So what have you heard about him?
Technical Analysis Fallacy
- #2,502
- Edited 10:29am Apr 23, 2008 10:12am | Edited 10:29am
- | Joined Aug 2007 | Status: Trader | 2,219 Posts
- #2,505
- Edited 4:48pm Apr 23, 2008 2:14pm | Edited 4:48pm
- Joined Mar 2007 | Status: Pip pip | 2,692 Posts
Sorry, peeps ... no word still on fti 
.
Please know that the minute I hear from him, I will post here that I've heard from him, until then, if I don't post about it, then it means I haven't heard from him. I wouldn't keep you guys in the dark about something like that.
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I've been giving some thought to how we can make things even safer, since many probably have been more apt to taking losses more frequently lately, due to the tidal wave scare incidents.
If we are too fast to take the loss rather than conduct the rescue, then it defeats fti's methodology and puts us back to being no different than putting a stop loss onto our trades.
However, once our confidence is shot, it's very hard to overcome the fear and then we become inefficient Generals.
So, I've been giving Ro3K (Romance of 3 Kingdoms) another look at, since fti really seems to encourage that concept.
Now, what I am about to explain will be deviating from his "attack" sequence method, but it will be safer for those who may want to have some insurance, as well as assurance, with saving the book.
I haven't yet been able to test this out and will be doing so starting today (or tonight) after I write this, so at this time, I don't have any quantified results to report, but I wanted to put it out to those who may want to try this out for yourselves if it makes sense to you.
Okay, here is what I will be experimenting on ...
I have 5m timeframe charts for the following currency pairs on my screen:
I am not going to be entering "attack" levels at all, instead I am going to enter whatever the sum of my 3 level attacks are on my spreadsheet. So, since my spreadsheet is telling me my attack sequence is .2, .3, .5, then I will enter 1 lot each on 2 pairs at the same time. The 2 pairs will be EUR/USD and USD/CHF.
I picked those two, because they normally always go opposite of each other pretty consistently.
As I mentioned before, USD/JPY many times goes same way as EUR/USD, so it's not dependable for me to use those two as the opposing pairs, thus USD/CHF is safer for me.
I am going to be watching the Ro3K in conjunction with USD/CHF for entries and exits.
So, here's an example of how a possible entry will look ...
So, once my dance is over and I TP on the pair in profit, I will rescue the other pair. If after I put in the rescue troops and the PA continues to go against me, then the only time I will exit at a loss is if the amount is equal to my profit I just made on the other pair. That way, my book is squared and no loss is incurred on my Account Value.
I figure that, more times than not, I will probably be able to conduct successful rescues and even make additional profit on some of those rescues. So, at WORST - I break even, at GOOD - I make profit on one pair and B/E on the other, at BEST - I make profit on both pairs.
Now, will there be times when EUR/USD and USD/CHF go the same way? Hmmmm, I've watched those two earlier in my trading and they seem to always go opposite, but like everything else, there's no guarantees, so I'll figure out how I'm going to deal with that if the time ever comes. I will probably rescue one first (the one going against the trend) and rescue the 2nd one after the 1st one is squared.
Because my troop sizing is small due to my MM, I'm really not too worried about something like that happening though, cuz my risk is small.
Also, I can babysit BOTH dances, because I'm not having to enter attack or rescue sequences (for the latter, at least not at the same time). Once my initial entries are placed, I am then just sitting back and waiting for my TP to happen on one of the pairs. I can even leave my babies unattended if have to, lol.
Anyway, I am going to test this out and I will let you know how it is working. Hmmm, I think I'll test it out using half my original position to get the hang of it first, so will use .5 lots for each of my positions to start (instead of 1 lot each), until I know it works successfully
If anybody can find a reason this doesn't make sense, please let me know so I have a different perspective on it. Also, if your arguments are reasonable and make sense, then that'll save other people from wasting their time trying it out.
. Please know that the minute I hear from him, I will post here that I've heard from him, until then, if I don't post about it, then it means I haven't heard from him. I wouldn't keep you guys in the dark about something like that.
--------
I've been giving some thought to how we can make things even safer, since many probably have been more apt to taking losses more frequently lately, due to the tidal wave scare incidents.
If we are too fast to take the loss rather than conduct the rescue, then it defeats fti's methodology and puts us back to being no different than putting a stop loss onto our trades.
However, once our confidence is shot, it's very hard to overcome the fear and then we become inefficient Generals.
So, I've been giving Ro3K (Romance of 3 Kingdoms) another look at, since fti really seems to encourage that concept.
Now, what I am about to explain will be deviating from his "attack" sequence method, but it will be safer for those who may want to have some insurance, as well as assurance, with saving the book.
I haven't yet been able to test this out and will be doing so starting today (or tonight) after I write this, so at this time, I don't have any quantified results to report, but I wanted to put it out to those who may want to try this out for yourselves if it makes sense to you.
Okay, here is what I will be experimenting on ...
I have 5m timeframe charts for the following currency pairs on my screen:
GBP/USD
EUR/USD
USD/JPY
USD/CHF
I am not going to be entering "attack" levels at all, instead I am going to enter whatever the sum of my 3 level attacks are on my spreadsheet. So, since my spreadsheet is telling me my attack sequence is .2, .3, .5, then I will enter 1 lot each on 2 pairs at the same time. The 2 pairs will be EUR/USD and USD/CHF.
I picked those two, because they normally always go opposite of each other pretty consistently.
As I mentioned before, USD/JPY many times goes same way as EUR/USD, so it's not dependable for me to use those two as the opposing pairs, thus USD/CHF is safer for me.
I am going to be watching the Ro3K in conjunction with USD/CHF for entries and exits.
So, here's an example of how a possible entry will look ...
1 lot SHORT the USD/CHF
1 lot SHORT the EUR/USD
So, once my dance is over and I TP on the pair in profit, I will rescue the other pair. If after I put in the rescue troops and the PA continues to go against me, then the only time I will exit at a loss is if the amount is equal to my profit I just made on the other pair. That way, my book is squared and no loss is incurred on my Account Value.
I figure that, more times than not, I will probably be able to conduct successful rescues and even make additional profit on some of those rescues. So, at WORST - I break even, at GOOD - I make profit on one pair and B/E on the other, at BEST - I make profit on both pairs.
Now, will there be times when EUR/USD and USD/CHF go the same way? Hmmmm, I've watched those two earlier in my trading and they seem to always go opposite, but like everything else, there's no guarantees, so I'll figure out how I'm going to deal with that if the time ever comes. I will probably rescue one first (the one going against the trend) and rescue the 2nd one after the 1st one is squared.
Because my troop sizing is small due to my MM, I'm really not too worried about something like that happening though, cuz my risk is small.
Also, I can babysit BOTH dances, because I'm not having to enter attack or rescue sequences (for the latter, at least not at the same time). Once my initial entries are placed, I am then just sitting back and waiting for my TP to happen on one of the pairs. I can even leave my babies unattended if have to, lol.
Anyway, I am going to test this out and I will let you know how it is working. Hmmm, I think I'll test it out using half my original position to get the hang of it first, so will use .5 lots for each of my positions to start (instead of 1 lot each), until I know it works successfully
If anybody can find a reason this doesn't make sense, please let me know so I have a different perspective on it. Also, if your arguments are reasonable and make sense, then that'll save other people from wasting their time trying it out.
- #2,507
- Apr 23, 2008 2:39pm Apr 23, 2008 2:39pm
- | Joined Feb 2006 | Status: adjust your sails to the wind | 1,354 Posts
- #2,508
- Edited 3:30pm Apr 23, 2008 3:13pm | Edited 3:30pm
in your scenario you are focusing on the rescue rather than on the attack. you are going for the imminent danger.
I dunno, I'll have to actually test this out to know for sure if it works.
trade Eur/Chf then but it is like watching paint dry (small risk, good for patience/endurance training).
you can be usd bear or bull but you shouldn't be both at the same time.
Because people have been losing their confidence after the tidal wave incidents, I am showing a possible method for those who might need a safer way to trade a possible "no loss" book with applying "reaveraging."
For myself, I am fine with dancing and applying attack levels as I have been doing thus far, but I do not always post these things for my own benefit and needs, but possibly if it can make things easier, safer and less stressful for others, as well
in my humble opinion 3 kingdom power is the picture it paints. you can easily see the weak and the strong currency.. if its usd that is getting stronger against the majors or just eur getting weaker.
i might be wrong and your scenario could play out. just an opinion. good luck.
Okay, everyone might just keep doing what they are doing then. I will test this and report if it works for those who may want that "insurance" and a more conservative method with applying "reaveraging" without stress.
LOL, I could be the one wrong, but I'll give it a shot and test it out none-the-less
:
- #2,509
- Edited 4:34pm Apr 23, 2008 4:13pm | Edited 4:34pm
Just in case people aren't understanding my logic, lol ...
I am basically anticipating that one pair will be in the GREEN and the other in the RED at the point one of them is ready for the profit taking (for those who are not yet dancing well, this makes it easier to at least make profit on one of the pairs even if you weren't correct in your original direction).
When I see that the PA is reversing and I'm ready to take my profit, I will exit the pair that's in profit. The other pair (the one that should be in the RED), I will issue a rescue.
There are two outcomes for the rescue ...
1) I will either exit at B/E or at profit. Rescue successful.
2) If the PA continues to go the wrong direction and starts to get closer to the amount of my previous profit amount taken from the other pair, then I exit the trade, so at worst, my book is squared (back to my previous balance before taking those two trades). So, in essence, my overall book balance has not incurred the loss, because I used the "house" money of the previous profit I just made to rescue that trade. So, at worst, both trades will cancel each other out. My account value has not made profit, but at least it hasn't diminished due to any loss larger than what I just made.
Now, I/we still have to dance well enough to be able to make those rescues have the #1 outcome, cuz we want to make profit and not just keep our book stagnant, but with this method, at least people can feel a little more confident and at ease with conducting rescues, cuz they are only risking "house" money for each rescue.
Okay, I hope I have made this all make better sense, because after piccolo's post, I know that it was not being understood the way it is supposed to be, lol.
BOTH pairs MUST have the troop(s) entered into the trade going in the SAME direction (either BOTH short, or BOTH long, it CANNOT be ONE short and ONE long, cuz that defeats the whole method's purpose), otherwise this will NOT work since these two particular pairs go in opposite directions.
LOL, does anybody see my logic, or is this just totally out in the Twilight Zone?:
I am basically anticipating that one pair will be in the GREEN and the other in the RED at the point one of them is ready for the profit taking (for those who are not yet dancing well, this makes it easier to at least make profit on one of the pairs even if you weren't correct in your original direction).
When I see that the PA is reversing and I'm ready to take my profit, I will exit the pair that's in profit. The other pair (the one that should be in the RED), I will issue a rescue.
There are two outcomes for the rescue ...
1) I will either exit at B/E or at profit. Rescue successful.
2) If the PA continues to go the wrong direction and starts to get closer to the amount of my previous profit amount taken from the other pair, then I exit the trade, so at worst, my book is squared (back to my previous balance before taking those two trades). So, in essence, my overall book balance has not incurred the loss, because I used the "house" money of the previous profit I just made to rescue that trade. So, at worst, both trades will cancel each other out. My account value has not made profit, but at least it hasn't diminished due to any loss larger than what I just made.
Now, I/we still have to dance well enough to be able to make those rescues have the #1 outcome, cuz we want to make profit and not just keep our book stagnant, but with this method, at least people can feel a little more confident and at ease with conducting rescues, cuz they are only risking "house" money for each rescue.
Okay, I hope I have made this all make better sense, because after piccolo's post, I know that it was not being understood the way it is supposed to be, lol.
BOTH pairs MUST have the troop(s) entered into the trade going in the SAME direction (either BOTH short, or BOTH long, it CANNOT be ONE short and ONE long, cuz that defeats the whole method's purpose), otherwise this will NOT work since these two particular pairs go in opposite directions.
LOL, does anybody see my logic, or is this just totally out in the Twilight Zone?
:
- #2,511
- Edited 4:56pm Apr 23, 2008 4:40pm | Edited 4:56pm
LOL, okay
I think it's best I leave you guys to do your own thing, lol. I might just be confusing people more:
Just disregard my post for those who find it not making sense, haha.
Anyway, I need to leave again to attend to personal business, so good trading everyone!
I think it's best I leave you guys to do your own thing, lol. I might just be confusing people more
:Just disregard my post for those who find it not making sense, haha.
Anyway, I need to leave again to attend to personal business, so good trading everyone!
- #2,513
- Edited 5:49pm Apr 23, 2008 5:30pm | Edited 5:49pm
- Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts
- #2,514
- Apr 23, 2008 5:40pm Apr 23, 2008 5:40pm
- Joined Feb 2008 | Status: Cartographer | 1,981 Posts
LOL, please reread my post, cuz you might not quite understand what I am trying to do. Every way I looked at it, it seemed actually very safe as I have tried to omit the "danger."
I dunno, I'll have to actually test this out to know for sure if it works.
Again, please reread my logic of what I am trying to do. I do not want to be bear one and bull the other, because that would defeat the purpose of the "insurance."
Because people have been losing their confidence after the tidal wave incidents, I am showing a possible method for those who might need a safer way to trade a possible "no loss" book with applying "reaveraging."
For myself, I am fine with dancing and applying attack levels as I have been doing thus far, but I do not always post these things for my own benefit and needs, but possibly if it can make things easier, safer and less stressful for others, as well
I have come up with this, only because I could see how many have lost their confidence and may even be settling for the losses instead of even attempting rescues (even if they may be going with the trend), cuz once spooked, it's not easy to shake the fear of encountering something like that again.
Thanks, I appreciate it, but again, I'm not sure if you are completely understanding the reasoning behind what I am trying to do.
Okay, everyone might just keep doing what they are doing then. I will test this and report if it works for those who may want that "insurance" and a more conservative method with applying "reaveraging" without stress.
LOL, I could be the one wrong, but I'll give it a shot and test it out none-the-less
My friend...I think you are rushing...it is too complicated...how to keep track of it and not to miss the actual dance?...Risk managment as someone said before is already part of the MM and MO...so several pairs?...I could not do it...
You might want to do some demo and test it...me?...I guess I am orthodox..I practice what we learned from fti...there is plenty...managing the tough day is not hard...just get out...OUT OUT OUT...when to get out?...Clearly, when the trend is broken...so let us just watch the trend...that is enough.
See this...If our win rate is 80 % and we win 0.5 % profit we have expected wins of 0.4 % (=0.80 x 0.5)...Now if we loss, let us say 2 %, then 0.2 x 2 = 0.04 %. So still dropping a session 20 % of the time is not such a bad idea...without having to go to the complexity of multi pair tracking... Of course...we must get out fast when things do not look right...maybe at the first rescue...never a third rescue...it would be too late...never too many troops out...
Note. 0.4 % per session...that is not hard to do...note 2 % loses, that is even too much...I stop here...I do not like to use my analytical mind in forex...
Hey...I have only 2 losses since January and my hit rate is above 95 %...and those were large because I did not know what to do...Now I am willing to get out and fast...If my wins drop to 80 % that is still fantastic as long as capital keep increasing...the point? never go deep into rescue mode...NEVER...do the ant work...take your profit early and run with the money... I think that solve the problem.
My 2 cents.
Empty as water and soft as a facing wind mountain
Having two trades going like that could be distracting but then women are supposedly multitasking so you could be in luck!
Since I can see all 4 charts at the same time, I just need to enter my initial positions on both the EUR/USD and USD/CHF charts. It's basically going to be the same way I enter the Scout.
Once my position is in for both pairs, I don't do anything more except when I'm ready to TP.
Since my charts are side-by-side on one screen, I'm able to see the whole picture at one glance (it's actually pretty easy to assess things without much effort the way my screen is setup).
And because they both dance opposite of each other pretty much in sync, there's really nothing to analyze further, because I'm not needing to do anything during the dance ... I'm just waiting for my TP.
Once I exit the TP pair, at that point I only have one currency pair to concentrate on to conduct my rescue.
My question is why wouldn't you just enter long and short on the same pair? The next question is why would you want to?
Anyway, I was just trying to come up with a safer way for those who want one, but since most are not grasping the concept of what I'm talking about, lol, we can just drop it and I'll just test it out on my own
:Everything everyone needs is already in fti's posts anyway, so just keep doing what you're doing. Don't pay attention to me, haha.
- #2,516
- Edited 9:10pm Apr 23, 2008 5:51pm | Edited 9:10pm
- | Joined Aug 2007 | Status: Trader | 2,219 Posts
- #2,517
- Apr 23, 2008 8:57pm Apr 23, 2008 8:57pm
- | Joined Aug 2007 | Status: Trader | 2,219 Posts
My friend...I think you are rushing...it is too complicated...how to keep track of it and not to miss the actual dance?...Risk managment as someone said before is already part of the MM and MO...so several pairs?...I could not do it...
You might want to do some demo and test it...me?...I guess I am orthodox..I practice what we learned from fti...there is plenty...managing the tough day is not hard...just get out...OUT OUT OUT...when to get out?...Clearly, when the trend is broken...so let us just watch the trend...that is enough.
See this...If our win rate is 80 % and we win 0.5 % profit we have expected wins of 0.4 % (=0.80 x 0.5)...Now if we loss, let us say 2 %, then 0.2 x 2 = 0.04 %. So still dropping a session 20 % of the time is not such a bad idea...without having to go to the complexity of multi pair tracking... Of course...we must get out fast when things do not look right...maybe at the first rescue...never a third rescue...it would be too late...never too many troops out...
Note. 0.4 % per session...that is not hard to do...note 2 % loses, that is even too much...I stop here...I do not like to use my analytical mind in forex...
Hey...I have only 2 losses since January and my hit rate is above 95 %...and those were large because I did not know what to do...Now I am willing to get out and fast...If my wins drop to 80 % that is still fantastic as long as capital keep increasing...the point? never go deep into rescue mode...NEVER...do the ant work...take your profit early and run with the money... I think that solve the problem.
My 2 cents.
LOL, actually, it's going to be less work, cuz entering attacks has more effort involved than this will have.
Since I can see all 4 charts at the same time, I just need to enter my initial positions on both the EUR/USD and USD/CHF charts. It's basically going to be the same way I enter the Scout.
Once my position is in for both pairs, I don't do anything more except when I'm ready to TP.
Since my charts are side-by-side on one screen, I'm able to see the whole picture at one glance (it's actually pretty easy to assess things without much effort the way my screen is setup).
And because they both dance opposite of each other pretty much in sync, there's really nothing to analyze further, because I'm not needing to do anything during the dance ... I'm just waiting for my TP.
Once I exit the TP pair, at that point I only have one currency pair to concentrate on to conduct my rescue.
My broker's platform can't conduct hedging on the same pair, but even if it could, I have a reason for not wanting to do that. This needs to be hedged with two separate pairs, for it to work. If hedging the same pair, then I'd not be able to take profit from one, to use for the rescue resources of the other. Remember, I am wanting to use "house" money on this same trade so I don't incur a book loss in case rescue is unsuccessful. Because I am risking a maximum amount (the amount of the hedged TP profit trade), I'm not incurring any loss out of any previous profits on my book.
Anyway, I was just trying to come up with a safer way for those who want one, but since most are not grasping the concept of what I'm talking about, lol, we can just drop it and I'll just test it out on my own
Everything everyone needs is already in fti's posts anyway, so just keep doing what you're doing. Don't pay attention to me, haha.
I understand what you try to convey. I also read something about currency correlation. Here are few links for you to read about correlation of currency pairs. One problem may be the correlation between EURUSD and USDCHF may not be one. So there may be some difference in the degree they move in opposite direction. Your strategy sounds like a stress free one. I will try in demo first and share my findings. In the meantime please read the following about currency correlation. The 2nd link has some tools. Hope the links are not removed by moderators.
http://www.forexproject.com/tag/currency_correlation/
http://www.mataf.net/en/forex/trading/
- WaveRider3
- #2,520
- Edited Apr 24, 2008 12:31am Apr 23, 2008 11:06pm | Edited Apr 24, 2008 12:31am
I understand what you try to convey.
.I have to admit after giving it more thought, there might be a little bit of a problem with my theory, cuz when I posted it, I didn't actually conduct any trades using it, so it was only a theory, but here's the thing ... if the pair in the GREEN moves a shorter distance than the pair in the RED, then even if I bank the GREEN pair's profits, if the rescue isn't successful, then I may still have a small deficit.
At first I was thinking that I wouldn't be having losses at all, cuz I'd be using the banked profits to buffer my rescue, but if the pair in the RED is already larger than the profits banked, it might not work the way I originally thought, lol. It will still work to some degree, cuz the profits banked will still help with making the loss very minimal.
If I dance well, then I'd be able to rescue the pair in the RED more times than not, especially if I'm exiting the first pair and rescuing the second pair at a reversal/retracement point.
Anyway, I'm still gonna test it out, too, cuz I think this has real potential. Between us, we can find out if it will work enough to be worth it, or if there's too many flaws in my theory, haha.
Your strategy sounds like a stress free one.
:I also read something about currency correlation. Here are few links for you to read about correlation of currency pairs. One problem may be the correlation between EURUSD and USDCHF may not be one. So there may be some difference in the degree they move in opposite direction. Your strategy sounds like a stress free one. I will try in demo first and share my findings. In the meantime please read the following about currency correlation. The 2nd link has some tools. Hope the links are not removed by moderators.
http://www.forexproject.com/tag/currency_correlation/
http://www.mataf.net/en/forex/trading/
Ah, I can see that they are using correlating pairs with putting one short and one long on the opposite moving pairs (EUR/USD and USD/CHF), or one long and one long on pairs that move in the same direction (EUR/USD and GBP/USD), so it's not quite what I'm testing (cuz I'm using opposite pairs (EUR/USD and USD/CHF) and putting positions in the SAME direction), but the read was very interesting and it was good to learn the degree (high -90s) that those two pairs move opposite of each other. If I'm interpreting that right, that should be good for my theory's premise.
The thing that will make this theory work well, is if the rescues are successful more times than not. Without the rescue aspect, then this would definitely not work.
Anyway, it's worth a try (even if I'll be deemed a kook), cuz that's the inventor and adventurer parts in me
, so I at least wanna give it a shot before totally being negative against it.Hey, everybody thought Columbus was crazy to believe the world was round, and if people never tested out the art of flying, we'd be still ground traveling today, so sheesh, I'm going to at least test something out and quantify it before giving it the axe prematurely
:If you short E/U and U/C at the same time, it is the same as you short EUR/CHF. Please think about it.
Sorry, but most of you aren't grasping the concept ... or maybe WaveRider3 is the only one as crazy as me, haha!
------------
Thanks for everyone's concern and opinions, but I've gotta at least give this a test drive, okay? I don't like to just jump to conclusions without at least testing things out
Like I said, it might not work like I originally thought, but I'm still gonna give it a try.