Technical Analysis Fallacy

Quoting musgrove

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Hello

I just got caught up on the 30 pages I missed in the couple of days and noticed some concern over the use of this thread so I thought I would re-hash a few lessons I think are important.
1)
Rule #1 preservation of cap.
Rule #2 preservation of cap.
Rule #3 don't forget rule #1

2)This is not new. It was old when the Phoenicians were trading with the Romans and the Greek Philosophers cornered the olive oil market. This is the concept.

The percentage gain it takes to recover a loss increases geometrically with losses

% Loss initial capital % profit required to Recover
5----------------------5.3
10----------------------11.1
15----------------------17.6
20-----------------------25
25----------------------33.3
30----------------------42.9
35----------------------53.8
40----------------------66.7
45----------------------81.8
50----------------------100
55----------------------122
60----------------------150
65----------------------186
70-----------------------233
75------------------300
80------------------400
85------------------567
90------------------900

The % gain required to come back to balance (break even) will increase geometrically with your losses.
If you lose, 20% of your capital, you will have to make 25% to come back to breakeven.
However if you lose 50% of your capital, you have to make 100% to come back to break even.
So please be careful with you’re trading

3)
Do not be confused that the attack sequence and the rescue sequence both take on the geometric basis. The purpose of rescue MO is to recover the scout, when encumbered; therefore the minimum response is at least a fib progression sequence.
The attack sequence is for press therefore should at least be a reverse fib, to protect from possible retracement against position.

4)
If 1 scout was in trouble, u sent in 1 to rescue then 3 to rescue if unsuccessful, if more rescue were required then the next squad would be?

Ten, did you get it right?
Based on this progression what would be the next required rescue?
Thirty, did you get this right?
What’s next, ninety.... see now.
Lets say you use a 1,2,3
then required rescue is 18, 50, 150,

I best not show you level 3....

if you evaluate your rescue risk snowball....
now do a rough guesstimate for every pip run against you, it will cost your book?

5)
Losing money is no big deal in trading. Losing the ability to financial trade again is the pits of it. But truly losing moral, that ones incurable.


6)
I am the general, commander of my forces. As general, I am responsible for understanding where the market has been (trend lines), it’s strength (bull, bear or sideways) and on what ground it is in at any point in time (Asia, London, New York).
The general starts all the engagements with the enemy, EURO/USD or GBP/USD, the time and place is based on his interpretation of the information that he has gathered before hand. The preparations for this engagement include gauging the strength of the opponent’s moves, volatility, and direction of movements: long and short term trends.
He also chooses a strategy (buy or sell, long or short term) and asset commitments.
All this he ponders in his temple. When the plans are made, he waits for the enemy to provide an opening and the starts the battle.
Once a battle has started, the general will modify his plans to account for movements of the enemy (price action, changes of ground).
The general will not display his retreat points (stop loss points) nor will he announce his points of victory (limits). These will only help the enemy to defeat him.
Management of resources will always be part of the battle (money management).
The general will practice responding to enemy movements, honing his skills both in battle and in the practice field.
This general is a guerrilla fighter. He does not have the resources to go head to head with the enemy. The fight is always on the flanks and is not able to see the full strength of the enemy, but can feel the effects of the enemy’s movements instantly and must be able adjust his adjust his attack using discipline and methods learned in battle and instruction

There is so much more but these were a few things that caught my eye during my review.

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Quoting fratti

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Hi Fti!
I've some questions about Forex that I couldn't find the answers yet!! If you help me on them I'd be very happy and thankful!!
1- Are the markets we'r trading in are really free!! Or there're some certain almighty forces has a huge effect in them!!(cb's,tier1s,tier2e.g)
They are as free as everything in life. All markets have owner, aka majority shareholders, they protect their interest that the is no riots in their vested interest. Freedom has its limits
2-What 's the REAL amount of the money circulate in this market!! Namely ,how those huge leveraged position effects the price action in reality!!It encompasses all of international trade plus speculation
Assumed I engaged with my enemy and not able to see its full strength,but can feel the effects of it!To me that means it can see me!! but I can not see it!!Of course , it can see you, but you are too insignificant compared to the totality for them to be interested in you.
How I'm gonna fight against that enemy!!?Does fundamental ,technical ,sentimental analysis give us really edges or sometimes sucker us into emotional roller coasters!.Use your God given brain and learned skills to manage youself and your exposures.Are those leveraged positions created base on Credit !!If its so that virtually boosted other parties playing against me can take me down through their highly leveraged position(Eventhough they might not have really big capital!)l Am I thinking right or I'm missing something that I don't know yet!!
3-You said Liquidity and Volume are two different things!Can you explain little bit more on that? Liquidity denotes the ability to find prices to deal when required. Volume basically means what DutchAngel has told you, It is the sum total of all trades done.

Thank you again!

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Quoting piccolo

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What is the difference between finished and closed? Somewhat confusing..

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Quoting piccolo

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I am finished for today means that I have added to positions? if you don't know don't invent new meanings, better you learn first.lol.. please come up with better names.. like 'deployed' or something.

from what I have seen fti uses:
scout/attack/rescue standby - ready to enter a new position
scout/attack/rescue deployed - position entered
scout/attack/rescue out/home - position closed

we need some sort of protocol here because for some "out" means new position in the market and "finished" means adding to position, hehe. just trying to keep the radio 'clean'.

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Quoting Green_David

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Thanks. It is very hard to explain to you my MO over forum in detail. But your advice of no positions before the MAJOR news, is good, I will take it.

Yes, I agree to keep victory is more difficult.

David

BTW, Who is the fat lady?

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Quoting fti

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I am finished for today means that I have added to positions? if you don't know don't invent new meanings, better you learn first

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Quoting fti

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Hi,
I don't know her personally,
but when ever she sings, its game over.

http://en.wikipedia.org/wiki/It_ain%...fat_lady_sings

regards

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Quoting fti

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Hi All,
My bias is bull USD, but please dance the tempo.
Its getting very tricky, as the market trys to pass on the losses fom yesterday. Today either they fight a bigger figs battle or they may just give up and go to sleep.

One thing for sure, is that there will be no more opportunities to fight this week , whatever happens. If you lose and want revenge , then you may like to sit shivering and praying, with your exposures until next week, when they come to take your heads off a tired and defeated gamblers.

OK Battlestations people !

regards

Just for info I am Sx eurusd X65 before I made the postings.
If you are not nimble, better you be squared before NFP.

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Quoting Green_David

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Hi, FTI:



David

P.S. Maybe you should set some discussion rules in this thread, since Jest made some suggestions.

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Quoting maheswara

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sir , when u say 65 , do u mean 65 standard lots ?

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Quoting fti

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Hi maheswara,
I meant price, we are way passed size discussion.
Use your own discretion , I am showing blotter just for info.
and this info mation may be late. You may mark against it,
But you are to swim for your own, now.

regards

If you are squared , best you stay sq fro the figs.
I deployed scout to benchmark timing only.

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Quoting MaMood

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Fti, I'd like to ask:

EURUSD today from begin asian session to now.
Do you dance such slow fox or are you at the sidelines?
If you are dancing in it, do you bring out attacks and rescues in such a small 20 pip ranged market? Or do you just send out your scout?

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Quoting fti

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squared 75.
OK squeeze jump zone up, ceiling 1.5600 bottom not in sight.
bias Bull USD.
ready for NFP
remember yeaterday, if fig Bear USD mkt will be slow up moves, can attack impulse. swing tolerance seems about 50 pips only.
If Bull USD will be swift, so watch the levels , don't chase impulse.

regards.

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