Technical Analysis Fallacy | Page 680 | 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

  • #13,581
  • Feb 14, 2010 11:23am Feb 14, 2010 11:23am
Quoting Fana
Hi Baifu
Interesting, i just also study this...
When you rescue, u use very big troops... Isnt it too much risk?

Now my question is, if it is good to make some booked profits from lower levels before trigger bigger balls... to reduce risk from bigger positions.

Because when u win first three levels consecutively, u have good base (your profits are booked and the risk was low), for triggering bigger balls and when these "biggers" wont succed with the same risk parametres like what you have grabbed with those "low levels"... You are still...
Hi Fana,

FTI and veterans' advice to new students is work with 1,1,2 and build up competence. However, when I do my demo training I find it is easier to feel the market with multiple positions, that's why I sometimes split the scout into it's own micro spiral, spies I call them.

My basic MO is ride with 1, at most 2 troops. The first attack, 2, will be withdrawn with profit as soon as momentum wanes, or at first sign of danger. It is not meant to ride a retrace. However, I often mistimed and the first attack is stuck, then at the next thrust and retreat I will attack with 3, then 5. I reckon most reactive waves will not have more than 3 thrusts (waves must overlap, or they are not reactive), the last 8 will only be entered on stronger evidence of reject from S&R, such as LH/HL etc. This is the theory but I often erred (have gone to 13, 21, 34 ), so still thinking and practising to recognize as many adverse conditions and drill for internalized responses. I have a lot of work ahead.

I was engaged in a 3 day rescue from Feb 1-3, ending with 1% profit to the book. This is unacceptable for a real money account as overnight positions are not acceptable, so I have to improve my responses. For the rest of the last 2 weeks I was in rescue situations quite a few sessions but always squared with +ve % for the day, again this might not be the case as soon as real money is involved.

My rescue is always zooming in to a smaller time frame to scalp and airlift the least wounded troops, reducing exposure gradually. As I said in the last post I do not have the troop reserve to zoom out to a larger time frame rescue. I would rather cut and take a loss - for me it is about winning the war, not winning every battle.

I started an Euro 10K demo 14 trading days ago and the acct is up 18%, averaging a little over 1% a day. What I said in the last post about 1-3% a day is possible is not always based on 100 troops, I have been experimenting between 50-500 troops. When I go over to real money account I will start initially with 1000 troops to warm up, then work up to 100 troops.

We will learn together, here's best of luck to you and me
  • #13,582
  • Feb 14, 2010 11:37am Feb 14, 2010 11:37am
Quoting lilpip
Maybe Im misunderstanding you but how can anybody be free of imotionally distress ?
That 2,000 would be better suited for battle in a mini account.
As we read fti demonstrations in past hes rescued beyond 40 pips.
OK, I'm not sure what you are saying. The point I was making is that trading one standard lot on a $2,000 account balance is not a good idea, because prudent MM and market relalities are in conflict with that suggestion. Putting it bluntly, I think the person who presented this idea is wrong. As for emotional distress, discipline is the best way to deal with it, imho.
  • #13,583
  • Feb 14, 2010 11:41am Feb 14, 2010 11:41am
Quoting GEfx
OK, I'm not sure what you are saying. The point I was making is that trading one standard lot on a $2,000 account balance is not a good idea, .
I misunderstood.
  • #13,584
  • Feb 14, 2010 11:50am Feb 14, 2010 11:50am
Quoting Baifu
Hi Fana,

FTI and veterans' advice to new students is work with 1,1,2 and build up competence. However, when I do my demo training I find it is easier to feel the market with multiple positions, that's why I sometimes split the scout into it's own micro spiral, spies I call them.

My basic MO is ride with 1, at most 2 troops. The first attack, 2, will be withdrawn with profit as soon as momentum wanes, or at first sign of danger. It is not meant to ride a retrace. However, I often mistimed and the first attack is stuck, then at the next thrust...
Hi Baifu. Great post

What i currently work on is, how to implement high profitability ratio with using snowballs. I cant play it with numbers, because as i realized, it is rigid mindset after. I only have a model with numbers... I posted before...

So first is something like cumulation, when it works, i have confirmation of what i do and the basis for high skew attack. Market is like that is moving. Up, down. We can see TRIANGLES. But not reversed TRIANGLES. And there is something important in this fact. So u control the risk with snowballs UNTIL THE MOMENT you HIT. And in this moment it is clear that u go rightly with high skew and u now, that your risk is relatively very low(not because of your leverage, but because of speed of the market). And you know, that you are there.
I would be very curious what fti would say to this...
  • #13,585
  • Edited 3:00pm Feb 14, 2010 12:09pm | Edited 3:00pm
areas of extra interst considering the weekly timeframe
e/u
4116-35 down is bias for month
3785-3839 down is bias for week
3454
  • #13,586
  • Feb 14, 2010 12:21pm Feb 14, 2010 12:21pm
Quoting auxesis
Baifu,

Firstly, I'm just a student of the markets so take what I say and study for yourself, FTI is the only one here to take at face value, everyone else is interpretation.

Fib progression grows @ 1.618, in doing so you will keep your break even level within 25-30% of your average entry level on rescues by multiplying total troops x phi.

The simple way to do so is by adding, taking inside the fib spiral, but the risks associated may be to great for the individual, so either adjust entry level or work out a different skew growth...
Hi Auxesis,

Yes, when working out the number of troops for rescue the retrace is based on the leg being retraced, not the distance to our average price (market can’t care less about our DD . There are several considerations at work – what the market is likely to retrace, what we need as BE and what we have as reserve troops. Thank you for the rest of your comments, I will keep them in mind.

Agreed fti is the ultimate authority but I have always valued your posts, not the least because you are easier to understand

For example, phi (1.618 and it’s inverse 0.618) is easy to understand as a handy tool in position sizing, but I am still frying my brain over fti’s explanation of pi and the pi window. My only consolation is I am not the only one, even the formidable Mamood admitted to not getting it.

Not complaining fti, I know you want us to think for ourselves

Regards,
Baifu
  • #13,587
  • Feb 14, 2010 1:40pm Feb 14, 2010 1:40pm
Speculation :

1 round Trades=10 PT/SL=9/4 1X (for example 10000units)
Winners :3
Losers : 7 Total=-1
........................................
2 round Trades=10 PT/SL=9/4 2X (20000units)
Winners :3
Losers : 7 Total=-2
...........................................
3 round Trades=10 PT/SL=9/4 3X (30000units)
Winners :3
Losers : 7 Total=-3

Total of all is -6.

It is not normal, that we have only consequent losers...
We can have more than 3winners from 10trades often i think...

When i will have more than 3 winners in any round, the result will be much better. Due to skills it is not obvious to have less than 5winners from 30trades. And in this case if happened, it is not good, but not so bad....
  • #13,588
  • Feb 14, 2010 4:01pm Feb 14, 2010 4:01pm
Quoting Baifu
Hi Auxesis,

Yes, when working out the number of troops for rescue the retrace is based on the leg being retraced, not the distance to our average price (market can’t care less about our DD . There are several considerations at work – what the market is likely to retrace, what we need as BE and what we have as reserve troops. Thank you for the rest of your comments, I will keep them in mind.

[size=3][font=Calibri]Agreed fti is the ultimate authority but I have always valued...
Baifu,

Are referring to this post?

http://www.forexfactory.com/showpost...&postcount=876
  • #13,589
  • Feb 14, 2010 4:04pm Feb 14, 2010 4:04pm
Auxesis

I don't follow what most other traders do anymore, I used to follow common guidelines for about three years and that was getting me nowhere. One day you wake up and you see that following what everyone does is just leading you the same path that everyone is going and we know where that is. So I refused to follow that anymore and pretty much went against all that and I could not be more satisfied.

Yes, 1 standard lot (or more) per $2000 balance.

But its only my personal style, you guys do what you want.
  • #13,590
  • Edited 4:46pm Feb 14, 2010 4:19pm | Edited 4:46pm
Quoting robertw
Auxesis

I don't follow what most other traders do anymore, I used to follow common guidelines for about three years and that was getting me nowhere. One day you wake up and you see that following what everyone does is just leading you the same path that everyone is going and we know where that is. So I refused to follow that anymore and pretty much went against all that and I could not be more satisfied.

Yes, 1 standard lot (or more) per $2000 balance.

But its only my personal style, you guys do what you want.
Robertw,

I will be the first one to admit there's no right or wrong, only profit and loss in this business. To that end, everyone is responsible for their own success or failure, following someone over the cliff is no ones fault but your own.

If you have consistent success at that level, congrats. Imho, your over-leveraged, but that sizing will not work for the methods outlined in this thread.

Regards, and continued success.
  • #13,591
  • Edited 5:23pm Feb 14, 2010 4:39pm | Edited 5:23pm
Quoting robertw
Auxesis

I don't follow what most other traders do anymore, I used to follow common guidelines for about three years and that was getting me nowhere. One day you wake up and you see that following what everyone does is just leading you the same path that everyone is going and we know where that is. So I refused to follow that anymore and pretty much went against all that and I could not be more satisfied.

Yes, 1 standard lot (or more) per $2000 balance.

But its only my personal style, you guys do what you want.
I understand my partner and I set up a robot which traded in a way similar.

He set up the indcators getting in using 1 lot per 2,000.
My small contribution was watching the range to install 2nd and 3rd orders if one wanted to reduce risk a bit and go martingale. The points of 40 and 80-85 seem to work the best for a generic e/u system.
Was ok if you feel theres no need to keep a pulse on the market.
  • #13,592
  • Feb 14, 2010 4:49pm Feb 14, 2010 4:49pm
Quoting auxesis
Baifu,

Are referring to this post?

http://www.forexfactory.com/showpost...&postcount=876
YES!! You are good

@ Zoran
I think Zoran did ask me about my using the pi against that was suggested in the golden ratios (phi) by some posters here. I will answer him here as it is related issue.
Using a phi spiral creates a constant growth spiral from a point.
Whereas using pi skews breaks the circular leg price range and creates a spiral initiating from a "range window" .In doing so, price and volitility ( determined by visual observation of the leg of run from the bar chart.) becomes a component to the skew. This is akin to the using ATR of a run leg of a trend ( note: run leg and not bar range). And the spiral growth becomes a function of the windowed range. To do this requires much capitalisation.

This can also be constructed from a phi start point which begins not from the fibonacci progression but a user determined base. Only that the spiral growth then coils into a 1.618 constant of itself. The exact technique of determining that range window leg is classified for my own use as it may not be suitable for individuals.

I understand the part about applying phi (1.618) to the base, e.g., if we have 4 troops to rescue, 4*1.618= 6.472, say 7 troops. Re-setting the base of 4 troops as 1, We have now 1+1.618=2.618, the inverse of 2.618 is - how handy - 0.382. Just as the inverse of 1.618 is 0.618, all fibo retrace levels, if you believe in such things. By the way I don’t, retrace of one quarter, one third, one half, … etc is good enough for me. Nevertheless these relationships are very handy position sizing tools.

But “The exact technique of determining that range window leg is classified for my own use as it may not be suitable for individuals.” Hm ……

And
“Whereas using pi skews breaks the circular leg price range and creates a spiral initiating from a "range window" .In doing so, price and volitility ( determined by visual observation of the leg of run from the bar chart.) becomes a component to the skew. This is akin to the using ATR of a run leg of a trend ( note: run leg and not bar range). And the spiral growth becomes a function of the windowed range. To do this requires much capitalisation.”
Defeats me to this day, and I remember Zoran, Mamood, may be even youself, admitted to the same.

Just speculating for speculating sake, personally I never believe in perfect order theories.

Regards

P.S. When i came across this pi thing in the Lounge thread I jotted down more thoughts, but can't remember what just now. having my senior moment, it's way past my bed time
  • #13,593
  • Feb 14, 2010 5:05pm Feb 14, 2010 5:05pm
Auxesis

Thank You very much and MUCH success to you.

I've just started reading the thread so when I'm done (one day eventually) I'll know more about your methods here. I'm sure I can learn something new from so many posts.
  • #13,594
  • Feb 14, 2010 5:27pm Feb 14, 2010 5:27pm
Quoting Baifu
YES!! You are good

@ Zoran
I think Zoran did ask me about my using the pi against that was suggested in the golden ratios (phi) by some posters here. I will answer him here as it is related issue.
Using a phi spiral creates a constant growth spiral from a point.
[i][font=Verdana][color=#0070c0]Whereas using pi skews breaks the circular leg price range and...
Baifu,

Personal observations here, when a move ends it normally retraces back a minimum 25-35%, or forms a range based off a close high or low near the end of the run. I try not to get caught up on the exact price level on fibs and such and can eyeball if needed. But a lot of people look at them.
Even if the markets were true harmonics, the fact that they are highly leveraged will blur the %'s somewhat.

So when looking to rescue I need to visualize the needed distance between the average of position and the terrain of the chart between where I am now and that level. I know by adding a fib progression size of my position will bring my break even point to about 1/4 distance, but if that level is still too high I might need to go higher on rescue position ( if I feel the time is right) [ I'm adding exponentially to risk here] to exit out inside the price patterns showing.

On Pi skews, I have tried to get a handle on the methodology, my thoughts or estimations on their use, may be way off course here..............

When you look at a trend and the waves that make it up, you will see a general distance of run on the legs, if they are harmonics, in fib relation is not necessary - but there's a general distance they travel normally.

Sometimes you see it as a pattern or channel. It's where you get into ab=cd and such, don't want to get into that line of thinking, So,

If you take the range distance or average length of the leg as a base measure instead of a specific level, then you can start to model around that distance increasing or decreasing position size as it extends or shrinks from the base run length and where it turns on the retrace in relation to the base.

I also imagine that rescue levels could be determined from the proximity of your entry figured in Fibo progression levels by the distance of the base run, but without becoming totally rigid in application and relying on a statistical martingale to enter I've never solved that one.

I've had enough tring to get my hands around the basics,

Maybe FTI, will come back to that one and further the study.

regards,
  • #13,595
  • Edited 8:02pm Feb 14, 2010 7:32pm | Edited 8:02pm
Baifu and all:

This is what I understand, and I hope that if I am wrong, fti and other please point out for me (thanks in advance):

Quoting Baifu
Using a phi spiral creates a constant growth spiral from a point.
This is the usual lot size progression of 1,1,2,3,5,8,13...



Quoting Baifu
Whereas using pi skews breaks the circular leg price range and creates a spiral initiating from a "range window" .In doing so, price and volitility ( determined by visual observation of the leg of run from the bar chart.) becomes a component to the skew. This is akin to the using ATR of a run leg of a trend ( note: run leg and not bar range). And the spiral growth becomes a function of the windowed range. To do this requires much capitalisation.
When the price action, chart terrain and volitility, capital and trader's skill evel etc allows, the skew progression is deviates from the usual fibo sequence. The deviation, I think fti has mentioned in this post: "http://www.forexfactory.com/showpost.php?p=2148899&postcount=4971

"When aggressive, I skip rightwards levels of progressions,
when defensive, I skip leftwards levels of progressions."

This means that if agressive, the skews are: 1, 2, (skip 3,)5, (skip 8,) 13; if defensive, the skews are 1, 1, (skip left and remain in) 1, 2, 3, (skip left and remain in) 3. And so on.

"Akin to ATR": take into consideration of pip moved within a leg (not a single bar), and the time needed for that move (ie, speed). This is summarised as volitility.




Quoting Baifu
This can also be constructed from a phi start point which begins not from the fibonacci progression but a user determined base. Only that the spiral growth then coils into a 1.618 constant of itself.
The starting lot size of a skew (scout) may not necessary be 1. It can be a non fibo number, say, 6. This 6, which may or may not be a based built (by the previous progession of 1,2,3), and was subjected to 1.618 spiral for further progression. In other words, this 6 is scout level, next level is 6x1.618=9.7, round down to 9 (or up to 10), then 14, then 22.




Quoting Baifu
The exact technique of determining that range window leg is classified for my own use as it may not be suitable for individuals.
I cannot handle this type of progression, at least now. Not sure if any of us here can.

Hope that I am right.
  • #13,596
  • Feb 14, 2010 7:47pm Feb 14, 2010 7:47pm
Quoting Fana
I have discovered this :
Imagine trades...
Example: 10000units is scout
20000 is level 1
30000 is level 2
50000 is level 3
80000 is level 4
....
@ Fana:

1. There are many ways to trade, and ONLY you know which way suit you the best. So I am not saying you are wrong, but this is not what I understand from fti's teaching.

2. I think once scout is deployed, scout stay on and don't close out that fast. New levels are added later as attack. These newly added levels are remove if price stalled (or whatever). The point is scout stays.

3. See the following example of what fti did some times back:
http://www.forexfactory.com/showthre...ti#post2124968

4. Scout being small, can affort a bigger fluctuation in term of pips, thus able to ride a longer wave move, not just short impulsive thrust as attacks. In this sense scout is for "longer term trading", while attack is started as scalping (and see if it can be use as "heavy scout" to gain more $ if situation allows). That is why attack size has to be bigger than scout.

5. Closing of scout is only when you think the the current leg has ended, or you have doubt about current direction, or you think you can deploy it again later at better price, or your trading time is up, or you have enough profit, or there is big news coming up.

6. When re-depolying scout, go back to orginal lot size, unless you have good reason for having other size than the initial 1.

If I am wrong, please let me know. Thanks.
  • #13,597
  • Edited 11:16pm Feb 14, 2010 10:27pm | Edited 11:16pm
For those who have no capacity to listen.
here is some one to teach you, and she is d....

evelyn glennie - how to listen
http://www.ted.com/talks/evelyn_glen...to_listen.html

<object width="446" height="326"><param name="movie" value="http://video.ted.com/assets/player/swf/EmbedPlayer.swf"></param><param name="allowFullScreen" value="true" /><param name="wmode" value="transparent"></param><param name="bgColor" value="#ffffff"></param> <param name="flashvars" value="vu=http://video.ted.com/talks/dynamic/EvelynGlennie_2003-medium.flv&su=http://images.ted.com/images/ted/tedindex/embed-posters/EvelynGlennie-2003.embed_thumbnail.jpg&vw=432&vh=240&ap=0&ti=103&introDuration=16500&adDuration=4000&postAdDuration=2000&adKeys=talk=evelyn_glennie_shows_how_to_listen;year=2003;theme=live_music;theme=the_creative_spark;theme=spectacular_performance;event=TED2003;&preAdTag=tconf.ted/embed;tile=1;sz=512x288;" /><embed src="http://video.ted.com/assets/player/swf/EmbedPlayer.swf" pluginspace="http://www.macromedia.com/go/getflashplayer" type="application/x-shockwave-flash" wmode="transparent" bgColor="#ffffff" width="446" height="326" allowFullScreen="true" flashvars="vu=http://video.ted.com/talks/dynamic/EvelynGlennie_2003-medium.flv&su=http://images.ted.com/images/ted/tedindex/embed-posters/EvelynGlennie-2003.embed_thumbnail.jpg&vw=432&vh=240&ap=0&ti=103&introDuration=16500&adDuration=4000&postAdDuration=2000&adKeys=talk=evelyn_glennie_shows_how_to_listen;year=2003;theme=live_music;theme=the_creative_spark;theme=spectacular_performance;event=TED2003;"></embed></object>

regards

hum , is that you, S G Warburg??
  • #13,598
  • Feb 14, 2010 10:57pm Feb 14, 2010 10:57pm
@fti
and also those celebrating ,
Gong Xi Fat Choi !
good trade to all
To Live is the rarest thing in the world , Most people exist , that is all
  • #13,599
  • Feb 14, 2010 11:09pm Feb 14, 2010 11:09pm
Quoting maheswara
@fti
and also those celebrating ,
Gong Xi Fat Choi !
good trade to all
Thanks mahes,
Gong Xi Gong Xi.

regards
  • #13,600
  • Feb 14, 2010 11:48pm Feb 14, 2010 11:48pm
and V day too.
Inserted Video
29 traders viewing now