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Technical Analysis Fallacy

  • #2,921
  • Jun 5, 2008 12:56pm Jun 5, 2008 12:56pm
yes, what does it mean?

thanks
  • #2,922
  • Jun 5, 2008 1:31pm Jun 5, 2008 1:31pm
Its a programed system on MT4 that open ans closes trades on its own.( I would never trust them)
  • #2,923
  • Jun 5, 2008 8:08pm Jun 5, 2008 8:08pm
yeah right, dont trust EA, they are suppose to take emotion out of trading.at the same time, they also take out common sense. To be good trader, you need to master your emotion, not leaving it out.
  • #2,924
  • Jun 5, 2008 8:17pm Jun 5, 2008 8:17pm
Quoting zenseven
2 Jairo:
May i give you an advice
I fought with my nature six years to get to profits.
Finally I understood that simplest technic known as S&R recognition make me profitable.
Now Every morning I always go through process of S&R identification.
During day I use trends if I can see them, but currenly I look more for Impulses of market before S&R and after S&R.
And Candlesticks in conjuction with S&R finally started to fire
So
Two simplest technics - S&R and Candesticks make my day.
Hi Zenseven & fti,

Thank you for your input. So Zen you trade when the market goes off the S/R levels? What do you do when caught in a false start? (say the market starts to trend in the opposite direction as soon as you jump in)
If you don't mind to be specific, I am curious about the natural tendency you fought for six years. That is a point I disagree a little with fti comment, suggesting that I trade congestions due to my tendency to go the opposite direction. I think each person must find a technique he feels comfortable with and also ajust the risk level. But these things must be adapted to the personality, not to the person's flaws. A weekness like this (a tendency to go against the trend) should rather be eliminated than adapted to. It is hard to change, but I think I MUST. I am not against the idea of changing, maybe I need only be smarter, not being fooled so easily by the market.

Good trading to all.
  • #2,925
  • Edited 9:10pm Jun 5, 2008 8:50pm | Edited 9:10pm
Quoting Jairo
Hi fti,

I am fully aware that I have a strong tendency to fight the trend.
can be done but in small target

I know there are always conflicting trends in the market but almost invariably I end up going against the trend I have initially chosen to follow!

R U trying to pick the tops/bottoms to get in at the best level? If you think price is long, why would you short, unless to gather counter pips? Or you think the trend is changing?

I have survived through prudence (small lots) and patience.
A must when counter scalping, think unlevel betting. Not all trades are equal and worthy of larger entries

But I am becoming tired of this. I am not sure if it is indiscipline or the scorpion in me (or both).
Identify the reason for the counter entry

 What can I do to overcome this? Hmmm... I am 48 years old but not closed to changes... (hopefully).
jairo,

a question for ya.

a

edit

Trading congestions, or ranges is easy for the counter trade, as the boundaries or the range are easily identified, trade the edges taking profit at the other side, if you like leave some to try to break the opposite side in the direction you feel the trend will go, normally in the direction they entered, unless its an exhustion range then normally a small retrace before resuming.

Fwiw,
  • #2,926
  • Edited 3:23am Jun 6, 2008 2:13am | Edited 3:23am
Quoting Jairo
Hi Zenseven & fti,

Thank you for your input. So Zen you trade when the market goes off the S/R levels? What do you do when caught in a false start? (say the market starts to trend in the opposite direction as soon as you jump in)
If you don't mind to be specific, I am curious about the natural tendency you fought for six years. That is a point I disagree a little with fti comment, suggesting that I trade congestions due to my tendency to go the opposite direction. I think each person must find a technique he feels comfortable with and also ajust the risk level. But these things must be adapted to the personality, not to the person's flaws. A weekness like this (a tendency to go against the trend) should rather be eliminated than adapted to. It is hard to change, but I think I MUST. I am not against the idea of changing, maybe I need only be smarter, not being fooled so easily by the market.

Good trading to all.
Jairo: I think that I had and still have problems with identifying trends. To be exact I feel more comfortable to use word: impulse waves. It does not suggest that it is panacea. But other word works for me. Earlier I always waited for 10 times confirmation of trend. Finally often I was caught by counter-trend. I dropped overanalysing. I started to use feelings with 1st scout as FTI recommended. I watch for S&R level. If price comes to S&R level fast enough and does not form any reversal pattern with candle sticks, I will try to ride second impulse wave from S&R in direction of initial wave. Or If i view reversal pattern I send scout in other direction than initial.
If market proves me wrong, I do not hesitate to stop & reverse, Or if i do not see strong movement in initial direction (opposite to my order), I do not stop and reverse, I rescue my scout.
Sometimes I do mechanical things, I just try to send reversal scout immediately near few times tested S&R ( 1-3 days ago), but not near newly formed(today), at these levels price can at least make correction (not so many pips), but worth to try. If market proves me wrong, and Impulse, that I watch in all 3 Kingdoms, is STRONG, again I do not hesitate to stop and reverse with exposure size increaing.
Hope it helps
Good trading to all Please comment if anything is wrong with my approach
I'm very happy today: My wife give a life to our little daughter today. So i'm sorry if I cannot answer questions for while.
it's o'k to win ...
  • #2,927
  • Jun 6, 2008 2:27am Jun 6, 2008 2:27am
Quoting zenseven
I'm very happy today: My wife give a life to our little daughter today.
omg! congratulations! my wife and i are still trying hard to get ours. What blessings!

regards
jest
  • #2,928
  • Jun 6, 2008 2:48am Jun 6, 2008 2:48am
Thank you all for explaining EA out! What is S & R?

Thanks!!!!
  • #2,929
  • Jun 6, 2008 3:03am Jun 6, 2008 3:03am
Quoting nemke
Thank you all for explaining EA out! What is S & R?

Thanks!!!!
S and R is support and resistance.

@ zenseven
Congratulations on new baby. Have a fantastic weekend.
Hope isn't a viable investment vehicle.
  • #2,930
  • Jun 6, 2008 3:16am Jun 6, 2008 3:16am
Right...of course! Is there a thread I can find all the acronyms, terms and glossary?

Cheers
  • #2,931
  • Jun 6, 2008 3:29am Jun 6, 2008 3:29am
Jest, DutchAngel:
Thanks a lot
Jest:
There is Russian way to make woman pregnant.
Woman has to drink from a cup or a glass of pregnant
it is strongly believed as true in Russia
All Best to you and your wife
it's o'k to win ...
  • #2,932
  • Jun 6, 2008 3:31am Jun 6, 2008 3:31am
Quoting nemke
Right...of course! Is there a thread I can find all the acronyms, terms and glossary?

Cheers
Maybe this would help http://www.retire-asia.com/forex-glossary.shtml
I just googled it for you.
Hope isn't a viable investment vehicle.
  • #2,933
  • Jun 6, 2008 5:29am Jun 6, 2008 5:29am
thanks DutchA. !
  • #2,934
  • Jun 6, 2008 7:26am Jun 6, 2008 7:26am
Quoting zenseven
Good trading to all Please comment if anything is wrong with my approach
I'm very happy today: My wife give a life to our little daughter today. So i'm sorry if I cannot answer questions for while.
Congratulation!
Empty as water and soft as a facing wind mountain
  • #2,935
  • Jun 6, 2008 7:45am Jun 6, 2008 7:45am
Quoting zenseven
Jairo:
Good trading to all Please comment if anything is wrong with my approach

I'm very happy today: My wife give a life to our little daughter today. So i'm sorry if I cannot answer questions for while.

zenseven

Best wishes to you and yours.


BabeFX.
  • #2,936
  • Jun 6, 2008 9:25am Jun 6, 2008 9:25am
Hi guys,

I'm relatively new to this Forex War. I've done away with indicators as such. Becuase indicators are just an algorithm of price to some extent and just follow price.

At this stage I'm more interested in Previous Highs and Lows. Areas on the Chart where Price is respecting a certain level. Which means once it reaches a certain level it is either bought or sold.

Trend Lines, Support and Resistance Lines formed from previous highs and lows is about as simple as you can make it.

Follow the trend at all times. Trading counter trend is dangerous to say the least. Trading the Ranges is easier. Using stops just outside the range is the best way. When price breaks the range stops protect you. It's up to you to jump on when the Range Breaks.



Technically speaking you could draw a line anywhere on the chart where price action is. You could say to yourself. Ok if price passes this line I will buy long or sell short. You can't make it any simpler than that.


If anyone knows a great exit strategy to take profits I'm all ears. Taking the losers is easy. Knowing when to take the winners is Very Hard.



---There is only one Certainty in Trading, There is no Certainty ---
There is only one Certainty in Trading --- There is no Certainty
  • #2,937
  • Jun 6, 2008 9:50am Jun 6, 2008 9:50am
Quoting Druss
Hi guys,

I'm relatively new to this Forex War. I've done away with indicators as such. Becuase indicators are just an algorithm of price to some extent and just follow price.

At this stage I'm more interested in Previous Highs and Lows. Areas on the Chart where Price is respecting a certain level. Which means once it reaches a certain level it is either bought or sold. Are you saying buy at the highs & sell at the lows or Sell at the highs & buy at the lows ?

Trend Lines, Support and Resistance Lines formed from previous highs and lows is about as simple as you can make it.

Follow the trend at all times. Trading counter trend is dangerous to say the least. Trading the Ranges is easier.Isn't trading the ranges selling the high & buying the low ? so in essence this is countertrend trading. Using stops just outside the range is the best way. When price breaks the range stops protect you. It's up to you to jump on when the Range Breaks.



Technically speaking you could draw a line anywhere on the chart where price action is. You could say to yourself. Ok if price passes this line I will buy long or sell short. You can't make it any simpler than that.Why not place a buy entry at the high or sell entry at the low of the most recently closed candle (time frame of candle to suit your preference) as the high & low of the the most recently closed candle represents support & resistance in that time frame.


If anyone knows a great exit strategy to take profits I'm all ears. Taking the losers is easy. Knowing when to take the winners is Very Hard. Read this thread for important info on possible exit strategies.



---There is only one Certainty in Trading, There is no Certainty ---


Regards,


BabeFX
  • #2,938
  • Edited 1:04pm Jun 6, 2008 10:59am | Edited 1:04pm
Quoting Druss
Hi guys,

I'm relatively new to this Forex War. I've done away with indicators as such. Becuase indicators are just an algorithm of price to some extent and just follow price.
>>>Congratulation...you are part of the gang...indicators...too late...

At this stage I'm more interested in Previous Highs and Lows. Areas on the Chart where Price is respecting a certain level. Which means once it reaches a certain level it is either bought or sold.

Trend Lines, Support and Resistance Lines formed from previous highs and lows is about as simple as you can make it.
>>>Correct...that is what I use in my trading...

Follow the trend at all times. Trading counter trend is dangerous to say the least. Trading the Ranges is easier. Using stops just outside the range is the best way.
>>>we do not use stops...we exit manually...

When price breaks the range stops protect you. It's up to you to jump on when the Range Breaks.
>>>indeed

Technically speaking you could draw a line anywhere on the chart where price action is. You could say to yourself. Ok if price passes this line I will buy long or sell short. You can't make it any simpler than that.
>>>absolutely correct, but some lines are better than others...who do set your line?


If anyone knows a great exit strategy to take profits I'm all ears. Taking the losers is easy. Knowing when to take the winners is Very Hard.
>>> Either on trendline break, at the next S/R level, when you feel that you have enough, or at a fixed target...Your choice as per your own psychology...all work if you are in the money...


---There is only one Certainty in Trading, There is no Certainty ---
Welcome to fti's domains!
I hope you enjoy your stay and I hope my comments help you.
Empty as water and soft as a facing wind mountain
  • #2,939
  • Jun 6, 2008 12:48pm Jun 6, 2008 12:48pm
Finally someone explains clearly the foundations we need to trade intelligently.

I am a novice trader and have spent the past year+ mostly in demo accounts, study, practice, backtesting different approaches, EA development, etc. But until reading this thread, I did not consider myself to have a strong enough foundation for live trading. Now I'm at least pointed in the right direction, and standing with two feet on solid ground.

After a week of trading based on these principles, our troops are up 40% on a demo account, with max drawdown < 10% (while experimenting with some aggressive rescue tactics), typical drawdown < 5%. All attacks finished in the positive, so drawdown is only ever seen between the launch of an attack and the inevitable victory. This is part of the beauty of the Art of War MM strategy, IMO, as real drawdowns (losing battles) will be rare, allowing for more consistent geometric growth of the account.

Even with all my room for improvement as a trader, I "get" the basic approach and it suits my style and personality very well.
My first post here is just to give a big heartfelt thank-you to brother FTI for sharing so generously and to all active participants on this thread for keeping it alive.

 Bless.
  • #2,940
  • Jun 6, 2008 1:28pm Jun 6, 2008 1:28pm
Druss, just keep in mind that SR is useful as guidance and rescue but try primarily to feel the market. Using SR as a trigger builds rigidity so look at what the market is telling you first.

Check the thrust or power of movement. Stops are normally placed around SR areas so what you may consider a break could just be a sweep.

When I enter now I look for rescue points so I can determine in advance what type of risk I am taking. I wait patiently for topping and bottoming action before entering but there are times when action just tells me that an SR level just isn't going to hold.
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