Technical Analysis Fallacy | Page 105 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Ultimate Fallacy in Technical Analysis 99 replies

"Technical Analysis Fallacy" thread people, I need your help 54 replies

Technical Analysis Fallacy Redux 23 replies

Statistical analysis fallacy 33 replies

Attachments: Technical Analysis Fallacy
Exit Attachments

Technical Analysis Fallacy

  • #2,081
  • Mar 30, 2008 1:55am Mar 30, 2008 1:55am
Quoting jest1081
Exactly, this is why i tell you its worth watching em. coz just by spotting the anomalies. We can gauge how the crosses are behaving.

e.g. When EU and GU go opposite of each other, and when we have multiple wave forms of them indicating opposite swing movements, it does mean that EurGbp is trending very well it would be wise to take a trade with EurGbp to exploit both currencies in one trade.

I tend to analyse their correlative actions on the 1hr timeframe watching for anomalies instead of comparing them on the 5min frames.
LOL, okay, okay. You do what you gotta do :

I don't need to gauge how the crosses are behaving from analysis other than what my own song and dance floor is doing in the moment.

As luSan called right ... I'm into Zen, so I don't need no more "stuff" cluttering my mind :

But if it works for you, FANTASTIC!! (you can definitely carry more arsenal than me, haha)
  • #2,082
  • Mar 30, 2008 2:06am Mar 30, 2008 2:06am
Quoting leighsww
Now, that's great if that's how you use it and it's been working for you!

I haven't studied it in the way of volatility, so that's cool if you're using the info for something like that and it's not as ambiguous as the correlation concept.

For me, I'm still going to have to keep my dancing simple and light, though, since it's working fine for me as is, without the need for any more pieces of arsenal, lol. I'm tiny so I can't (or rather, don't want to) carry around as much weapons as some of you guys :

As they say, don't fix what ain't broken, so I'm good dancing with just my nunchucks, hehe http://leighswishingwell.com/lp/emotes/bruce_h4h.gif

Thanks for sharing that though, cuz many others may find that very useful!
IMO I am not sure it really matters that much. The volatility should already be in the PA you would be watching in G/J anyways. So I don't think you are necessarily missing out on anything. And as you said...if what one is doing works then....it works.
  • #2,083
  • Edited 2:51am Mar 30, 2008 2:36am | Edited 2:51am
Quoting leighsww
(you can definitely carry more arsenal than me, haha)
At the risk of sounding arrogant and condescending (which I truly am not wanting to come across, because I only want to help and never hurt you) (Taken from leigh -- You may be right, i probably do have a bigger arsenal.

on the other hand...

yes, maybe in all perspective you and lusan could be right, i am making things too complicated and biting to more than i can chew. Well, i'm figuring if i should dump it or continue where i left off, coz as far as the dancing is concerned im still all demo till now, seeing lots of promise and giving myself another few more months to get used to driving the fastlane, im not too eager to jump into the money making shceme yet.

Thing is i have not got myself in a position where i have to throw all the ballistics in order to save the trade and this maybe the pin that pops the balloon for me, as long as i am not mentally conditioned for this, trading the final rescue is gonna be a major psychological barrier, im not sure i can take the heat....imagine this we are litrally ballooning our per pip size by approx 3times its actual value from stage4, now, can i tango that?

I'll stop babbling and cont practising not forgetting to hope for a few loser trades to start knocking on the doors.

Maybe im just displaying my usual singaporean kiasu-ism. lol

PS, sorry if i sounded like an "all knowing". And i hope i have not stepped on anyone's tail. If i did, i seek your deepest apologies.

happy weekends,
jest
  • #2,084
  • Mar 30, 2008 3:41am Mar 30, 2008 3:41am
Quoting jest
You may be right, i probably do have a bigger arsenal.
LOL, now just imagine if we take away that "nal" at the end of that arse-nal?

Quoting jest
And i hope i have not stepped on anyone's tail.
Hey, are we monkeys? Whose got a tail? It's TOES, TOES!!! LOL, no spelling class for you, you need to go straight to "popular phrases" class!! :

Awww, you didn't step on anybody's toes nor tail. Your posts sounded perfectly fine to me. You're just giving your opinion, is all, as we all have been doing (anyway, I didn't take any offense to anything you said, so all's good as far as I'm concerned).
  • #2,085
  • Mar 30, 2008 5:05am Mar 30, 2008 5:05am
jest ...

There's something I want to change regarding my Post 2047

For some reason, I hesitated posting what I truly felt, because most people have a hard time with the concept of trading with more than 20% or whatever of ones actual account value/capital.

Well, because I kept that in mind (and thought you might agree with that concept, as well), I told you that you might leave $10k in your account but enter $2,500 for your starting Account Value in the spreadsheet.

The truth is, that's not what I really believe in doing. Here's what I really believe ...

That you leave $2,000 or at the most $5,000 in your account and enter $1,200 for the starting Account Value.

I really don't subscribe to the having tens of thousands or hundreds of thousands of $$ of ones own money in the trading account.

If you ever blow your account (which heaven forbid should happen, but we'll take the worst case scenario), you're not as likely to be as devastated by the drawdown since it's pretty minimal to the actual amount you were willing to allocate to your trading account in the first place. You can then just fund it with another $2,000 from your allotted reserves should you need to.

Having tens of thousands of $$ easily accessible within the account, tends to make some people want to use it up faster and be more reckless with preserving it.

Only when you can start trading with "house money" would I leave large sums in the account for compounding, but until such time, best to not have your own money tied up like that.

Anyway, that's what I truly feel about how much $$ one should fund an account with.

This is why I'm trying to prove with my own trading using my spreadsheet, that one can do this business with a minimum investment, because I really can't see people putting at risk so much of their hard earned $$.
  • #2,086
  • Mar 30, 2008 7:13am Mar 30, 2008 7:13am
Quoting leighsww
jest ...

There's something I want to change regarding my Post 2047

For some reason, I hesitated posting what I truly felt, because most people have a hard time with the concept of trading with more than 20% or whatever of ones actual account value/capital.

Well, because I kept that in mind (and thought you might agree with that concept, as well), I told you that you might leave $10k in your account but enter $2,500 for your starting Account Value in the spreadsheet.

The truth is, that's not what I really believe in doing. Here's what I really believe ...

That you leave $2,000 or at the most $5,000 in your account and enter $1,200 for the starting Account Value.

I really don't subscribe to the having tens of thousands or hundreds of thousands of $$ of ones own money in the trading account.

If you ever blow your account (which heaven forbid should happen, but we'll take the worst case scenario), you're not as likely to be as devastated by the drawdown since it's pretty minimal to the actual amount you were willing to allocate to your trading account in the first place. You can then just fund it with another $2,000 from your allotted reserves should you need to.

Having tens of thousands of $$ easily accessible within the account, tends to make some people want to use it up faster and be more reckless with preserving it.

Only when you can start trading with "house money" would I leave large sums in the account for compounding, but until such time, best to not have your own money tied up like that.

Anyway, that's what I truly feel about how much $$ one should fund an account with.

This is why I'm trying to prove with my own trading using my spreadsheet, that one can do this business with a minimum investment, because I really can't see people putting at risk so much of their hard earned $$.
Hi leighswww,

noted and thank your for your kindness.

regards
jest
  • #2,087
  • Mar 30, 2008 8:43am Mar 30, 2008 8:43am
All,

it is fantastic to see high passionate are you ALL about trading. So much energy about this...It sounds that we have 2 camps...the one who says "the less the better" and the other saying "let us bring more weapons for the army."

This could be good---because it help us focusing our energy on the 5M dance; bad---because it bring more emotions to the battle station.

"Good or bad?", as another famous chineese story says, "who know?"

Let see what fti says about our extensive weekend conversation. I remember that once he complained that his students -we- were not talking much. Now people are passionated talking!! And we are kind to each other!

So, one kingdom or 3 kindoms? That is the question.

In another note: next Wed I will travel to Germany for 10 days: Berlin, Dresden and Brauschweig. So I will stop trading for 10 days...still I will bring my lap top and keep learning from all.
Empty as water and soft as a facing wind mountain
  • #2,088
  • Edited 3:52pm Mar 30, 2008 3:16pm | Edited 3:52pm
When I first started trading currencies I followed a very successful trader.

One of his favorite setups was following the 3 majors on 5min & 15min time frames.

Now if 2 out of the 3 majors were moving Usd positive from an explosive
start he would look to enter Usd positive with the remaining pair that hadn't
started to move, his success rate using this type of setup was impressive.

I always have the 3 majors on my screen at the same time.


I have the daily,hourly 15min,5min & 1min charts on screen.

Hourly,Daily & 15min in the background & 1min & 5min from the majors in the
foreground, this works for me.

If I might change the subject to risk assessment, I wonder how many of us
have a back-up computer & separate internet connection at the ready in the event of your main trading computer or internet connection going down.



Regards,


BabeFX.


I am wrong until the market proves me right.
  • #2,089
  • Mar 30, 2008 3:21pm Mar 30, 2008 3:21pm
Hey all, thanks for keeping our education alive.
I'm in the middle of rereading the thread and of coarse AOW.
May I suggest while keeping up with whats newly discussed, May we all continue to reread AOW so to develope our trading mindset.
For those that do not have a basic understanding what fti presented reread, much information was given and the picture becomes clearer your 2nd , 3rd and I'm still looking forward to my 4th reading.
I'm using the 5 min. trying to dance the best I can ( at least in profit). I havn't mastered the battlefield and the attacks, although in time I believe it will be developed.
Luson, I read in one of your earlier post of the 2nd guessing when to add troops and thats exactly where I'm at. My example being thur.- fri. gbpjpy over 200 pip move and I only get 4 troops in. I feel like my ability right now is as I'm practicing tactical manuevers and not ready for battle.
I usually just focus on 1 pair the gbpusd the goal being to come to know the terrain thruroughly so I lay in wait with confidents to engage in battle but as
I vewed the terrain of gbpjpy thurs I couldn't help but to throw a 5 min. chart up as I felt the 200.20 was a good time to get in and dance.

Leighsww, All the more power to ya looking at so many pair and deciding which to dance with, I couldn't do it. Its a large enough task coming to know one pairs terrain and keeping up with the direction it wants to go in but maybe I'm over analyzing. Maybe the trick is to do as I did thurs and slap a 5 min chart on a pair that looks good but I don't feel like I'm adhering to the AOW.
As far as the 3 kingdoms go, Is the thread ready to digest all what can be put to use from considering the 3 kingdoms I imagine its pretty in depth to learn. I'd like to see, including myself people becoming profecient at mastering the battle consistantly and with confidence before moving on.
However, I just may be one of those that have to work there way out of the slow class and catch up with the rest of ya.
  • #2,090
  • Mar 30, 2008 4:07pm Mar 30, 2008 4:07pm
Here's a past post by fti that has more info on the 3 kingdoms --> Post #984

Then scroll down to his Post #986 for detailed explanations.

He probably explains better how to use it, but it's still too much "stuff" than I want/need in my trading life :, so I'll stick to what I'm doing, but it may be something others who are more proficient in handling several arsenals at a time, can use (like BabeFX, who has had success with it ).

I'm an artist by trade, so I guess I prefer to keep the TA simple, easy and less time-consuming for myself, haha :

Quoting BabeFX
If I might change the subject to risk assessment, I wonder how many of us have aback-up computer & separate internet connection at the ready in the event of your main trading computer or internet connection going down.
Definitely a must is to have 2 forms of Internet connections (DSL as well as cable modem, or Clearwire, or satellite, etc.) as well as backup computer. A wireless laptop (would be best), especially one that doesn't depend on needing to connect to somebody's DSL connection (cuz if the electricity goes down, that modem is going down, too).

Another must is having a cell phone as backup in case your landline is down.

BUT, the most optimum security for peace-of-mind is to get a generator in case of power failure. There are some very inexpensive and quiet ones available.

In my opinion, the generator is the most important, because when the power goes down, even having an extra computer or second Internet connection won't do any good, because when the electricity goes down, many times it also affects your cable, DSL modem, etc. especially the ones dependent on electricity, lol.

I've had instances where ALL (electricity, cable and telephone) were down at the same time. Now, that can be spooky if you're in the middle of a rescue with many troops in (which has happened to me twice in the past, and although I wouldn't be happy about it, I wouldn't be devastated should the worse happen to me, because I don't have my life's savings tied up in my account - I have a small amount of money invested (basically, what I mentioned before to jest about, and why I subscribed to that mindset of not tying up hard earned $$).

After the last electrical outage, we have been looking at generators recently
  • #2,091
  • Mar 30, 2008 4:23pm Mar 30, 2008 4:23pm
Regarding the three kingdoms, whatever fti has mentioned about it is quite vague in my mind and I will have to review it again at some stage. However, I have nearly always had multiple charts in view. These include DOW, Crude and pairs of most majors (USD, EUR, GBP, JPY) + some minors (NZD, AUD).

I've found it useful at times to reference other charts to check for normality and to see where strength and weaknesses live - whether the USD and GBP are still weak and the Yen and EUR strong by viewing them against multiple pairs.

Having said that, I do tend to focus on the pair I'm trading but I do glance at other pairs to see what's going on. I would like to learn more about the three kingdoms but I'm not sure whether fti has covered it sufficiently.

I'm on holiday until next Tuesday so I'll see you all when I get back.
  • #2,092
  • Mar 30, 2008 4:31pm Mar 30, 2008 4:31pm
Quoting leighsww
Here's a past post by fti that has more info on the 3 kingdoms --> Post #984

Then scroll down to his Post #986 for detailed explanations.
Thanks for that leigh, you saved me the time looking for those nine charts. I have a new monitor dedicated to it now.
  • #2,093
  • Mar 30, 2008 4:37pm Mar 30, 2008 4:37pm
Leighs,

Great work on the spreadsheet and the hypotheticals. As you and Fti have mentioned, there are a whole bunch of different ways one can trade, different skews, different TF’s, 3 kingdoms, individual or many pairs, and on and on…At the end of the day however as stated in the AOW, whatever stratagem one decides to invoke on one particular battle, the idea is to judge the terrain as well as the enemy so you can deploy the appropriate troops into battle. I think this is what Fti means when he says be nimble. For the sake of repeating, although the spreadsheet is awesome, I hope not to fall victim of the rigidity in prediction of potential outcomes, ie 15 or 20 pips per lot. I know what you are trying to point out to the crowd that with proper MM and skew the attacks are quick and effective, but the hard part is to say, “hey, if I only get 8pips and I feel the momentum changing, then so be it, I am outa here”…the point is not losing the rhythm and feel whilst fixating on the 15-20pips (deer in headlights). And for those like Zoran, I too have yet to get to a 4th level on the attack and still my results are good, although my battles are longer, I just am not ready to pull the trigger on any more exposure, I am hoping this will be revealed with more experience. Keep up the great work and thanks.

NP
  • #2,094
  • Mar 30, 2008 4:43pm Mar 30, 2008 4:43pm
Quoting lilpip
Leighsww, All the more power to ya looking at so many pair and deciding which to dance with, I couldn't do it. Its a large enough task coming to know one pairs terrain and keeping up with the direction it wants to go in but maybe I'm over analyzing. Maybe the trick is to do as I did thurs and slap a 5 min chart on a pair that looks good but I don't feel like I'm adhering to the AOW.
I guess that's what I basically do - look for a pair that looks good dancing the 5m at the moment. However, I do look at the 2hr and 4hr for that particular pair for trend direction, but that's basically the most TA I use when dancing. I prefer to just dance "in the moment" rather than have to do so much homework and studying of other TA material, lol. Did I mention that I never did like school, haha.

Oh, but one thing I do try to not forget to do is to look at the Calender here at FF to make sure I'm not going in before some sort of news thingy happens, lol. However, by the time I wake up, most times news had already happened, so I'm usually lucky that I can catch some great "tears" from the "after news" dancing (but only if I'm still in the direction of the 2hr/4hr trend)

Quoting lilpip
I'd like to see, including myself people becoming profecient at mastering the battle consistantly and with confidence before moving on.
However, I just may be one of those that have to work there way out of the slow class and catch up with the rest of ya.
You are quite right in that people need to master the dance before moving on to higher levels of education. Hey, don't worry, I'm like you ... it takes me a while to absorb everything. And, I may still not utilize everything being taught to me, cuz like I said, it may not fit with my mentality/personality, lol.

As an Artist, I like to create and let the dance move me, so too much TA just hinders my abilities to be an Artist, lol. Unfortunately, I was forced to become analytical too, cuz in my own business I had/have to take care of a lot of paperwork, legal, financial and administrative stuff. I've also got some geekiness in me, as well :, cuz in having to create and develop my own website, I had to learn coding/programming and such. I also used to be a CADD operator for my Dad's Electrical Engineering business many moons ago (before I started my own business), and through my computer skills, I also learned to develop and program spreadsheets, databases, etc. (thus, I can do the Excel stuff, although I actually use QuattroPro, but I figured that most here would be using Excel, so I had to switch - but once you know one, they're all the same, lol).

Anyway, you are on the right track with wanting to first learn to dance well, lilpip . The next step is to practice doing rescues and attacks, so that you become confident and not fear conducting them (especially, the rescues, lol).

If you are finding yourself fearing too much, then keep demo'ing until you are confident enough to go live with your skills of the dance.

I will go slow and steady with you, so together we will get there. Hold my hand and we'll dance down the yellow-brick road together, giving each other support, comfort and encouragement, along the way
  • #2,095
  • Mar 30, 2008 5:04pm Mar 30, 2008 5:04pm
Quoting Zoran
I have a new monitor dedicated to it now.
Yeah, isn't it GREAT having 2 monitors!! GAD, I'm wanting a 3rd one myself now, haha.

Quoting NorthPro
I know what you are trying to point out to the crowd that with proper MM and skew the attacks are quick and effective, but the hard part is to say, “hey, if I only get 8pips and I feel the momentum changing, then so be it, I am outa here”…the point is not losing the rhythm and feel whilst fixating on the 15-20pips (deer in headlights).
I totally agree with you, NorthPro, that you shouldn't have any preconceived fixed target. My using 15 - 20 pips is mainly just showing what the minimum you need and still be able to obtain wealth would be.

If you look at my actual trades, you will see that I have varying pips grabbed per each trade depending on the dance I had conducted.

But, I am trying to do more of fti's reverse progression to lock-in pips, so I'm finding actually I get less pips than when I waited for the price to give me a reverse signal, haha.

However, I find that his logic makes more sense - to lock in the pips, so as not to turn a winning trade into a losing one.

Anyway, everybody dance the way that suits you best. We're all just sharing opinions and experiences to each of our personalities, so there's no right way or wrong way ... well, there is a wrong way, if you're losing too much, lol, but you know what I mean
  • #2,096
  • Mar 30, 2008 6:02pm Mar 30, 2008 6:02pm
Quoting NorthPro
although the spreadsheet is awesome, I hope not to fall victim of the rigidity in prediction of potential outcomes
I guess for me, it's more about setting goals for myself.

Many interviews (in Forbes, or Fortune 500, or similar type magazines) with very successful people, show that even with their diverse backgrounds, different industries they are in, etc. ... what they normally all have in common is that they set goals for themselves and especially write them down.

I have attended many business/motivational seminars in which this is one of the important things that is stressed with what one should do ... write down ones goals.

When you don't write down your goals in which to shoot for, then they're just floating around out there in outer space, many times getting lost with all the other noise of everyday life. And then, they become less and less important to give attention to, and the motivation and inspiration then starts to fade more and more each day, from that day you were excited and inspired to set those goals.

When you write down your goals and make it a point to look at them everyday, then it acts as a trigger device to keep them in the forefront of your consciousness so that they keep you motivated to stay on track in shooting for and eventually attaining your goals.

So, this is what my spreadsheet is doing for me, as well as telling me how many lots to enter as my account value increases, lol.

But, if you find that it presents rigidity for you, then you definitely shouldn't use it, and use whatever method works for you
  • #2,097
  • Mar 30, 2008 6:09pm Mar 30, 2008 6:09pm
Quoting leighsww
Yeah, isn't it GREAT having 2 monitors!! GAD, I'm wanting a 3rd one myself now, haha.



I totally agree with you, NorthPro, that you shouldn't have any preconceived fixed target. My using 15 - 20 pips is mainly just showing what the minimum you need and still be able to obtain wealth would be.

If you look at my actual trades, you will see that I have varying pips grabbed per each trade depending on the dance I had conducted.

But, I am trying to do more of fti's reverse progression to lock-in pips, so I'm finding actually I get less pips than when I waited for the price to give me a reverse signal, haha.

However, I find that his logic makes more sense - to lock in the pips, so as not to turn a winning trade into a losing one.

Anyway, everybody dance the way that suits you best. We're all just sharing opinions and experiences to each of our personalities, so there's no right way or wrong way ... well, there is a wrong way, if you're losing too much, lol, but you know what I mean
Interesting...I lock my profit about 12 pips...sometimes longer...I am uneasy about it...I could do sometimes better...a lot better...but at times, I find that I do just right...profit taking prior to reversal...I have no fixed rules...

Main problem? The scout... Normally short profit easy...long profit easy...but then I just play only a leg of the lady...I guess there is no fixed ways of doing this...my view?...feed the book breakfast, lunch and dinner...turn the computer off and have a nap....rest after a concentrated trading session.

My point? there are not rules...I cannot even predict my own actions... I just act..is this the way is supposed to be?...I guess fti would yes...as long as your book is increasing you are ok.

Regards

PS.: I have to monitors.... I love them: 22 inches each... I have a lab top for emergency...and after my Europe trip, I will bring a computer out that I save just in case...Just never know..
Empty as water and soft as a facing wind mountain
  • #2,098
  • Edited 6:27pm Mar 30, 2008 6:15pm | Edited 6:27pm
Quoting leighsww
Yeah, isn't it GREAT having 2 monitors!! GAD, I'm wanting a 3rd one myself now, haha.
Yes, this replaces another smaller one so I now have matching 24in widescreens with the resolution of 4 standard monitors. My plan is to get another dual video card and have 4 in total as they have come down in price quite significantly. I paid over £650 for the first one and now it costs £199 so two more on the way (before they get discontinued) an a nice permanent sun tan will do me.

NP, I agree with your interpretation of being nimble. I believe fti suggests being quick to seize. When the opportunity presents itself, take it immediately and don't hold onto something if things don't look right. I see it as a light footed martial arts person like in the movies, flowing around the enemy, hitting and ducking right on time.

Leigh, you have the most insight into fti's trading. Can you share some of your observations? How quick did he tend to be with his entries and snowballing?
  • #2,099
  • Mar 30, 2008 6:15pm Mar 30, 2008 6:15pm
Quoting luSan
My point? there are not rules...I cannot even predict my own actions... I just act..is this the way is supposed to be?...I guess fti would yes...as long as your book is increasing you are ok.
Yes, that is exactly how it should be

Like I said earlier, if it ain't broke, don't fix it! Your method and dancing ain't broke, luSan, so just keep doing what you are doing!
  • #2,100
  • Mar 30, 2008 6:40pm Mar 30, 2008 6:40pm
Quoting Zoran
NP, I agree with your interpretation of being nimble. I believe fti suggests being quick to seize. When the opportunity presents itself, take it immediately and don't hold onto something if things don't look right. I see it as a light footed dancer moving with the flow.
LOL, did I misunderstand NorthPro's post? I thought he thought I was too rigid by only using 15 - 20 pips in my scenarios and thought those were my set goals, and he also thought that we shouldn't exit too fast by setting predetermined pip taking.

I better go read his post again, haha.

Of course we need to be nimble and conduct our exits/take profits and such from the diverseness of each dance ... that's a given if we've even been learning anything from fti's lessons, lol :

Quoting Zoran
Leigh, you have the most insight into fti's trading. Can you share some of your observations? How quick did he tend to be with his entries and snowballing?
Zoran ... did you miss this post of mine? --> Post 2059

LOL, right there I have a link to one of fti's post where he showed one of his many possible dance sequences. Sheesh, you even talked about how you saved it to your computer (the image, cuz he had removed it, remember?) and it's hanging on your wall with some Leonardo da Vinci stuff, haha.

I have to admit though, the thing that his sample doesn't show is the prices. So, it doesn't give us any indication of how many pips were grabbed in that particular sample.

However, when I've seen him trade on my ride-alongs, he'd take anywhere from 13 pips at times to 40+ pips per troop, so it varies depending on how the dance is going for each trade.

Here's a past post where he showed his blotter --> Post 947

... so you can also get an idea of some other take profits he's done. If you notice the time stamps on when he entered and exited the trades, some he actually took a longer dance with.
64 traders viewing now