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Technical Analysis Fallacy

  • #11,701
  • Edited 5:56am Dec 20, 2009 4:06am | Edited 5:56am
Rescue - ? How to prevent snowballs from "becoming martingale".Because when i try to rescue, some day, it fails. And loss is big....
Question : Primary source of profitability is big% of winners of big snowballs? They are winners because of experience of smallest snowballs...???
Or, what is the main difference between good winning system using for example 1lot per one trade. And the system with snowballing? Because when it depends on traders experience and...how good the trader is... results should be simmilar...?( because of martingale risk...)
Regards
  • #11,702
  • Dec 20, 2009 5:12am Dec 20, 2009 5:12am
Quoting Setebos
IMHO 15M is pointless if you also use 5M - it gives you almost the same picture. 1M or 5M depends on your mindset and nerves - I personally use 5M most of the time with seldom dips into 1M for quicker actions. But that's just me. Fti explained how to use the time frames for all 3Ks back in the thread (there was even a screenshot, if memory serves me well) - try to search for it.
Screenshot Page 66 Post 984 Regards Ray
  • #11,703
  • Dec 20, 2009 5:55am Dec 20, 2009 5:55am
Quoting Fana
Rescue - ? How to prevent snowballs from "becoming martingale".Because when i try to rescue, some day, it fails. And loss is big....
Question : Primary source of profitability is big% of winners of big snowballs? They are winners because of experience of smallest snowballs...??? Regards
Fana,

There was much discussion early in the thread about not being caught in the wrong direction, basically standing in front of the train and letting your emotions get the best of you. If your position is in negative ground, you have to wait for the current move against you to finish before entering a rescue. That being said,rescue should not be attempted if you do not have the resources, both time and capital to withstand the move against you.

I'm not there watching you trade, but I would say you need to widen your view of price action as it sounds like you are working from a very small perspective. Price action for the last several days has been very directional, specially if you have been trading the Yen or Euro.

The Euro has been straight down, and if you had been trading with the current trend, no position should have been a loss. You might have had to wait a few hours for any mis-timed entry would have been caught in a correction only for that correction to finish and the trend resume with a series of nice runs in your favor. Here again, you need the time and money to wait it out.

There is no, max pips or rigid formula to tell you when to stay and where to cut and run, that information is derived from the chart and changes with each move. An understanding of the current market structure is necessary, knowing when price is ranging and when it's trending in relation to the time frame you are working with, but you have to see that perspective in relation to the next higher time frame.

Experience will teach you this, there's nothing better than screen time and being in the market, unfortunately the lessons can be painful at times.

STICK WITH THE DIRECTION OF THE CURRENT HOURLY MOVE, ONLY !!!!
And wait for price action on the smaller time frames to turn in your favor.

If you do not have the time to finish a trade, don't add to it when it does not go in your direction.

Regards,
  • #11,704
  • Dec 20, 2009 7:18am Dec 20, 2009 7:18am
Quoting Fana
Rescue - ? How to prevent snowballs from "becoming martingale".Because when i try to rescue, some day, it fails. And loss is big....
Question : Primary source of profitability is big% of winners of big snowballs? They are winners because of experience of smallest snowballs...???
Or, what is the main difference between good winning system using for example 1lot per one trade. And the system with snowballing? Because when it depends on traders experience and...how good the trader is... results should be simmilar...?( because of martingale...
Hi Fana,

What FTI teach us is not a system, it is a method, big difference.
(don't look for systems, you will waste your time)


When you are in the wrong side, you should first think if you can rescue or not,
depending in your current acc. balance and how big was your bet that
is "in" the market right now.
If you decide to rescue, (you need capital and time!) scale out the chart,
if you are in 5 min (advisable!), go to the 60 min chart, and watch what
has to tell you. (and come back to the 5 min chart to trade)

IMHO I think you are in trouble because your bets (lots) are too big
for your acc. balance. That's it.
Reduces your lots. Whats the problem?
The fact that your broker offer you 50:1 or 100:1 leverage, doesn't mean
that you have to use it! It is a trap for your small acc.
As a trader said:
If you don't bet, you can't win. If you lose all your chips, you can't bet.

Fana, here in the thread there are much better traders than me,
but I try that you see behind the scene, I don't know if I achieve it
with these few and simple words.

Experience come with the time. Learn by doing.

Rgs,

Textor
  • #11,705
  • Dec 20, 2009 8:09am Dec 20, 2009 8:09am
Quoting Fana
Rescue - ? How to prevent snowballs from "becoming martingale".Because when i try to rescue, some day, it fails. And loss is big....
Question : Primary source of profitability is big% of winners of big snowballs? They are winners because of experience of smallest snowballs...???
Or, what is the main difference between good winning system using for example 1lot per one trade. And the system with snowballing? Because when it depends on traders experience and...how good the trader is... results should be simmilar...?( because of martingale risk...)
Regards...
Hi Fana,
Just sharing a few thoughts on the questions. Before you learn to rescue a trade, you had better know how to trend. From your comments, I think this is your first problem. If you do not understand trend, how can you rescue? An inexperienced trader should never trade against the 1H trend. Trying to rescue a trade against the 1H trend is very expensive and very foolish. When you reviewed your losses were you trading against this trend? If you do not know the answer to this question without looking, you have not been working hard enough to do this job.

Once you know the 1H trend, do you know how to tell if the market is reversing against the trend? I know candle patterns are not discussed much here, but there are clear signs of a trend change that you need to know. If you do not know how to detect a trend change, then you are adding to the risk of the rescue move. When you reviewed the losses, did you detect the trend change? Again, if you do not know the answer to this question, you need to get to work.

How far back does a typical pull back go on the currency pair you are trading? The average pull back differs on each currency pair. I know this for all the pairs I trade, because I have looked at several thousand pull backs on each pair and averaged them out. Do you know this informatin? If not, how can you know when a pull back is exceeding the average and the alarm bells start to go off? If you don't know this, you need to get to work.

I could go on like this for many more paragraphs covering support/resistance, trend lines on Day or 4H charts, fib levels, etc. The point is, you are asking questions that can have very complex answers, and are highly dependant on the trader's skills. From my last post to you, I suggested that you open a demo account to eliminate your losses. Hope you did that.

Here is another suggestion: establish a loss level that you are willing to live with (for example, 5%) on any one trading event. Open your trade by risking 2% (if you have a demo account with $50,000, then you will close that trade if you find yourself down $1000). On some trades, that 2% might be covered with 2 standard lots (a 50 pip pull back) or may require a 1 standart lot trade (for a 100 pip pull back). The other 3% can be used for practicing rescue, but under no circumstances will you let the first trade go more than $1000, or the combined first trade/rescue trades go more than $2,500. If you can't cut your losses in this manner, you may want to find another line of work. After you do several hundred trades like this, you can increase the at-risk% from 5% to a higher number, but only after much practice. I know this is adding rigid mind set to trading but you need training wheels for now.

My personal opinion is that rescue is a high-level skill that comes well after your demonstrated ability to perform the necessary TA, the ability to skillfully follow PA, and the ability to maintain discipline. I've never watched you trade, but from your posts, I don't see you at the rescue level yet.
  • #11,706
  • Dec 20, 2009 9:43am Dec 20, 2009 9:43am
auxesis,textor,GEfx : Thank you very much. I listen attentively and follow your instruction. Very helpfull and very appreciate. Much obliged. Fana
  • #11,707
  • Dec 20, 2009 9:53am Dec 20, 2009 9:53am
current speed , longer term outlook , overall market view , and time of day ... they are the factors that makes ur decision to cut or to rescue ...

if u cut , u r going to commit to the other direction , cos u cut when u r clearly wrong ... so decide the safest place to cut n to turn direction (both usually the same place , scale out n scale in to get most profitable point)

if u r not cutting , u r left with two choices ,
-scalp retracements n create buffers for the bleeding position
or
-try rescuing quickly when theres a sign of deep retracement

good mm and feel and u will almost never need to cut ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #11,708
  • Dec 20, 2009 10:05am Dec 20, 2009 10:05am
maheswara : Thank you
  • #11,709
  • Edited 10:53am Dec 20, 2009 10:37am | Edited 10:53am
Hi Fana,

You got some very good answers to your question already.
The only aspect I wnat to add to GEfx answers is:
If your are btrading demo try to use the same accountsize, that you plan to with on real money later. It is very important to get a feeling for the numbers of position sizes, profits and losses. You neede to get a feeling for the number of troops you will have with real money later on.
It does not help much, when training with 100.000EUR and starting later with 1000 only ....

Just my 0.02EUR

CU,
MaMood
  • #11,710
  • Dec 20, 2009 11:06am Dec 20, 2009 11:06am
Quoting MaMood
Hi Fana,

You got some very good answers to your question already.
The only aspect I wnat to add to GEfx answers is:
If your are btrading demo try to use the same accountsize, that you plan to with on real money later. It is very important to get a feeling for the numbers of position sizes, profits and losses. You neede to get a feeling for the number of troops you will have with real money later on.
It does not help much, when training with 100.000EUR and starting later with 1000 only ....

Just my 0.02EUR

CU,
MaMood
MaMood : Thank you
  • #11,711
  • Edited 4:22pm Dec 20, 2009 3:18pm | Edited 4:22pm
Hi Fana

maybe something more :o)
Japanese geisha scuttle small steps and English lady is stubborn long step go ... etc.

Rgs

PS Europe girl knows not what he wants and not stop until after you do this
  • #11,712
  • Dec 20, 2009 3:30pm Dec 20, 2009 3:30pm
Its good to see the reminders of backing out our time frames for rescues, with thinner markets the order of the holidays mm is adjusted accordingly.
  • #11,713
  • Edited 6:00pm Dec 20, 2009 5:38pm | Edited 6:00pm
Lessons from Christmas.
===============

Thank you to the Lord for such wisdom and understanding, from Christmas.

M't:5:3: Blessed are the poor in spirit: for theirs is the kingdom of heaven.
M't:5:4: Blessed are they that mourn: for they shall be comforted.
M't:5:5: Blessed are the meek: for they shall inherit the earth.
M't:5:6: Blessed are they which do hunger and thirst after righteousness: for they shall be filled.
M't:5:7: Blessed are the merciful: for they shall obtain mercy.
M't:5:8: Blessed are the pure in heart: for they shall see God.
M't:5:9: Blessed are the peacemakers: for they shall be called the children of God.
M't:5:10: Blessed are they which are persecuted for righteousness' sake: for theirs is the kingdom of heaven.
M't:5:11: Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake.

Amen

Also oh Lord, Blessed are those who are not so intelligent,
for they can understand and comprehend(learn), instead of creating elephants from horses.
Blessed are the unlearned, for they can follow teachings zealously.

Thank you for the lessons of life.
The lessons about traders.

Inserted Video


Those that understand, will.
Those that cannot , won't.

regards
  • #11,714
  • Edited Dec 21, 2009 6:12am Dec 20, 2009 6:59pm | Edited Dec 21, 2009 6:12am
Quoting textor
Hi fana,

Perhaps already you read the following thing, but I remembered it and I thought that it would help you to read it again.

It is from Musgrove:

http://www.forexfactory.com/showpost...postcount=5367

http://www.forexfactory.com/showpost...postcount=4657

Rgs,

Textor
Thanks Textor for refreshing my mind it's very good

Btw anyone are trading this way as quoted no.9 on the second link

"9)get in and out of your trades quickly 7 bars max average three"


"Have a merry X's mas and happy new year to all"
  • #11,715
  • Dec 20, 2009 7:56pm Dec 20, 2009 7:56pm
Quoting textor
Hi!

May be I am in the wrong party here, but if you don't mind, drink a gin tonic and enjoy:

http://www.youtube.com/watch?v=6KUJE2xs-RE

Kind regards,

Textor
Hi textor.
reminds me of jest.


Eat your heart out,
Sexy bomb,Evgeny Plutshenko 2006 world champion.

Inserted Video


merry christmas

regards
  • #11,716
  • Dec 20, 2009 10:21pm Dec 20, 2009 10:21pm
eyes are on e/u 4343, anyone with her?
  • #11,717
  • Dec 20, 2009 10:54pm Dec 20, 2009 10:54pm
Quoting lilpip
eyes are on e/u 4343, anyone with her?
Hello lilpip. e/u 4343. Yes, but low volume... And for me it seems like there is unclear from H1. It can go up or down, despite of the e/u bear trend... It will tells...but i feel the christmas now
  • #11,718
  • Dec 20, 2009 11:12pm Dec 20, 2009 11:12pm
Quoting Fana
Hello lilpip. e/u 4343. Yes, but low volume... And for me it seems like there is unclear from H1. It can go up or down, despite of the e/u bear trend... It will tells...but i feel the christmas now
I hear ya on the up or down, and if she dont get movin Im goin to bed.
  • #11,719
  • Dec 20, 2009 11:14pm Dec 20, 2009 11:14pm
Quoting lilpip
eyes are on e/u 4343, anyone with her?
I am out at the moment, but mostly likely will go short on the EUR/USD with a scout. Looking to see what will happen if it gets to 1.4400 area. Good trading to all on the first day of the week. Ray
  • #11,720
  • Dec 20, 2009 11:27pm Dec 20, 2009 11:27pm
Quoting 1234
I am out at the moment, but mostly likely will go short on the EUR/USD with a scout. Looking to see what will happen if it gets to 1.4400 area. Good trading to all on the first day of the week. Ray
eyes will be open in that area as well but not so quick to jump on short.
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