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Technical Analysis Fallacy

  • #681
  • Edited 7:23am Dec 21, 2007 7:10am | Edited 7:23am
Quoting Slee
Was Fti looking for an option to 'close all orders' in MT4?
Some scripts seem to exist for this in the metatrader forum section
http://www.forexfactory.com/showthre...ht=closing+all

It seems that by using MT4 there is much flexability, but the scripts will mostly be created by users.

You may be able to script an indicator to show your averages.
Or better still - to open an order ( with confirmation ) with the average already included so you dont have to do it manually.
Thanks Slees. MT4 is a very flexible and excellent platform in my opinion. I'll just need to spend some time (one day) figuring out how to program it.
  • #682
  • Edited 5:14pm Dec 21, 2007 7:14am | Edited 5:14pm
Quoting alexfot
I'm absolutely sure Fti, will be back on this thread in 2008, like he said he would, hope fully leighsww will be back earlier. I think by pi, fti meant 3.14159 number and maybe he uses it somehow.
That's what I originally thought but after researching, I thought he may have meant phi? The golden ratio is represented by the letter phi φ 1.618 (also a fibonacci number). He mentioned logarthimic spirals and the golden spiral is one whose growth factor is related to phi (similar to the fibonacci spiral shown below). But pi π is also related.

Each square represents a 1/4 circle, therefore π/4 and the subsequent smaller square is 1/φ (initially 0.618) and then next smaller square is 1/φ2 (inverse of phi squared 0.382) and then 1/φ3 (inverse of phi cubed 0.236) and so on.

I suppose we'll just have to wait for his clarification.
Attached Image (click to enlarge)
Click to Enlarge Name: Fibonacci_spiral_svg.png Size: 17 KB
  • #683
  • Dec 21, 2007 11:29am Dec 21, 2007 11:29am
Quoting vinn234
ok , read this thread and its not working at all. Looks to me like another mind twister , I appreiciate everyones time ,but if you are going to put something out there to help people learn how to trade ,then do it. dont jerk people off creating threads as long as WAR and PEACE and then walk away . Look not the greates trader at all but , this remindes me off when dark Star started a tread and then decided to keep it from the Forum ,and got it erased completely . If you got something that works great keep it to your self and get lost , dont hang it in front of these guys and then take it away , not right and , prety stupid on your end . If these threads are going to achieve anything then its going to need guys with bigger commitments .

happy trading
Hi Vinn,

I do agree with you a little about what your saying. Alot of people seem to come and solely preach on the forum, tell stories and quotes and all other things weve heard a thousand times on this forum and others.
For Glory or maby they enjoy to tease the people who are taking part I do not know.
Personally, for all I know FTI could be one of these, no idea. But afew things he has said make me want to keep my eyes peeld, and I will do.

The BIG problem when we come in to forex from the retail end of things is that we do not receive and kind of valuable trainning, and I dont beleive it is available anywhere other than institutions.
The basic structure is,
newbs either learning from other relative newbs - road to success?
newbs learning from ebay courses and such- road to success?

I will keep faith and wait for his return, if nothing more I will atleast have another parable to read!

LG

PS. 'technique dangerous in wrong hands' 'too powerfull', lol, I have read remarks like this earlier in the thread about how FTI trades. Unless you are talking about a complicated martangle strat then I dont see the danger. Any valuable extra knowledge can only enhance someones trading.
  • #684
  • Dec 21, 2007 1:02pm Dec 21, 2007 1:02pm
Hello All

In many ways, its disheartening to see what this thread is turning into in fti's absence... To my knowledge this isn't a flame thread, its simply an open discussion about trading ideology, infantile egomaniac's really don't belong. Some people really seem to be missing the point, and that point is people contribute what they are able to. Just because I sign up on this forum doesn't mean that I have to hand out a full disclosure on my trading methodology, nor does it mean that I have to make a lifetime commitment of postings. I"m not trying to be cliche' people, but remember the old saying "You get what you pay for". IMO forums like this one are a STARTING point, for you to do your own research and experimentation and to draw your own conclusions.

Now enough with my rant, here are a few things to consider.

1. Each and every trader is different
2. Each traders circumstances are different
3. Differences in levels of capitalization
4. Trading goals
5. Risk Acceptance vs Risk Aversion

What I see so many many times is people in search of the Holy Grail as far as trading strategy or system... And I chuckle many times because it is right there in front of them, its called STUDY+HARD WORK. There is no "secret"

The way I view it, all of the various technical indicators are simply tools used to view two things in the market.

1. Greed vs Fear
2. Points of Hesitation

That being said, they are all manifestations of the same thing, adapted to the creators own particular needs. This is where your own experimentation comes into play. Finding a system that works for you. I grasp the method that fti is using here, and i use parts of it myself.. but i can guarantee that he wont trade my system as effectively as I do, and vice versa. We are different people, most likely with different goals.

As far as there being a lack of quality training available, I must disagree. The training is there, it just isn't free. It all comes back to hard work, and money. You aren't going to get something for nothing, not of value anyway.

And I also agree with, I believe it was fti, the fact that some things are too powerful for most traders, because without a thorough understanding of complex strategies it will do nothing but cost you money. This is where the experimentation comes into play. Folks, all people are created equal and remain that way... until they draw their first breath. After that point its all up to you, no one else is responsible for your success.

Please bare in mind that I come from institutional side as well, hence my point of view being different. I remain

Respectfully yours

Lawrence a.k.a. The Bear

p.s.-- My apologies for hijacking the thread
  • #685
  • Edited 4:50pm Dec 21, 2007 4:35pm | Edited 4:50pm
Quoting fti
I hope you will think about what I've said very carefully.
I shall try to push these doors ajar for you slowly to show you the light at the end of the tunnel (please hope its no on-coming train), God willing.

regards
Nice post Lawrence.

The quote above is from fti's first post on this thread. If anyone is feeling a little impatient, I would suggest re-reading the first page. I haven't gone past it myself as I'm still in the process of reading what fti has recommended.

From personal experience, I can totally relate to fti's method of teaching. As Beartrade mentioned, there are no secrets. Put in the effort and it should eventually pay off.
  • #686
  • Dec 21, 2007 5:01pm Dec 21, 2007 5:01pm
Excellent thread guys and gals. I'm reading through to see if, afterwards, there would be anything that I can contribute.
I dream, therefore I become.
  • #687
  • Dec 22, 2007 4:13am Dec 22, 2007 4:13am
Quoting vinn234
ok , read this thread and its not working at all. Looks to me like another mind twister , I appreiciate everyones time ,but if you are going to put something out there to help people learn how to trade ,then do it. dont jerk people off creating threads as long as WAR and PEACE and then walk away . Look not the greates trader at all but , this remindes me off when dark Star started a tread and then decided to keep it from the Forum ,and got it erased completely . If you got something that works great keep it to your self and get lost , dont hang it in front of these guys and then take it away , not right and , prety stupid on your end . If these threads are going to achieve anything then its going to need guys with bigger commitments .

happy trading
ba humbug...........




Enjoy the holidays everyone.....thoughts-n-prayers to Leighsww
trading naked.......
  • #688
  • Dec 22, 2007 5:19am Dec 22, 2007 5:19am
u cant rely soley on TA....
{Promotion Removed}
  • #689
  • Edited 9:17pm Dec 22, 2007 4:19pm | Edited 9:17pm
Quoting Beartrade
<snip>...

1. Each and every trader is different
2. Each traders circumstances are different
3. Differences in levels of capitalization
4. Trading goals
5. Risk Acceptance vs Risk Aversion

What I see so many many times is people in search of the Holy Grail as far as trading strategy or system... And I chuckle many times because it is right there in front of them, its called STUDY+HARD WORK. There is no "secret"
What Beartrade is saying is spot on, fti (or anyone else for that matter) can not just jot down some rules and numbers and expect anyone to make money from it, he probably could but human nature being what it is we would break them anyway . Another factor is the market is 'always' changing, therefore so must your methods but some principals/strategies remain the same.
This is the point, he has given clues that you must explore and a mindset to employ, find what works for you and only then is it 'your' system, this is why he teaches this way.

If you are a bit impatient, just read fit's posts only, I outlined the most important ones (I think) in a recent post but others are there to tell you something else, but again we are all different and interpret them differently.

Once you have read and re-read them, try some experimentation on a demo, throw some numbers around and see if you can find something that clicks - this is the hard work part. Remember, fti is 'mentoring', not training, so when studying throw some questions at him and with his experience he can guide you to what he thinks is the best way so you can avoid the pitfalls you may not have seen yet, but he has!

I wouldn't get too bogged down with the golden ratio or anything else either for that matter, they are all just analysis tools that can 'help' you interpret what is going on and some people just use them better than others. They won't tell you what 'will' happen though, that's the fallacy.

I can't offer any proof other than my demo acct. activity history which would be difficult to decypher anyway, but since I had the 'aha' moment, I haven't lost a trade, I might not have made much money at times but my book is still full.
I may have missed his method all together but what I did find through my own work and fti's thought provacation is good enough for me, I won't be looking any further for a 'system'.
The key is your book and your blotter, keep them balanced and you will win, it's hard work but do-able.

All the best to All for the new year,
cheers,
Mick.
  • #690
  • Dec 23, 2007 4:54pm Dec 23, 2007 4:54pm
Hi Zoran, sorry haven't posted, got horribly sick past Tuesday, just got the laptop hooked up in the hospital, a very bad case of the pnemonia I cut somehow. In any case, you are on the right track with the golden spiral thoughts, just treat each frame separatelly, here is where the attack is structrured. Also kep in mind that everything in the universe involves/grows and decayes/dies. That's why it is important to only act on key levels that the golden spiral together with fib's will help you identify. Just my 2 cents, as I see you are very close.
Each spiral could be viewed as a separate life cycle, the only reason to look at the next life cycle will come in a recovery mode/higher time frames. Or for longer terms structured positions, but I think fti likes to deal with the immedeate only, see you
  • #691
  • Dec 23, 2007 5:50pm Dec 23, 2007 5:50pm
Quoting MickD
I wouldn't get too bogged down with the golden ratio or anything else either for that matter, they are all just analysis tools that can 'help' you interpret what is going on and some people just use them better than others. They won't tell you what 'will' happen though, that's the fallacy.
Hi Mick

I'm glad you have managed to get so much out of it already.

I still have some large question marks over my head. I wonder sometimes whether my thinking and those of most others are not alligned and that fti has made some generalisations that have me confused.

I mean, does anyone really believe that the signals "will" happen? I never have and I always looked at it as a probability (or just a guide). I looked for historical support and resistance and saw that as a low risk strategy (with a bit of patience). It has worked very well although I still had some problems. My biggest lesson so far has to do with foundation and realising my "self destructiveness" when things didn't work out. It didn't happen often but it happened. Also, I have not proved my system over a prolonged period so I take fti's position very seriously.

So i'll keep searching.
  • #692
  • Dec 23, 2007 7:14pm Dec 23, 2007 7:14pm
Quoting Zoran
Hi Mick
....
I mean, does anyone really believe that the signals "will" happen? I never have and I always looked at it as a probability (or just a guide).
That is also the way I see it too and also why I said not to get bogged down with it, yes use everything you can, just don't take it as a certain.

The biggest shift for me was looking at my blotter and my book, you have to be extremely conservative to avoid things like margin calls if it goes against you too far. Like I said, I may be wrong and/or this is only part of the puzzle but I take safety as priority one!

Imagine you are working for fti at the bank and your pay was performance based, ie. you get a bonus for profits BUT, any losses come out of your pocket!
IOW try to think like a professional trader who manages the country's and other peoples money, you would do all you could to secure their money but also make more for then at the same time.
That makes you think a bit
  • #693
  • Dec 23, 2007 9:01pm Dec 23, 2007 9:01pm
I havent read all of your thread yet, but im working on it. I assume from what i have read you are a firm believer in price action. I also like to trade as naked as possible...KISS

Love your thread keep it going

Regards HH
  • #694
  • Dec 24, 2007 9:14pm Dec 24, 2007 9:14pm
@ FTI

I use one platform for charts and another for trading live.

Gaincapital or www.forex.com for live trading and VT trader, or MT4 for charting.

regards HH
  • #695
  • Dec 24, 2007 9:19pm Dec 24, 2007 9:19pm
Another thought, i read somewhere here in a forum that there is a broker that has tradestation which is supposed to be the best charting platform available. If you open a small live trading account with them they will allow u to use tradestation free. I will try to locate the broker.

HH
  • #696
  • Dec 25, 2007 4:32am Dec 25, 2007 4:32am
Quoting hharrington
Another thought, i read somewhere here in a forum that there is a broker that has tradestation which is supposed to be the best charting platform available. If you open a small live trading account with them they will allow u to use tradestation free. I will try to locate the broker.

HH
FMT's DealBook360 maybe? =)

I also like ACM's, but DealBook is the king.
  • #697
  • Dec 26, 2007 8:13am Dec 26, 2007 8:13am
@syres

Im not sure if dealbook 360 is tradestation or not since i dont use tradestation...I have heard that tradestation is one of the best platforms for trading fx, futures etc...

Since i dont use it im not recommending it just thought i would mention some of the remarks i have heard from people who do use it. Syres i will check out dealbook 360..

Thanks HH
  • #698
  • Dec 27, 2007 6:27am Dec 27, 2007 6:27am
Dear Zoran, MickD and Syres,

Thank you for keep this thread alive before fti continues teaching.

As for loss rescue, fti suggests two methods:

1. If the position was desirable, then more capital will have to be put at risk
and a rescue of the badly timed position must be effected.
2. If any mitigating factors, disallows for such to be effected, the trader should
bite the bullet, and put the position out of its misery,
until it may be advantages to reinstate.
No other subjective thoughts must enter to his mind to hamper the managing of the position.
(Please see post#179)


So snowballing is only one alternative.

I will cut loss if I am trading against the daily trend AND the hope of retracement to rescue some loss impossible. Because that trade is not a wrong timing, it is wrong direction! In such case, snowballing loss can potentiallly become loss-averaging, which is a bad speculation practice.

Just my 2 pips.

David
  • #699
  • Dec 27, 2007 7:05am Dec 27, 2007 7:05am
@david

I have managed to rescue 2 bad trades in countertrend trading with FTI's method...and the third i had to bite the bullet on...but in the last 19 trades i have had only 2 negative trades to my book.....very small also...and also have never risked more than 3 percent of my book.


I am a firm believer in price action,,but with this method it takes it to another level..I have been trying to trade the 5 min charts for the last several months, and i finally found something that suits me....

Have a great day everyone HH
  • #700
  • Dec 27, 2007 9:41am Dec 27, 2007 9:41am
Hi,

I discovered this thread last weekend and I read it throroughly. This is my first post. I was thinking to ask a question to FTI but since the discussion is going on I will post it now.

I wonder if there is the possibility of using the loss recovery technique from a more "distant" point of view. Let me make it more clear. I have limited time to follow the market. I can access my account in my work desk but cannot concentrate too much to take intraday trades and baby sit them. So I thought about taking trades that follow an intermediate trend (a few days to weeks). This will make the cycles longer. I estimate to be able to check market 3 to 6 times a day.

In this condition, loss recovery becomes a very critical task. Drawdowns will certainly be bigger and will take longer to revert. I made some calculations in an Excel spreadsheet: with an account balance of 3.3K (an experimental standard account), let's say I first buy 0.01 lot EURUSD at 1,4550. A passive wait until margin call would require price falling to impossible -1.8400 (a 32950 pips drop). To recover from this drawdown, let's say my analysis at 1,4450 (100 pips below initial entry) indicates it's time to increase the bet. I buy 0,02 lots. This would move margin call price to 0.3534 (10916 pips below this second entry). Let's think of a third buy of 0,04 lots at 1,4300. Margin call price goes to 0.9715 which is 4.585 pips below the third entry level. With good market analysis and not going against the trend this seems to me relatively "safe".

Is this doable or am I missing something or dreaming awake? There is still the possibility of counter trend independent trading, which reduces drawdown and pushes margin call farther away.

Thanks for any ideas from fellow traders and from FTI when he's back from vacation.

Ppl, I was trying something like this live when I discovered this thread. I look forward for any feedback. I used to feel a lot doubtful doing that alone against many people's advice but now, after reading FTI's lessons, I know I am at least in the right direction. But don't know if I am doing everything right.

Again thank you very much for your attention and very good trading for us all.
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