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Technical Analysis Fallacy

  • #2,141
  • Edited 8:21am Apr 1, 2008 7:28am | Edited 8:21am
So what are we watching for as the 3 kingdoms have been going inthe same direction for the last 2 hours, a sudden break out from one?
I'm dancing with the gbpusd allowing for a 160-180 rescue if need be, seems like 80-85% of the time is 20-30 pips.
I'm trying to develope the ability to attack,once again I failed to recognize when to send in heavy troops.
I begain attack at 1.9865 and 9863 with 2 troops each 5 times size of scout, and nothing more.
Anyone have a suggestion where I could add troops to do better or was the 1.9865 area the place to hit them hard and 1.9805 the place to begin backing troops out?
  • #2,142
  • Apr 1, 2008 7:42am Apr 1, 2008 7:42am
Quoting ianf0ster
Lusan,
I think you have misunderstood.
I was not joking.
It is a real money £10,000 account.
I was not tying to dance, I use a Fib method for my longer term trades - but needed to attempt rescue or take a loss.

1. I was not attempting to predict the future. Open a trade if price breaks Fib line + spread + padding. Similar for T/P.
1 yr backtesting I have done on the method shows probability of success - nothing is certain.

2. I could never dance Lusan style with my real money account - it takes far too long to open and close trades.

3. I explained in an earlier post why I always try to have a 200 (or so) catastrphic stop loss. If you can stand to lose > 200 Pips when you get a power cut or lose internet connection or your brokers server goes down - then good for you. I can't afford that on a live money account.

4. I do not understant when you say I broke rules on rescue. I did not use SL on rescue (except for catastrophic SL and it really would have been a catastrophy - 200 pips x 12 lots at £1 per pip). I attempted rescues in the style of the expmple posted by Leighsww. What did I do wrong - apart from perhaps getting into the trades in the first place?

Please help me understand,
Ian
Ian, again, my apology...I did not know you were using real money.. Please post your charts...Many here will be happy to make comments...

Rescue as I understand it and sometime I use it -but not always? Why? I do not know...yet

Attack sequence: 1-2-3
Rescue sequence: 3-9-20
Sizes: they are multiple of the sequences above.

Ok, let us say...

(1) I go long because the bias is long
(2) PA retraces....I am losing
(3) PA in 5M begins turning in my favor
(4) I make some calculations to determine break even
(5) I enter long with level 1 rescue troop.
(6) I close both trades when the their effect of my book is zero.

That all there is...as far as understand it...There are many messages describing the these mechanics.

My advise...demo practice attack and rescue sequence before using real money...do it for a long time...I passed the whole month of January just practicing in demo...and I stil demo practice... Why? ..this is too dangerous...as I saw today. I have to use level 2 rescue and I hesitated..missed the timing and I have my own WWIII.

My problem with normal stop losses...today in the middle of my battle I understood that my style is a stop-losses sweeper....I use a broom to collect pips...

My trouble with catastrophic stop losses...fti wants to develop a general mindset...knowing that there is a way out since a violation of the first paragraph of AOW:

"The military is a great matter of the state.
It is the ground of death and life,
The tao of survival or extinction."

So if we have a catastrophic stop losses, does that create a somewhat careless mindset? I think it does...I consider this type of SL and I told myself...that I must be vurnerable otherwise how could I take trading deeply serious...which as you could image I do...

Again, my apology...I am just a terrible kid....Ah...
Empty as water and soft as a facing wind mountain
  • #2,143
  • Apr 1, 2008 7:46am Apr 1, 2008 7:46am
Quoting luSan
Oh yea....I got humble today...I found myself in the wrong airplane...going south when I wanted to go North...humility, humility, humility and courage...I need to develop more of that....Any way, after almost 5 hours of fighting, fti's teaching saved my book...(oh...whatever I understand of his teachings)

Go to my journal and see a crazy WWIII full of rockets, missiles and pain... Now...my problem...I need to evaluate my B/E strategy and agreed... Am I suffering of self-destruction habits...I need to reflect about it...

In the middle of the battle I was thinking about one of the fti's story... remember the man caught on the roof of house, praying and waiting for god to save him?...I was there today...Oh well...I am still alive...The holy book was not hurt...

Actually, this was a PA great lesson...humility, courage, and patience...I need more of that.

Regards,
Hi luSan

 Before I pull the trigger on any trade, I am always aware that anything can happen and whatever happens the market is always right.

 Those who continue to trade despite the setbacks, are the real heroes, living life the best they know how, evolving and growing through their losses and gains, through their triumph and defeat, their fear and greed, their hopes and anxieties. You cannot afford to let yesterday's gains or losses cloud your thinking as you trade today. Though you may be carrying a position over from yesterday, you always have to look at the market afresh. Each trade, each position is a new position.

The Market exists by itself, unaffected by and separate from the trader and his emotions. As he slowly begins to tune into the market and its ways, he starts to observe the rhythm of the market. Instead of trying to force the market to do his bidding, he starts to embrace it and to dance like a Samurai warrior; he starts to live life instead of struggling with it. That is when he starts to make money on a sustained basis.

 Don't be too hard on yourself. As I said initially, in trading and in life anything can happen and we must be prepared for this.

Hope isn't a viable investment vehicle.
  • #2,144
  • Apr 1, 2008 8:24am Apr 1, 2008 8:24am
Quoting luSan
Why should I change what is already working?

Why? Why? Why? How could thing be better? I am open to learn...I am just a student...learning about forex...a newbie...open mind...ready...tell me..
Hi LuSan,

Are you sure your MM is able to protect you from giving back all your hard earned profits in one single bad day? If your answer is yes, then it is OK. If it is no or maybe, you better think it out again. There are hurricanes in this market that begin as an innocent breeze. Be sure you will not be caught by one of these. And this is all about MM. When increasing in lot size this may easily be mistaken... good trading.
  • #2,145
  • Apr 1, 2008 8:42am Apr 1, 2008 8:42am
Hi Lusan,

Only 5 hours? :

I guess you would have understand now how I felt last week. Truthfully, last week lesson taught me something important.....in scenario like today I would have cut my losses, reverse my position and went short. Like you, I was Long early today but i was quick to cut my loss. (I know, I know...this is against what Fti taught) I felt the trend was turning and would be dead in the water so rather than hang on to it, I have 2 choices:-

a) reverse my position or
b) exit and wait for a better position to enter Long but with rescuers instead of scout. This is to compensate for the earlier loss - sort of sending in the rescue without the scout still in battle.

I chose option a). Therefore, I broke even today with a little profit.

I know this is deviating from Fti's teachings but just something I was experimenting with today after what happen to me last week.

p.s reason for going short is because of the reversal bar formed on the Daily chart. This PA makes me willing to reverse and dance short on the 5s.
  • #2,146
  • Edited 9:08am Apr 1, 2008 8:50am | Edited 9:08am
@Lusan,

I think you have enough mental capacity bro. You'd make an exceptional trader. I can never execute rescues such as fast as you, i admire your proactiveness to the market, you seem to respond very fast. Oh and btw welcome to the 5hour rescues...(be prepared to face more, i din get to sleep last night nursing my euro shorts, i got caught a bit before she stripped)

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

I made a really long battle today. I was (should i say) slaugthering the euro. taking shorts and beating down every rally she made. (it was quite easy today). I have just wounded off almost all my position (except for 1) and i have gathered quite a huge foreign capital, i noticed that my broker quoted my average price as 1.6100. With only my scout left in the field, i am approximately 500pip in the money and he's still picking the spoils of war as i type right now. I am just wonderin, (thinkin out loud)

Would it be a good idea for me to leave it there? im not too worried abt 200-300pip fluctuation coz i should be able to stamp down a position to reaverage her to a better ground. There are some pros and cons that i can gather by having one scout running in the field 24hrs...

Pros
I will always have a good feel of market action everytime i start a trading day.

Cons
I will tend to develop a biased view on my position.

pls give feedbacks

anyway back to ro3k. look at the trends!!!! look at how cable/euro tear away from the yen ... gbp is proly leading the reversal now...lets see if she can pull the majors or if she'll sink along.....
  • #2,147
  • Apr 1, 2008 8:57am Apr 1, 2008 8:57am
Quoting jest1081
I made a really long battle today. I was (should i say) slaugthering the euro. taking shorts and beating down every rally she made. (it was that quite easy today). I have just wounded off almost all my position (except for 1) and i have gathered quite a huge foreign capital today, i noticed that my broker quoted my average price as 1.6100 (euro never did got there ). Yes, with only my scout left in the field, i am approximately 600pips in the money and he's still picking the spoils of war as i type right now. I am just wonderin, (thinkin out loud)

Would it be a good idea for me to leave it there? im not too worried abt 200-300pip fluctuation coz i should be able to stamp down a position to always-reaverage her to a better ground. There are some pros and cons that i can gather by having one scout running in the field 24hrs...

Pros
I will always have a good feel of market action everytime i start a trading day.

Cons
I will tend to develop a biased view on my position.

pls give feedbacks

anyway back to ro3k. look at the trends!!!! look at how cable/euro tear away from the yen ... gbp is proly leading the reversal now...lets see if she can pull the majors or if she'll sink along.....
http://www.forexfactory.com/showpost...postcount=2022

Sounds familiar Jest.....

IF you are leaving it overnight without monitoring your position then you must be prepared to lose your scout in the event market turn against you while you are sleeping.

Otherwise, just take the profits and fight again tomorrow.
  • #2,148
  • Apr 1, 2008 9:32am Apr 1, 2008 9:32am
All, thanks for your condolence!!!

But I need to make a clarification....I did not lose the war!!! I walked out full of bruses and with a small amount of pips for the book...Now I have the experience that several of you have with a much longer dance.

Still....it was a humbling experience that taugh me many lessons...and clearly show me that there is a future in this....I apply almost all that I have learned here and I came back alive...I even checked the 3 kingdoms...while the war was going on and notice G/U with a lot of volatity...(a better pair for my style?)

My confidence? Intact...I hope I became a little wiser... Leighsww, you are correct...I need to reduce my size because I hesitated twice... then I began doing it correctly...but this is a sin...So, I will take a step back and develop more this General.

During my vacation... if I have access to a computer...I will demo rescue with the same lot size...and all this will be done against the trend...I want to develop myself as a single strok killer... No hesitation... It is not that is a good idea to fight the trend but I think that it is good to expose myself to the worst possible scenearious

One of the lesson I learned that might be usefull for some people...single 5M bar trading is also nerve dangerous...and the dance need R/R...and reaccessment... then that dance could me done all day long... Maybe a fixed War target of 50 pips...then end the war...and restart the dance...that is a possiblity to consider...

Why am I writing all this?
Because I am just a student... and I am open to any advise that will make me better.

Why to make it public?
Because I believe that human tend to hide the truth and that is very dangerous in this business. I want to make all my mistake now with small size and avoid the agony of learning my error with standard lot sizes!

Regards
Empty as water and soft as a facing wind mountain
  • #2,149
  • Apr 1, 2008 9:36am Apr 1, 2008 9:36am
Quoting sitoca
http://www.forexfactory.com/showpost...postcount=2022

Sounds familiar Jest.....

IF you are leaving it overnight without monitoring your position then you must be prepared to lose your scout in the event market turn against you while you are sleeping.

Otherwise, just take the profits and fight again tomorrow.
ahh yess...hehe thanks!
  • #2,150
  • Apr 1, 2008 9:38am Apr 1, 2008 9:38am
Quoting jest1081
I am just wonderin, (thinkin out loud)

Would it be a good idea for me to leave it there? im not too worried abt 200-300pip fluctuation coz i should be able to stamp down a position to always-reaverage her to a better ground. There are some pros and cons that i can gather by having one scout running in the field 24hrs...

Pros
I will always have a good feel of market action everytime i start a trading day.

Cons
I will tend to develop a biased view on my position.

pls give feedbacks
Hi Jest1081,

I would keep a small position in the market not 24h but as long as the main trend is in alignment with the intermediate trend and there is no sign of an intermediate trend reversal. This would be independent from the short term baby-sit fight. There is a psychological advantage: we would pay a small price for the possibility of catching big moves that do occur when we are not monitoring the market. One important point, in my opinion. NEVER snowball an intermediate term position. Initial level ONLY.

P.S.: I believe fti's techniques are the best (the most profitable in existence). But there are mid and long term profitable possibilities too.
  • #2,151
  • Apr 1, 2008 9:47am Apr 1, 2008 9:47am
Quoting Jairo
Hi Jest1081,

I would keep a small position in the market not 24h but as long as the main trend is in alignment with the intermediate trend and there is no sign of an intermediate trend reversal. This would be independent from the short term baby-sit fight. There is a psychological advantage: we would pay a small price for the possibility of catching big moves that do occur when we are not monitoring the market. One important point, in my opinion. NEVER snowball an intermediate term position. Initial level ONLY.
jairo,

thats what i was thinking. scale out...i can already trade the position in the hourly timeframe, it has already made several swings coz i remember fti saying, if he scales out to the longer timeframes, he is either deep it waters or deep in money. But sitoca is right, protracted battles are not good, im quite tired really. it would be almost 24hrs since i started this skirmish.

regards
jest.

ps euro and gbp turned....jpy still not moving.
lets look at how the market react. i believe this is one of the things fti mentioned about arbitrage.
watch the PA guys
  • #2,152
  • Apr 1, 2008 9:55am Apr 1, 2008 9:55am
Quoting jest1081
jairo,

thats what i was thinking. scale out...i can already trade the position in the hourly timeframe, it has already made several swings coz i remember fti saying, if he scales out to the longer timeframes, he is either deep it waters or deep in money. But sitoca is right, protracted battles are not good, im quite tired really. it would be almost 24hrs since i started this skirmish.

regards
jest.
Hi Jest,

Protracted SNOWBALLED battles are not good... I have had very good protracted battles so far. Very small positions, very good nights of sleep... Anyway, this is only my thoughts. Good trading.
  • #2,153
  • Edited 10:54am Apr 1, 2008 10:06am | Edited 10:54am
one thing you can take notice in terms of the 3 kingdoms stuff, is how each of them respond to big figure numbers/options strike prices.

if you look at usd/jpy today from 7:40am-pst till my posting you'll see that it gets stuck below the 102.00 number (a big figure number and a possible options strike price), this allows the eur/jpy and eur/usd to move in unison. since the eur/jpy isn't pressed down by a nearby big figure number or options barrier and is already in an uptrend, this will appreciate the euro as seen on the euro/usd chart during the same time period.

so if you get stuck short the euro you could use that information to help get yourself out of one.

EDIT: now that the eur/jpy has reached it's big figure number at 159.00, everything stops, since both euro/jpy and usd/jpy are prevented from moving higher. (this are things you'll find happening at overbought/oversold levels as many times in a fast moving market it'll just plow through these numbers.)
  • #2,154
  • Apr 1, 2008 10:57am Apr 1, 2008 10:57am
Well, im bored, i came accross this...from a trader's blog

http://tharptradertest.com/default.aspx?question=1

You are an Artistic Trader!

Being an Artistic Trader suggests that you enjoy what's going on around you and being in the "now." You like to have your own space and work within your own time frame. In this sense you enjoy the independence of trading, although not the fixed hours of the markets. One of your strengths is your ability to be open-minded, adaptable and flexible, so if you can figure out how to apply that to trading, it will improve your chances of success...

One of your Trading Strengths
You have an ability to be open minded, adaptable and flexible within your trading.

One of your Trading Challenges
Finding and fixing mistakes are not preferred behaviors.
  • #2,155
  • Edited 3:29pm Apr 1, 2008 12:48pm | Edited 3:29pm
LOL, jest

Here's what my test's results were ...

You are a Facilitative Trader!

The Facilitative Trader type suggests that you are very quiet and serious. You tend to be very sociable and good at facilitating others as a group leader. You tend to provide inspiring leadership as you find potential in everyone and you want them to fulfill their potential. As a result, you might be a good leader of traders, but be aware that you could be stretching yourself to be an individual or solitary trader. However, you probably like to be well organized, which is quite a useful trait for a trader/investor and you do have two of the three core qualities that are essential to being a great trader (i.e. you have the ability to see the big picture and connections between things. You are also decisive, orderly and able to do things sequentially).

Furthermore, you'll work at maintaining structure but you probably do not like to deal with logic and ideas, so trading system development could be a big problem for you.

One of your Trading Strengths

You bring energy, creativity and a willingness to explore new ideas to system development and trading.

One of your Trading Challenges

May have a need for external confirmation of your ideas, systems and beliefs to the detriment of developing your own system.

I took this test twice, cuz I didn't think some of that was me, and I had a few questions where I could have selected either answers, so the 2nd time I selected the other answer, but it came out the same both times, lol

Yeah, right ... I am QUIET and SERIOUS!! haha :

* Edited - Wow, I thought I would have been an Artistic Trader from the results/descriptions of your test, Jest. That is so strange (almost "Twilight Zone-ish") that the descriptions mentioned things that we were talking about, like being in the "now", etc., lol

It would be fun and interesting to see other people's test results
  • #2,156
  • Apr 1, 2008 1:10pm Apr 1, 2008 1:10pm
Quoting jest
With only my scout left in the field, i am approximately 500pip in the money and he's still picking the spoils of war as i type right now. I am just wonderin, (thinkin out loud)

Would it be a good idea for me to leave it there? im not too worried abt 200-300pip fluctuation coz i should be able to stamp down a position to reaverage her to a better ground. There are some pros and cons that i can gather by having one scout running in the field 24hrs...
Well, fti has mentioned many times about "small overnights"

Here's something he had emailed me when he sent his feedback on my spreadsheet ...

Quoting fti
Although ability to stance with short sword, stands well as basic, the ability to use long sword thrust is important for windfall profitability, if it does not impede the buffer(foreign capital) parameters.
So long as the P&L risk is within the buffer that the short sword brings in for you, your equilibrium balaance shouldn't be impacted much.
Remember? the small overnights when the opportunity presents.
Maybe that's the "long sword" that he was talking about, no? You decide

Try searching fti's posts for keywords "long sword" and "overnight" in this thread and see if you can find more info on that.
  • #2,157
  • Edited 2:06pm Apr 1, 2008 1:26pm | Edited 2:06pm
Quoting lilpip
I begain attack at 1.9865 and 9863 with 2 troops each 5 times size of scout, and nothing more.
Your Scout, if I recollect, is .01, so your attack sequence is ... .01, .05, .05? * Edited - Or this ... .01, .1, .1? (2 troops x .05 each)

As far as where is best place to enter attack troops, can you show screenshot of your particular trading chart and show where you entered Scout and where you entered attack troops. The overall picture is important to see how the dance floor looked like for your trade.
  • #2,158
  • Apr 1, 2008 1:35pm Apr 1, 2008 1:35pm
Leighs,

yes...i was frantically looking for something he wrote about "bread and butter" and "bringing home the bacon" still cant get it, busy trading. an the oppurtunity is now....lol.

These small overnights can build you up a nice position if we manage to ride a minor trend with it. Further more i don't see how much the position can impede much of my foreign capital. other than minor 40-80pips price swings.

I thought about managing it on the longer term as well due to its depth. Anyway, i have decided to take it out...well so maybe i'll reconsider it next time. After all we wanna be flexible in our trading. Do we?
  • #2,159
  • Apr 1, 2008 1:54pm Apr 1, 2008 1:54pm
Quoting jest1081
yes...i was frantically looking for something he wrote about "bread and butter" and "bringing home the bacon" still cant get it, busy trading. an the oppurtunity is now....lol.
That wasn't about the overnight positions. That was about rescue and attack, lol. Here's the post --> Post #1801

Quoting jest
These small overnights can build you up a nice position if we manage to ride a minor trend with it.
Just remember that his use of overnights, as I understand it, means that Scout has to be well out of reach (Basis far away from the market) so as not to get into trouble (rescue situation). That's why one would be able to not have to babysit it.

Again, that's my understanding/interpretation of what he describes as "overnights," but as you know, he speaks in metaphors and often one has to decipher his meanings, so who the heck knows if I am correct, lol :
  • #2,160
  • Apr 1, 2008 3:17pm Apr 1, 2008 3:17pm
I can't find where can i apply metatrader to show on the chart where my trades were executed.As i mentioned it was just gambling when the banks were killing ducks I did a test and it really said everything about me(the biggest reason why i am fun loving is i'm young ). Well fortunately i am not very easygoing on the markets beasue i respect my opponents

You are a Fun-Loving Trader!
You tend to be optimistic, outgoing, playful, loving life, the people around you and your material comforts. You probably enjoy working with others to make things happen and are more gregarious than the other trader types, finding security in your connection with others. You also bring a logical, common sense approach to your work. And you like to things to be fun. You are highly productive and have an infectious zest for life...
One of your Trading Strengths
If you choose to trade, you would be optimistic about your chances in the markets.
One of your Trading Challenges
You will have a tendency to throw good money after bad to try to jumpstart a losing trade and turn it around.

regards
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