Technical Analysis Fallacy

Quoting HapaSasa

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I put my comments to fti´s post some time ago but never posted them as it seemed they were not going to be debated.

"In waging a war one must always attempt to score a swift victory.
Protracted battles will frustrate and diminish morale.
Therefore swift victory is the best outcome and
protracted war is the most undesirable."
Attempt to trade with the flow and do not stay with a trade when the price movement consolidates and ranges as capital is tied up and cannot be used on other trades.


Disciplined and calm, to await the appearance of disorder and hubbub amongst the enemy:
--this is the art of retaining self-possession.
Do not allow emotions to take over

A clever general, therefore, avoids an army when its spirit is keen,
but attacks it when it is sluggish and inclined to return.
This is the art of studying moods.
It is a military axiom not to advance uphill against the enemy, nor to oppose him when he comes downhill."
Go with the trend, only enter once you are sure the trend has started


2.02.01. You are the General, therefore you must carry a General's mindset always.
General Code : Never leaving the army in the battlefield cut-off from support.
The trader must have the right mindset and leave nothing to chance

regards

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Quoting Leonlorenzo

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Hi DutchAngel,

According to Dirk du Totis book.........

Indicators (macd, RSI, STOCHS ect) were not made for forex and yeild no edge in this market.
Any Timeframe lower than 30mins gives so much random movement it is impossible to trade, and anyone who claims they can is a liar.

Remember people, IN THE BOOK. Not my opinion!
I am sitting on the fence on this one. I class consistent as roughly 2 years profitable, and I have no proof either way.

Just would be nice to hear FTI's opinion on the book as a whole and maby the industries thoughts on Dirks statements.

Leon

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Quoting crazy_bdog

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Overall it was a rough week last week, but so far yesterday and today seem more predictable. Good luck trading to all, I am going to try and ride more, rescue less and stay in the battle!

Eric

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Quoting Northpro

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Hi all,



Hope you all had a great weekend. I had to go to Hong Kong over the weekend for work. During my weekend travel however, I was reflecting back over my trades and of lesson 2. Here is another brief of my original posts of lesson 2 as well as a summation of the application of a trade, as I see it. Please comment and debate.


The battlefield should be looked at from a distance to get the whole picture of how large an army is, an estimation of where and how far we can anticipate the battle to last. In the trading sensethis can be done using multiple time frames. Look at daily first to get the overall trend (flow of the water), and where about in the current wave is within the trend. If it approaching a critical fib level such as the 61% or the 161%, this is the time to execute discipline and patience, waiting for the corrective wave to take hold then exhausting itself. This is knowing when to fight and when not to fight, going with the flow of the water and respecting fortified cities such as the 161% fib level. Once the corrective wave nears another critical fib level such as the 23% or the 38% and begins to appear in disorder and to lose its keen-ness, now would be a time to attack for another impulse wave. The lower TF’s such as 1 hr and 5min would be employed to optimize entry. Personally, I use the 1 hr TF’s to plot my MM levels for a target and scaling into a winning trade as well as where I can anticipate rescue levels if the timing is off. From here, I can calculate what size the initial attack wave will be (lots). In the end we assess the proper trend, where-a-bouts within the trend the pair is trading, then timing the entry based on the exhaustion of the price action near certain corrective fib levels. The MM is based on Risk assessment, so no matter what happens with a wrong timed entry, we will be properly positioned to rescue a trade with the appropriate resources.
The MM is calculated backwards from the worst case rescue level. (example) If the timing is off or even the short term trend was misread and then I chose the -61% level as the approximate point of rescue. From here I can determine how far away in negative from the entry I will be. This will give me an approximate level and what skew will be applied for entry and rescue. If my ultimate risk exposure is to be 10% and the initial entry lots plus the rescue levels and skew fall within my maximum 10% risk, then it is a fight worth fighting. If it is over my maximum risk, I either size down or pick a different battle. ”Attack is the secret of defense; defense is the planning of an attack”. Also if it is determined that there was a miss-timed entry we can execute a deployment of an equal sized army to neutralize the effects of the first lots sufferings and fight with the flow of the water. The initial entry is what is called Cheng, while the reversal neutralized entry is Ch’I, which soon after reverts to Cheng as well. This in my interpretation is attacking from front and rear like the Shuai-Jan snake. Once the trend is exhausted and shows signs of correcting, rescue the initial entry. In this tactic you have neutralized the defeated position of the first regiment that attacked from the front, deploying a rear attack and quickly destroying the enemy going with the flow of water, and finally rescuing the initial regiment at the point of enemy exhaustion.

Here is my summation;

1. Assess the battlefield: Look at the overall trend (daily)
2. Plot estimated points of entry, additional entries, and rescue entries. (Daily and hourly)
3. Determine the strength (vol.) of the prevailing trend and where-a-bouts the price level is at within the impulse wave to determine your entry point for attack. Let the enemy tell you when it is tired. (hourly and 5 min)
4. Apply MM calculations and work backwards from worst case rescue level to determine initial lot size for the attack. Think a defensive plan, to assure victory before battle even begins.
5. Plan possible neutralization level if required (hourly)
6. Use the lower TF’s to time your frontal attack with the flow. (5min)
7. Add to attack when going your way to assure quick and maximum effect.
8. Neutralize if trend goes against you and attack from rear if required.
9. Once trend shows signs of weakening, rescue initial entry as per the rescue skew.
10. Exit rear attack positions, assuring victory, never leaving the battle unattended.


NP

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Quoting fti

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@ Northpro,

Good read and understanding.
However some pointers.
2. plot...
Do not be sucked into trying to predictive analysis. Instead seek "feel" & form from the market.
8.Neutralising...
Please do not believe in hocus pocus , locking and hedges.
That does not exist in reality, FIFO, first in first out.
locks and hedges, exist in crosses, and synthetics and these are for experienced players.


regards

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Quoting crazy_bdog

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Northpro, thanks for your efforts and posting of charts, I do not trade the Eur/jpy, so I am just looking at the 5 minute chart and noticed the right triangle. I would be looking to trade this long in the very short term......although I do not have enough experience/courage to trade that pair! Keep up the good work, and excuse my poor drawing skills...[IMG]file:///C:/Documents%20and%20Settings/Eric/Desktop/northpro.gif[/IMG]

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Quoting Northpro

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Crazy,

Here is how this trade worked out. Wasn't as good as I had hoped, but still a profitable trade. I never entered a 2nd position as I was targeting a close below 157.00 to do this. My entry was on the break of the upward trendline left circle and I exited at the second circle....short and sweet.

Cheers
NP

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Quoting fti

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Hi All,

An good read about understanding self and risk.

http://blog.thirdage.com/?p=1222

regards

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Quoting Leonlorenzo

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Dutch, Jairo and Fti,

Thanks for your responces, I had the opinion that this was a very well known book. I supose the reason for my dificulty trading is not due to this Markets Short-term randomness then. Back to the classroom me thinks.

Thanks again.

Good Trading.

Leon

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Quoting Leonlorenzo

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Dutch, Jairo and Fti,

Thanks for your responces, I had the opinion that this was a very well known book. I supose the reason for my dificulty trading is not due to this Markets Short-term randomness then. Back to the classroom me thinks.

Thanks again.

Good Trading.

Leon

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Quoting fti

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@ Leon

I'll meet him in the markets, if he got what it takes to put the money where his mouth is. Instead of trying to raise funds selling books.

regards

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Quoting DutchAngel

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This made me laugh. I will, however, have to say that there is nothing wrong with raising funds by selling book. Sorry, but as a published author myself it's easy money. Take 3 months to write a book and sit back for the next few years and get your royalty payments. Damn, why did they stop publishing my book? lol. I am not condoning people who are totally clueless and slap some rubbish together to try and flog to newbies, and there are many of them as we all know, but I don't consider this to be the case for Dirk du Toit.

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