Technical Analysis Fallacy | Page 235 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Ultimate Fallacy in Technical Analysis 99 replies

"Technical Analysis Fallacy" thread people, I need your help 54 replies

Technical Analysis Fallacy Redux 23 replies

Statistical analysis fallacy 33 replies

Attachments: Technical Analysis Fallacy
Exit Attachments

Technical Analysis Fallacy

  • #4,681
  • Aug 1, 2008 3:48pm Aug 1, 2008 3:48pm
Quoting Zoran
If you clicked on the link, you would see memory was added - but 128k sounds like a lot in those days. My first computer was bought around the same time and had 16k (which we later upgraded to 32k).
Hi Zoran,
Its the Apple 2. he say 2 boxes of memory.
but didn't say how much on board.
If you added a mem module card you can run 64K.
I doubt that it should run128K. Probably have lots of spare mem chips, thats all, that adds up to 128K.

mem chips used to burnt out alot , those days.


regards
  • #4,682
  • Aug 1, 2008 3:52pm Aug 1, 2008 3:52pm
fti, I did suspect something like that. 128k on board was a lot in those days. If he confirmed it worked, I would have bidded for it.
  • #4,683
  • Edited 4:07pm Aug 1, 2008 3:56pm | Edited 4:07pm
Quoting ksl
I wanted to ask you about delta hedge technique for some time now. Is it related to options in any way?

Thanks
Hi ksl,

delta is a "greek" component in any pricing model that calculates fair value.
Option pricing models are of the same class.

delta hedges can be used as a position hedge models for all kinds of derivative trade and synthetic instruments, options is one of them.

In the options markets.The delta hedged technique known as delta neutral hedging is used by professional option writers to defray price risk, and capitalising on volitility money and time decay of premiums which is their component of income.

delta hedging is predominantly used by treasury managers to measure net exposure of all the banks treasury activities, inclusive of capital markets,money market , forex , derivatives and synthetics.

Why do you ask?

regards
  • #4,684
  • Aug 1, 2008 4:10pm Aug 1, 2008 4:10pm
Quoting fti
Hi ksl,

delta is a "greek" component in any pricing model that calculates fair value.
Option pricing models are of the same class.

delta hedges can be used as a position hedge models for all kinds of derivative trade and synthetic instruments, options is one of them.

Why do you ask?

regards
I belive you had mentioned this while explaining damage control -the right protocol was to get out with minimum damage or comitt in to the position as a rescue process use reaveraging for position retrival.
Also when I do not understand a termenolgy or want to know more I try google and terms like sigma, vega all point towards options pricing ...
Which are little complicated for me.

Thanks
  • #4,685
  • Edited 4:37pm Aug 1, 2008 4:23pm | Edited 4:37pm
Quoting ksl
I belive you had mentioned this while explaining damage control -the right protocol was to get out with minimum damage or comitt in to the position as a rescue process use reaveraging for position retrival.
Also when I do not understand a termenolgy or want to know more I try google and terms like sigma, vega all point towards options pricing ...
Which are little complicated for me.

Thanks
Hi ksl.
This is the metdoloy of treasury managers in risk management , in that he could offset risk in any # of dealers books against his book by the use of the delta.
You see in a bank, there are all sorts of dealers managing all sorts of instruments , like the deposits dealers , forex dealers , capital market dealers,
options OTC dealers, etc............................So hecannot be looking at all the dealers exposures to know , lets say what the banks exposure was in USD against his natural currency, All the TM need is to generate net USD deltas for all USD activities and he woulds know his net exposure, in this case the USD. if the delta read he was exposed, he could initiate trade positions to neutralise the exposure.
However as the component of delta is dynamic . So as the price of , in this case USD/??? changes then his delta shifts as well. In effects , it has to be dynamically managed as well, requiring the TM to have an opinion to the exposure.

This has no important significance for speculative traders. It is a management tool to curb risk, whereas traders creates risk exposures. Unless you traded multiple instruments of same risk denomination.

deltas , sigma, vega teta... etc these are the "greek" components in management & pricing models that calculates the respective risk elements. These can be plotted and identified graphically.

regards
  • #4,686
  • Aug 1, 2008 4:34pm Aug 1, 2008 4:34pm
Quoting fti
Hi ksl.
This is the metdoloy of treasury managers in risk management , in that he could offset risk in any # of dealers books against his book by the use of the delta.
You see in a bank, there are all sorts of dealers managing all sorts of instruments , like the deposits dealers , forex dealers , capital market dealers,
options OTC dealers, etc............................So hecannot be looking at all the dealers exposures to know , lets say what the banks exposure was in USD against his natural currency, All the TM need is to generate net USD deltas for all USD activities and he woulds know his net exposure, in this case the USD. if the delta read he was exposed, he could initiate trade positions to neutralise the exposure.
However as the component of delta is dynamic . So as the price of , in this case USD/??? changes then his delta shifts as well. In effects , it has to be dynamically managed as well, requiring the TM to have an opinion to the exposure.

This has no important significance for speculative traders. It is a management tool to curb risk, whereas traders creates risk exposures.

regards
Thanks for clarifying fti, todays discussion was also very fruitful and learning experiance.
Have a super weekend.

Many Thanks

In pursuit of the "Goose"
  • #4,687
  • Aug 1, 2008 4:39pm Aug 1, 2008 4:39pm
Ok,
ksl and all my friends,

Be happy and have a nice weekend.

regards
  • #4,688
  • Aug 1, 2008 4:44pm Aug 1, 2008 4:44pm
Quoting fti
regards
Thank you for your comments and observations. I did not mean to suggest that you trade triple tops or anything/anyway other than what has been presented in this thread. Perhaps I mis-read your comments:

Just look at the naked chart . We have a three top test at the 80/85 zone. If any read it is a possible 3 tops.

Call it what you will, but the market found resistance in that zone.

My trading is good, but I suppose the fact that I am participating in this thread implies that I am trying to fix something or change something. What I am doing is trying to get better, and I appreciate the fact that God has brought me to this thread to read about and learn new things from a tier-1 banker (I have not found many places on the Internet where tier-1 bankers are sharing information!).

Let me ask you this question: You are walking down the street with a friend. If you think the friend is about to bump their head on a tree branch, should you warn them? Today, my analysis/observations indicated the "sticky" zones around the 5585/90 level, and the 5533/29 level. I did not share this with my friends, and apparently they do not want to hear this kind of information. For me, this is not a humane action on my part, but I will respect your direction on what to do with my analysis (shove it or share it, right?).

This is the source of my angst or frustration. If I had shared (and you believed), you might have avoided the defensive battles today.

Like all of you, I hate to lose. I also try to avoid fighting a defensive battle whenever possible. This thread has helped me make greater advances when on the offensive. For that I thank you.
  • #4,689
  • Aug 1, 2008 5:17pm Aug 1, 2008 5:17pm
Quoting rapaduski1
Thank you for your comments and observations. I did not mean to suggest that you trade triple tops or anything/anyway other than what has been presented in this thread. Perhaps I mis-read your comments:

Just look at the naked chart . We have a three top test at the 80/85 zone. If any read it is a possible 3 tops.

Call it what you will, but the market found resistance in that zone.

My trading is good, but I suppose the fact that I am participating in this thread implies that I am trying to fix something or change something. What I am doing is trying to get better, and I appreciate the fact that God has brought me to this thread to read about and learn new things from a tier-1 banker (I have not found many places on the Internet where tier-1 bankers are sharing information!).

Let me ask you this question: You are walking down the street with a friend. If you think the friend is about to bump their head on a tree branch, should you warn them? Today, my analysis/observations indicated the "sticky" zones around the 5585/90 level, and the 5533/29 level. I did not share this with my friends, and apparently they do not want to hear this kind of information. For me, this is not a humane action on my part, but I will respect your direction on what to do with my analysis (shove it or share it, right?).

This is the source of my angst or frustration. If I had shared (and you believed), you might have avoided the defensive battles today.

Like all of you, I hate to lose. I also try to avoid fighting a defensive battle whenever possible. This thread has helped me make greater advances when on the offensive. For that I thank you.

I seem to have a lot of opinions of late so here is one more.
TA is another tool in my box. I personally don't mind people saying where they see these levels. I don't plot them on my chart and I don't put to much faith in them holding strong. But I do take note of them(fortified casltes) and apraise the situation as it unfolds adjusting my MM,skew, and MO to suit.

Once again I'm still quite green at this as well
  • #4,690
  • Edited 6:35pm Aug 1, 2008 5:32pm | Edited 6:35pm
Quoting ianf0ster
Hi All,
I have had yet another confusing day reading this thread.

As I recall, FTI says;

1. ignore S/R - so why the post about not attacking until below 50 ?
The reason for not attacking above the 50 mark , was because 50 was round about where my cost of exposure was. On the same virtue, when the market was trading to above that it meant that I was in aloss situation , Therefore at prices above 50 I was supposed to be in a rescue mode. But in effects I had gone into 4 mild attack test and a rescue at 50 . So that was threshhold point Although I could had mounted a rescue mission near 80 which was the expected test zone. I couldnt due to the speed whyby the momentum was lost at that zone. Moreover if you had been followed closely, I had a test scout before the figs, and ihe was taken out at near 80 due to that I needed to be squared for the NFP, which is an important fig release, couple with 2 other figs, released simu;tenously. After the figures release, the market gape down and pushed southwards although ther was strong push it lost its momentum too quickly. As she tested higher there was 4 mild checks by myelf andI deployed rescue at 50, that rescue failed to contain the upsurge which proved strong. As it rallied, the next likely resisitence was the previou point where the initial scout was killed,before the figures. This point was around 80. Remember that The extreme ceiling that had been determined by the scout was 80 and thenearest prime point (the 50, 00 points ) was 15600. If the market had the momentum to take out the 15600 which also neglates the gap price after the figs ,which was about 58 . then the uptrust would be too strong for the market to contain. If you would refer to the previous days actions, that was the case . Howevr I noticed that as we tested for downside strength , it lost momentum swiftly. This could be due to if themarket was not confident to breach all percieved support levels by most tech Analyst, who would be looking for the last nearest bottom at 20
Whats most important was my failed mild attacks and one rescue at 50, never came in the money even on a couple of trys,. This signaled that market was not prepared to breach the 50 now, it could be that more buildup of stop was not detacted by mmakers, who would mostly probably seek for the breach downwards, later nearer the lunch hours as USD bears became less confident of holding the market after a gaping figure release.

As a prudent move to protect book, I then felt that it wouldbe more productive for a forcefull skew attack after the breach of the 50 level, and that I would alloew the market more time to gather the momentum and volume to test the end of the 2st wave. From hindsight the breach was not to be . But if it had breached by after ny lunch , I would have had a forceful skew attck for the breaching of the 20 support that the whole world was watching for. Generally if USD bears had stops it would normally be about a 10 pip zone under the 20 support, which they worshiped. And that would give my strong attack lots of room to ride.

These decision was made from the sequence of the "dance" and not from any predetermined S/R levels as from charts , but actually danced into these zones to gather the feel of the momentum sentiment.

2. Dont use Elliot - so why are people counting the numbers of waves and deciding if they are Impulse waves or not?
I really wonder if you had actually read my opinions about the Elliott wave studies,. If you had you would relise that I think the Elliott studies is adulterated, except for his foundational wave and impulse behaviour of wave. Ask people on this thread what I think about the Elliot waves.

As a matter of fact , I do nor count waves, the counts are due to physical ID of impulse and the counts are for guidance of whether the skew should be inro-or Extro.

3. Don't go against the trend - but there are so many trends. When I determine the trend for a timeframe in the most basic way - is it up or down from left hand side of chart. Then for me the E/U daily is Up , the 1Hr is down and on the 5 min it has been completely flat for most of the day - it has just turned down about 1 hour ago. So we take our pick - long , short or stay out.

Like I mentioned earlier you have a little understanding of market trends, When a daily trend is in effects, if the short chart trends differ, then the short chart is infoming you of the retracement posibility. You seem to confuse yourself between trend, because you think in time frames, I think I had mention many times , that time is of no consequense, it is divided to assist you to not run out of graph space and to compree for bird's eye view analysis.

So , I would just like to say that ,truthfully you are from the commercial(books) schools of technical Analysis, and thats the reason for your confusion. You cannot understand what I do, as you already think you know that which you had been misled in. Unless you can unlearn the mis info in your mind , you will never truely grasp that I had presented. Not so unlike many "trained" minds.
Ian
Hi Ian,

When I was saying my daily prayers.
When I reached the part asking for God's forgiveness , as I forgive my traspassers, Some how I guess God may be angry with me.

In someways , he reminded me that I had snaped at you. And had been unfair to you as you had tried to make sense of my presentation.

So I would like to apologies that I was harsh, because I was disppointed with the market ,and it affected me that I was not patience with you.

Let me try to help you understand.

Please Refer above for general directions.

If you like you may like to start a thread , about your analysis skillsand I can burst every one of your misconceptions. The most dangerous of which is PREDICTIVE ASSUMPTIONS. In your question #1 you had assumed that I was using the "most frequent patterns analysis" taught by "book" schools.


regards
  • #4,691
  • Aug 1, 2008 6:05pm Aug 1, 2008 6:05pm
As i am rereading this stuff for 2 time now i am finding some hidden pieces to complete my puzzle( impulse, congestion, trend is your only friend) , plus watching you guys chat during trade sessions also is opening my eyes, starting to see the light still a bit dark but happy with my progress,( have plenty of time to learn),and if i may i will post some questions when appropriate, so thanks a lot everybody you have good hearts i feel that... wish you guys a good weekend and profitable trades. FTI YOU SHOULD LAST FOREVER thank you. Peace...
  • #4,692
  • Edited Aug 2, 2008 4:58am Aug 1, 2008 6:34pm | Edited Aug 2, 2008 4:58am
Today I was discussing with someone about the inconsistencies in this thread. I believe they come up quite frequently but I keep thinking about my driving. I am a bit of a lead foot and having lived in Melbourne (AUS) for most of my life where people tend to stick to the limit of 100 kph (60 mph) while blocking the "fast" lane, I used to get annoyed!

When I moved to the UK and found that 90 to 100 mph (160 kph) was not unusual, I thought - wow, this is great and felt a sense of freedom.

The problem being that so many people living on this island, I am frequently trapped at 10mph on the motorway. Other times I just have to stay with the traffic at 50 - 60mph but if I see a gap, I'll hit the accelerator until I see a slow moving car ahead and slow down.

The point is that I am always looking through my windscreen and mirrors to feel the traffic. I don't have to look at some gauges on my dash or read the traffic report on my sat nav - I just move with the flow and take advantage where I can. Sometime the reports I get may become useful - if there is an accident reported and I'm uncertain of the traffic, I may take another route - but always being aware is important.

Now the person with "L" (or learner) plates is going to take some time to get to the same level. I remember when I was there and all of the uncertainties that used to go through my mind but after spending many years at the wheel, it does eventually become second nature.

I went to the race track the other day and found it difficult but I remember someone taking over like lightning. All I saw was the number plate - which read "fti 007".

The simple question is, are you up to it?

Inserted Video
  • #4,693
  • Aug 1, 2008 8:27pm Aug 1, 2008 8:27pm
...Now the person with "L" (or learner) plates is going to take some time to get to the same level. I remember when I was there and all of the uncertainties that used to go through my mind but after spending many years at the wheel, it does eventually become second nature.

I went to the race track the other day and found it difficult but I remember someone taking over like lightning. All I saw was the number plate - which ready "fti 007".

The simple question is, are you up to it?

Hi Zoran althought you donīt refer my name i assume that the question is for me so only i have a few words for you YES I AM. But donīt assume either that i am a learner in the true sence of the word, yes learning this new way of seeing the markets, completely! But fighting with the markets 2,5 years from now, if you wish i can send you a file with all types of books related to TA (Steve Nison, John Hill, John Murphy, John F. Carter, you name it...) and i have already like many of you my hard lesson with the markets, lost about 40% of my initial accountt in first 2 weeks of trading live after reading my first book, Portuguese one ( crap) then i realized the markets were not so easy like i was thinking ( i will be rich next year )so i reset my brain and asked the same question to me (are you up to it?), so i said to myself you will not surrender you will take a break from live trading you will learn at least where you failed, so i started to buy a few more books and ebooks went to fxbootcamp, google... and a few months later was able to find most of my mistakes (lack of patience, trading scary money, hope, greed, fear, not having any kind of plann to attack the enemy and so on.). Nontheless i donīt achieved consistency yet, yes i make some good trades but then there comes one that blows everything, so i keep learning what i can, thatīs why i step here and donīt think i am looking for the holy graill what i look for is consistency and i thrust in FTI and all of you to help with that task...Besides also realised already that it will take long long time to master this business as i am a very vrey slow learner. Anyway that being said if i feel rude in my answer dont take to that way itīs because my English is very poor, didnīt find others words, in fact i am very happy that you found you way, cheers...
  • #4,694
  • Edited 4:45am Aug 2, 2008 2:18am | Edited 4:45am
Quoting Thenew
...Now the person with "L" (or learner) plates is going to take some time to get to the same level. I remember when I was there and all of the uncertainties that used to go through my mind but after spending many years at the wheel, it does eventually become second nature.

I went to the race track the other day and found it difficult but I remember someone taking over like lightning. All I saw was the number plate - which ready "fti 007".

The simple question is, are you up to it?

Hi Zoran althought you donīt refer my name i assume that the question is for me so only i have a few words for you YES I AM. But donīt assume either that i am a learner in the true sence of the word, yes learning this new way of seeing the markets, completely! But fighting with the markets 2,5 years from now, if you wish i can send you a file with all types of books related to TA (Steve Nison, John Hill, John Murphy, John F. Carter, you name it...) and i have already like many of you my hard lesson with the markets, lost about 40% of my initial accountt in first 2 weeks of trading live after reading my first book, Portuguese one ( crap) then i realized the markets were not so easy like i was thinking ( i will be rich next year )so i reset my brain and asked the same question to me (are you up to it?), so i said to myself you will not surrender you will take a break from live trading you will learn at least where you failed, so i started to buy a few more books and ebooks went to fxbootcamp, google... and a few months later was able to find most of my mistakes (lack of patience, trading scary money, hope, greed, fear, not having any kind of plann to attack the enemy and so on.). Nontheless i donīt achieved consistency yet, yes i make some good trades but then there comes one that blows everything, so i keep learning what i can, thatīs why i step here and donīt think i am looking for the holy graill what i look for is consistency and i thrust in FTI and all of you to help with that task...Besides also realised already that it will take long long time to master this business as i am a very vrey slow learner. Anyway that being said if i feel rude in my answer dont take to that way itīs because my English is very poor, didnīt find others words, in fact i am very happy that you found you way, cheers...
Hi Thenew,

I think you have misundersyood Zoran .
What he is trying to describe is my MO and mindset transposed to a traffic scenerio. The internalisation on the mindset and the observation of the situation thats affecting, the "drive". If you understand the only common patterns, you must also understand howthey come about. They don't just happen to be. They are formed barby bar over time. Recognition of patterns is important , only that knowing how one forms from one to another is more important. The convetinal heckline and other strategic reads of patterns do injustice to it s understanding.

What he is saying is that some people trade looking at the far horizon instead of the situation at hand and lose perspective of the managing.

Hope I articulated clearly.

Like you said , English is not mother tongue for you, so you may not articulate clearly. Similarly , you may not have understood what he had said.
Try to understand what he said, There is truely a lesson there.

Forget about his jest about james bond,it is his way of jesting.

regards

Inserted Video


Inserted Video
  • #4,695
  • Edited 6:44am Aug 2, 2008 6:02am | Edited 6:44am
Thenew, my post was not directed at you but after catching up with this thread last night with some nice wine, it seems some people have lost there way. I wish I could participate more but I am far too busy at the moment with moving abroad, work and family. I am even finding it difficult to keep up here and tend to just scan through it now while focusing on fti's posts.

What I am trying to say is that it takes a few years of trading full time to become comfortable and able to move with the market. We need to learn to feel it first and fti has shown the way. When we start driving we generally take it easy and we have to keep our eye on the road otherwise, if we are out of step with the traffic or not watching it, we are very likely to have a costly accident. We can use maps, signs and indicators on the dash for some guidance but we need to look at the road to feel the traffic. In other words, technical analysis has its uses but if you are not watching and feeling the market, it is just guess work. Remember the market is always right.

The other message is that James Bond knows how to get himself out of difficult situations. fti is our James Bond and I sense some "L" platers are trying to be like him. I think some people are playing with fire if they are attempting to get there so quickly. Take it a step at a time until you are comfortable - it takes a long time with lots of effort to get there - so are you up to it?

Finally, sometimes I get scared by some of fti's comments - he mentioned his return rate and I couldn't find the post (so he may have edited it), but what he has at stake. Again, James Bond lives in a dangerous world and even Sean Connery (the best James Bond there ever was) had to make way. fti, I do worry about you at times. You are a very generous person but please look after yourself and be careful with what you say at times. We all have scorpions and it sometimes takes others to point them out.

There are many "L" platers here in the seat of a racing car.

Inserted Video
  • #4,696
  • Aug 2, 2008 6:13am Aug 2, 2008 6:13am
Hi guys can you what time(eastern) does the newzealand stock exchange opens?
  • #4,697
  • Aug 2, 2008 7:07am Aug 2, 2008 7:07am
Quoting fti
If you would please study about analog and digital. Digital is inferior by leaps. i GUESS i WILL STAY WITH nanonano TECH, INSTEAD.

regards
Hi fti, I saw you edited this post. I did study analogue and digital at University as part of my studies. I wouldn't go so far as saying analogue is superior. They each have certain qualities and at times, one works better than the other in different applications.

You may be referring to music but so long as the digital quality (sampling rate) exceeds the ability of the ear, then you shouldn't notice any difference except that digital is far easier to make exact reproductions. That cannot be done with analogue.

Personally, I prefer the convenience of digital technology over analogue. The whole world is moving in that direction.
  • #4,698
  • Aug 2, 2008 8:39am Aug 2, 2008 8:39am
Quoting Zoran
Hi fti, I saw you edited this post. I did study analogue and digital at University as part of my studies. I wouldn't go so far as saying analogue is superior. They each have certain qualities and at times, one works better than the other in different applications.

You may be referring to music but so long as the digital quality (sampling rate) exceeds the ability of the ear, then you shouldn't notice any difference except that digital is far easier to make exact reproductions. That cannot be done with analogue.

Personally, I prefer the convenience of digital technology over analogue. The whole world is moving in that direction.
Agreed. Any analogue signals like sound waves cann't go very far, even as loud as thunder, it won't go far beyond several hundred kilometers. But digitalized sounds, they are made of numbers sequence by 1 and 0. They can go as far as you like. Of course the frequency of sampling shall be enough.
  • #4,699
  • Edited 3:27pm Aug 2, 2008 10:51am | Edited 3:27pm
Dear FTI,
I am sorry but I do not understand, perhaps (after more than 6 months of reading this thread) I should conclude that I will never understand what you are trying to say.

My latest replies in Red
Response from Fti in Blue
Originally Posted by ianf0ster http://www.forexfactory.com/images/buttons/viewpost.gif

Hi All,
I have had yet another confusing day reading this thread.

As I recall, FTI says;

1. ignore S/R - so why the post about not attacking until below 50 ?
If I told you the reason, you would have to find a rock to hide under for you reading and comprehension.

- I believe that Support and Resistance either holds or it does not. Therefore it is a good place to look at what price is doing, if it reacts to the supposed S/R. Not a place to be ignored!

Edit: I now realise I misunderstood - I had thought that when you mentioned not attacking above 50, that you were giving advice to David.
Also I have never (since before starting to read this thread in either late 07 or Jan 08) used S/R or any other TA for making a prediction about future Price Action. Despite this, I was told off (by Lusan) when I made a post about planning rescue attempts for areas of potential S/R when price Action reacted. I was told in no uncertain terms that in this thread we do not use S/R . It seems that it was more OK for LeighSWW to do such things but not for anyone else.

2. Dont use Elliot - so why are people counting the numbers of waves and deciding if they are Impulse waves or not?
You didn;t read about my comments about E waves , did you, be honest.
- I did read your posts about Elliot ( I have read every post of yours in this thread - I didn't understand most of them, but I believe this was your intention so we would have to work harder). You said that you do not use Elliot Wave Theory. Then you said you used waves - but did not make it clear what sort of waves or which part you used. Of course Waves (as per Elliot) are subjective and I admit that I have problems separating out the differing degrees or timeframes - I am not good at pattern recognition).
Edit: I see that you have added to your response:
As a matter of fact , I do nor count waves, the counts are due to physical ID of impulse and the counts are for guidance of whether the skew should be inro-or Extro.
I am afraid that I do not understand this at all - are you saying that you do not count waves, or that you only count Impulse waves. Also I do not understand what you mean by skew being Intro or Extro.




3. Don't go against the trend - but there are so many trends. When I determine the trend for a timeframe in the most basic way - is it up or down from left hand side of chart. Then for me the E/U daily is Up , the 1Hr is down and on the 5 min it has been completely flat for most of the day - it has just turned down about 1 hour ago. So we take our pick - long , short or stay out.You have little understanding about trends. Tell me what is the basic defination of a trend?

- There are 3 basic definitions of a trend:

1. The Dow definition - Up is higher highs and higher lows (but these are subjective and you need 2 consecutive of each for a confirmed trend - by which time it is usually about to turn. So many people guess that it is a trend after only 1 HH, HL or LL,LH pair rather than wait for a confirmed trend).

2. The 5 year old child's vision - is it above or below left hand side of chart (as currently used by Jacko). This is also subjective - how far out do you zoom?
You obviously disagree with this one, but it isn't any less subjective than the Dow definition.

3. If you can draw an unbroken non-subjective trend line (up or down), then there is a trend and otherwise no trend.
Unfortunately, out of more than 6 ways I know of for drawing trend lines, there are 3 non-subjective ways and
only 2 of them give even a similar trend line. The similar ones are:
1. Tom De Mark level 2 trend lines
2. Draw backwards from most recently cloed bar and connect High (or Low) with oldest High (or Low) possible without crossing a bar.

The third non-subjective way is (for uptrend) draw from Lowest low (or intermediate Low if using a shorter timeframe) to Highest relative Low immediately before Highest High then pull it out parallel until no bar (between the low and high) intersect it. This is a modified version of the definition used by Victor Sperandeo (Trader Vic) because his definition allows for trawing already broken trend lines.

Edit: I see that you have expanded upon it thus:

Like I mentioned earlier you have a little understanding of market trends, When a daily trend is in effects, if the short chart trends differ, then the short chart is infoming you of the retracement posibility. You seem to confuse yourself between trend, because you think in time frames, I think I had mention many times , that time is of no consequense, it is divided to assist you to not run out of graph space and to compree for bird's eye view analysis.
In fact I agree very much with you that time is of little consequence (except that I for one, must sleep and eat occasionally). However I recognise that most people referr to H1,D,W,MN charts and expect to see a different overall time period for each. I was assuming that you went along with the majority in this case. I for myself do not - I zoom in or out so as to encompass the major Highs/Lows of interest to me - thus I sometimes draw exactly the same trend line on 3 different T/F charts.

Ian

Quoting fti
Another one , back to your homework. It was all given, and I don't want to do it all over again.
regards
Edit: You have also responded:
Hi Ian,

When I was saying my daily prayers.
When I reached the part asking for God's forgiveness , as I forgive my traspassers, Some how I guess God may be angry with me.

In someways , he reminded me that I had snaped at you. And had been unfair to you as you had tried to make sense of my presentation.

So I would like to apologies that I was harsh, because I was disppointed with the market ,and it affected me that I was not patience with you.

Let me try to help you understand.

Please Refer above for general directions.

If you like you may like to start a thread , about your analysis skillsand I can burst every one of your misconceptions. The most dangerous of which is PREDICTIVE ASSUMPTIONS. In your question #1 you had assumed that I was using the "most frequent patterns analysis" taught by "book" schools.

Thank you, but there was no need to appologise.

I think you are confusing skill with my having read some (conflicting) books. I have next to no TA skill. What success I have comes from guts not skill or prediction. The only methods I am at all successful with are trades lasting days or more, based upon break-outs or pull-backs after break-outs. For the most part these either have a poor win to loss ratio or large SLs or both (which is where the guts comes in). It is only because I would like to be able to 'finesse' these methods that I started reading your thread. So you see that I have not given up on my SLs (I can't babysit most of my trades), but they are so big that I doubt that most StopLoss sweeps will get them until price is already in the general area.


With respect,
Ian
  • #4,700
  • Aug 2, 2008 11:06am Aug 2, 2008 11:06am
Quoting musgrove
Thats my take on it
Thanks Musgrove,

1. But what is a 'fortified castle' if not an area of potential S/R ?

2. Is this what FTI meant by his posts about Elliot Wave. I understood that as in his posts about support/resistance, that we should not use it .

3. In my reply to FTI, I have explained why I find trends difficult. With all the things that we should not use (from my comprehension of FTI's posts), there is very little left to base one's dancing on apart from 'feel'.

Perhaps now that I am unemployed I will have time to demo sufficiently to develop some 'feel'. Certainly it is too dangerous for me to try in my live account (due to the no stop loss rule - I really feel insecure without a catastrophic stop loss of a hundred or more pips, and I have never understood why FTI thinks these are susceptable to stop loss sweeps).

Thanks again,
Ian
33 traders viewing now