Technical Analysis Fallacy | Page 338 | 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

  • #6,741
  • Apr 27, 2009 4:09pm Apr 27, 2009 4:09pm
Quoting j-pax
you are probably right about analysis thats why i replied to 8 fingers....
just tried to explain, the difference between analysation (predictingthe future) and observation with TA.

thank you for your support.
Hi j-pax
TA = Charting + use the brain - used continuously.
analysation predictive future = trade what the brain wants to see and not to see what in fact.

Flow + Rhythm = Determination within AoW + MM(explained AoW)

"Don 't be perfect, it's dangerous"

I hope that helped
  • #6,742
  • Apr 28, 2009 7:58am Apr 28, 2009 7:58am
Quoting Gro
Hi j-pax

Flow + Rhythm = Determination within AoW + MM(explained AoW)

"Don 't be perfect, it's dangerous"



I hope that helped
hey gro...

do you mean we can never trade perfect so we have to use realy small scout MM. and have patience to feel flow and rythm (the dance) ??

i often attack and rescue too early. ("don't try to be perfect" does make sense to me) this is also because i don't have much time to trade.

i demo-trade ...so don't worry about my account....i have much to learn first.

thanks for your support
even with my eyes open i cannot see everything
  • #6,743
  • Apr 28, 2009 9:29am Apr 28, 2009 9:29am
The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself. Thus the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.

To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting

Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. If it is to your advantage, make a forward move; if not, stay where you are. Anger may in time change to gladness; vexation may be succeeded by content.

-Sun Tzu
To Live is the rarest thing in the world , Most people exist , that is all
  • #6,744
  • Apr 28, 2009 6:01pm Apr 28, 2009 6:01pm
Quoting maheswara
[font=Comic Sans MS][size=2][color=Black]The good fighters of old first put themselves beyond the possibility of...
Hi maheswara

Thanks for the repetition ... this is the mother of wisdom.

Hi j-pax

understand you correctly ... not overexpose yourself, not overexpose account.

In this thread is a hidden diamond, matter how many sacrifices for his finding.

Regards

Inserted Video

  • #6,745
  • Edited 9:18pm Apr 28, 2009 9:01pm | Edited 9:18pm
Quoting maheswara
The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy. To secure ourselves against defeat lies in our own hands, but the opportunity of defeating the enemy is provided by the enemy himself. Thus the good fighter is able to secure himself against defeat, but cannot make certain of defeating the enemy.

To fight and conquer in all your battles is not supreme excellence;......
Here how I relate this to the margin requirement consideration of this trading method:

Initial Account balance : $10,000, leverage 1:200, no position, free margin $10,000. Trade only EURUSD.


Scenario One:

For some reason, position is opened and after a few layers of rescue, total long position is 1 std lot at average price of 1.2800 while current price is 1.2770, let us look at how this is going to change the free margin:

Margin required : 1.2800x100,000x1/200 = $640
Unrealised Loss: (1.2800-1.2770)x100,000x1=$300
Free Margin : 10,000-640-300 = $9060

To exhaust this free margin without adding any more rescue, price need to move (9060/10=) 906 pips further against the trader (from 1.2770 to 1.1864) before the trader face margin call. Not very likely to happen considering the trading time frame.

With this buffer of 906 pips, surely one can find a few very good locations to rescue and attack.


Scenario Two:

Continue from Scenario One, further rescues are deployed (2x & 4x) and total long position is 7 std lots at average price of 1.2700 while current price is 1.2670, let us look at how this is going to change the free margin:

Margin required : 1.2700x100,000x7/200 = $4445
Unrealised Loss: (1.2700-1.2670)x100,000x7=$2100
Free Margin : 10,000-4445-2100 = $3445

To exhaust this free margin without adding any more rescue, price need to move (3445/(10x7)=) 49 pips further against the trader (from 1.2670 to 1.2620) before the trader face margin call.

Now this is NOT something unlikely to happen.

Those carelessly/wrongly deployed rescues or overstay rescues is putting the trader in risk of margin call.
  • #6,746
  • Apr 29, 2009 2:31am Apr 29, 2009 2:31am
wat happens to london... so slow
To Live is the rarest thing in the world , Most people exist , that is all
  • #6,747
  • Apr 29, 2009 4:47am Apr 29, 2009 4:47am
Quoting hcong168
Unrealised Loss: (1.2800-1.2770)x100,000x1=$300
If the $10,000 in your trading account is your entire trading capital then I think you are already in deep trouble. You are looking at a 3% loss on the account on a single attack and so are either taking positions that are too large for the acount size or have been trying to rescue a position you should have walked away from.

In this example you shouldn't be in that position if the price is only 30 pips away from your entry point.

(Sorry if I am taking your example too literally and it was just meant as a mathematical exercise.)
  • #6,748
  • Apr 29, 2009 6:30am Apr 29, 2009 6:30am
Im not sure how the math goes, but i think as long as scout is equal to capital (10000 cap --> 0.1 lot scout) the risk is manageable ,
again its about ur risk appetite , more risk = more profit , with the assumption u can handle such risk , both in terms of $ and % ...

if u feel the risk is too high for u , keep cutting the scout by half till its comfortable ... when it is comfortable enuf increase it slowly

stick to good habits and basics ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #6,749
  • Apr 29, 2009 10:39am Apr 29, 2009 10:39am
Quoting maheswara

(10000 cap --> 0.1 lot scout)
.
You mean for every 10,000$ you can have a scout which can take 1$(.1 lot) movement for every pip ...
Quoting maheswara

if u feel the risk is too high for u , keep cutting the scout by half till its comfortable ... when it is comfortable enuf increase it slowly

stick to good habits and basics ...





Double that..




V
  • #6,750
  • Apr 29, 2009 1:30pm Apr 29, 2009 1:30pm
Feels good to be on the right side once in a while...i was on right side

shorted at 1.3300... out at 1.3260....


V
  • #6,751
  • Apr 29, 2009 1:50pm Apr 29, 2009 1:50pm
Hi Friends,

nice to see that there are still some of you around here.
Hope you are all doing well.
Unfortunately I have not much time these days to read and post here in FF.

Wish you all the best!

Reagards,
MaMood
  • #6,752
  • Edited 6:58pm Apr 29, 2009 6:28pm | Edited 6:58pm
Quoting MaMood
Hi Friends,

nice to see that there are still some of you around here.
Hope you are all doing well.
Unfortunately I have not much time these days to read and post here in FF.

Wish you all the best!

Reagards,
MaMood
Hi MaMood

It is nice to return when here the original members.


Where is FTI?Know someone?
  • #6,753
  • Apr 29, 2009 11:30pm Apr 29, 2009 11:30pm
just a thought,
tomorrow is a bank holiday in Europe, we have seen a nice gain in euro past 1 week n there was almost no substantial retracement , meaning almost everyone is carrying a very heavy positions of long ...
if they close and square out their positions because of the euro holiday tomorrow , there will be quite a down move today ...

anyway stay to what your chart tells u

goodluck n good trading
To Live is the rarest thing in the world , Most people exist , that is all
  • #6,754
  • Apr 30, 2009 12:32am Apr 30, 2009 12:32am
Quoting maheswara
just a thought,
tomorrow is a bank holiday in Europe, we have seen a nice gain in euro past 1 week n there was almost no substantial retracement , meaning almost everyone is carrying a very heavy positions of long ...
if they close and square out their positions because of the euro holiday tomorrow , there will be quite a down move today ...

anyway stay to what your chart tells u

goodluck n good trading
Thanks, I was only looking at todays FF Calendar. Did not know that it is bank holiday in Europe Friday. Makes sense. Could be a good move down for the EUR/USD today.

Good trading to all. Ray
  • #6,755
  • Apr 30, 2009 4:20am Apr 30, 2009 4:20am
Quoting maheswara
just a thought,
tomorrow is a bank holiday in Europe, we have seen a nice gain in euro past 1 week n there was almost no substantial retracement , meaning almost everyone is carrying a very heavy positions of long ...
if they close and square out their positions because of the euro holiday tomorrow , there will be quite a down move today ...

anyway stay to what your chart tells u

goodluck n good trading

we have Queensday in the netherlands but the markets are open and in the restt of europe it's busness as usual...

good thing you stay with the charts...

i hope you are doing good.
even with my eyes open i cannot see everything
  • #6,756
  • Apr 30, 2009 6:09am Apr 30, 2009 6:09am
Quoting j-pax
we have Queensday in the netherlands but the markets are open and in the restt of europe it's busness as usual...

good thing you stay with the charts...

i hope you are doing good.
yup doin well,
it has started moving down from the looks , lets see how this plays out
To Live is the rarest thing in the world , Most people exist , that is all
  • #6,757
  • Edited 7:23am May 1, 2009 2:05am | Edited 7:23am
hello all,

you're right mahesware ... (i read your post-date about the holiday wrong)
today most markets in europa ARE closed, it's labour-day.
only london is open.

sorry

have a good weekend
even with my eyes open i cannot see everything
  • #6,758
  • May 1, 2009 6:43am May 1, 2009 6:43am
Hi Mate, i am a bit worried. I want you to go for a swine flu test. I know you have not been to Mexico but fuck me, you've been with some pigs in your time!
  • #6,759
  • May 3, 2009 8:59pm May 3, 2009 8:59pm
Hi guys,

Hows everyone doing... I am still USD bull right now in red...


anyhow reason for this post is.. i was at barnes and noble and first time i didnt liked to pick any book bcz all were either
some technical analysis or how to i will get u 100 positive trade in forex...

anyhow i picked one book and i was amazed this is exactly what we talk here..

here is the link forget the amazon ranking i guess now i know how muhc relaible these rankings are..

http://www.amazon.com/Warrior-Tradin...1402253&sr=8-1


V
  • #6,760
  • May 4, 2009 12:58am May 4, 2009 12:58am
I also have a absolute MUST read article which I wanted to share for a long time !

http://www.wired.com/techbiz/it/maga...urrentPage=all

Enjoy !
19 traders viewing now