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Technical Analysis Fallacy

  • #2,881
  • Jun 2, 2008 11:26am Jun 2, 2008 11:26am
Quoting hemal011
Hello fti and other brilliant traders ,

I was trading with as per your teachings and inching up regularly. I got confident and now (due to my lack of nimbleness, I think) , EURUSD snowballed against me.

I am Long 10 mini contract with average price of 1.5667. Just could not book loss in the "hope" that Buck can't be strong for long. Need your help and suggestion.

I had to infuse extra captial to avoid margin calls and now too scared to do any rescue. Lesson's learnt hard way to be nimble.

Any suggestion or advise will be really helpful.

(I think DutchAngel was in similar situation .....any words of advise DutchAngel)

Regards,
Hi hemal011,
Sorry that you are in a fix.
Let me give you some general advice first.
You may think that you are following my MO .
In fact I believe that you are not, for the following reasons.

1. If you have risked more than 10% on this battle, If you have not and have followed my advice then you will still have sufficient to rescue this situation.

2. You are not dancing the rhythm, if you think you are then something is out of line . as I can see lots of opportunities for good rescues. Moreover it seemed to me that you were trading against trend. ( big NO,No)
I cannot tell where you placed scout a. then rescued, probably more than twice ( just my guess), but the average you gave suggested that you traded against 2 bear impluse waves. Your rescue time window is getting shallow as we move into last leg. ie either 3 impulse or extended 5 wave impulse. Either way the impluse will be shallow and swift.

Otherwise you would have moved into changed trend and the impulse would be going your way, so you would have to re-access for attack instead as a means to recover. This requires lots more capitalisation. At your experience level, I dare not suggest this for you.

If you must.
break your positions into 3 levels, 3,7,10
treat that you have initiated 3 and 7 , so you are waiting for timing to send rescue 10. This must not fail. Time yourself well.
When the 10 is sent for the rescue, do not allow them to over stay.
enter on the turn as best you can, then take them out with whatever profits you can recover confortably, when taking them out take the 7 out as well.
Next attempt. rescue with 7 and take all out as best you can ride.

Calculate your per pip exposure , it is now USD 20 per pip move , so make sure that you can comfoetabily take pain for at least 150 pip.

You may not recover all your lost, probably up to 70% of lost. but this may recover some lost pips for capitalisation for next battles ahead. This seems your best options out. otherwise "bite the bullet" and cut the cancer.

Remember , never trade against day trend or hourly chart trend again.
Not unless you are expert and can maneuver like one.

Do re-read the thread again slowly, if suit, you have missed some critical knowledge and training.

Trade Carefully.
regards

PS If you are cash tight, the you may like to attempt what Lusan suggested.
Quoting luSan
Thoughts:

You are so far away... and 10 mini-lots!...so you are brave and probably already got a lot of foreign capital...and it is Friday...!!!

So either

1) Many rescues with level 1 and 2 when EMA(12) in 5M is long and away from resistance...

Edit: 2) Close some positions _yes, with a lose_ and use the funds to rescue the left behind...

3) Pull the plug and promise never to go against 15M...See it as a the price to learn a lesson...
  • #2,882
  • Jun 2, 2008 11:29am Jun 2, 2008 11:29am
Quoting hemal011
Any views on EURUSD move in next few days ? (based on fundamentals and market trends )
Never do this, never ask for other's views neither make predictive assumptions.
ASSUME= makes an ASS of U and ME.

Please learn to trade the dance instead.


regards
  • #2,883
  • Jun 2, 2008 11:36am Jun 2, 2008 11:36am
I wrote something about Tibet issues against another guy.

http://www.forexfactory.com/showthre...62#post2032162

Interesting.
  • #2,884
  • Edited 1:05pm Jun 2, 2008 11:47am | Edited 1:05pm
Quoting luSan
Ema,

it is easy to give advise but hard to take it...I got beaten into the ground today...I paid my entry ticket into a new universe and I learned 5 big lessons. I want to share it with you:

1. Friday trading...be specially careful because traders wrap the day and the day is very short...We have not much time to rescue.

2. End of month trading...probably avoid them...Winners want to lock their profits and loser want to reduces it...so very odd volatility...

3. Sometimes we must let go and fight another day. Do not hesistate to close a trade.

4. Trading is easy but it takes a long time to really learned. I must be patient. I learned something new everyday...so I need to keep my size small until the rate of learning slow down. I do not want to thousand dollars lessons that could be bought for pennies.

5. Confidence is built by practicing with small size and gradually building up. It is like weigh lifting...first we do 20 and then 30 pounds,,,until we reach our limits...there will be pain along the way...so we slow down but do not stop...

...still it hurts like hell...

Regards,
Lusan, I have no problems with 3,4 5

But about trading time.
I would like to add.
A normal trade day is one, where you come out with a profit for the day.
A great trade day is one where you came out with a profit , inspike that most of the day you were fighting with a loss book.
A bad day is one where you came out flat for the day.
The day that you come out with a loss, its a longest day.

To fix and stereo-type trading days or hours is unhealthy for a trader. It is rigid thinking. A good trader will stay with the battle , for as long as necessary to see accomplishment and to stay out of battles that are protracted.

Strategies for week ends and month book closings, should be designed for swift take downs, and therefore should be skewed-in for fast action.

I always remembered what my dad always warned me.
小艇怕風浪 , 大船難轉彎

( Small Boats are afraid of wind and waves turbulence, Big Ships have difficulty to to turn.)
regards
  • #2,885
  • Jun 2, 2008 12:05pm Jun 2, 2008 12:05pm
Quoting Zoran
hemal

My advice would be to read this thread and practice the principles. There is no hand holding here and if you get in trouble then you will normally have to learn the lesson until you get it.

As babies, when we learnt to walk, we all fell down and hurt ourselves. Just like riding a bike. But once you get it, it's with you forever. So keep at it and keep learning, but to have a true master here with us, it makes the journey ever so shorter.

My simple advice is, please do not over expose yourself. Do not be greedy as that is a sure way to kill your account. Find your balance.

The market is the best teacher you will have.
Hi Zoran,

Masterful advise.

regards
  • #2,886
  • Jun 2, 2008 12:07pm Jun 2, 2008 12:07pm
Quoting Jairo
Hi fti,

One single little intervention in the smoking issue. Your trading career was (and is) brilliant. Your technique is excellent and difficult to master. You have done it. Saving the banks' books is stressful. Correcting other people's errors is stressful. Babysitting positions is stressful. Snowballing is stressful. The reward to risk of the MO is stressful. You achieved great success in all that. You are a winner. Many people (including winners like you) smoke to lower stress. I have never done it. I hate smoking but I understand the smoker.

As I have already said a lot of times, I am immensely thankful for all your efforts in teaching us. So I wish you a very long life, enjoying the success you so hardly conquered.

Thank You Jairo for your kind words.

regards
  • #2,887
  • Jun 2, 2008 12:09pm Jun 2, 2008 12:09pm
Quoting seeit
Middle age technical support.





http://www.youtube.com/watch?v=LRBIVRwvUeE
HI seeit,

LOL, this is funny.
resembles my tech support does it,
Instructions are clear, nevertheless, brain required.

regards
  • #2,888
  • Edited 1:07pm Jun 2, 2008 12:38pm | Edited 1:07pm
Quoting Green_David
Hi, fti:

Glad you still maintain Chinese culture. On the contrary, I have met a lot Malaysian and Singaporean "bananas". You know what I mean. So to keep your family tree book, you need have sons.

Since 20 May, I started to short G/u and E/u. Bad timing. Until now, I am still holding some G/U short positions opened @9676 on average with -60 pips gain. However with some rescue operations, my equity is still growing during these days with rate of return which Buffet could kowtow to me .

The key is M/M. Thank you fti, I wish I could be one of your best students in the end.

By the way, where is Leighswww, our cheer leader. Wonder how is her trading going? Any news from her?

Best regards, sincerely.

David
Hi David,

You understand , correctly.

However 一山比有一山高 , 強還有彊沖手
(There is always a higher hill, there is always a stronger adversary.)
So humility will accord , the peace of soul.

Last I heard from Leighsww,
she was very busy settling her sister's affairs and business and also her own.
She is a very engaged and successful business woman so mostly her time is very precious. It is so very gracious of her to have given this thread so much of herself already.

Moreover, as she had revealed, she is on "secret" experimentation, and will be giving us a full performance report asap. So be patience, she's be here to whip us, as soon as she can find some time to spare, I believe.

regards
  • #2,889
  • Edited 1:34pm Jun 2, 2008 12:48pm | Edited 1:34pm
Quoting woopypooky
hi guys, i want to ask how to determine the trend on larger timeframe? i.e 15M or daily
I used to have indicators such as median lines and moving averages to determine the trend. If prices are above the MA, then i would assume it to be uptrend.
Since you guys here trade naked, i am curious about it. And i want to join too.
Can i know what technique used to feel the trend? Is it bar charts/candlestick to determine your bias?
Hi woopypooky,

For daily as well asfor all timeframes, How is a trend determined?
Well basically the same, how any trend is determined. Check out the basic defination of a trend. Did you actually read this thread?

How is a depression defined? Well, the concepts are the same.

what technique used to feel the trend? Focus with brain, on behaviour of pulse. ie "feel" aka "form"

Read this thread slowly, no need to rush and miss out the info contained within.

regards

Be watchful, that USD/YEN is suggesting something, and the EUR and Cable is behaving quire.
  • #2,890
  • Jun 2, 2008 2:01pm Jun 2, 2008 2:01pm
Quoting fti

Be watchful, that USD/YEN is suggesting something, and the EUR and Cable is behaving quire.
Excuse me , Mr. Fti,
what you mean by quire ? .........> 2 dozen paper ? that what dictionary say.

thnkzz.....
I Deeply Love My Virtual Life In Virtual World , RLC
  • #2,891
  • Jun 2, 2008 3:59pm Jun 2, 2008 3:59pm
" Never do this, never ask for other's views neither make predictive assumptions.
ASSUME= makes an ASS of U and ME. "

Another life lesson we all can use... when we are by nature a meaning making machine. Thanks.

When you say "I try to recognise the compounded formatioms in the bar charts."
I have studied steve nison's book Beyond Candlesticks and patterns from http://thepatternsite.com/
is there any other source we can use because when you say some thing like
" if stall was in shape of "C"(saucer shaped) then rounding would suggest bottoming distribution.
However since distribution was in shape of "B" likely to be down."

I know that I am missing out a lot.
Thanks

ksl
  • #2,892
  • Jun 2, 2008 4:01pm Jun 2, 2008 4:01pm
Quoting notme32
Excuse me , Mr. Fti,
what you mean by quire ? .........> 2 dozen paper ? that what dictionary say.

thnkzz.....
Hi notme,

...interlocked .... spaghetti junctioned.

regards
  • #2,893
  • Edited 4:38pm Jun 2, 2008 4:27pm | Edited 4:38pm
Quoting ksl
" Never do this, never ask for other's views neither make predictive assumptions.
ASSUME= makes an ASS of U and ME. "

Another life lesson we all can use... when we are by nature a meaning making machine. Thanks.

When you say "I try to recognise the compounded formatioms in the bar charts."
I have studied steve nison's book Beyond Candlesticks and patterns from http://thepatternsite.com/
is there any other source we can use because when you say some thing like
" if stall was in shape of "C"(saucer shaped) then rounding would suggest bottoming distribution.
However since distribution was in shape of "B" likely to be down."

I know that I am missing out a lot.
Thanks

ksl
Hi ksl,
What I highlighted is basic continuation and reversal characteristics of bar charts. This is bare basic, so any tech analyst can spot it on the big picture patterns,

Distributions are very hard to decipher, whether if its continuation or reversal. The trick is to use scout positions. From experience, I find that the pulse becomes clear if having positions, whereas without exposures it seems harder to feel the form thats developing. But of course the scout can be wrong, then you know what you must do.
The key is in the consistency, your scout can be consistently wrong or consistently right. It depends on your skill & experience in the markets. No matter if you are either, you can formulate good strategies to handle the market. And of course your MM helps a lot, in cases where you are mostly wrong.
Your exposure coupled with your attention on the volitility of the distribution will que you into the "form" readings.
It is very difficult to describe. Once you tune into it from practise, you can actually "feel" it.

regards

PS: Some of my trainees (at banks)had ever asked about having deployed scouts numerous times and still be on the wrong side of the impulse. In these instances , it is very clear that you will be against the major trend. So you must formulate careful exit strategies as you are not supposed to trade against the trend. Under these situations ,the exitings can become painful and labourous.

Rule of thumb is to risk enter positions quickly and when the feel is discovered, to exit the positions slowly with masterful strategems, for book preservation.
  • #2,894
  • Jun 2, 2008 8:00pm Jun 2, 2008 8:00pm
Quoting fti
Hi woopypooky,

For daily as well asfor all timeframes, How is a trend determined?
Well basically the same, how any trend is determined. Check out the basic defination of a trend. Did you actually read this thread?

How is a depression defined? Well, the concepts are the same.

what technique used to feel the trend? Focus with brain, on behaviour of pulse. ie "feel" aka "form"

Read this thread slowly, no need to rush and miss out the info contained within.

regards

Be watchful, that USD/YEN is suggesting something, and the EUR and Cable is behaving quire.
Thanks for the reply.
I have read this thread twice. I guess i need to read it many more times. I guess basic trend definition are 1-2-3 formation, higher high, higher lows for uptrend.
  • #2,895
  • Edited Jun 3, 2008 6:14am Jun 2, 2008 8:06pm | Edited Jun 3, 2008 6:14am
Follow the impulse and corrective movements.

http://baynhamtyers.com/contraptionII.html
  • #2,896
  • Edited 10:34pm Jun 2, 2008 9:42pm | Edited 10:34pm
Quoting fti
Distributions are very hard to decipher, whether if its continuation or reversal. The trick is to use scout positions. From experience, I find that the pulse becomes clear if having positions, whereas without exposures it seems harder to feel the form thats developing. But of course the scout can be wrong, then you know what you must do.

The key is in the consistency, your scout can be consistently wrong or consistently right. It depends on your skill & experience in the markets. No matter if you are either, you can formulate good strategies to handle the market. And of course your MM helps a lot, in cases where you are mostly wrong.

Your exposure coupled with your attention on the volitility of the distribution will que you into the "form" readings.

It is very difficult to describe. Once you tune into it from practise, you can actually "feel" it.
FTI. I've always wondered if its a phenomenon?

Ever wondered why we could actually feel the movements better when being active rather than flat (which encourages predictive behaviour instead)?

Just yesterday, i had the exact same conversation with a friend, abt actively deploying scouts to feel the action and amazingly today, i saw your post, instant de javu.

good day and best regards
jest
  • #2,897
  • Jun 2, 2008 10:12pm Jun 2, 2008 10:12pm
Quoting fti
Hi ksl,

Your exposure coupled with your attention on the volitility of the distribution will que you into the "form" readings.
It is very difficult to describe. Once you tune into it from practise, you can actually "feel" it.
Many Thanks fti,
I have been there thanks to you when I have the "feel", but the indicators confusing me, all I need now are balls of steel to do it live without any indicators(or may be glance at them once in a while). Using demo would not give the feel as the emotions are not so strong or involved then (as discussed before).

regards

“To learn and never be filled, is wisdom; to teach and never be weary, is love.”
  • #2,898
  • Jun 3, 2008 12:10am Jun 3, 2008 12:10am
Quoting fti
Hi David,

You understand , correctly.

However 一山比有一山高 , 強還有彊沖手
(There is always a higher hill, there is always a stronger adversary.)
So humility will accord , the peace of soul.

Last I heard from Leighsww,
she was very busy settling her sister's affairs and business and also her own.
She is a very engaged and successful business woman so mostly her time is very precious. It is so very gracious of her to have given this thread so much of herself already.

Moreover, as she had revealed, she is on "secret" experimentation, and will be giving us a full performance report asap. So be patience, she's be here to whip us, as soon as she can find some time to spare, I believe.

regards
Roger! Thanks. Humility, modesty, low-profile....

Good insight. In fact, most of my huge failures after big success are due to that "得意忘形"(So proud and forget his shape/behaviour).

Take that into heart. Shi Fen Gan Xie again. It's a my great pleasure to talk with you.

David
  • #2,899
  • Jun 3, 2008 6:34am Jun 3, 2008 6:34am
Quoting fti
Hi notme,

...interlocked .... spaghetti junctioned.

regards
well, thanks , i will try to understand that spaghetti junctioned........
I Deeply Love My Virtual Life In Virtual World , RLC
  • #2,900
  • Jun 3, 2008 8:33am Jun 3, 2008 8:33am
Hi All,
So bernanke speaks, but what is he saying.
Are they gonna spend less on the fireworks, or is yhere gonna be sponsors (suckers). LOL
Looks like 4th july fever is alive.
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