Technical Analysis Fallacy

Hi J-Pax,

sorry but I have not idea. I do not expect a major relevance of this intel data. JPMorgan is more interesting, because it is a major bank and we are still in the middle of a banking crisis ....

hey mamood,

talking heads want to keep us watching them and the commercials. so they make me believe it is relevant. i'll be carefull anyway.

kind greets, pax

Thanks Auxesis,

I'll print out your advice and stick on my head to keep on reminding me - danger to go short when prices broke north out of the flag & south failed to make new low.

Hope you are making big pips.

Good Moringn Friends!

Some info about amrket sentiment for the trading so far:

0616 GMT [Dow Jones] ASIAN SUMMARY: Stocks mostly higher: Techs rally on positive Intel outlook, Shanghai shares rise on data showing pickup in China's trade. Shanghai Composite +1.8%, Shenzhen +1.4%, Nikkei down 0.2%, Kospi +1.2%, HSI +1.4%, Taiwan +1.3%, S&P/ASX 200 +1.0%, NZX +0.5%, STI +0.4%. In FX markets, USD weaker vs EUR, JPY after dovish comments from U.S. Fed's Kohn Tuesday bolster view U.S. rates to stay low for extended period; EUR/USD breaks through 14-month high at 1.4887, pulls up JPY too; EUR/USD now at 1.4892 vs 1.4829 late NY, USD/JPY at 88.95 vs 89.75, EUR/JPY at 132.49 vs 133.09. BOJ keeps interest rates at ultra-low 0.1% but surprises some by making no mention of whether it will end emergency debt-buying operations (program scheduled to close end-Dec); central bank raises economic assessment for 2nd-straight month saying "Japan's economy has started to pick up."
[...]

Disclaimer: Be aware of possible COw Dung included ;-)

be very nimble , feel we are at critical levels...

edit

wanted to share here,
http://www.finfacts.ie/irishfinancen..._1016894.shtml

look at the smallest debt/gdp ratio , russia , aussie n china ... while usa is approching 100% , jap has 200% already!

Happy trading day to everyone, and i hope you are all trading well. I have been long the E/J so far today, and now waiting for a bit deeper pullback before another long position. Currently, Dow futures are up over 100, and oil is up. Advanced Retail Sales are due in 25 minutes. Good trading everyone.

Edit: Got a nice pullback and am long again at 133.34, protecting that price as was approach Retail Sales. Good trading everyone.
Edit: Jumped out at 133.65 and am now waiting for next opportunity

Unfunded liabilities in the US exceed the current debt level, and are growing. Completely unsustainable.

dow(fut) at 9900 , jpm posts good profit ...
10k kiss today ? (which incidentally might be 1.5 for EU )

edit:

bad mindset

I have a weird feeling about this. Something in my gut whispers this will turn into a bull trap.

could be many signs of cooling off ... 1000s of ppl must be thinking the way i do , and then marketmaker will capitalize this n make a lot of money out of me n the 1000s of simple minded people
therefore stay nimble

Couldn't agree more

For today and at the moment my eyes are extra wide around 4948-4955 area.
Will follow her though.
Seems like the 3 kingdoms are in sinc at the moment.
sure acts like she wants to continue to climb.

as much as i im a technical trader, i think the the holy grail for forex is reacheable, the basic factor in this market is the trader, as much as you trade technically , either using an oscillator or trand following indicator, you must not ignre the fundermentals, either you learn how to trade the news and add it to your tools of trading or you stay away from the market completely.
the holy grail for forex is the trader himself. the markets acts on its own , therefore, no tradercan single handedly change ti, although with alot of linquidit you pull strings.
however, your money management , discipline, sticking to your trading system is the holy grail in forex. you have to overcome yourself and never be ante-trend in the market. 'the trend is your friend'

-no mentor, or course, or literiture can give anyone the holy grail to the secrets of success in trading in the markets.
-"and no one, sells the goose that lays golden eggs, probably the eggs, but never the goose"
Nevertheless, I will humbly attempt.

Since the late 70s and into the millinium.
Many "engineers" have made public, their inventions of reading probabilities into Technical Indicators. Many Technical Analysis Gurus came to the forefront to sell their research findings. To name a few,
The Grand daddy being Charles Dow and his Dow theory which later lead to the creation of the Dow Jones Indexes.
Rene Descarte who introduced the Spiral studies.
Leonardo Da vincci who fostered the fabonacci principles,
W.D. Gann, who introduced Cyclic Studies of Squaring time and price.
R.N.Elliot, who introduced the Elliot Wave Studies
W.Wilders.Who introduced the mathematics of calculating overbought and oversold markets by his introduction of the DI+,DI-, ADX lines and the Relative Strength Index.
The Stocastics, MACDs, ……………………………...etc

If one was to impliment all these studies onto their charts. What you will see is a beautiful piece of art, displaying very impressive hog wash, that do nothing but dazzle the uninitiated. If anything else it 'll confuse you even more.

Then you have the charting specialist who have introduced many ways to chart eg,
Linear Charts, HiLoClose Bar Charts, Japanese candlestick charts, Point & Figuring, John Hill's Bar Chart congestion & reversal patterns, reverse point waves, pivots, fractuals, ………..etc

Today, we find lots of originally and mutated techniques and methodologies available to the Chartist or Technicians.

What many fail to realise, is that all these studies, basically are statistical tables plotted in graphic form to present a "picture" to assist traders in their decision process. The maxim being, that a picture tells a thousand words.

"It is not theirs (the charts) to reason why,
But to signal Sell or Buy,
For the traders to do or die,
Hoping that the signal does not lie,

I would, from my many years of studies, go so far as to say, that they all work, some more than others but they all do serve a purpose. (to give traders, the "guts" to do or die)
If I may borrow from the quotes of Sir Winston Chirchill.
"That you can lie to some people all the time, all people some of the time, but not to all people, all the time."
Similarly, theses studies can work in some market conditions all the time, all market conditions some of the time, but not all market conditions all of the time."

Think about what I've just quoted very carefully.

The problem with some people and some professional Technical Analyst today ( being a certified Technical Analyst myself ) is that they use the Technical studies as if, it were the "Holy Grail" of trading & their pathway to the millions.

How far that is from the truth.
Any person with a good brain on their shoulders, will ultimate come to the realisation that these are just tools. Tools that are built on historical and lagging databases. Moreover the rigidity of the parameters used in the studies imposes rigid responses to changing market conditions. Have we forgotten that the market is a live beast that learns and adapts to trader behaviours? Many have forgotten that the market is the sum total of the behaviour of the participants engaged in the market place. These tools are used for measuring the markets health, not so unlike the thermometer to a doctor, or the measuring tape to a carpenter, just a tool.

Then how is it possible that these studies themselves can be considered the "Holy Grail"?
It may be due to ignorance (being new and uniniatiated), lazyness, or just plain stubborness ( a little knowledge is a dangerous thing). Of course it is not nice for me, to tell you about those who have "a little knowledge", trying to scam those who know less than them. That's another story.
Some do so, because of a very new disease discovered recently, the sickness of "the chance".
If you use the Technical studies as your "Holy Grail", I have only one word for you, GAMBLER.

I put it to you, that, to consider your Technical Studies to be more than what they are is a "fallacy" in trading the markets, not so unlike martingale gamblers' fallacy. It can lead you to a very dark place.

What many traders do not know, or may fail to recognise, is that your success in taming the markets, is comprised of a mix of ingredients. Not so unlike in baking cakes.
I suggest three very important ingredients. One is " Market Structure ", the other is "YOU", then Capitalisation. Of course there are many more components, for the moment these seems of dominant importance, in my humble opinion.

I hope you will think about what I've said very carefully.
I shall try to push these doors ajar for you slowly to show you the light at the end of the tunnel (please hope its no on-coming train), God willing.

regards[/quote]

Happy trading day to everyone, and what a great day it has been since London. I hope everyone is getting in on these nice moves. Not sure what got into the GBP today but who really cares! Good opportunities across the board. Stay focused and get them while you can.

Markets, specially Pound have been driven by ECB statements earlier and $ moves by early ( pre-opening) big corp earnings reports.

At this half hour we have some important US fig releases, so be careful going in, maybe some pre-priced in levels.

regards

Technical analysis is not a fallacy , not building a system around is the fallacy . i'm of the opinion that no matter the technical indicator you have in your tool box; you can not make a dem.

apart from good money management and discipline forex trading will be a rollercoaster. you have to build a simple system that combine oscillators and momentums. you dont need too much indicators on your chart , because you will get yourself confused. i love exponential moving avarage and the RSI , this has been working fine for me on 4 hours chart.

sincerely you need to determine again what indicator works best on what time frame, oscillators are best used on shorter time frames. but for a stable intra day trader you can stay on 4 hours chart and do a 'combine therapy' as dicussed above.

Fashola,

This thread is dedicated to it's author and to ideas laid out therein. Obviously you have not read the thread. Please understand that all indicators are lagging by nature as they are derived from historical data, and are not predictive.

The author,a retired tier I bank trader with many years trading and teaching traders at the highest levels has laid out a methodology and mindset that avoids any type of predictability. The reasons for such are presented in the thread.

The followers here are one big family, and everyone tries to help each other as everyone is at a different point on their respective journey, but please do try to interject other types of trading into the thread, there's other threads on this forum that deal with all types of indicator and system methodologies that would be a better venue for you. If you have found a different way, great, we each must find what works for the individual, but please keep the thread on topic.

regards,

The large type and red color seem to indicate you are shouting at us. Please understand that there are over 10,000 posts here that are dedicated to quality trading, and we gladly follow the thoughts and ideas of the host of this thread, fti. May I go out on a limb and suggest that you start a thread and we can continue this conversation there. Do not mean to be disrespectful to you.

GEfx was an early bird and caught a few worms

Yes, there's plenty of liquidity today, some nice moves.

Beginning to feel a like a pig. Just took the E/J for a little ride and am back on the sidelines again.