcad might be dropping too, at the same volatility, just turn based, and usdcad is not down, but barbwire, but you are choosing a barbwire terrain to rescue into, doesn't mean usdcad will automatically go up or down, it could be usdcad just thrust up and collapse or thrust down and swings back up, what your thinking process there would indicate some minor form of rigidity and crystal balling.

As fti mentioned earlier on, anything with predictive mindset automatically will fail, because it will lead to a married bias and bog your mind to be able to perform properly.

In fact, what you have mentioned, check out eurgbp recently, it's been trending, if you automatically assumed USD strength or weakness, and spreaded it out that way, your book will be burnt. Because it's tearing at a very fast rate, you essentially legged it wrongly, EUR is strongly trending up Vs GBP, and GBP strongly trending down, but eurusd is lacking in trend, feels double zigzag, then what happens if you long GBPusd and rotate out using short eurusd, you are short eurgbp, against a daily trend in eurgbp, that still does not help you and may in fact force you to be unable to rescue because you committed troopers in a bad rotation. So on the outset, you have to consider not just the pair you will be using to spread out, you have to consider the resultant pairs trend and terrain as well, if not you will encounter the problem which fti has said about legging into the 2 legged animal, a very dead book. That is why it's a 3 legged animal, just considering the other major pair only will be a 2 legged animal.

https://www.forexfactory.com/showthr...03#post7705203

Just to sum up and reiterate, the reason why short usdcad, is because this is just one possibility of how terrain on all 3 pairs may manifest, you have to consider all 3 pairs terrain as well as the shifts in terrain as one goes from dormant to active and active to dormant.

if you are interested, we can carry the conversation to my trading journal so as not to detract the trade here.

and if you are further interested in how it can be capitalized, the situation you talked about above regarding gbpusd and usdcad and gbpcad,
i guess it was lucky i encountered it, today, except eurjpy is coiling, but all 3 pairs are in zig zag formation during my stay in the markets, from New York 8.30am to 10.30am, with fairly deep pullbacks, and is where this mo would maximize its full potential in. essentially profiting on both legs of eurusd and usdjpy as the swing strongly in both directions.

https://www.forexfactory.com/showthr...8#post10201178
  • #57,690
  • Aug 17, 2017 10:23am Aug 17, 2017 10:23am
Quoting CookieMonsta
{quote} Maybe it's just me who can't seem to grasp the cut and flip, part of the reason I want to use the 3 pairs relationship. As fti mentioned earlier on, anything with predictive mindset automatically will fail, because it will lead to a married bias and bog your mind to be able to perform properly.
Hello CookieMonsta,

As I see it, for me a small leverage retailer, good days are of a pips number swinging or trending volatility (more than 60 - 70 is just fine). From this point, EUR/USD, USD/JPY and USD/CAD have recently performed high class. I don't merry them but dance with a lady or two if they let me do so. E.g., started the day with EUR/USD, then switched to USD/JPY and finished with USD/CAD. I'm grateful for all 3 separate dances.

I should agree with you that your so called 3 legged arbitrage is just a way to execute an attack or rescue. For me the simpliest and easiest dance as I have described briefly before. Personally, I don't have any issues with your way (nice reading) and it actually does not distract me from my simple path.

Also undestand that cut and flip requires specific skills. But whatever our ways to protect our books and make consistent profits, they are individual and should be welcome unless they might delude other readers and yourself.

Finally, if I want to discuss your "complicated" attack and rescue dance with a strange 3 legged animal (naturally and usually ladies dance on one and two; animals having 4 may be doing well on 2, 3 and 4), I would come to your thread using your yesterday's invitation.

And congratulations with your good trade!

Best regards,
Exnav
Not to Advance is to Fall Back
  • #57,691
  • Edited 10:26pm Aug 17, 2017 7:03pm | Edited 10:26pm
Quoting Exnav
{quote} Hello CookieMonsta, As I see it, for me a small leverage retailer, good days are of a pips number swinging or trending volatility (more than 60 - 70 is just fine). From this point, EUR/USD, USD/JPY and USD/CAD have recently performed high class. I don't merry them but dance with a lady or two if they let me do so. E.g., started the day with EUR/USD, then switched to USD/JPY and finished with USD/CAD. I'm grateful for all 3 separate dances. I should agree with you that your so called 3 legged arbitrage is just a way to execute an attack or...
Hi exnav,

Thanks.

The 3 legged animal was primarily done to ease into different volatility scenarios, with 1 pair, if volatility expands, you have to be able to handle the volatility, with 3 pairs you can choose volatility, with the spreading, you can even come out ahead after the spread, and work with foreign caps through the spreads after you legged out of the profitable spread. So in this case, its for rescue and attack plus mitigating the volatility aspect.

Yes, personally I find that the cut and flip is very difficult to pull off because I can't seem to grasp the timing, and cutting and flipping works against the law of motion, which makes it difficult to handle, it's usually only feasible to do it near the start of the trend, but with volatility these days, it's 1 strong stick 10 to 20 pips sometimes 40, and because of it, there may be very little time to react, because of this, being able to choose terrain may mitigate this problem altogether, by employing the 3legged animal.

It's partly for the above reasons, and that my dance is usually only 4 hours per day, which I decided I have to evolve stronger to trade in a way to surpass such limitations.

It's usually good practise to not let the p&l get too far in the red for effective salvaging, and possibly turn the situation into a good chance to profit from. This is simply an alternative.
  • #57,692
  • Aug 17, 2017 11:47pm Aug 17, 2017 11:47pm
Hi,

Yes, every trader will have different mindset on how to tackle the market, at the end coming out of the battle alive is the bottom line.
We can always learn something new from the best teacher, the market.

Just some quote to share with you all from reminiscences of a stock operator, there is some hidden gem if one fully understand what it means

“I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up.”

The best warrior know where to choose his terrain to fight, and secure himself against defeat

One can obtain a strategic advantage if he can use the different timing of move, tearing and ultilise it for optimal entry.

Good trading to all

regards
  • #57,693
  • Aug 18, 2017 2:23am Aug 18, 2017 2:23am
Hello CookieMonsta and GoldenFinger,

As always, an interesting reading of your posts. I would just like to add a corresponding note by FTI from JAN 2012 (on a simple and EASY trading):

Quote
oh
not so difficult.
cut away dead in waters .
hang on to that which profitable, and not overstay.
Follow flow to best of ability.
if pressure unsurmountable on books,then square out and stand aside.
stay within limit risk tolerance and pain threshold.

Best regards,
Exnav
Not to Advance is to Fall Back
  • #57,694
  • Aug 18, 2017 9:27am Aug 18, 2017 9:27am
Quoting CookieMonsta
{quote}" Essentially I will want to have a lot of tricks in my bag to handle various situations the markets throw at me."


So on the outset, you have to consider not just the pair you will be using to spread out, you have to consider the resultant pairs trend and terrain as well, if not you will encounter the problem which fti has said about legging into the 2 legged animal, a very dead book. That is why it's a 3 legged animal, just considering the other major pair only will be a 2 legged animal. https://www.forexfactory.com/showthr...03#post7705203...

That first quote you said is spot on. The more tools you have in your arsenal the more prepared you will be to handle certain situations. it may not be useful every time...a screwdriver isnt all that useful when you need to saw some wood, but you'll be glad you had it when you need to put in some screws. The trick is to have many tools to handle whatever situation you encounter. So maybe taking time to learn to flip and develop that tool would be useful as well. In my experience, when the only tool you have is a hammer, everything looks like a nail... If you get what i am sayin. Just my two cents , i am still a newbie at this methodology.

I for one am benefiting from this conversation about the 3 legged animal. It's already given me more insight and understanding the 3k and market maker operations. Although it might be going away from the basics into more complex territory, i think it is still within the scope of this thread...

about the 2 legged animal... when Fti says never leg into a cross does he mean if you are trading EURUSD never to leg into Eur/jpy without trading USDJPY as well. (Thus creating the 3 legged animal) but could you just leg into another one of the majors (ie usdjpy, gpdusd usdcad) or is that still creating a two legged animal?
  • #57,695
  • Edited 12:22pm Aug 18, 2017 11:30am | Edited 12:22pm
Quoting dbrown101
{quote} That first quote you said is spot on. The more tools you have in your arsenal the more prepared you will be to handle certain situations. it may not be useful every time...a screwdriver isnt all that useful when you need to saw some wood, but you'll be glad you had it when you need to put in some screws. The trick is to have many tools to handle whatever situation you encounter. So maybe taking time to learn to flip and develop that tool would be useful as well. In my experience, when the only tool you have is a hammer, everything looks...
Hi dbrown101,

you will find that by executing the 3 legged animal, you would at some point perhaps also have executed indirectly the cut and flip, or you can simply just implement a lock so as not to lose money while the markets are running against you.

and i would agree with you that learning to cut and flip is definitely a good idea, im just saying i tried and could not do it, in fact i did realize very early on that the cut and flip needs to be learnt but i have blown 1-2 small accounts trying to do it, that i simply am tired of blowing accounts just trying to learn that, but the 3 legged animal saved me many times, so i am very much inclined to use it in-place of the cut and flip, in fact, after mastering it to a at least proficient level, even counter trend trades i can make it out with small profits.

if you are long eurusd and long usdjpy, you are long eurjpy, so if you short eurjpy 2x, you have locked eurjpy 1x and short eurjpy 1x isn't that part of cutting and flipping? except you used more cap to do it.

that is partially why i think the 3 legged animal works well for my style and mo, it just seems to be 2nd nature to me.

but after all, to each his/her own.

the 3 legged animal is a derivative of ro3k, so im pretty sure it is inline with this thread, and the base idea is not just ro3k but specifically mm and player profiling, know thyself and know thy enemy, AoW. its just that the 3 legged animal's relationship can be used not just for reading PA but for active management as seen by how market makers move the markets, that is the market makers used it against me so many times that i learnt by observing their strategies to develop counter strategies. its the basis of adapting to an enemy or opponent which keeps changing, and you keep adapting. perhaps why fti said, market moved, so he reacted, i simply reacted to ro3k and the 3 legged animal.

that is why trading strategies and trading styles must be natural to oneself, because that is you deep down, there is only 1 true underlying mode of thinking, which is, "he made this move, how can i counter, if it is feasible and within my means?"

regarding the 2 legged animal, what it means is if you are long eurusd, don't assume USD is the driver, and go long usdjpy, then you are assuming/predicting eurjpy will go up, when it tears down, both tank, as its eur tanking or jpy strengthening or both, you lose on both ends. that is the actual dance for the 3 legged animal must consider eurusd usdjpy and eurjpy, these 3 pairs' terrain all around, then from their terrain, form and momentum and direction, decide how to spread properly, that is why you might end up with 2 positions but in essence you are still dancing 3 pairs as you are rotating into the 3rd pair, then when the 3rd resultant pair works (possibly a pullback or a range trade) you can instead rescue into it and convert it into an attack. and not assuming which currency is automatically the driver. notice how fti says USD bull and USD bear, i was wondering, what if USD is neutral? then who is bull or bear? has to either be EUR or JPY right?

anyway you have leg into other majors if you prefer, as per looking at ro3k volatility of all pairs, just that, since i focus more on eurusd, usdjpy, gbpusd and usdcad, i tend to only look at the crosses for these pairs, and only a cursory glance of audusd and nzdusd and usdchf to see if USD is syncing up strongly.

the thing i guess, because some of the skills like cut and flip is not simply for me to use, can't seem to be able to use it well, it still does not change the fact that, if i instead implement the cut loss, sometimes the losses can be fairly large, especially in the event of a tsunami wave type event, and sometimes you may not know a position is dead in the water, until it is actually dead in the waters already. and sometimes, if you simply cut only, the assassin formation will kill you very fast especially if each time you flip, you increase your rescue skew level. you see, i figured with this mo, where the critical points lie, among all the transformations, the one that kills the fastest is, the broadening formation, and the sudden counter impulse formation, these 2 you will not know till you are very dead in the waters, these 2 market forms are the real killers, everything i can trade out of, these 2 kills the strongest, and see where the dichotomy is at? on the outset when price breaks a new high or low, it can either continue strongly or reverse strongly, but you will not know till after the fact, and that also means you need to withstand the volatility, for price to keep pushing against you, if thats the case, since i know the 3 legged animal moves in a defined form by the fact that market makers will enforce the relationship among the 2 majors and its cross, doesn't that mean that, if i track them properly, i have the ability to ease the volatility my positions are exposed to until the picture clears up.

in fact, nobody will on purpose go trade against the markets, its because they believe the markets might reverse or continue that is why they put on that trade, so as to make money off of it, because they don't have the crystal ball too, and sometimes, the markets can get very confusing, swinging wildly up and down because both bulls and bears are attempting to pick each other off, in such cases a you can get very confused by the price action, and if you get too strong a rescue or attack without alternative, that makes you a sitting duck without a stop. should you cut or hold on because its a valid rescue? only time will tell, and as price unfolds, it also means more exposure and possibly more losses, the question then is, will you continue tolerating the loss and when the opening comes you go for the rescue and come out, or will you prefer to attempt to ease and balance your book by other means as well.

you see, cutting and flipping will only work when volatility is very very strong and you are near the start of the move, and the timing window is fairly small to pull off, precisely because you work against the law of motion, and have also incurred losses, and because you work against the law of motion, and require the volatility to pull off the cut and flip, the timing window is exceedingly small to properly time it well.
  • #57,696
  • Aug 18, 2017 1:27pm Aug 18, 2017 1:27pm
Quoting CookieMonsta
{quote} that is partially why i think the 3 legged animal works well for my style and mo, it just seems to be 2nd nature to me. but after all, to each his/her own.
that is why trading strategies and trading styles must be natural to oneself, because that is you deep down, there is only 1 true underlying mode of thinking, which is, "he made this move, how can i counter, if it is feasible and within my means?"

I think this is whats most important. in the end its all YOU and what works for YOU to maintain a profitable book.


" its just that the 3 legged animal's relationship can be used not just for reading PA but for active management as seen by how market makers move the markets, that is the market makers used it against me so many times that i learnt by observing their strategies to develop counter strategies."

This conversation over the past couple of pages has opened doors for me in understanding how the market makers move and the options i have to counter. Its given me a deeper understanding of 3ks in general.

In reguards to your comments about volatility. I think this is where the advantage lies in 3 legged animal. just a few hours ago i was caught in that bull impulse move on usd/jpy. had i flipped where i wouldve wanted to i would been stuck due to decreasing volitility. the Eur/usd was stuck in tight range and Gbpusd moved only 30 pips or so while the Eurjpy jumped about 110. Im not sure i understand it deep enough to start trading the 3 legged animal but i see how the extra volatility in eurjpy couldve been used as an advantage. either way, i was able to rescue and now am squared for the day. Still a lot to think about over the weekend... Thanks for bringing this topic to light
  • #57,697
  • Aug 18, 2017 11:44pm Aug 18, 2017 11:44pm
Quoting dbrown101
{quote} I think this is whats most important. in the end its all YOU and what works for YOU to maintain a profitable book. " its just that the 3 legged animal's relationship can be used not just for reading PA but for active management as seen by how market makers move the markets, that is the market makers used it against me so many times that i learnt by observing their strategies to develop counter strategies." This conversation over the past couple of pages has opened doors for me in understanding how the market makers move and the options i...
well this is a derivative part of ro3k, but its a little indirect and takes awhile to understand, but some of the post which fti have mentioned which are quite subtle and takes abit of deeper understanding and thinking to get it, hinted at this too i believe.
  • #57,698
  • Edited 2:11am Aug 19, 2017 1:49am | Edited 2:11am
[quote=Exnav;10203570]I would just like to add a corresponding note by FTI from JAN 2012 (on a simple and EASY trading): {quote} /quote]

Hello FTI Followers Friends,

Another thought to continue my previous post and elaborate on the point of experimenting and advance development, as I can see it vis-a-vis the Basics:

Trader may get a kind frustrated with a series of failures, or, being too slow and less profitable than expected or needed. Then, it may ignite a scorpion to make something innovative, different, to decode secrets believed within lines or behind.

The FTI's Baisics, IMHO: Ants Work, It Must Take Time - Skills Come with Experience. So, one tries to get a desirable profit (for Living) in 100 m or 1 mile instead of 4 miles. Mostly due to abusing the Leverage Point and having not crafted enough. Where and when did FTI state using Leverage more than 1:10 ("Any trading more than 7x is already very dangerous")? Hence, there is an ultimate search for alternative MO's.

I do remember, e.g., once FTI tried and hit BIG even without scout with a tight stop-loss, and his SL was immediately trigerred (he was much distressed and subjectively accused his Broker, later it was proved by other charts that the Market had indeed been there).

Then, what would be your pain threshold if you are, e.g., leveraged 1:40, how many pips counter move would make you Very nervous? Would you remain cool in a healthy mindset?

Why not polish your skills, internalize being light weighted? Probably because of the need to jump and succeed, get the profit as soon as possible.

I also recall once again, 6 years ago - was advised by "an experienced trader representing brokerage" to settle all my newbie problems (my account was 3K Euro that time) - "why not hit 5 Lots?" he consulted me...

The Basics should be upgraded naturally with time - experience.

Having expressed the above mentioned, I might not reject the possibility of talanted and lucky traders who are able to survive long term engaging His Mighty Leverage. And there maybe a lot of different successful trading strategies, although they seem to be beyond the FTI basics.

As far as I'm concerned, on Friday morning missed several opportunities with EUR/USD, put SL with USD/CAD due to necessity to leave the screen. When I was back, naturally SL was triggered. So, by my 14.00 h. I should have been frustrated...
By 16.00 GMT my diet was filled after two engagements: USD/CAD (CounterAttack total size Leverage 1:2.5), GBP/USD (Light CounterAttack without Leverage).

Have a nice week-end,

Best regards, Exnav

P.S. Edit: to specify on that USD/CAD SL - it was put with a Scout position being in green, so just to protect on BE+, I did not know when I'm back from my trip.
Not to Advance is to Fall Back
  • #57,699
  • Aug 19, 2017 2:38am Aug 19, 2017 2:38am
the market evolves and learns as we do... another fti post from our friend.


Hello my friends.

I like ask if anyone can please provide me some assistance.

The situation is that seem the liquidity of the euro markets have reached a point where is all dried up.
Markets are trading in manipulated vacuum situation.
so the spread we seeing from our feeds is unreal and computer simulated.
In reality since the start of 2013 i had noticed this change. because of ill health, i not so on the ball. so didn't put energy to decifering the percularity.
But yesterdays trading day confirmed my suspicions and i need find a way filter my charts.

What is happening is that because liquidity is all dried up.
The eurp in in fact quoting in vacuum of 10 pips spreads.
I suspect is higher than that.
From the way the market shades is seems between the quoted spreads the market makers are quoting per lever shift 10 pips+.
So if i am watch the pulse of the euro on piptits, i will actually be misled all the time by my chart.
And the strategies used for the trades will be all out of sync in relates to the real market situation, in terms of money management as well as timing.

In echange traded and regulated trading environments, public price feeds are actually traded prices without price infractions. The thing about OTC is that there is no way determined if prices are actually traded. I have to rely on the market made prices to gauge market prices, which i found in the electronic world is a farce.

Furthermore because the liquidity is not there, 5 min time scales is already a mistake.
This can easily be remedied by my going to 15 mins time scale, would like go incrementally to 10 but technology is in their hands and my MT4 charting potato not give me liberty have 10 mins time scales.

The problem i urgently need help with to try remedy out of their cage, is to have a filter that filters my price feeds to 10 pips scaling. which means that i want my charts show scaling of prices to 3 decimal places instead of 5.
If you can understand , euro is quoted as 1.31234 by the feed controlled by the masters of the universe.
I want my MT$ read them in 1.312 so that i can have realistic charts to analyse and strategise to.
The way they locking us to their virtual reality will be making me read rubbish technicals.
because like monday, what happened was the market maker suckered me into thinking they actually have bids given , by just shading the virtual spreads down , when in fact the only peeps hitting the bids was myself.
After getting critical mass business they shaded 2 times in 8 to 10 pips increments in nano seconds upwards and i found my attacks all dead in waters.

I am tinkering with the MT4 charts to try to get the charts to do what i would like have to analyse properly find the way deal with the liquidity problem the market is in. But found that MT4 is a locked down as it is ,so as i cannot read real analysis from it.
Also brought out my old metastocks charting program see if i can use that to chart the fx feed. but this gonna need take some time for me readjust to as has been a long time since i used that program.Also is very particular about what type of price feeds it is linked to.

Any assistance or thoughts help , is appreciated, my friends.

Thanks.

regards

if i unable find the solution to the charting problem ,i will downgrade euros to exotic currency class, so that i not get trapped in the electronic scam.
Is sad see that the vibrant liquid USD/DMK world currency had been degraded to whoring levels by electronic trappings. Also sad to see that a supposedly world class charting platform like MT4 is so locked to only what they allow users to see and use.

my paticipation in this electronic farce will be suspended again until i can find real solutions to the problems.
I don't see survival possibilities carrying knives in gun battles, when even the sharpness of the knives is determined by the gunners.

https://www.forexfactory.com/showthr...95#post6627595
-be careful about what you allow to be put in your mind-
  • #57,700
  • Aug 19, 2017 9:21am Aug 19, 2017 9:21am
Quoting phil13
The way they locking us to their virtual reality will be making me read rubbish technicals. After getting critical mass business they shaded 2 times in 8 to 10 pips increments in nano seconds upwards and i found my attacks all dead in waters. I don't see survival possibilities carrying knives in gun battles, when even the sharpness of the knives is determined by the gunners.
Hello Phil,

Thank you for bringing this to our attention. That's true for those who are exactly of FTI style, to be aware of: when you are very nimble in killing attacks (...as there is no tomorrow...) and not overstaying. For me, it's almost impossible to jump into a rocket flying or vibrating bus, just wait until brokers let me in...
I feel that there is something more in the text you posted.

Best regards,
Exnav
Not to Advance is to Fall Back
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