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Technical Analysis Fallacy

  • #201
  • Dec 3, 2007 5:49pm Dec 3, 2007 5:49pm
Quoting leighsww
... so I guess having only ONE losing call, that puts your wins to losses at a very good ratio (unless that loss caused you to lose much of the other profits you had earned).

Well, if it keeps up that way for you, I guess what can anybody say to that. Again, for me, it's all about consistent profitability, so if you're achieving that, all the power to you!
I am trying to make the point that I can make a few good calls that generate some nice profit but that one slap in the face can hurt! It seems that when my confidence gets boosted, I somehow manage to lose sight of the ball and these marketmakers come back to take something back. I can go for months with little problem but a slap seems to be inevitable! It seems that my self-destuctive nature kicks in for some reason, and that normally happens when my call is wrong and my confidence is high!

Don't be too distracted by the number of pips in the call. My analysis is based on the monthly charts so the moves tend to be big if you're prepared to be patient.
  • #202
  • Dec 3, 2007 6:02pm Dec 3, 2007 6:02pm
Quoting Zoran
I am trying to make the point that I can make a few good calls that generate some nice profit but that one slap in the face can hurt! It seems that when my confidence gets boosted, I somehow manage to lose sight of the ball and these marketmakers come back to take something back. I can go for months with little problem but a slap seems to be inevitable! It seems that my self-destuctive nature kicks in for some reason, and that normally happens when my call is wrong and my confidence is high!

Don't be too distracted by the number of pips in the call. My analysis is based on the monthly charts so the moves tend to be big if you're prepared to be patient.
Ah.

So, can you explain which call was the one that got you and how you read which indicators that was the reason for the call?

This may help in determining if you could have possibly called all the winning trades anyway (by just reading the price action without all the clothing), and also may have been able to prevent the bad call, as well.
  • #203
  • Dec 3, 2007 6:28pm Dec 3, 2007 6:28pm
Quoting leighsww
Ah.

So, can you explain which call was the one that got you and how you read which indicators that was the reason for the call?

This may help in determining if you could have possibly called all the winning trades anyway (by just reading the price action without all the clothing), and also may have been able to prevent the bad call, as well.
Check the chart and my post below.

http://www.forexfactory.com/showthre...37#post1709437
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  • #204
  • Edited 7:28pm Dec 3, 2007 7:10pm | Edited 7:28pm
Quoting fti
Hi MickD,

Is TA a fallacy?
No not by itself and if you keep to the mainstream analysis.
but you can create the fallacy if you approach it wrongly.

The word
Technical = implys Charting
Analysis = imply the need to use brains to think and to reason.

If you use TA meaning line crosses, breakout trading , predictive analysis. black boxes, and ahost more ??????????????
Sorry, for calling a spade , a spade.

Think about it.
whether it is technical or otherwise , the fact that you have to think, deems it analysis.
A trend follower is called a trend rider.
What should we call line followers? surely not Technical ANALYST.
I guess for me thats "the Fallacy"

regards
I can relate to this. I've been in the computer business for over 30 years, and it took 15 years before I had a job title with the word analyst in it. If someone is just following directions, or their whole way of doing things is easily documented for others to follow, that person isn't an analyst in my view of things. A technician is more like it.

In trading I would tend to see things about the same, with most people doing technical trading as opposed to being technical analysts. Exactly where I would draw the line on this, I'm not sure yet. Maybe that judgment is still evolving with time. But for now I see myself as a technical trader, and people like Zoran who are doing creative things with charts that's mostly beyond my own experience, I view as technical analysts.
  • #205
  • Dec 3, 2007 7:26pm Dec 3, 2007 7:26pm
Quoting Pips_Cruiser
... If someone is just following directions, or their whole way of doing things is easily documented for others to follow, that person isn't an analyst in my view of things. A technician is more like it.
Ahh, ok, this makes more sense now...couldn't see the trees for the woods

thanks Pips_Cruiser.
  • #206
  • Dec 3, 2007 7:27pm Dec 3, 2007 7:27pm
The way I see it: Technicians trade, Analysts analyze.

At least in this business.
  • #207
  • Dec 3, 2007 7:31pm Dec 3, 2007 7:31pm
Quoting SunTrader
The way I see it: Technicians trade, Analysts analyze.

At least in this business.

So does a "technical analyst" analise and trade?
  • #208
  • Dec 3, 2007 7:38pm Dec 3, 2007 7:38pm
Quoting pipmaster
So does a "technical analyst" analise and trade?
OK you didn't get my point so I will restate it clearer.

Technicians (By this I mean someone who uses TA) analyse, then trade. Analysts just analyse.

I use TA but I don't care if someone calls me a technician or not. Above all I am a trader. That is the main objective after all. And everything in life takes analysis. Aren't we all analysts then? I don't care.
  • #209
  • Dec 3, 2007 7:45pm Dec 3, 2007 7:45pm
Quoting SunTrader
OK you didn't get my point so I will restate it clearer.

Technicians (By this I mean someone who uses TA) analyse, then trade. Analysts just analyse.

I use TA but I don't care if someone calls me a technician or not. Above all I am a trader. That is the main objective after all. And everything in life takes analysis. Aren't we all analysts then? I don't care.
In that case I haven't really met that many "analysts". I assume they are the media type who just report and don't trade?
  • #210
  • Dec 3, 2007 7:56pm Dec 3, 2007 7:56pm
>>Aren't we all analysts then?

I'd say yes but there are more than one type of analyst, one who trades using charts to provide their entry and trading strategy before they enter the trade for the whole trade, they then enter and sit and watch in hope that it all goes to plan, for some it will if their whole strategy is well defined for them and their risk tolerance etc, etc see them through the trade.

Another type of analyst is one who also reads historical data but is also analyzing what is happening right now, they still have a strategy but is not written in stone for the whole trade, they have strategies for enhancing their positions when all goes well and strategies for quick exits if the current analysis tells them otherwise.

One hopes, the other dances

I may be splitting hairs here but I do think it's worth analyzing (sorry, couldn't help it)
  • #211
  • Dec 3, 2007 8:01pm Dec 3, 2007 8:01pm
Hi ALL,
On the development of Zoran, presenting a case study. I shall adopt his chart as exhibit for dissection.So I will be digresing back to the analytics before goning on into the MM.

On the issue of title, to me its of zero importance, maybe as conversation and debate headers.
This is because because any analyst in position that has no exposure, TO ME,
is a wasting piece of furniture taking up critical space.
Would do well as decorative material of no consiquence to book value, at best.

regards
  • #212
  • Edited 8:47pm Dec 3, 2007 8:09pm | Edited 8:47pm
Quoting Zoran
I am expecting a retracement now (not a reversal) so I am long for it
Quoting Zoran
First target and stops set to BE+1 at 232.8. Chart attached.
So, am I correct that your entry point was LONG at 232.79 by your above statements? And this was done on Nov. 9, correct (or rather, the arrow in my chart since your timezone may be different than mine for your charts)?

If so, if I were just reading price action on naked charts, I would not have gotten into that trade because there was no clear sign of the downside move being over. Also, a double-top had formed.

Quoting Zoran
I will expect a bounce somewhere within that bottom grey shaded area
Was the anticipated bounce due to your trendline and fib from your chart?

This may be a good example of how reading the price action may have avoided a call, such as this. Maybe a lesson in patience, as well, no? lol (okay, be gentle when you slap me, lol : ), since it looks like you entered far too early (before there was any real confirmation of an upward move).

Anyway, that's my opinion on this (if I am reading your chart and posts/explanations correctly - cuz it was rather confusing to me with so much going on :, and my not knowing exactly how to read/comprehend all the methods you are using).
.
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  • #213
  • Dec 3, 2007 8:26pm Dec 3, 2007 8:26pm
Quoting fti
Ones mindset must be "determination",
the resolve to right analysis and right timing within the financial capabilities.
( detailed explaination in the Art of War amd MM section later )
When a soildier,enters battle zones, its a "kill or be killed" zone.,
therefore the senses must be harden.
The facalties must be sharp, and the mind determined.

For interbank dealers, there is little time to think,
most all the time he's being hit either on the bid or the offer,
therefore his only thought process is,
Do I want this position?
There is only one possible answer, yes or no in accordance to his resolve,
and he has to reflex accordingly.
He may hesitate a moment to feel the market sentiments,but soonest he has to decide.

... more
Not sure one could relate Battle to trading. A trader having a bad day only means being on the wrong side. He will go home to his family and over time his loss will be forgotten. A troop in the "zone', lives minute to minute with a sense that watching the sun set could be his last. He does not think about home, money, or much else anything. Sumfin in the brain triggers the altered senses you mention and not sure what it is. I'll name it a "heightened awareness". He often gets a feeling when things are about to go wrong or sumfin is about to happen before it happens. Not sure what it is but maybe a DR might know... He does not have time to think as this often causes him to freeze under pressure. He must react to any situation at hand. Instincts kick in and a force takes over that has never been felt before. His heart thumps out of his uniform. He is tired, hungry, sore, but he is alive. He understands life and death. Often he just feels lucky. He does what he does for his buddies. He understands most telling him to do what he does have never worn combat boots and this pisses him off. He will not quit and would rather be on the offence then the defense. The list goes on and on...

A trader enters the battle of his mind. He fights himself. His loss is not in life but only money. He can get kicked down by the high tides of the market and can come back to his screen the next day. He can determine what is at risk.
Check Mate GAME OVER
  • #214
  • Dec 3, 2007 8:28pm Dec 3, 2007 8:28pm
Hi ALL,
The Zoran stripings.
----------------------
Istly the chart you presented is a cross chart.
the nature of crosses
-------------------
being non majors they have a tendency to cluster or tear easily due to that they are less liquid as conpared to majors.

so the runs you see on the chart is probabily due to widen spreads on their one leg of the USD cross, or both widenings of the USD/ currency majors, vreating directional tear, therefore trends.

makes sense?

regards
  • #215
  • Dec 3, 2007 8:38pm Dec 3, 2007 8:38pm
Quoting bunton
Not sure one could relate Battle to trading ...
LOL, we may be getting a little too carried away in the analogizing details, no?

I think people who may have two left feet in regards to dancing in real life, can still be darn good traders, even with or without the analogies, lol. At least I sure hope so, cuz I never was good at the bossa nova, haha.
  • #216
  • Dec 3, 2007 8:41pm Dec 3, 2007 8:41pm
Quoting fti
Hi ALL,
The Zoran stripings.
----------------------
Istly the chart you presented is a cross chart.
the nature of crosses
-------------------
being non majors they have a tendency to cluster or tear easily due to that they are less liquid as conpared to majors.

so the runs you see on the chart is probabily due to widen spreads on their one leg of the USD cross, or both widenings of the USD/ currency majors, vreating directional tear, therefore trends.

makes sense?

regards
Uhmmmm, sorry, but you lost me on that one :
  • #217
  • Dec 3, 2007 8:42pm Dec 3, 2007 8:42pm
Hi ALL,
@ Bunton
What you mentioned is alsolutely accurate, in the sense of a foot soildier.
Try relating in the context of the CO. General if you like.( part 1 of the Art of War training - 'YOU' The General. aka self.
What you related does apply to the general or CO in a sense.
But it becomes more than that.
Vision this a general (CO)with his troops in "runing battle".

Thats why I study Sun Zi, mastering the command of strategies.
Does this make sense?

regards
  • #218
  • Dec 3, 2007 8:46pm Dec 3, 2007 8:46pm
Quoting fti
Hi ALL,
@ Bunton
What you mentioned is alsolutely accurate, in the sense of a foot soildier.
Try relating in the context of the CO. General if you like.( part 1 of the Art of War training - 'YOU' The General. aka self.
What you related does apply to the general or CO in a sense.
But it becomes more than that.
Vision this a general (CO)with his troops in "runing battle".

Thats why I study Sun Zi, mastering the command of strategies.
Does this make sense?

regards
I have not given that much thought... Never herd of Sun Zi but I think I understand the art of war. Not sure how it apples to trading.
Check Mate GAME OVER
  • #219
  • Dec 3, 2007 8:51pm Dec 3, 2007 8:51pm
I need a little time for my brain to attempt to relate trading warfare...
1. Situation
2. Mission
3. Execution
4. Service and support
5. Command and Signal

paragraphs of an operation order..
Check Mate GAME OVER
  • #220
  • Dec 3, 2007 8:53pm Dec 3, 2007 8:53pm
Quoting leighsww
LOL, we may be getting a little too carried away in the analogizing details, no?

I think people who may have two left feet in regards to dancing in real life, can still be darn good traders, even with or without the analogies, lol. At least I sure hope so, cuz I never was good at the bossa nova, haha.
I thought I was restaining from the details to be honest...
Check Mate GAME OVER
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