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Technical Analysis Fallacy

  • #2,941
  • Jun 6, 2008 1:37pm Jun 6, 2008 1:37pm
Through my weekly adventures I came across some wisdom this week that I thought I would share in this thread. To fti for one reason and everyone else as a compliment to this thread. To all of our health and well-being!

Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it.
  • #2,942
  • Jun 6, 2008 3:06pm Jun 6, 2008 3:06pm
Zoran, nice quote. True on all levels, even trading.

Also ties into self-destructive tendencies of the human species.

The scorpion.

Ironically, narrow (rigid) vision is what leads to the wide path of destruction.
  • #2,943
  • Jun 7, 2008 2:35pm Jun 7, 2008 2:35pm
Quoting auxesis
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,
I think congestions are harder to trade than trends. But it is a matter of personal preference. Regards and happy trading.
  • #2,944
  • Jun 7, 2008 4:59pm Jun 7, 2008 4:59pm
Jairo, I think you are doing fine and don't need to go into hypnosis, lol.

Usually when you enter a position you can't do it at the very top or bottom and.. well the market goes both ways. Especially GBPUSD likes to go 100 pips up and 150 pips down in same day, so it is very easy to be on the wrong side and to feel that you are always on the wrong side.. and it is very easy to reverse and be wrong twice.. instead of sticking to initial plan and planning a rescue if needed.
  • #2,945
  • Jun 7, 2008 6:16pm Jun 7, 2008 6:16pm
Quoting Zoran
~~
Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it.
A bit like Wyckoff's creek!

Good one all the same Zoran.
Good Trading
  • #2,946
  • Jun 7, 2008 9:34pm Jun 7, 2008 9:34pm
Quoting Jairo
I think congestions are harder to trade than trends. But it is a matter of personal preference. Regards and happy trading.
Jario,

I was probably speaking out of place, but was just mho, why FTI suggested you trade congestions, as you mentioned that when price is trending you try to trade it in the opposite direction. My post was an attempt to pinpoint, not introspectively or deeply psychologically , but technically what are you seeing on the chart that triggers your entry and what are you attempting to trade, as I would think there-in lies your answer.

If price is long,why would I enter short? Either I'm trying to trade/catch a correction, scalping the counter trend or i believe that price is reversing. The mechanics can be worked out or eliminated if destructive, but it would seem to be necessary to understand the underlying reason or mindset for the trade.

fwiw,

a
  • #2,947
  • Edited 1:11am Jun 8, 2008 12:58am | Edited 1:11am
Quoting piccolo
Jairo, I think you are doing fine and don't need to go into hypnosis, lol.

Usually when you enter a position you can't do it at the very top or bottom and.. well the market goes both ways. Especially GBPUSD likes to go 100 pips up and 150 pips down in same day, so it is very easy to be on the wrong side and to feel that you are always on the wrong side.. and it is very easy to reverse and be wrong twice.. instead of sticking to initial plan and planning a rescue if needed.
I here you on the possible daily swings, it sure is a good teacher of money management, knowing the trend and the pair your trading.
I wrestle with the g/u most everyday.
  • #2,948
  • Jun 8, 2008 1:09am Jun 8, 2008 1:09am
Quoting onedrop
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.
Congratulations on your road to new found success, as we all are developing the art of trading.
  • #2,949
  • Edited 1:08pm Jun 8, 2008 9:40am | Edited 1:08pm
Quoting Jairo
I think congestions are harder to trade than trends. But it is a matter of personal preference. Regards and happy trading.
I love congestions...easy trading..
Empty as water and soft as a facing wind mountain
  • #2,950
  • Jun 8, 2008 6:57pm Jun 8, 2008 6:57pm
Quoting zenseven
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.
Hi zenseven,

Congratulation on the arrival of your bundle of Joy.

Be careful about trading now. Take a sabbatical if suits.
Its difficult to coordinate, feeding, diapers, sleep and markets.

regards
  • #2,951
  • Jun 8, 2008 7:12pm Jun 8, 2008 7:12pm
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.

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.

"Using stops just outside the range". Careful with that, it amounts to trading breakouts. This is a whole different school of discipline. Be wary of sweep ranges.

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.

Give this deeper thought. Generally, you are contradicting your earlier thoughts.
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.you said this earlier.


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.

Taking profits, however much or little is a good exit strategy.
"Excellence, we can achieve, perfection is God's work".. WB

---There is only one Certainty in Trading, There is no Certainty ---
This is because the only constant in markets is change.
Try to understand the thread better and it will come to you.

regards
  • #2,952
  • Jun 8, 2008 7:15pm Jun 8, 2008 7:15pm
Quoting luSan
I love congestions...easy trading..
Hi Lusan,
Congestions are excellent to play rescues... as long as the battles end before (possible) strong breaks in the "wrong" direction. A very demanding game. 1 loss may take away profits accumulated in 99 wins. Fti was in his career a top trader, frequently recovering from other people's errors. That was one of his tasks. A very important role played in the survival and profitability of the banks he worked for. I am not really sure if beginning from a neutral position this is the best way to play the markets. But again this is a matter of personal preference. Best luck.
  • #2,953
  • Jun 8, 2008 7:41pm Jun 8, 2008 7:41pm
Quoting onedrop
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.
Hi onedrop,

Welcome.
Thanks for your kind words.

Nice to hear that you are doing well in your demo.
Trade well.

regards
  • #2,954
  • Edited Jun 9, 2008 2:46am Jun 8, 2008 7:45pm | Edited Jun 9, 2008 2:46am
Quoting Zoran
Through my weekly adventures I came across some wisdom this week that I thought I would share in this thread. To fti for one reason and everyone else as a compliment to this thread. To all of our health and well-being!

Enter through the narrow gate. For wide is the gate and broad is the road that leads to destruction, and many enter through it. But small is the gate and narrow the road that leads to life, and only a few find it.
Hi Zoran,

Wow, you quote the bible well.
You seem to have found the "way".

Good for you.
Right mindset, right behaviour, right reaction. right results.

regards
  • #2,955
  • Jun 8, 2008 7:53pm Jun 8, 2008 7:53pm
Quoting auxesis
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,
You are right, but thats only part of the dance MO.
However, it is the critical part of the dance.
The teleporting of mind, to trend mode and the timing of it, is also essential for book health.

Your advise to Jairo is sound, and helpful for his peruse.

regards.
  • #2,956
  • Jun 8, 2008 8:40pm Jun 8, 2008 8:40pm
Fti,

Thanks, just trying to offer a little help where I can, have been down that path, myself.

Tis good to see you back on the boards, hope your feeling well.

best regards,

a
  • #2,957
  • Jun 9, 2008 8:55am Jun 9, 2008 8:55am
For music and trading lovers:

http://au.youtube.com/watch?v=LiE1VgWdcQM

Enjoy.

Textor.
  • #2,958
  • Edited 9:50am Jun 9, 2008 9:29am | Edited 9:50am
Quoting textor
For music and trading lovers:

http://au.youtube.com/watch?v=LiE1VgWdcQM

Enjoy.

Textor.
Hi textor,

Good music. Market wizard that Ed Seykota. Never knew he sings though.
Thanks for link.
Some sound MO he trades by, for a futures trend riding.
The train cho cho beat , reminds me of the hobo traders MO. aka Adam Theory.

regards

http://au.youtube.com/watch?v=_MugHx9wEao
as spill off, this was interesting.
  • #2,959
  • Jun 9, 2008 9:54am Jun 9, 2008 9:54am
Quoting fti
Hi textor,
.....

http://au.youtube.com/watch?v=_MugHx9wEao
as spill off, this was interesting.
... yes I saw this too.

I know that Seykota is a famous trader, but
I don't know about his work, what market he trade, etc....
I found the music funny....

Regards,

Textor.
  • #2,960
  • Jun 9, 2008 10:04am Jun 9, 2008 10:04am
Quoting textor
... yes I saw this too.

I know that Seykota is a famous trader, but
I don't know about his work, what market he trade, etc....
I found the music funny....

Regards,

Textor.
Hi textor,

Ed is one of the big boys of futures trading. (Market wizard)
His MO is Dochanian style, ie trend rider(follower) .
This MO is also the MO of Richard's turtle traders.

Main component is
"Cut losses Short , let profits run."
This is good MO for managing term money.
But it has its weaknesses, as experienced by Richard in 2000.

regards
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