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Technical Analysis Fallacy

  • #13,921
  • Mar 12, 2010 7:15am Mar 12, 2010 7:15am
Quoting imjscn
MyTbo,
Congrates on your pips on fig! But since you posted some question about rescue and attack, I would suggest another way to think about this trade.

Hourly trend was up yesterday, upside was capped but sentiment was very long eur, everybody wait for fig to crack top(it's still so today). When fig out, Swiss Private bank used the fig volatility to sell, but market absorbed him within 2 hours.

If you go short and got caught by the white bar, you have to wait the seller successfully defend his level, or wait hourly melt down, to rescue. Or,...
I think I get what you mean. The scenario I mentioned and my MO then was based on the probable dealers targets and moves. From what I've read till now I've learned that dealers prefered market state is trading range, so that they can sweep stops up and down.Am I right here? Trend actually is the dealers nightmare.Right? Bearing this assumptions in mind, I tried to get some pips in the low liquidity(dealers showtime) around the significant data release.

About the " retrace turning into reversal' thing I must say that I try rescues instead of flipping. I don't know when to flip. I remember fti saying " If you change busses frequently you will get run over soon", so I refrain from flipping. When I'm trying to rescue in the "retrace turning in reversal" case I usually lose the pips I got previously and even more. That's maybe my biggest problem.
So how can I deal with it? Any advice?

Hope you are on the right side of the trade

Cheers, MyTbo

P.S. What do you mean by the hour meltdown? Can you show me an example of it? This is maybe a stupid question but I'm still a newby
  • #13,922
  • Mar 12, 2010 7:24am Mar 12, 2010 7:24am
FA in 10 min and I have all my currency pairs at short term extremes, so let's see where the FA takes us. Have worked up several counter trend trades and several trend trades, so I am ready, assuming something actually happens. Someone pay the band and get the music started -- lol.
  • #13,923
  • Mar 12, 2010 7:50am Mar 12, 2010 7:50am
Quoting MyTbo
So how can I deal with it? Any advice?

P.S. What do you mean by the hour meltdown? Can you show me an example of it? This is maybe a stupid question but I'm still a newby
When get caught by reversal--
1. reduce size to confortable amount;
2. estimate how much you can suffer and decide hold for rescue or not;
3. if decide to rescue, just hold and wait, till the opposite impulse passed and start retracing.
By the way, flipping doesn't mean pigging. Sometimes it's necessory to flip. It depends on situation.

P.S. melt down means failed to go up, go down.
  • #13,924
  • Mar 12, 2010 8:41am Mar 12, 2010 8:41am
Quoting MyTbo
I think I get what you mean. The scenario I mentioned and my MO then was based on the probable dealers targets and moves. From what I've read till now I've learned that dealers prefered market state is trading range, so that they can sweep stops up and down.Am I right here? Trend actually is the dealers nightmare.Right? Bearing this assumptions in mind, I tried to get some pips in the low liquidity(dealers showtime) around the significant data release.

About the " retrace turning into reversal' thing I must say that I try rescues instead of flipping....
My 2.5 cents. To flip or not, it has to decided before hand, I do not flip unless I already have an idea of what to do when prices do reach certain levels. If I ever find myself in an uncomfortable position, I simply get out, I suspect you should too. Besides, in a scenario where your "retrace turning into reversal", if it is indeed a reversal, don't worry, there is almost always a second opportunity to get in. By considering flipping before hand, you remain in control psychologically.

In my personal application, a rescue is only initiated within my pre determined levels, prices get too far away, I will dump the plan and re evaluate. I do not know how you trade, I personally find a wonder synergy between the principles (note : principles) laid out here with text book technical analysis.

regards
  • #13,925
  • Mar 12, 2010 9:43am Mar 12, 2010 9:43am
Quoting auxesis
Lol, just stating he obvious.

Even with the large eyeballs you still gotta dance it.

regards,
Hi auxesis!

You get the same in 1 day chart.

Rgs,

Textor
  • #13,926
  • Mar 12, 2010 9:50am Mar 12, 2010 9:50am
Quoting aiyahmarklah
My 2.5 cents. To flip or not, it has to decided before hand, I do not flip unless I already have an idea of what to do when prices do reach certain levels. If I ever find myself in an uncomfortable position, I simply get out, I suspect you should too. Besides, in a scenario where your "retrace turning into reversal", if it is indeed a reversal, don't worry, there is almost always a second opportunity to get in. By considering flipping before hand, you remain in control psychologically.

In my personal application, a rescue is only initiated...
I have a plan before I go into trading, too, but problem is that my emotions get into the game and don't let me carry out the plan. For example today I wanted to short the eur/usd when it was oversold I had predermined level where to short(around 1.3790 where I thought I would be overbought) but I entered earlier at 1.3767

I did this with 5x my initial position cause I'm trying to break even some short positions in deep problem. Then I exited at 1.3755 cause I got scared it would go back. After some time I decided to continue the old plan and entered short at 1.3755 and put the same take profit as before 1.3725. Then I exited at 1.3633 just above the take profit target. If I was rigid and did as planned I would have made a perfect rescue, short from 1.3790 exit at around 1.3725 which is 67 pips (spread 3 pips)

Emotions are bad adviser
  • #13,927
  • Mar 12, 2010 12:15pm Mar 12, 2010 12:15pm
Quoting auxesis
Lol, just stating he obvious.

Even with the large eyeballs you still gotta dance it.

regards,
Cup with handle in the making ?

MyTbo, you are very aware of the problem, its a good thing, now you can work on it.

Cheers, enjoy your weekend guys
  • #13,928
  • Mar 12, 2010 3:12pm Mar 12, 2010 3:12pm
Quoting hcong168

I don't mechancially trade, and I still think fti's teaching is far more flexible.
hello hcong,

nice to hear you can trade more flexible, i agree with you i think Fti "method" is one of the most flexible... it's build around being flexible.... no sleep, switch to daily chart for rescue?? "THAT"S OK"... be flexible/profesional.

i am not flexible enough... are you; all students??

i only mentioned these turtle rules because of the steps making this a complete system:
1-position adjustment using volatility.
2-what to trade.... (3 kingdoms??)
3-risk management also using volatility
4-entries
5-exits

sorry if i was not clear on my intentions for presenting the turtle link..... like you i don't thing "this system" is great for forex!

my intension was to share the 5 steps above and highlight the first step.
and now i like to add a hightlight to step 3/risk.

step 1 and 3 i missed in my own study of Fti's lessons (and there is so much said on these subjects) i think they are more important than entry and exit!!

have a good weekend everyone, pax
even with my eyes open i cannot see everything
  • #13,929
  • Mar 12, 2010 4:52pm Mar 12, 2010 4:52pm
Quoting Fana
Hi J-Pax. Correct! This is really very important to have it all together and use it as a complex. fti is very unique in providing such completeness. In this, only a few traders (they are mostly from this gang), are like him.

Hold on man, here we dont need to bet.... Regards. Fana
hey fana,

i agree with you, i just want to share where i went wrong/not using the complete picture.

kind regards, pax.
even with my eyes open i cannot see everything
  • #13,930
  • Edited 5:17pm Mar 12, 2010 5:07pm | Edited 5:17pm
Quoting MyTbo
I have a plan before I go into trading, too, but problem is that my emotions get into the game and don't let me carry out the plan. For example today I wanted to short the eur/usd when it was oversold I had predermined level where to short(around 1.3790 where I thought I would be overbought) but I entered earlier at 1.3767
hey MY Tbo,

i am sorry i doubt your plan and what aiyahmarklah said.... i just agreed with hcong168 that Fti Mo is about being flexible... having a plan, IMHO, is not what dancing is about.

i hope my doubt makes you study hard.

kind greets, pax
even with my eyes open i cannot see everything
  • #13,931
  • Mar 12, 2010 5:17pm Mar 12, 2010 5:17pm
Quoting aiyahmarklah
Cup with handle in the making ?

MyTbo, you are very aware of the problem, its a good thing, now you can work on it.

Cheers, enjoy your weekend guys
aiyahmarklah, maheswara, imjscn thank you for the advices. Discussing with you guys really helps.

If you consistantly attack on retrace, there's only one attack get caught by reversal at the end of trend. The money you made on the attacks along the trend should be more than the final loss on reversal.

@imjscn
Your words here made remember something that had forgotten. Entering at certain points of retracement helps me realize if I'm wrong very fast. Lets say -15pips and I cut the position, thus if I have done 3 sucsessful attacks for 30 pips (just for example, my target is not always 30 pips) and the 4th attack fails at -15 or -30 pips, I still got more than I lost and that is the point.Right? Even if I have 1 success and 1 failure I would at least be at break even. It's better to take a small loss than to think I can rescue every position. The latter costed me a lot this week.Equity is down 20% but initial capital is intact.

I'm thinking of dividing the first entry in 2 parts, first part I cut when target is reached and second left to ride.

Have a nice weekend all. Stay healthy and happy
  • #13,932
  • Edited 5:53pm Mar 12, 2010 5:43pm | Edited 5:53pm
Quoting j-pax
hey MY Tbo,

i am sorry i doubt your plan and what aiyahmarklah said.... i just agreed with hcong168 that Fti Mo is about being flexible... having a plan, IMHO, is not what dancing is about.

i hope my doubt makes you study hard.

kind greets, pax
j-pax, having a plan,to me, means that I have several scenarios in mind - good, better, best, bad, worse and worst scenario( time and price determine the scenarios, not only price). Maybe the "predetermined 1.3790 level" mislead you. This level was worst case scenario, since I was trying to rescue.
The plan for thursday is not the same as the plan for friday and even the plan in friday morning is different from the plan at noon or afternoon. That's because the charts evolve. Do you think the above approach is flexible? Or no?

Regards
  • #13,933
  • Mar 13, 2010 5:08am Mar 13, 2010 5:08am
MyTbo,
From the 2 trades you posted recently, I get an impression that you normally trade against the flow. If it is the case, there's very limited success for attack, and rescue become extreamly dangerous.

By the way, 2 comment on your last post:
1. cutting small loss is not the way to avoid big loss --- add all small together, you get a big loss.
2. you don't need to rescue every lossing trade.

Cut or not cut, Rescue or not rescue, these decissions should base on market information and your capital.
  • #13,934
  • Mar 13, 2010 6:40am Mar 13, 2010 6:40am
Quoting imjscn
MyTbo,
From the 2 trades you posted recently, I get an impression that you normally trade against the flow. If it is the case, there's very limited success for attack, and rescue become extreamly dangerous.

By the way, 2 comment on your last post:
1. cutting small loss is not the way to avoid big loss --- add all small together, you get a big loss.
2. you don't need to rescue every lossing trade.

Cut or not cut, Rescue or not rescue, these decissions should base on market information and your capital.
I durign the recent months it was EUR/USD down trend and 80% of my trades are shorting the euro. This week began with a down move and I decided that the big trend is coming back, I did some nice short trades. In tuesday I entered short at the upward retracement and then it reversed and thats when problems began. I decided to stick to my positions since they are in the direction of the big daily trend. Thats how I got stuck against the flow. The trades I posted are rescue attempts.

If you look at the H4 EUR/USD up to wednesday do you know if it is a range or the hourly up trend will comtinue? I couldn't tell. Now when I look at the chart I see a pretty nice up trend and my actions seem to be foolish attempts to rescue "dead in waters" positions. However, that's from hindsight If I knew this was going to happen I wouldn't have shorted the euro/usd , but we never know where the market wants to go Right?
That's the story of my bad trading week.

Thanks for your comments imjscn. I really appreciate it Discussing helps me

Regards, Mytbo
  • #13,935
  • Mar 13, 2010 7:07am Mar 13, 2010 7:07am
looking at e/u weekly timeframe at fridays close last week.
I couldnt help to notice that this weeks close was the 1st week since dec. 1st area that we had a close on the upper side of the mid point, (or what I use to help identify the weekly trend).
3792
3615
3438

should be an interesting week.
looking at this weeks weekly time frame
3847 eyes extra open
3666
3485

monthly time frame
4722
3987 eyes extra open
3282
  • #13,936
  • Mar 13, 2010 7:42am Mar 13, 2010 7:42am
Quoting MyTbo
In tuesday I entered short at the upward retracement and then it reversed and thats when problems began.

I decided to stick to my positions since they are in the direction of the big daily trend. Thats how I got stuck against the flow.

If you look at the H4 EUR/USD up to wednesday do you know if it is a range or the hourly up trend will comtinue? I couldn't tell.

That's the story of my bad trading week.
I have been readying your posts this week and waited for the weekend to comment. The idea of having a trading plan each day is good, but do not let it blind you to actual PA. For example, if your plan is to trade the E/$ south (because you believe this is the prevailing trend) but PA is going north (a retracement or reversal?), then do not try to chase it north (outside your areas of experience) until you are sure that the PA has turned back south (back with your prevailing trend). If your plan was based on trading the E/$ with the 4H trend, and you know you are not good a locating points of reversal, then you should be sitting on the sidelines until you can see what is going on with PA before reversing your plan. You read a lot on this thread about not being rigid or staying flexible, but you must achieve these things within the limits of your trading acknowledge. Do not think that you can dance with the market as fti dances, he has much more experience than you.

Instead, when you and the market are in sync (its moving with your 4H trend), dance with it; if you are not in sync, sit back and start learning (how do you identify trend changes vs retracements?) to expand your trading with paper trades or demo trades. Trading success does not require trading every day and in fact depends on knowing when not to trade.

You seemed to have some problems with identifying trends, trend changes, reversal patterns, retracements, etc. One possible course of action to consider: find one master, trending time frame (Day or 4H), then look to lower compression charts (5M or 15M) for entries with that trend. Until you can become comfortable with reversals (on the master chart, not the entry chart), try to never trade against your master chart (ever). Learn to dance in one direction first, and as you learn to distinguish between retracement and reverals, you can start dancing in both directions. I know some here will find this rigid, but you must learn what it is to be flexible before you can be flexible.
  • #13,937
  • Edited 4:37pm Mar 13, 2010 3:05pm | Edited 4:37pm
saturday afternoon at the movies, grab your chicklets and popcorn.

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  • #13,938
  • Mar 13, 2010 3:34pm Mar 13, 2010 3:34pm
Quoting MyTbo
I durign the recent months it was EUR/USD down trend and 80% of my trades are shorting the euro. This week began with a down move and I decided that the big trend is coming back, I did some nice short trades. In tuesday I entered short at the upward retracement and then it reversed and thats when problems began. I decided to stick to my positions since they are in the direction of the big daily trend. Thats how I got stuck against the flow. The trades I posted are rescue attempts.

If you look at the H4 EUR/USD up to wednesday do you know if it...
An absolutely wonderful post by fti on vol. and how primary dealers handle possible situations like e/u this past week.
Note: vol. stayed high throughout this past week, why you may ask? That is another "macro" debate altogether.
http://www.forexfactory.com/showpost...postcount=2650
110% correct.
  • #13,939
  • Mar 13, 2010 3:46pm Mar 13, 2010 3:46pm
Quoting jacson101
An absolutely wonderful post by fti on vol. and how primary dealers handle possible situations like e/u this past week.
Note: vol. stayed high throughout this past week, why you may ask? That is another "macro" debate altogether.
http://www.forexfactory.com/showpost...postcount=2650
110% correct.
Excellent post and recall. There's so much to absorb in the thread, Fti's experience shows up at different points through out. Things we don't readily see in print he points as they occur, lessons he has already learned from years of being in the markets. It's hard for someone to just pick up everything on a first read, as the market will teach and open new lessons, later trips through the thread will unlock/open different understandings to Fti's answers.

Best advice is to keep at it, it's a life long pursuit.
  • #13,940
  • Edited 10:57am Mar 14, 2010 5:44am | Edited 10:57am
Hi ALL,
Ai ya,
My feelings is encompassed in this song.
AI YA, poor jack neo

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some of you must heed this advise la,

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regards

For all those that can keep the faith and remain nimble,
here's to you, thousands of songs.

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In these songs. There is much embeded in the lyrics, sorry if this not coherent to some. Maybe some kind soul who have affection for the others here can translate.

For some here, there has surfaced many masters here as well as understudies that have contributed their learning curve for illuminating others. If you still can't get it, there is little one can say . Good Fortune, the winds on usd is changing, this may be BIG. Bias however is still only that, dance well.

Busy at new playgrounds in the fun fine city.
http://www.marinakeppelbay.com/

http://www.rwsentosa.com/language/en-US/Gaming

http://www.marinabaysands.com/en/index.html

Lets see if they meet to my standards
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