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Technical Analysis Fallacy

  • #58,521
  • May 12, 2019 6:44am May 12, 2019 6:44am
@ftirecovers

chief, i am trading in my country's commodity future markets right now. i was introduced many years by a commodity futures trader. he is actually following a mean reverting system without knowing the name.

so fundamentally if $40 is a support for US Oil and if price is trading below that and if hints of an uptrend show up, he goes long. keeps building equal lot size position all the way down and tries scalping as much as possible. however, if volatility shoots up, his positions go into deep waters with this method, so he takes away some of the exposure by booking loss.

he is managing many people's money this way by offering a fixed ROI of 5% per month. All the remaining is his commission. i have lost contact with him for many years before and have recently entrusted with my borrowed capital (lower interest) to him. part of the capital is kept in my trading account and i saw him doing this MO with all contracts were closed in green. Just as there was about 2-3 days for payout, all the capital was lost, due to counter volatility. so in my case and many other case, as a gentleman agreement he needs to replenish the capital if lost and pay interest as well. Assuming he spent all his hard earned money and he is a bankrupt, he has to finance the account (by pumping in margin money to keep leveraged positions) from financial institutions. for me this looks dangerous and i have asked him to return the capital.

myself have got a decent return of 6% per month on average by trading on a demo account with the methods learnt from you. due to my country restrictions i cannot trade FOREX, so i am sticking to my country commodity exchange market. can you please provide your valuable inputs on adjustments to make, precautions to take and pitfalls in this kind of markets
  • #58,522
  • May 12, 2019 7:06am May 12, 2019 7:06am
Quoting ftirecovers
Thanks to Twee. Regards
let us contact twee then...

Alex
check out the terrain - follow never lead
  • #58,523
  • May 12, 2019 7:07am May 12, 2019 7:07am
Quoting pannet1
{quote} if his words were read again and again, you know the words. thats the power of memory humans possess. its forming some opinions, likes ...etc {quote} chief all your thoughts just seems to be right. opinions may differ but yours are the truth. i have so much emotions ... i just wanted to write more and more ... but unable to convey anything. i remain silent. You dont need anything now, but if you are my friend ... i would advice you this ... if you are my master ... then this is my offering to your feet. please spare a few minutes for these...
Thank You very wise thoughts.

I am friend.
I not master, your master should be God.

Regards
  • #58,524
  • May 12, 2019 7:22am May 12, 2019 7:22am
Quoting alexandria
{quote} .. do not discuss peeps personals... what you on? Alex
Attached Image


oh,

don't know which personals you are referring to. you all got mood swings like forex during news. now you started ignoring me. loosing all peeps who helped me. i dont know .... feels like .... without chief this place is very unfriendly at many times. i guess that is the price one need to pay for learning. makes me sad more and more/

will hang around till chief is visiting here.
  • #58,525
  • May 12, 2019 7:29am May 12, 2019 7:29am
Quoting pannet1
@ftirecovers chief, i am trading in my country's commodity future markets right now. i was introduced many years by a commodity futures trader. he is actually following a mean reverting system without knowing the name. so fundamentally if $40 is a support for US Oil and if price is trading below that and if hints of an uptrend show up, he goes long. keeps building equal lot size position all the way down and tries scalping as much as possible. however, if volatility shoots up, his positions go into deep waters with this method, so he takes away...

understood.

When implimenting what you had learned demoing forex. The difference will be this. Its kind of a sword. In forex your exposures are whatever position sizes you want to risk and you trade that size. In exchange traded derivatives, your exposure will be to the number of (fixed sized) contracts you trades.

In forex you can trade without leverage by trading up to your pot of capital. In exchange traded contracts you are leveraged to about 95% to 75% of contracted size depending on the exchanges. Mostly exchanges collect 5% margining. Higher for exceptionally volitile instruments.

The sword is this.
If you trade leveraged, either in forex or derivative contracts. You are given 24 hrs to top up margins when margin call occurs. Failing which your positions are liquidated by broker. It takes swift payment systems 2 working days move funds. So if your broker not accepts cash you will be unable to fund your shortfall margin requirements. That's how many newbies gets forced liquidated.

The pros of leverage is that it can give very high ROI ( If You Are Market accurate constantly. ) I not met superman yet. Only in comics.

Regards
  • #58,526
  • May 12, 2019 7:31am May 12, 2019 7:31am
Hi all, I was invited to check in on the thread as things were going a bit honky dory. It seems Twee and fti have things under control here so all I will do is wish you all many happy and profitable dances.
Hope isn't a viable investment vehicle.
  • #58,527
  • May 12, 2019 7:40am May 12, 2019 7:40am
Quoting DutchAngel
Hi all, I was invited to check in on the thread as things were going a bit honky dory. It seems Twee and fti have things under control here so all I will do is wish you all many happy and profitable dances.
Hey Angel,
Thanks. Happy Yoga.

Regards
  • #58,528
  • May 12, 2019 7:49am May 12, 2019 7:49am
Quoting ftirecovers
{quote} Hey Angel, Thanks. Happy Yoga. Regards
Thanks, my friend. Be gentle with the newbies.
Hope isn't a viable investment vehicle.
  • #58,529
  • May 12, 2019 7:56am May 12, 2019 7:56am
Quoting DutchAngel
{quote} Thanks, my friend. Be gentle with the newbies.


Regards
  • #58,530
  • May 12, 2019 8:01am May 12, 2019 8:01am
Quoting ftirecovers
{quote} understood. When implimenting what you had learned demoing forex. The difference will be this. Its kind of a sword. In forex your exposures are whatever position sizes you want to risk and you trade that size. In exchange traded derivatives, your exposure will be to the number of (fixed sized) contracts you trades. In forex you can trade without leverage by trading up to your pot of capital. In exchange traded contracts you are leveraged to about 95% to 75% of contracted size depending on the exchanges. Mostly exchanges collect 5%...
Thanks Chief

Got that LEVERAGE can kill me.

The leverage situation is this here:
overnight at 10X
intraday at 100X

these days, the trading account is tied with bank so we can just transfer money in seconds like shopping in amazon. The got new vice now. There is circuit limits but during to extreme volatility, circuits keeps breaking without giving opportunity to book loss in loosing positions. once the vola settles we are in 7th circuit or so .... and those who are over leveraged ... gets killed.

Also sub brokers managing many accounts are offered time to pay margin by their brokers. this system allows both brokers and their sub brokers get into a viscous circle and you know what happens in the end.

thanks once again chief.
  • #58,531
  • Edited 8:26am May 12, 2019 8:15am | Edited 8:26am
Quoting pannet1
{quote} Thanks Chief Got that LEVERAGE can kill me. The leverage situation is this here: overnight at 10X intraday at 100X these days, the trading account is tied with bank so we can just transfer money in seconds like shopping in amazon. The got new vice now. There is circuit limits but during to extreme volatility, circuits keeps breaking without giving opportunity to book loss in loosing positions. once the vola settles we are in 7th circuit or so .... and those who are over leveraged ... gets killed. Also sub brokers managing many accounts...
Ahhh, I see, the banks are trying help secure the broking business by linking depo account.

For those who are managing their risk prudently is a good banking service.

For rack less risk profiles, there is danger of over exposure and high risk to financial management.

This reasons why I still pay for goods and services by legal tender method than electronic payments. Control of out flows(spending). Hahaha I am a bad consumer. Never over consumes. I am enemy of debt traps. Banks hates me, that's why I used to manage treasuries. Hahahahaha

Regards

Inserted Video
  • #58,532
  • May 12, 2019 8:45am May 12, 2019 8:45am
@ftirecovers

another thing i wanted to know was if my attack is sharp.

my attack sequence is like ..... 1 (scout), 1 (attack), 2, 4, 8 ... so on ...and i act like a coward. this means that if price should always trade above my long entries, other wise i bail out ... leaving just the scout (1x) on the table. this way the attack is never a problem, because it works on the foraged foreign capital. if my attack with more than 1X is to be rescued ,,,, lets say 2x (scout), then my rescue had to be twice the normal exposure (of 12 lots) .... 2x3=6, 2x8=16 .. making a total of 24 lots instead of normal 12 lots rescue.

is this approach wrong?
  • #58,533
  • May 12, 2019 9:04am May 12, 2019 9:04am
Quoting ftirecovers
{quote} Ahhh, I see, the banks are trying help secure the broking business by linking depo account. For those who are managing their risk prudently is a good banking service. For rack less risk profiles, there is danger of over exposure and high risk to financial management. This reasons why I still pay for goods and services by legal tender method than electronic payments. Control of out flows(spending). Hahaha I am a bad consumer. Never over consumes. I am enemy of debt traps. Banks hates me, that's why I used to manage treasuries. Hahahahaha...
Confessions of an Economic Hit Man, by John Perkins, is great stuff! One has only to be careful not to be turned into some kind of "left wing freak" (because, obviously, left wing has no solution to anything). There is nothing wrong with capitalism. Greed and lack of ethics are the BIG problems.
  • #58,534
  • May 12, 2019 9:29am May 12, 2019 9:29am
Quoting pannet1
@ftirecovers another thing i wanted to know was if my attack is sharp. my attack sequence is like ..... 1 (scout), 1 (attack), 2, 4, 8 ... so on ...and i act like a coward. this means that if price should always trade above my long entries, other wise i bail out ... leaving just the scout (1x) on the table. this way the attack is never a problem, because it works on the foraged foreign capital. if my attack with more than 1X is to be rescued ,,,, lets say 2x (scout), then my rescue had to be twice the normal exposure (of 12 lots) .... 2x3=6, 2x8=16...
Pannet1,
There is no wrong skews or correct skews.
I taught peeps start 1, 1, 1, 1, to learn reaveraging of position cost as a way benchmark your risk from you start point. For those who gained experience managing they will ultimately start from different point benchmarks. I cannot teach you that.
You have to determine your risk tolerence from your book performance as well as your trade temperament. One sign that you can begin at higher scout point is consistency of profitability. If you can demonstrate profitability consistence you should have a better risk capital picture allowing you test for better ROI. Not before.
The most stable skew is a fibo skew.

Regards
  • #58,535
  • May 12, 2019 9:32am May 12, 2019 9:32am
Quoting Jairo
{quote} Confessions of an Economic Hit Man, by John Perkins, is great stuff! One has only to be careful not to be turned into some kind of "left wing freak" (because, obviously, left wing has no solution to anything). There is nothing wrong with capitalism. Greed and lack of ethics are the BIG problems.
Hello Jairo my friend.
Long time no see.
Keeping well?

Regards
  • #58,536
  • May 12, 2019 9:46am May 12, 2019 9:46am
Quoting pannet1
@ftirecovers another thing i wanted to know was if my attack is sharp. my attack sequence is like ..... 1 (scout), 1 (attack), 2, 4, 8 ... so on ...and i act like a coward. this means that if price should always trade above my long entries, other wise i bail out ... leaving just the scout (1x) on the table. this way the attack is never a problem, because it works on the foraged foreign capital. if my attack with more than 1X is to be rescued ,,,, lets say 2x (scout), then my rescue had to be twice the normal exposure (of 12 lots) .... 2x3=6, 2x8=16...
+
The skewing that is taught is way to rescue bad starts.
But if you skewed up to wave 3 elliot count chances is you trading against trend. There is no way to reskew to rescue because you point man is in the wrong direction.

So you don't skew every trade blind.
You need to know where the market is based on the chart positions.

Rescues skews are not the most profitable trades.
Attacks skews are.
Together they work to keep your book always in + or flat at worst.
Regards
  • #58,537
  • May 12, 2019 10:41am May 12, 2019 10:41am
Quoting ftirecovers
{quote} + The skewing that is taught is way to rescue bad starts. But if you skewed up to wave 3 elliot count chances is you trading against trend. There is no way to reskew to rescue because you point man is in the wrong direction. So you don't skew every trade blind. You need to know where the market is based on the chart positions. Rescues skews are not the most profitable trades. Attacks skews are. Together they work to keep your book always in + or flat at worst. Regards
True so maestro...
We have to be focused on reading the tape on a proper way. If some one have too much rescue operations, that could be the sign that we are reading the tape on a incorrect way..
My approach is always "don't let them run too far away from you" and exit on break even or some small loss...
...great that you are here maestro FTI...
..enjoy
  • #58,538
  • Edited 1:42pm May 12, 2019 12:13pm | Edited 1:42pm
Angel,

Due to some security settings settings on my huawei, I can see messages but my friends cannot see my responds. Also I am unable update the messanger due to security lock. So I put it here so that all can know. you too if you cannot read my reply. Hahahaha It's me.

I was told there was BIG problem at my FF thread. So I came take a look. But I am not at my best.
Just be the best I can be, under the circumstances.

Thanks for checking.
I am blessed have so many friends care.
Thanks all.

Esp Alex, she has been so stressed standing there all alone defending the thread. :hugs:

Inserted Video

Regards
  • #58,539
  • May 12, 2019 12:34pm May 12, 2019 12:34pm
Anyway, it's not a Big problem.

Is just that cookie's learned how to use the BS model create hedge and arbitrage trading.
That is the commercial treasury specialist stuff I never wanted bring to the thread because no one in retail has the cap required to do that kinda MO. It's long sword.


Confusion begun when hedgers starts arguing with off balance sheet traders(speculators). They on different pages. Different MO with different ROI portfolios. So problem of ego begins. Personality clashes.

Hahahahaha, world.

Regards
  • #58,540
  • May 12, 2019 12:46pm May 12, 2019 12:46pm
Quoting ftirecovers
..................Due to some security settings settings on my huawei,

FTI ... got call from the Angels......who else to ask? Really you?

Big dustup on thread --- much trust gone and many peeps left ..... too hard without proper moderation. But you no need worry your health more important.


Alex
check out the terrain - follow never lead
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