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Technical Analysis Fallacy

  • #4,981
  • Edited 8:24am Aug 6, 2008 7:05am | Edited 8:24am
Quoting joypips
hi all

am way back in thread and fti mentioned 'managed pegging' in a post ... have searched for meaning but no luck... can someone please tell me what it means.

joy
Pegging...Economics term...

a place to start:

http://library.thinkquest.org/19552/pegging.htm

if your are pegged to the dollar whatever happens to the dollar happens to you...you cannot use policies to manage economical cycles, etc...etc.

I am bearish-scalping until clarity-wrong direction trouble- great chance to practice U/CH hedging-I am beginning to like multiple pairs trading...very flexible indeed

Bull came back very angry and strong...U/CH parabolic...my plan: when bull rest collect my dollars and rescue E/U...So I am not a pig this time, what am I?
Empty as water and soft as a facing wind mountain
  • #4,982
  • Aug 6, 2008 8:44am Aug 6, 2008 8:44am
Quoting luSan
Pegging...Economics term...

a place to start:

http://library.thinkquest.org/19552/pegging.htm

if your are pegged to the dollar whatever happens to the dollar happens to you...you cannot use policies to manage economical cycles, etc...etc.

I am bearish-scalping until clarity-wrong direction trouble- great chance to practice U/CH hedging-I am beginning to like multiple pairs trading...very flexible indeed

Bull came back very angry and strong...U/CH parabolic...my plan: when bull rest collect my dollars and rescue E/U...So I am not a pig this time, what am I?
Hi Lusan,
What are You?
Well you are LOST?

regards
  • #4,983
  • Aug 6, 2008 8:45am Aug 6, 2008 8:45am
y is the bull rampaging the crosses ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #4,984
  • Aug 6, 2008 8:49am Aug 6, 2008 8:49am
Quoting fti
Hi Lusan,
What are You?
Well you are LOST?

regards
Not really...I am practicing this thing you did yesterday...I am doing it live...Crazy? ....Of course, I learn by experimenting...of course...today a bullish pig is a king...so far minimum losses...

My name is mr. Lost...
Empty as water and soft as a facing wind mountain
  • #4,985
  • Aug 6, 2008 8:50am Aug 6, 2008 8:50am
Quoting joypips
hi all

am way back in thread and fti mentioned 'managed pegging' in a post ... have searched for meaning but no luck... can someone please tell me what it means.

joy
Hi joypips,
Sorry , the replay is late, was riding the bull.

What you mentioned is about the Structure of the Forex makets.

Basically there is 3 structures in the forex market,

1. Free and managed floated markets
2. Managed pegged markets.
3. Fixed markets.

Before "bretton woods" all forex markets were pegged.
They were all peg to Gold. Depending on the gold reserves a country held, that would be the pegged, if you wiki "Gold standard Financial system" you will find the price tables where all the world currencies were pegged.

After the bretton wood agreement , the free world currencies were removed from the peg. and was allowed to be free floated and trading of it was between banks. The currencies like USD, Yen, cable, swiss were the major currencies that were floated. The CBs managed the exchange rates by monetary and fiscal policies like they do now. This structure of the forex markets is known as managed float.

Then there is the managed pegged system , which some countries decided to adopt, examples are like the state of Brunei, where its Burnei $ is pegged to the Singapore dollar.
Whatever the Singapore $ traded, that was what the Brunei $ would be pegged on.

While this is the new system of forex management, some countries , adopted the fixed exchanged rates regime where
the currencies exchange rates are fixed by the CBs, example are the iron curtain countries, russia , China, Malaysia....etc.

I hope this helps.
If you research about foreign exchange and markets you may get a clearer understanding , as it is too long a subject to explain in a posting.


regards
  • #4,986
  • Aug 6, 2008 9:05am Aug 6, 2008 9:05am
Quoting luSan
Not really...I am practicing this thing you did yesterday...I am doing it live...Crazy? ....Of course, I learn by experimenting...of course...today a bullish pig is a king...so far minimum losses...

My name is mr. Lost...
Hi Lusan,
What I did was to defray risk exposures, by crossing away the USD risk to meet the figs that wa expected.
from short of EUR/USD where the Usd portion would be exposed to risk from figures I sold the USD for STG . effectively having EUR/STG cross. After the figures this was revsed back to Eur/USD . The exercise is to avoid figures risk.
What you are doing is creating the risk. It is a dangerous way to trade.

This is the same direction that Leighsww had taken.

If you insist the markets will teach you a lesson, when you learn it the hard way, maybe you would like to share you experience . But please do not promote it's use.


regards
  • #4,987
  • Aug 6, 2008 9:13am Aug 6, 2008 9:13am
Quoting Billionaire
Hi Mr FTI,

I am not sure whether any body has ever talked about what I'm going to ask because I read till page 97 ATM.

My thought :
Instead of sending a scout into the battlefield to feel the dance, can we imagine that there was a scout already at centain point of the battlefield by looking at the chart ? Then, we will now to decide how to rescue or attack accordingly ? Maybe, this imaginary thing can be extended to cover our 1st troop of rescue/attack, can we try to be smart like that so that we can reserve more troop force ?http://www.forexfactory.com/images/icons/icon10.gif

regards,
Hi billionaire,
Yes it is very creative, BUT

A scout is exposure, it is trading, when wrong , you may have saved money. but when right, How are you going to initiate that position in a market thats away??

For me , my scout is correct most of the time , and that allows foreign capital for attacks. if wrong I skew to save them.
Tell me how your MO may look like?

regards
  • #4,988
  • Aug 6, 2008 9:15am Aug 6, 2008 9:15am
Quoting fti
Hi Lusan,
What I did was to defray risk exposures, by crossing away the USD risk to meet the figs that wa expected.
from short of EUR/USD where the Usd portion would be exposed to risk from figures I sold the USD for STG . effectively having EUR/STG cross. After the figures this was revsed back to Eur/USD . The exercise is to avoid figures risk.
What you are doing is creating the risk. It is a dangerous way to trade.

This is the same direction that Leighsww had taken.

If you insist the markets will teach you a lesson, when you learn it the hard way, maybe you would like to share you experience . But please do not promote it's use.

regards
Done...book is saved..I will post in 10 min a couple charts and thinking process...need to take a break, Ok?
Empty as water and soft as a facing wind mountain
  • #4,989
  • Aug 6, 2008 9:33am Aug 6, 2008 9:33am
Quoting fti
Hi Lusan,
What I did was to defray risk exposures, by crossing away the USD risk to meet the figs that wa expected.
from short of EUR/USD where the Usd portion would be exposed to risk from figures I sold the USD for STG . effectively having EUR/STG cross. After the figures this was revsed back to Eur/USD . The exercise is to avoid figures risk.
What you are doing is creating the risk. It is a dangerous way to trade.

This is the same direction that Leighsww had taken.

If you insist the markets will teach you a lesson, when you learn it the hard way, maybe you would like to share you experience . But please do not promote it's use.


regards
Hi, Lusan:

I agree with FTI, that kind of "hedging" is not a right path to trading. It makes things more complicated. If you feel a position will face unwanted risk, just close it.

By openning positions of two highly corretated two pairs with opposite direction, you may tend to save the bad positions by closing the good ones.
  • #4,990
  • Aug 6, 2008 9:42am Aug 6, 2008 9:42am
Here it is...
Yesterday I was worry that I did not now how to deal with a news announcement when I was with losing positions...so I thought and that case I have an emergency. Either (1) pull the plug, (2) hedge with some other currency, or (3) gamble...I pull the plug and I saw my profit gone!

Today I found myself misreading the market...caught in a storm with 3 position open...Be a pig or experiment save your book? With 1 small scout, I would be probably a pig? With 3 going the wrong way?...bad for my book!
So I decided to test life the hedging thing. I bought U/CH because its smaller spread than G/U...

Good thing: Saved the book...I am alive to fight another day
Bad thing: Where is my profit? 90 pips and I go nothing.

I would not recommend it because it's taking with the left what the right hand has. When you were away, we discussed this issued. I tested and discarded. Somebody kept experimenting and works around this approach...
Attached Image
Empty as water and soft as a facing wind mountain
  • #4,991
  • Aug 6, 2008 9:47am Aug 6, 2008 9:47am
Quoting Green_David
Hi, Lusan:

I agree with FTI, that kind of "hedging" is not a right path to trading. It makes things more complicated. If you feel a position will face unwanted risk, just close it.

By openning positions of two highly corretated two pairs with opposite direction, you may tend to save the bad positions by closing the good ones.
David, I totally agree. I actively managed the anticorrelated hedge and avoid keeping the loser and killing the winner -that is not a good idea...

I am ok with being a pig for scout...you know that...but for 3 open positions?...that is another thing.
Empty as water and soft as a facing wind mountain
  • #4,992
  • Aug 6, 2008 9:49am Aug 6, 2008 9:49am
Quoting luSan
Here it is...
Yesterday I was worry that I did not now how to deal with a news announcement when I was with losing positions...so I thought and that case I have an emergency. Either (1) pull the plug, (2) hedge with some other currency, or (3) gamble...I pull the plug and I saw my profit gone!

Today I found myself misreading the market...caught in a storm with 3 position open...Be a pig or experiment save your book? With 1 small scout, I would be probably a pig? With 3 going the wrong way?...bad for my book!
So I decided to test life the hedging thing. I bought U/CH because its smaller spread than G/U...

Good thing: Saved the book...I am alive to fight another day
Bad thing: Where is my profit? 90 pips and I go nothing.

I would not recommend it because it's taking with the left what the right hand has. When you were away, we discussed this issued. I tested and discarded. Somebody kept experimenting and works around this approach...
So why didn't you just close bad E/U positions and reverse like FTI. Difficult? Yes. But you could forget E/U after closed, and started trading U/CHF. Then you will make money.
  • #4,993
  • Aug 6, 2008 9:53am Aug 6, 2008 9:53am
Quote
If you insist the markets will teach you a lesson, when you learn it the hard way, maybe you would like to share you experience . But please do not promote it's use.

I've had this lesson.

When the market trends hard, it will inevitably leave you with one of your scouts deep in enemy territory on the wrong side of the trend.

To rescue it would be trading against trend and not effective use of capital.
Enter Signature
  • #4,994
  • Aug 6, 2008 9:57am Aug 6, 2008 9:57am
Quoting Green_David
So why didn't you just close bad E/U positions and reverse like FTI. Difficult? Yes.
Experimenting...there will be another day.

Quote
But you could forget E/U after closed, and started trading U/CHF. Then you will make money.
Absolutely! You cannot make money this way....I proved it to myself...and I hope that other people that see that chart will see likewise....

Do not try this at home...The rescue part is somewhat scary.
Empty as water and soft as a facing wind mountain
  • #4,995
  • Aug 6, 2008 9:57am Aug 6, 2008 9:57am
Quoting luSan
Here it is...
Yesterday I was worry that I did not now how to deal with a news announcement when I was with losing positions...so I thought and that case I have an emergency. Either (1) pull the plug, (2) hedge with some other currency, or (3) gamble...I pull the plug and I saw my profit gone!

Today I found myself misreading the market...caught in a storm with 3 position open...Be a pig or experiment save your book? With 1 small scout, I would be probably a pig? With 3 going the wrong way?...bad for my book!
So I decided to test life the hedging thing. I bought U/CH because its smaller spread than G/U...

Good thing: Saved the book...I am alive to fight another day
Bad thing: Where is my profit? 90 pips and I go nothing.

I would not recommend it because it's taking with the left what the right hand has. When you were away, we discussed this issued. I tested and discarded. Somebody kept experimenting and works around this approach...
Hi Lusan.
I think the book of strategems has a name for this strategy.
I Think it is the 37th strategem.

著虫進肛門

Could be useful for the mindset. I guess

regards
  • #4,996
  • Aug 6, 2008 10:01am Aug 6, 2008 10:01am
Quoting Rainman
I've had this lesson.

When the market trends hard, it will inevitably leave you with one of your scouts deep in enemy territory on the wrong side of the trend.

To rescue it would be trading against trend and not effective use of capital.
Hey...another way is to forget about the scout...change pair and dance that particular trade...when the trend is over you might come back and fix the mess...something else to experiment...
Empty as water and soft as a facing wind mountain
  • #4,997
  • Aug 6, 2008 10:05am Aug 6, 2008 10:05am
Quoting fti
Hi Lusan.
I think the book of strategems has a name for this strategy.
I Think it is the 37th strategem.

著虫進肛門

Could be useful for the mindset. I guess

regards
Hi, FTI:

It seems you wrote some foul language? Couldn't understand it, a slang?

Is USD bull running the last wave(wave 5)?
Would E/U test support zone 5400~5300?
Would G/u test support zone 9350~9450?
Would U/J meet 110 resistance?

I know "no prediction", and I paid also dearly cost for this lesson. But special attention shall be paid to.
  • #4,998
  • Aug 6, 2008 10:10am Aug 6, 2008 10:10am
Quote
Hey...another way is to forget about the scout...change pair and dance that particular trade...when the trend is over you might come back and fix the mess...something else to experiment...

That works when the market is in tight range. But when market trends hard you could find one of your scouts 2-300 pips under. Capital used to rescue it would be better used on right side of trend. Best to kill scout at this point so really no point.
Enter Signature
  • #4,999
  • Aug 6, 2008 10:16am Aug 6, 2008 10:16am
Inserted Video




humor only...
  • #5,000
  • Aug 6, 2008 10:16am Aug 6, 2008 10:16am
Quoting fti
Hi Lusan.
I think the book of strategems has a name for this strategy.
I Think it is the 37th strategem.

著虫進肛門

Could be useful for the mindset. I guess

regards

Do you mean 36th strateagems?
I have not read it and for sure I will.
http://en.wikipedia.org/wiki/Thirty-Six_Strategies


Quote
No. 4. Make a sound in the east, then strike in the west 聲東擊西
In any battle the element of surprise can provide an overwhelming advantage. Even when face to face with an enemy, surprise can still be employed by attacking where he least expects it. To do this you must create an expectation in the enemy's mind through the use of a feint.
Empty as water and soft as a facing wind mountain
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