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Technical Analysis Fallacy

  • #2,001
  • Mar 25, 2008 4:00pm Mar 25, 2008 4:00pm
Quoting Zoran
Since my "dancing" post, I have had some PMs and replies on this thread that I would like to answer here.

I would like to clear something up. My dancing was to feel the market and its pulse - that's what I was missing. I was not analysing the market to make predictions but just observing the present action on the 5 minute chart. We are watching a living beast and the idea was to be in sync with it.

As mentioned, this came naturally to me as I have had a 5 min chart (or charts) in front of me practically all day and every day for the past two years. I have been observing this action (and played with it) for about 3000 hours.

As for technical analysis, there is some there but I mainly rely on current market action. Perhaps price has returned to a support and resistance level and the dance changes. I do not predict here but observe. Will it break or will it bounce? The action will tell me what I should do. Perhaps it is starting to round and weaken? Again, depending on what I observe (and feel), I will take appropriate action.

Technical analysis has its uses and I will use what I need and learn what I should but there is no book that can teach you to feel the market and to dance with it. You will need to experience that for yourselves by playing with it. Read the thread, become familiar with fti's teachings (hint: it's not rocket science), get naked and jump in. Then start asking questions and I will assist where I can (as will others). Leigh also has her whip to get you onto the fast track.

Now that reminds me of something luSan said recently - Imagine you are a soldier and your general tell u...drop your TA weapons and stop-loses shield...go naked to battle...scary... If you take this, some people here are carrying two machine guns, 20 hand grenades, a rocket launcher, 4 communication devices, a parachute, night vision goggles and ammunition thinking it's going to help them. It will just bog you down. The best troops are highly motivated, lightly armed, highly mobile and know the terrian well.

Why else do you think the Teleban are doing so well against the world's greatest military might? Why couldn't the US defeat the Vietcong? (These are just examples, not for political debate).

That was nicely said. As i said many times i was a quite a professional chess player and i read many books and i had a very good theoritical knowledge but in real games on tournaments( 1h 30 min per player) i failed. In chess you will never play the same game as once before, some positions will be similiar but in a lots of you have to stuck to yourself. I am sad beacuse at this time i didn't have any clue about the art of war. If i would, probably i would be today very strong master now i am just III. categorized player (shameful). Endly, you have to balance yourself, consider what your opponent plans to do, defend from this plans and waits him to make a blunder or smaller mistake otherwise it's imposible to win if he doesn't make any mistakes (with no mistakes all games would end draw). And i think the same is with the market. Don't stuck too much time for the PA as patterns are only the history on the chart and don't try to be a fortune teller. For all paterns on charts is typicial : You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.
Abraham Lincoln
For proper MO we just need years of experiences and as i am only 17 i hope till my 50s i will get some Regards.

P.S People don't be fortune tellers just dance GO WITH THE FLOW NOTHING LESS NOTHING MORE
  • #2,002
  • Mar 25, 2008 5:26pm Mar 25, 2008 5:26pm
mijamoto, I have known you for a little while now and you have huge potential and lots of motivation so keep it up! It's good to see you on this thread!
  • #2,003
  • Mar 25, 2008 5:34pm Mar 25, 2008 5:34pm
Quoting Zoran
mijamoto, I have known you for a little while now and you have huge potential and lots of motivation so keep it up! It's good to see you on this thread!
thx buddy. Did you celebrate this eastern. Aren't we orthodox having it next month. regards and i am also glad you follow fti's thread which will help you i hope to retire soon And also in vacations i will get job in small brokerage house and i will stick badges on envelopes and writte some facts on computer and i hope i will have more clue than brokers and it can be funny than.
  • #2,004
  • Mar 25, 2008 5:42pm Mar 25, 2008 5:42pm
Quoting auxesis
for each there are numerous others saying that’s hogwash it cant be done, but I have seen it work for them and there in lies the key
Firstly, I want to thank you for sharing and posting your trading style, as I can see it was a lot of work and effort to do so. Also, probably knowing that it would be dissected in this thread.

I surely wouldn't call it hogwash, because I am sure that they are having whatever success that suits them. As long as they are successful with it and getting the results they want, then all the power to them.

All I'm saying is ...

If you're not getting the results you want from your system, then just be open to weigh out all the methodologies for yourself and maybe try out fti's one and see if you might not like it better for yourself once you get your feet wet.

Like I said in previous posts, it took me a bit to totally let go of the stop loss concept, but once I did so, it's been very liberating and fruitful.

When I first started trading, I did the intraday newbie thingy, tried all the different strategies, TA, indicators, etc. that were posted on this forum, as well as various other places on the Internet and a few books.

When doing intraday back then, I found that I was getting stopped out too much just before the PA went my way, so I started increasing my stop loss, but then I read and listened to experienced traders saying that one shouldn't have a larger stop loss than the take profit target, so I was caught in a dilemma.

I read practically every strategy on this forum, and found that feb's "The System (Irony included)" thread, which was a longterm trading strategy, made the most sense to me. I concluded that longterm, higher timeframe trading was the way to go.

Well, I was just getting into that style when fti made his grand and infamous entrance into that thread (you've already heard the story, so I won't need to go into all that again), lol. When fti first told me he wanted to help me and train me, I was a little hesitant, because I had just invested a lot of time and had made a commitment to do the longterm strategy that feb was teaching.

But, after talking to my husband, he told me to at least give it a try, since he said it wasn't every day that one gets a Pro trader to offer to train you.

So, I humbly (well, maybe not that humble, cuz I did whip him a few times during my training, haha) accepted fti's generous offer and here we are.

After comparing all the systems and the results, I have to conclude, that at this writing, I haven't seen anything as good as this.

I'm not saying that other systems don't work, I'm saying that one has to weigh out which gives maximum profitability with the least amount of diminishing returns.

This is the only one, so far, that has proven that to me.

I wish you success with your system, I truly do. I wouldn't be spending this much time responding to you if I didn't want to see better for you. You seem like a really intelligent, hard-working person with a good heart, so I would imagine that you could get some really awesome results with fti's style should you choose to adopt it.

But, I understand that you want to perfect your own system and I do wish you well with that (you can always come back and try fti's style when the time is right)

-----------

The following is not directed toward auxesis, but just something I wanted to say ...

My goal here is to help those who are less seasoned/experienced than the veterans, cuz that's basically where I'm at. I've only had 1 year of live trading experience, but I'm glad that I bumped into fti when I did, because I hadn't yet developed all the bad habits and conditioned mindsets that are hard to break. But although I may not have years of experience with Forex, I do have years of experience with Life, lol, and our mindset, attitudes, temperament, relationships, philosophies in Life transposes wholeheartedly to the Forex market and trading. Thus, the "lessons" that fti had us go through, were so valuable in our training. Please make sure you read this thread again, if you hadn't done the lessons.

As far as experience goes though, I will also say this ... the many years do not a good person/trader make. Cuz, if you're 70 years old, there's no doubt you have had a LOT of experience in life, yet if you've been a grumpy old coot who's always negative and constantly complaining about this and that and never proactively making positive changes in your life but rather put blame on others for your misery and predicament, then what the heck kind of contributions from your experience would anybody want to learn from you?!! : LOL!

So, the moral is ... don't be or become an old coot because more important than experience is ones mindset and attitude which can make all the difference to ones success in both Life and Forex trading (Leigh needs to make sure to hide her own old cootness so that it doesn't show, haha).
  • #2,005
  • Mar 25, 2008 5:43pm Mar 25, 2008 5:43pm
Quoting mijamoto
thx buddy. Did you celebrate this eastern. Aren't we orthodox having it next month. regards and i am also glad you follow fti's thread which will help you i hope to retire soon And also in vacations i will get job in small brokerage house and i will stick badges on envelopes and writte some facts on computer and i hope i will have more clue than brokers and it can be funny than.
Hey...do not complain...I wish to to have that opportunity...but my only chance is to start my own business and be the one stuffing envelopes:...

Nice knowing you are on vacation! I wish to have one...I would spend it trading!!
Empty as water and soft as a facing wind mountain
  • #2,006
  • Mar 25, 2008 6:08pm Mar 25, 2008 6:08pm
So I'm moving onto the next level and experimenting with spirals. Although I was dancing with my scout on my live account I'm not brave enough to do the same with spirals (attack/rescue sequence) so I'll be practicing on demo although I'll need to find an account that suits as MT4 does not seem appropriate and my other account only offers two week trials.

I don't have an attack and rescue sequence for now but I intend to use the fibonacci sequence as a starting point. As this came up in a PM, I'll post it here to illustrate the growth (power and risk) so the idea is to have adequate capitalisation and position size appropriately. Keep in mind that this again needs to be worked out based on ones individual tolerance so I'll be finding my own.
Attached Image
  • #2,007
  • Mar 25, 2008 6:15pm Mar 25, 2008 6:15pm
Quoting Zoran
So I'm moving onto the next level and experimenting with spirals. Although I was dancing with my scout on my live account I'm not brave enough to do the same with spirals (attack/rescue sequence) so I'll be practicing on demo although I'll need to find an account that suits as MT4 does not seem appropriate and my other account only offers two week trials.

I don't have an attack and rescue sequence for now but I intend to use the fibonacci sequence as a starting point. As this came up in a PM, I'll post it here to illustrate the growth (power and risk) so the idea is to have adequate capitalisation and position size appropriately. Keep in mind that this again needs to be worked out based on ones individual tolerance so I'll be finding my own.
What about Oanda? it has no time limits and you could do any lot sizing.

Enjoy.
Empty as water and soft as a facing wind mountain
  • #2,008
  • Mar 25, 2008 10:05pm Mar 25, 2008 10:05pm
Just completed my tour of duty on the E/U. Total time taken: 4 trading days or 7 days!!!!!!!!!!! Imagine the anxiety and worries over the long holiday break!

Moral of the story: Exit intra-day trades before any long holidays.

I entered on the 19th, as everyone can see I got caught in 2 down days. No opportunity to send in my rescue so waited till Monday. Finally got out with a small profit......40 pips! That is after 5 days of fighting! Was it worth it? You be the judge.

Others might have rescue the trades earlier but I did it according to how I feel the market is moving. On the 19th & 20th, I felt it was too risky to send in my rescues early. Maybe my dance is not as good as the others but that was how I played the game and luckily I came out with a little profit. Lucky I guess. Phew!

Thanks Fti!

One other thing to note, during the battle, I send it small rescue troops to test the market if returning to trend. Things got messy and I got lost in my re-avg BE esp. when my rescue troops have to exit with small profits when market started turning again. So my scout is still in but rescuers took small profits and exit. Not sure if anyone understands what I'm talking about..as I mentioned...messy!

-------------------------------------------------------

Note:- I went through the 5 days without constant monitoring but I had the alarms and smses going off when the market hit certain levels to alert me. At times, I'm forced to use stops due to emergencies (when Mr. A**hole just couldn't hold it anymore)
  • #2,009
  • Mar 25, 2008 10:52pm Mar 25, 2008 10:52pm
Quoting sitoca
Just completed my tour of duty on the E/U. Total time taken: 4 trading days or 7 days!!!!!!!!!!! Imagine the anxiety and worries over the long holiday break!

Moral of the story: Exit intra-day trades before any long holidays.

I entered on the 19th, as everyone can see I got caught in 2 down days. No opportunity to send in my rescue so waited till Monday. Finally got out with a small profit......40 pips! That is after 5 days of fighting! Was it worth it? You be the judge.

Others might have rescue the trades earlier but I did it according to how I feel the market is moving. On the 19th & 20th, I felt it was too risky to send in my rescues early. Maybe my dance is not as good as the others but that was how I played the game and luckily I came out with a little profit. Lucky I guess. Phew!

Thanks Fti!

One other thing to note, during the battle, I send it small rescue troops to test the market if returning to trend. Things got messy and I got lost in my re-avg BE esp. when my rescue troops have to exit with small profits when market started turning again. So my scout is still in but rescuers took small profits and exit. Not sure if anyone understands what I'm talking about..as I mentioned...messy!

-------------------------------------------------------

Note:- I went through the 5 days without constant monitoring but I had the alarms and smses going off when the market hit certain levels to alert me. At times, I'm forced to use stops due to emergencies (when Mr. A**hole just couldn't hold it anymore)
Hi Sitoca,

May i ask the timeframe you are trading? FTI did mention that 10 mins bars are also not dependable for dancing.

Maybe you may wanna consider restucturing the rescues. It seems that your rescue troops only found "tracks and traces of your lost scout", which explains, i quote, "when my rescue troops have to exit with small profits when market started turning again".

This may be due to

1. longer timeframes, which results in playing bigger swings trends, imo, its no good coz the further price is from the rescues, the harder it is to manage sizing.

2. insufficient rescue troops sent thus they could only comb a smaller surface area.

just my humble 2pips

regards
jest
  • #2,010
  • Mar 25, 2008 11:23pm Mar 25, 2008 11:23pm
Quoting jest1081
Hi Sitoca,

May i ask the timeframe you are trading? FTI did mention that 10 mins bars are also not dependable for dancing.

>>Trade on Daily Trend but dance on the 5s

Maybe you may wanna consider restucturing the rescues. It seems that your rescue troops only found "tracks and traces of your lost scout", which explains, i quote, "when my rescue troops have to exit with small profits when market started turning again".

This may be due to

1. longer timeframes, which results in playing bigger swings trends, imo, its no good coz the further price is from the rescues, the harder it is to manage sizing.


2. insufficient rescue troops sent thus they could only comb a smaller surface area.

>> I was caught in a strong Downtrend. No rescue troops was send in until way down at 1.5450-1.5400. My scout was too far away from the market re-avg basis hence the long fight. On Friday mkt was dead due to being a holiday. I send rescue scout to test the market again before commiting more rescue troops in case market keeps falling away. Monday has a bit of whipsaw thus I keep withdrawing my rescue troops whenever market turns against me until the later part of the day and finally yesterday when Mkt turns back up.

What plays on my mind is that I have an initial opportunity to get out at BE but I hang in there since I felt that I could always re-avg in at a better price. Little did I know that the next drop would be huge...and so far away from my basis. Thus, I send in rescue scout instead of commiting to the rescue troops fully.

As I mentioned, we each dance with the market differently. I still need to dance better, react quicker and have bigger balls than Fti...still learning. But it was a good fight!

Was the efforts worth it? Yes, in terms of the experience. No, in terms of the remuneration. BUt we have to start somewhere......

just my humble 2pips

regards
jest
Btw, all this is on a micro account so there really wasn't any danger of me blowing up or over-leveraging. The lesson learnt was well worth it.

regards
p.s (For those who are in Sgp) After coming out from this battle, the whole experience is similar to passing your driving tests.
Relief, shiok,.....etc
  • #2,011
  • Mar 25, 2008 11:38pm Mar 25, 2008 11:38pm
Quoting leighsww
Firstly, I want to thank you for sharing and posting your trading style, as I can see it was a lot of work and effort to do so. Also, probably knowing that it would be dissected in this thread.
Leighsww,

Thank you for the response, My style is really not as rigid as it appears in the post and charts, they were just to give an overall approach. Jmho, but each of us when we enter use some form of methodology either consciously or subconsciously to give us the signal to long or short or stand aside. This is just the framework from where I start.

When I first came across this thread, it was refreshing to see others openly talk about scaling into or re-averaging entries, as most consider this taboo, and then the concept of eliminating stops. Not to mention just the fact of just picking up gems from FTI’s banking experience.

I am not to the point that I want to toss everything nor am I unhappy with my present situation but I’m always looking to enhance and build upon what is there.

However the concept of trading from the “void” is a very interesting idea.

Again thanks, but I feel that the majority of my responses are a deterrent to this thread so I will try to keep any future comment within the construct of FTI’s teachings.

a

@ FTI, Thank you very much for taking the time to look over my charts, I will study the use of my kodachi.
  • #2,012
  • Edited 4:57am Mar 26, 2008 1:59am | Edited 4:57am
Quoting sitoca
Btw, all this is on a micro account so there really wasn't any danger of me blowing up or over-leveraging. The lesson learnt was well worth it.

regards
p.s (For those who are in Sgp) After coming out from this battle, the whole experience is similar to passing your driving tests.
Relief, shiok,.....etc
yes, hehehe...and when you first started, you get those shaky legs feeling, cold sweat. scary sia, heh.

anyway, your trend indentification is excellent but on a micro level you would have noticed that price makes these small 15-30pip swings if we look at the 5min bars.

You'll slowly get the drift as to how the prices makes their swing after looking at it for a while, i believe this is what fti meant by the 'dance'.

These 15-30pips movements, if identified and traded with properly can prove to be hugely powerful, i take these swings as waves of attacks that i should make, if i have gained an upperhand in the first swing and price is moving in my direction, it would be easy to start scaling profitably (which reasons why i look at 1hr and 15 price swings too).

Else the normal rescue methods would come into the picture, the faster you send in the rescue troops, the shorter your battle will be. Once rescue is done, you will want to re-consider going back into attack or pullback and reverse depending on PA.

In the 5 min charts, you'll see that price makes 'certain forms' or 'flag' that indicates an ending/beginning of a swing, they then slowly form into a wavelike structure, thats probably where your bread and butter is (fti may wanna correct me on this), you can be right abt the general long term trend but if you are taking the wrong dancesteps, it would probably cost you a longer and a much more expensive war. The further away the price is from its rescues, the more expensive the skew will become. Also note that its the short term charts that will first detect the change of a trend.

But the perks of trading the long term trend...allows you to leave a troop or two in your conquered lands, their numbers may grow as you conquer the enemy in every skirmish. I believe fti's meant by "bringing home the bacon".

Well each of us may dance differently, but for you to be able to stay consistently cool with such huge PAs, I give you 10 balls for that!

best regards
jest
  • #2,013
  • Mar 26, 2008 4:33am Mar 26, 2008 4:33am
Quoting sitoca
Btw, all this is on a micro account so there really wasn't any danger of me blowing up or over-leveraging. The lesson learnt was well worth it.

regards
p.s (For those who are in Sgp) After coming out from this battle, the whole experience is similar to passing your driving tests.
Relief, shiok,.....etc
Sitoca, welcome to the micro universe.
Do no lose your nerve. I am glad you survived.
You began a journey and micro account will help a lot to find your own style...oh well...I am still using a micro account...1000 units/troops.

Still you have larger b... than fti...to have a war for 5 days!... I could not do it...to much for the heart.

Would you consider these AOW quotes?

"If victory takes long, it blunts the military and grinds down its sharpness.
Attaching walled cities, one's strength is diminished."

And

"...And there has never been a military prolonging that has brought advantage to the state."

Regards,
Empty as water and soft as a facing wind mountain
  • #2,014
  • Mar 26, 2008 4:44am Mar 26, 2008 4:44am
Quoting jest1081
yes, hehehe...and when you first started, you get those shaky legs feeling, cold sweat. scary sia, heh.

anyway, your trend indentification is excellent but on a micro level you would have noticed that price makes these small 15-30pip swings, if we look at how the 5min bars.

You'll tend to get the drift the swing movements price is making after looking at it for a while, i believe this is what fti meant by the 'dance'.

These 15-30pips movements, if identified and traded with properly can prove to be hugely powerful, i take these swings as waves of attacks that i should make, if i have gained an upperhand in the first swing and price is moving in my direction, it would be easy to start scaling profitably (which reasons why i look at 1hr and 15 price swings too).

Else the normal rescue methods would come into the picture, the faster you send in the rescue troops, the shorter your battle will be. Once rescue is done, you will want to re-consider going back into attack or pullback and reverse depending on PA.

In the 5 min charts, you'll see that price makes 'certain forms' or 'flag' that indicates an ending/beginning of a swing, they then slowly form into a wavelike structure, thats probably where your bread and butter is (fti may wanna correct me on this), you can be right abt the general long term trend but if you are taking the wrong dancesteps, it would probably cost you a longer and a much more expensive war. The further away the price is from its rescues, the more expensive the skew will become. Also note that its the short term charts that will first detect the change of a trend.

But the perks of trading the long term trend...allows you to leave a troop or two in your conquered lands, their numbers may grow as you conquer the enemy in every skirmish. I believe fti's meant by "bringing home the bacon".

Well each of us may dance differently, but for you to be able to stay consistently cool with such huge PAs, I give you 10 balls for that!

best regards
jest
You nicely describe my experience of the 5M dance...yes...the wavelike structure...and the timing between scout and rescue as a major turning point...

thanks for the insights...I will think about it.

Regards,

PS. 5 day war! It takes a heart of steel.
Empty as water and soft as a facing wind mountain
  • #2,015
  • Mar 26, 2008 5:29am Mar 26, 2008 5:29am
Quoting luSan

Still you have larger b... than fti...to have a war for 5 days!... I could not do it...to much for the heart.

Regards,
Quick note....its actually more than 5 days as I have turn from defence to attack. Attacking phase now....and market moving really fast. Hopefully I will have earned enough today to keep an overnight position and get some good sleep.

Talk later as market still mvoing fast...
  • #2,016
  • Mar 26, 2008 5:52am Mar 26, 2008 5:52am
Dear All,
first let me thank fti for the great thread. i really found some good ideas and readings here! However, i was not following things from the beginning and i have read in post no. 1707 by fti that there were some files distributed. Would it be possible for someone to send these to me? I am especially interested in the ones which is about fti's trading methods. Thank you for your help in advance.
All the best, xrbor.
  • #2,017
  • Edited 7:58am Mar 26, 2008 7:47am | Edited 7:58am
Ok. Have exited all my troops except one to hold O/N. First thing first, why I did what I did over the last 5 days:-

1. I was on a micro account thus I am in an experimental mood. I can afford to pay for the lessons. I was down by 900 pips (total 3 lots) at a point but how much was it in a micro account? $90. Thus, blowing my account was not a big concern. Concern is to hold my mentality right and claw back this amount. $90 may not be much but its the mentality to get it back.

2. As mentioned, I am in an experimental mood. I wanted to jump into the deep end and get myself wet. I am still in a learning phase so even if I did lose some money, it was the lesson learnt and experience gain that i wanted. Two for one exchange....not a bad deal.

3. My feel and dance wasn't great hence why my rescue was delayed and lasted 5 days. However, I re-iterate that the whole thing was a lesson for me so I felt no excessive pressure. Even though my dance lasted 5 days, most of the time in the first 2 days was spent looking at the 5 min charts. Nothing was done as I couldn't send in my rescue troops effectively . It was only on Monday when the rescue started gathering pace that I became more active and aggressive with the rescues.

4. I'm no man of steel.... weird that during the whole time even when I'm deep into enemy's territory I don't feel a single moment of anxiety. I was patient and getting myself ready for the trend to resume. Lesson learnt:- Follow the MO and MM. Concentrate on the battle plan and not the P/L. This will help tremendously.

The anxiety kicks in only during the long holiday break. I couldn't do anything about it and what I fear was for the market to drop even further once the market opens again. Luckily for me, the opposite happened.

I've now turned from rescue to attack hence the trade may last even longer......
  • #2,018
  • Mar 26, 2008 8:13am Mar 26, 2008 8:13am
Quoting luSan

Would you consider these AOW quotes?

"If victory takes long, it blunts the military and grinds down its sharpness.
Attaching walled cities, one's strength is diminished."

And

"...And there has never been a military prolonging that has brought advantage to the state."

Regards,
The first quote is especially true. There are times when I'm near to my BE that thoughts like exiting with a small loss or just bite the bullet creeps in.
Right now even when I'm attacking, there is a voice inside telling me to exit with the profits instead of pushing even further and just go to sleep!! It is the tiredness that wears you down and makes you give up. If this whole post doesn't make sense thats because I AM TIRED!!
  • #2,019
  • Mar 26, 2008 8:23am Mar 26, 2008 8:23am
'Really, don't you think you should give that shadow of yours a good heart to heart. It may have had difficulty in understanding the value of money.'

You are a very insightful man
Irregular
  • #2,020
  • Mar 26, 2008 10:59am Mar 26, 2008 10:59am
Hi, fti!
I'd like to ask a question, it might be a stupid one. Is it possible for Fed, or maybe for 1 tier bank(banks), to move the price down by buying, and to move it up by making sells. The reason I'm asking, because sometimes I have a feeling that this is happening, from time to time on the market. If it's impossible, which most likely is, then just say No.
Alex
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