Technical Analysis Fallacy

remembering Fredde... how's it going my friend



everytime i hear this song, it reminded me of you... as Teresa is you special friend...

Just wanna compare notes,

what is your average pip gain per trade?
also average loss per trade?

win rate?
profit factor?
sharpe?

Guys, my problem is my scout goes in and becomes positive. However, I'm always too late for the trend with my main troops or get caught in a ranging market. How do you avoid that?

Seals & Crofts - We May Never Pass This Way Again [w/ lyrics]

Show an example and we can comment maybe.

Alex

193/5000
I think Ichimoku is a very powerful system for Forex trading and analysis
We must understand Ichimoku and use all its components.

In your opinion, will the specified level be touched in the image below?
We wait.
GBP/CAD

Hi V

i am good thanks hope things are well for you, good to see you here again my friend.

regards

Phil.

Hi hamidrtafx

sorry we do not use these type of indicators here to read price action, so i doubt you will get an answer... sorry but wrong thread to post this on for the answers you want.

regards

Phil.

I've been thinking about fti lately. Decided to drop by and dedicate this song to him.

I read carefully first 120 pages of thread and have some succes on demo, now I go to cent accaunt. Thanks all esp Exhav(he help me in russian, cause I have bad english), Cookie, alex and offcourse fti. Cookie advise me:
Do 1.6 rescue and 0.6 attack skews. But the attack sequences 0.3 0.18 0.11 its not that fti 112358. I think scout need to be the lesser one of attack sequences. I understand that no rules set in the stone and etc. Thank for thoughts and advise!

Hello Protuberanec,

Thank you for your appreciation. As I've just PMed you, there likely to be many different factors affecting the skew and sequences. If you have reached success on Demo, could it be comfortable trying the same on Cent - Live? Maybe start with sizes as safe as possible and increase them gradually when appropriately enough skilled and confident.

Have all luck and success trading Live.
Best regards, Exnav

lesson for today from FTI.....


Alex

Yes, Alex,

and to add some good/bad wood to fireplace, indeed, decisions will be of ours as per FTI's:
"Create your heaven or if you so wish, create your hell. The choice is yours.
God gave all good things. But along with the good it balances with the bad. The Yin and the Yang.Yin cannot exist without Yang.
So you choose, the ying yang of your life."
The same sort of concept was in the two wolfs story. Which one am I feeding right now?

And how one will regard and cope with the "human being errors".

Best wishes,
Exnav

Hi friends,

I have one question, if a trader edge in getting a trade right is <50%, or no edge, is there a point to rescue, will rescue save him from being a losing trader to a profitable trader ?

Looking from a different view, if a trader really have an edge, lets say about 55-60%, is there a point to implement rescue instead of taking loss on those losing trade knowing in the long run, he will still be profitable. Rescue might increase win rate, but it also reduce the winning on winning trade, so the net effect is the same.

The reason being I always want to incorporate rescue into my trading style, knowing it might be able to enhance the profitability, or else fti wont use rescue strategy, but I find it quite meaningless, as the edge remain the same with rescue or no rescue, a trader with no edge still lose, a trader with edge don't have to rescue, win rate just doesn't matter.

If rescue wont change the edge, why adopt rescue if it comes with several problem such as
1)where to rescue, when to tp in rescue trade, how much is the cost of trading (could be high if we tp for just several pips away from ave position cost)
2)if edge is more than 50%, this means price always go to our direction, we will have to chase the price, which give (higher position cost) lower profit than a full position at the beginning of price movement.

All this make me think full position with 1:1 RR and reasonable sl for current volatility is a much easier option compare to rescue? so why should we rescue?


Many THANKS

Regards

Hi,

You can't compare single entry mo with averaging mo like this, in that, the position cost average would have adjusted your probability higher.

Also the main idea of position averaging mo is to try to average yourself closer to the start of the swing leg with the major trend intact, and not to rescue against trend.

The missing piece you need to figure this out is this, volatility and timing of entries affects your risk reward ratio and accuracy rate.

Being able to rescue helps you to increase risk reward ratio in a changing volatility environment, example, market shifting from trend to range bound. Suppose you buy near a pullback, but price develops into a range, of volatility range of 50pips, you bought at 35pips. It's a 1 to 3ish risk reward, if you Reaver age once, at say 10 pips, your risk reward becomes 1 to 1 with respect to the trading range, now, there are 3 cases, price breaks out downwards against you, suppose you cut losses, and you lose 2x 25pips approx, if price ranges, you profit, 2x 25pips approx, and if price breaks upwards in your favour, you get alot more, and in such a case, with 1 level of Reaver age you can handle a shifting terrain and risk reward ratio and notice this, you are adjusting your risk reward ratio on the fly.

Ok now let's say, you do attack only, your risk reward ratio is alot higher, your accuracy rate is dependent on your ability to spot good opportunities. This is what Richard Dennis and gann is using to stretch their edge. The pyramiding function.

Next, is mm skew, if you do a 1 1 1 mm, say first scout then 2nd is either attack or rescue, then 3rd is purely attack, (very rigid way to do this) but for illustration, your risk profile and risk reward ratio is kept inline to a certain extend for a defined volatility range.

So this was the main idea behind the rescue and attack mo, otherwise when you can't readjust in a changing circumstances, you will become left to the mercy of the markets.

And also not everything should be rescued sometimes because of risk level, sometimes because of terrain, so therefore the daily limits, but the daily limits needs to be assessed by volatility.

That being said, how you deploy entries also matter as the timing of entries itself has a certain effect on risk reward ratio as well. For example, suppose you are a pullback entry guy, by buying or selling into dips or rallies, you do have certain timing advantage that increases your risk reward ratio with respect to current volatility.

However, what I have presented above you will find is very rigid, but it does illustrate certain effects of certain ideas have on money management and volatility and risk reward ratio. But for the full thing, the real lesson is still in the pages before.

1 more thing, the concept of the edge is a very illusive thing for single entry trades, mainly because it can just stop working altogether, main reason is because for expectancy there are 2 things, accuracy rate and risk reward ratio, either 1 stops working your edge is gone, ability to readjust is the only edge that works always.

For example, last time pullbacks are alot more common, especially news pullbacks, now, not so much, they just run up pop the stops and fizzle out, if you are single entry and you count only on this 1 edge, well it can still work, but I think with less human market makers around, and more hft, it's become alot harder to pull off such trades, but that also means that volatility is more bivariated, making sometimes terrain alot easier to spot?( My take)

finally, certain entries work better for certain mm skew, so that has to be taken into consideration as well.

just as an add on, that is why sometimes, when terrain is wrong, rescue is not invoked, as rescue may not be the correct strategy here, simply exiting and reviewing if on low skew may be alot better.

and partially also, with no ability to attack, doing rescue only you expose up your book to alot of risk but not enough reward to compensate, your risk reward ratio inverts on you alot, like maybe your risk reward ratio may now be 4x to 1x of reward, and you now need 80% accuracy to break even.

that being said, from experience, i tried what you mentioned before, using single entry, i eventually converged back to the mo provided by fti again, in an attempt to improve it, perhaps with minor variation in terms of sequence and skew, but nonetheless, the answer i always arrived at after independent research and attempting to improve my own single entry mo, is that i converged back to the mo here, single entry is simply not as powerful as whats provided here. it wasn't just simply a case where it was learning to do it from the lessons provided here but, more of a case of learning if i had done it in other ways i saw for myself why fti did it this way and why its more optimal, through direct experimentation on the markets.

the answer was always that, dancing the markets imply having ways to adjust to the markets which is always shifting, and some form of averaging is needed to achieve the ability to readjust, but then limits should also be enforced so that things do not get out of control that you lose the entire account, like the 3x average daily profits loss limits.

finally to answer your first question, rescue will not take a losing trader and make him a winning trader, all the time, or at least its meant to survive the most terrain, but not all. but then again, you have to ask, what kind of terrain are you rescuing in? if you are rescuing in a terrain which is either range bound or pullback but inline with major trend, then yes, but if you try to do it counter trend, then either your mm is really good or you are trading extremely small, otherwise odds are you may end up losing alot more if you tried that, because remember that fti never told us to fight the market but instead go with the flow?

so the answer really isn't rescue, but its terrain and the feel the trend aspect, its the dancing aspect.

then comes the really really niche question, when to know when you should or should not rescue? well that really depends on your experience and what your preferred mo is as well as capitalization. there is no one right answer, but more of simply experience, because terrain can shift from range mode to trend mode anytime, a decision made previously which may be right can be wrong now, because the markets changed.

also edge = expectancy = risk reward ratio * accuracy rate, but, these are what you see on paper the stats, volatility and terrain and the shifts in terrain and finally the decision making and the management and money management, all these affect the outcome which is the risk reward ratio and accuracy rate, which in turns affects the edge. so when you can re-average, rescue or attack, you can affect these variables to a certain extend and hence, that is why the mo is so powerful. then it no longer becomes a game of chance but a game of how well you can dance.

Hello HLAng,

May I refer and quote one of your FF posts one year ago: "Finally i manage to turn from USD1000 to USD10000 in one year time. I will create the groupchat and share the method how i trade and target 10% to 30% per month profit."

I'm rather weak at arithmetic or math since being unable to match your USD value with percentage results (highlighted in bold).

Best regards,
Exnav

BEWARE ....

anyone who wants to 'share' their golden goose and not just share it on a thread here openly, i can not see the need to do this in a private group unless their is some other motive, if you are giving something away does it matter where you give it?

this guy has spammed other threads with this message/offer too.

those who can trade just trade, those that can not often try to sell a trading system, BEWARE of advertisements like this please.

We must be thankful to Phil13 for a plain WARNING regarding HLAng on the TAF .

Since there's no feedback from HLAng to my reference of yesterday, here's to continue.

What "an old Cherokee" might as well be teaching his grandson about life:
”It is a terrible fight and it is between two wolves. One is evil–he is anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.”
So, how many character traits of the evil wolf are veiled under alias HLAng?

These sorts will sometimes claim themselves a businessman.
(in this case: the more gullible are lured, the more prosperious they are).