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Technical Analysis Fallacy

  • #1,781
  • Edited 8:06am Mar 14, 2008 1:57am | Edited 8:06am
Quoting luSan
We are dealing with psychology. I keep enough troops in my domain that I believe that I can bring more and more to save the day if I have to. Of course, my constrains are very well define: I trade the 5M for only 1 hour, I do not commit to trading more than 25 % of my potential trading capital.

My number 1 rule: Preservation of capital. I mean: I am a total coward. I want to win a war with the fewer number of battles, so I fight every 5M bar. Illogical? will that limit my profit potential? probably. I just want to win day in and day out, any number larger than zero is delicious. Everyone has to define their own pain level. For some is 1% for other is 2 %.

I play very small because I still do not know what is my threahold for pain...but I tell you that an stop loss set is hell for me..Today I was losing 200 pips and I just followed the teaching and rescue the troops for another win day. Why? I screw up. I did not understand PA...no indicator to blame, no system to blame but my own blindness.

If I am in trouble I might play for another hour then I will take my loses and go to bed and cry. I will stop. So far, in more than 30 wars, the only time I have a loss was when the computer acted on me and I lost my mindset.

Protection against a major disaster? I already have it. I only need to close the trades. I mean, I babysit my trades as if they were my own children. Could that happen? Yes, if you play when US news are coming out. Do I do it? No news trading for me. I already got burned once. It will never happen AGAIM in my whole life... Of course...I am just learning and in training.
lusan,

I see from your reply that you have the mental fortitude & MM to overcome all eventualities, I applaud you.

Regards,

BabeFX.


I am wrong until the market proves me tight.
  • #1,782
  • Edited 7:57am Mar 14, 2008 2:08am | Edited 7:57am
fti, re:Stop loss orders.


Thanks, that was a good example of why we shouldn't use stoploss orders.

I await your post on "Trailing Stops".

Regards,


BabeFX.


I am wrong until the market proves me right.
  • #1,783
  • Mar 14, 2008 2:12am Mar 14, 2008 2:12am
I personally find it harder to initiate an attack than rescue MO. Believe a few other posters prefer to rescue too.


I think I know the reason but can't put it out in words. Its more pyschological than anything else.

Anyone else have the same experience?
  • #1,784
  • Mar 14, 2008 2:24am Mar 14, 2008 2:24am
Quoting sitoca
I personally find it harder to initiate an attack than rescue MO. Believe a few other posters prefer to rescue too.


I think I know the reason but can't put it out in words. Its more pyschological than anything else.

Anyone else have the same experience?
hi sitoca,

i believe it would be better to be in the attack...

coz MO requires us to dance with the market rhythm, thus the purpose of the scout is to confirm that we are doing the right limbo.

Once we find outselve in a rescue mode, it somehow confirms to a certain extent that we have essentially entered a the dance on the wrong foot.

Resulting swings would therefore confirm that all sense of rescue may prove worthless.

personally, i'll wanna be very wary of the rescues, maybe its just habit.

after a few rounds demoing the dance on 5min charts, i just find it hard to conduct a rescue beyond level 3, its nerve wrecking. Maybe its due to the MM.
  • #1,785
  • Mar 14, 2008 2:26am Mar 14, 2008 2:26am
Fti,

You might find this a good proxy to the spot FX.

http://equivalentsrdc.cme.com:443/index.html
  • #1,786
  • Mar 14, 2008 2:28am Mar 14, 2008 2:28am
Quoting jest1081
hi sitoca,

i believe it would be better to be in the attack...

coz MO requires us to dance with the market rhythm, thus the purpose of the scout is to confirm that we are doing the right limbo.

Once we find outselve in a rescue mode, it somehow confirms to a certain extent that we have essentially entered a the dance on the wrong foot.

Resulting swings would therefore confirm that all sense of rescue may prove worthless.

personally, i'll wanna be very wary of the rescues, maybe its just habit.
Yes. When you are in attack mode, try pressing. See if you can pull the trigger to its potential.

Now compare against the rescue....which is easier?
  • #1,787
  • Mar 14, 2008 2:34am Mar 14, 2008 2:34am
Quoting sitoca
I personally find it harder to initiate an attack than rescue MO. Believe a few other posters prefer to rescue too.


I think I know the reason but can't put it out in words. Its more pyschological than anything else.

Anyone else have the same experience?


I find it easier to work out where to add positions on rescue but harder to know where to scale out.

On pure attack I find it harder to add positions but some how easier to scale out. Doesn't make sense I know.

I will ponder over this & the issue of stops whilst away on vacation for the next few days.

BabeFX.


I am wrong until the market proves me right.
  • #1,788
  • Mar 14, 2008 2:34am Mar 14, 2008 2:34am
Still the attack.

It gives you the buffer. Even though you are averagiing out, thus allowing you more space to scale your defense.

The depth that you attain by gaining ground allows you to use the foreign capital, thus it also allows you to construct a more elaborate and cheaper form of defense. we need to note that we're working with profits gained. so losses are minimalised in case of disasters.

I think the idea of losing profit made from market does not appeal to many which reasons one preference to rescue than attack. but most astute general understands that preservation of the main troops is important, so use up the slaves that you have caught in the previous battle to form you fore front, once they have been exhausted, then you may use your fresher troops to fight the next level for you.

ok im being too long winded again.

regards
  • #1,789
  • Mar 14, 2008 2:39am Mar 14, 2008 2:39am
Quoting BabeFX
I find it easier to work out where to add positions on rescue but harder to know where to scale out.

On pure attack I find it harder to add positions but some how easier to scale out. Doesn't make sense I know.

BabeFX.


I am wrong until the market proves me right.
Yup. I am not alone.

This is what I am experiencing too.......

We need to get comfortable with it i guess.....
  • #1,790
  • Mar 14, 2008 4:53am Mar 14, 2008 4:53am
Quoting BabeFX
lusan,

I see from your reply that you have the mental fortitude to & MM to overcome all eventualities, I applaud you.

Regards,

BabeFX.


I am wrong until the market proves me tight.

Not really. I am just learning...a beginner...I just try to apply what I learn here to my own way of doing things. You see, for me, the point is NOT making money, but to become the best trader I can be...then profit will be there, righ?
Empty as water and soft as a facing wind mountain
  • #1,791
  • Mar 14, 2008 5:02am Mar 14, 2008 5:02am
Quoting jest1081
Still the attack.

It gives you the buffer. Even though you are averagiing out, thus allowing you more space to scale your defense.

The depth that you attain by gaining ground allows you to use the foreign capital, thus it also allows you to construct a more elaborate and cheaper form of defense. we need to note that we're working with profits gained. so losses are minimalised in case of disasters.

I think the idea of losing profit made from market does not appeal to many which reasons one preference to rescue than attack. but most astute general understands that preservation of the main troops is important, so use up the slaves that you have caught in the previous battle to form you fore front, once they have been exhausted, then you may use your fresher troops to fight the next level for you.

...Beautiful!

ok im being too long winded again.

regards
What about that we have trouble with attack because we are greedy? Look I just made 20 pips with my scout..so..when should I send more troops out?...maybe I should wait...you see, I am winning 20 pips...I do not want to lose it...so we wait and wait...pa keep going up...Now I am 30 pips and winning...maybe I should wait a little bit more...etc.

Flip the coin...in rescue we have fear in front of us...we are losing..damn it..we must do somethin...Ah...we get angry...our ego are damage...so we are more proned to triger away the rescue troop...let send 3 out...quick before it is too late.

What I mean? It is just psychology...
Empty as water and soft as a facing wind mountain
  • #1,792
  • Edited 5:35am Mar 14, 2008 5:23am | Edited 5:35am
Quoting luSan
What about that we have trouble with attack because we are greedy? Look I just made 20 pips with my scout..so..when should I send more troops out?...maybe I should wait...you see, I am winning 20 pips...I do not want to lose it...so we wait and wait...pa keep going up...Now I am 30 pips and winning...maybe I should wait a little bit more...etc.

Flip the coin...in rescue we have fear in front of us...we are losing..damn it..we must do somethin...Ah...we get angry...our ego are damage...so we are more proned to triger away the rescue troop...let send 3 out...quick before it is too late.

What I mean? It is just psychology...
Hi lusan,

i believe this is where the MO is of utmost importance. The attack/preservation/rescue sequence needs to have a direct relation to the dance you take with the market. The amount of slaves that your have caught also determines how much room you get to manouvre your next attack before you get into rescue/preservation mode.

The question is, should you just take harvest and leave or use this harvest to gather a few more in the final press.

Reminds me of the movie called "300". Leonidas used the dead soldiers he caught to create a wall and used these guys as a shield and a tool to trample the enemy before sending out his troops for the final slaughter.
  • #1,793
  • Mar 14, 2008 5:32am Mar 14, 2008 5:32am
Quoting luSan
What about that we have trouble with attack because we are greedy? Look I just made 20 pips with my scout..so..when should I send more troops out?...maybe I should wait...you see, I am winning 20 pips...I do not want to lose it...so we wait and wait...pa keep going up...Now I am 30 pips and winning...maybe I should wait a little bit more...etc.

I was thinking more along fear than greed. And also maybe the fact that we are ingrained to buy on bargains. Scout is where we enter and consider a good place for entry. Anywhere above is considered expensive so to press on and buy expensive goods with even more lots.....that I think is the difficult part. Sorry if this part is not clear. Hopefully, you know what I mean.

Flip the coin...in rescue we have fear in front of us...we are losing..damn it..we must do somethin...Ah...we get angry...our ego are damage...so we are more proned to triger away the rescue troop...let send 3 out...quick before it is too late.

I would think this is most likely why we pull the trigger far easier in rescue than in attack.

What I mean? It is just psychology...
regards,
  • #1,794
  • Mar 14, 2008 6:51am Mar 14, 2008 6:51am
Quoting jest1081
omg ...!
not that way!

im sure a many of us would beg to differ, at least not...."gulp"...yet.
Hi jest,

ROFLOL.

@M-H Trader,
Other than respect for CB, yes,seem so.
But that is if the charts can sing the star & stripes.
But there's no chart evidence of it singing that yet, although it tried.
So trading with the swings is the way to go for now.

regards
  • #1,795
  • Mar 14, 2008 6:54am Mar 14, 2008 6:54am
Quoting sitoca
Some good points here but isn't demoing a form of backtest too? Once you are done with the demo and ready to go live, the results obtain from demo are historical.

I believe its how a trader backtest, using the appropriate methods that will determine the validity of the results. Its a tool that if used properly will be beneficial to the trader but if wrongly applied then.......

Its similar to the MM and MO that Fti teaches us here. Who would have thought of trading without a SL or averaging into a loss trade? Again, in the wrong hands it is dangerous.
@ sitoca
In essence , you are right.
the slight marked differences in demoing and back testing is in the application of it, like you mentioned.

If the use is in testing, participant's abilities to feel and mindset training, it give in heaps. But if to show profitability , the result carrys little benefits, other than to convince one self.
The problem that historical back testing does not give sentiment feel to participant is its weakness, carrying no real value.
Having said that, however if the participant can create self imposed environment, where a point in the past is chosen and to test forward with it, then there is some value. The problem with cheating does also become an issue, as the participant cannot force the mind to forget, and the mind actually remembers the flow quite clearly. esp if testing was done more than once. You may start from different points in time, but the mind remembers the flow , including the volatility.

However it is sliced, the inability to create urgency in the mindset of the participant is still a factor. So to duplicate the most realistic, its best to demo, and even that has the weakness that the participant, will be aware of the lithal nature of the endevour.

In the stone ages were I traded and trained , we didn't had the liberty of demo, only historical data testing. This is only available due to current developments. Back then even accurate historical data was difficult to come by and it was expensive.

As you mentioned, this is a very sharp double edge sword. It can take you head off, if you cannot master it properly. When mastered, it is a very powerful, essentially very relaxing way to tame the markets, and if especially so if it was not your own $$$ at risk and if you had generated lots of foreign capital over time.

Confidence begets confidence.

regards

A more accurate way of looking at it is,
A managed stop loss and $$ cost averaging to regain footing on losses.
In terms of managing profit, I would say that mostly,
if you had a good head, it would be in essence managing itself, its the losses that needs the attention and massaging.

So sitoca, your perspective of it is essentially correct, the practising of this "under fire", The question, do you have what it takes with the correct mindset, mo,mm to survive live "running battles". That, you have to find out for yourself. In the end its all "YOU".
  • #1,796
  • Mar 14, 2008 7:20am Mar 14, 2008 7:20am
Quoting fti
In the end its all "YOU".


Read this once, " The only person who is responsible for your trade stares back at you in the mirror"
  • #1,797
  • Mar 14, 2008 7:25am Mar 14, 2008 7:25am
Quoting jest1081
hi sitoca,

i believe it would be better to be in the attack...

coz MO requires us to dance with the market rhythm, thus the purpose of the scout is to confirm that we are doing the right limbo.

Once we find outselve in a rescue mode, it somehow confirms to a certain extent that we have essentially entered a the dance on the wrong foot.

Resulting swings would therefore confirm that all sense of rescue may prove worthless.

personally, i'll wanna be very wary of the rescues, maybe its just habit.

after a few rounds demoing the dance on 5min charts, i just find it hard to conduct a rescue beyond level 3, its nerve wrecking. Maybe its due to the MM.
@sitoca,
Be aware, ability to rescue, brings home the bread and butter. ability to execute good attack, bring home the bacon.

If I gave you a mio$ to back up your trading of the retail size positions, all you nerve wrecking would simply disappear. It is all just relative. You felt the nerves, probably due to captilisation and possibly because this MO is new to you.


Quoting sitoca
Fti,

You might find this a good proxy to the spot FX.

http://equivalentsrdc.cme.com:443/index.html
Thank you for your link to globex. I shall not comment on that again, as I have posted about it here before. They have to prove their worthyness & efficiency to me, to erase their old bad records, and I am not so young that I should waste another 30 years to see if they can find their feets. The innovations and development I see in the retail forex is way ahead. Seems not so unlike, SMAs they seem to b always lagging behind

regards
  • #1,798
  • Mar 14, 2008 7:27am Mar 14, 2008 7:27am
Quoting luSan
Not really. I am just learning...a beginner...I just try to apply what I learn here to my own way of doing things. You see, for me, the point is NOT making money, but to become the best trader I can be...then profit will be there, righ?
Lusan,
correct, "take care of the losses, and the profits will take care of themselves."
Good head.

regards

Sidenote: the feds wins again for now, but for how long? I take my hats off for their resilience, very pro, fighting tooth and nails.
what a roller coaster ride...

I take a break , before going into tralling stops. as am very tired, and preparing to see hoew laet london and Ny will fare tonight.
  • #1,799
  • Edited Mar 15, 2008 3:14am Mar 14, 2008 11:42am | Edited Mar 15, 2008 3:14am
Lucky 57 thx for a sharing your life in forex. It is very useful for a young traders as i am to see how traders can kill theirself without strong mindset. I like the most your story about the student and when you explained how people trade among of their belief and not with some rational view how the current situation is. The biggest problem i see in traders, they don't know when to trade and when to not. If you know at least this it's much easier work. For instance it's much easier when you go in a silent markets with a winning side (you win slowly but with lesser risk) than in markerts as last days are. Huge volatility imposible for us retails to know what will big players do I traded in whole life with one account of 50 USD which i screwd up and that was a million dollar valuble lesson for me. The only way to succed in any market is to have a many years of experiences because markets are moving in cycles and when you feel on your skin few of them you start to understand them

Regards and i hope you people weren't today sucked in market
  • #1,800
  • Mar 14, 2008 11:54am Mar 14, 2008 11:54am
Quoting mijamoto
Lucky 57 thx for a sharing your life in forex. It is very useful for a young traders as i am to see how traders can kill theirself without strong mindset. I like the most your story about the student and when you explained how people trade among of their belief and not with some rational view how the current situation is. The biggest problem i see in traders, they don't know when to trade and when to not. If you know at least this it's much easier work. For instance it's much easier when you go in a silent markets with a winning side (you win slowly but with lesser risk) than in markerts as last days are. Huge volatility imposible for us retails to know what will big players do I traded till now only with one account of 50 USD which i screwd up and that was a million dollar valuble lesson for me. The only way to succed in any market is to have a many years of experiences because markets are moving in cycles and when you feel on your skin few of them you start to understand them

Regards and i hope you people weren't today sucked in market
Hi mijamoto,
Why are you doing trades when you should be studying what I posted for you?

One of the most important character of a dealer is..
YOUR WORD IS YOUR BOND.

You were supposed to try to take a job at the broking house , you mentioned.
on your vacation first , remember. and try to understand the business.

You try to take on the ,market, undercapitalised and not trained, and it will teach you lessons, and it will continue to teach you that same lesson , until you learn it.

You are young, prepare your self slowly. You develop bad habits, and you will spend the rest of your life trying to unlearn them.

Markets are testing CB resolve, these are the toughest markets to handle. Only the nimblest can survive in these. You are not ready.

regards
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