Technical Analysis Fallacy

Hey Ge,
Every time the chart makes a rapid rally we start hearing of the end of the dollar as reserve currency or the end of the EUR or even the end of the EU. If half the doom forecasts were to come true the wold would've been a so much more interesting place, lol
I do agree on the Spain point. Only that in my opinion this is exactly the message the EU is sending to its members - "We will not tolerate you j*rking around and then coming to us for help". After all the reason why those countries are in trouble now is because they did not obey the EU regulations. If the faith of the EUR is to diminish... well, I will make sure I have taken the most of it before it goes down the sewage

And I will do the same with the dollar (we may all end up floating down the drain sometime soon! -- LOL).

Hey auxesis, is it time to move to the TAF Lounge? Wondering what your thoughts are, at least for weekend talk.

One thing folk should understand is the EU doesn't have a treasury as is the case in most of the world.
So fiscally, a bailout needs to be ratified by another country completely.
Doesn't mean I'm running out to bid, just means these guys don't print off Euro just like that, but I'll maybe throw out a bid somewhere...bids 12800

Sounds ok to me, but me's just a small voice. If the chief is gone, might be a good idea, my only beef is keeping the trade discussions as close to the threads intent as possible. I know most incorporate their own ideas, but to discuss the pros and cons of such would be very distracting to someone trying to read through the thread at a later date.

Not saying they are right or wrong, just not here so the threads purity remains intact.

I'd possibly like to move to a chat room somewhere, real time live might be better.

regards,

TAF lounge is better..... real time chat i think not so sure...

V

note taken of mindset from inside the owners war room.
http://gata.org/node/8430

Tis the golden rule, "he who has all the gold, makes all the rules".

As fti explains....

" Hi northpro,
like I said you already have a true understanding of the mechanics of what i am highlighting on MM.
My respond was mostly for the benefit of wavetrader3 and some others I had noticed is branching out of the mainstream.

In the begining , my intent was to highlight the basic fallacy , that the Technical Analysis has mutated towards, were I later did hightligt some knowledge about "the dance" but without showing how I do it. "3 kingdoms" for me is a very private thingy , as it is the "bread & butter" secret, if you like about my methodology.As I mentioned to Leighsww, I much prefer that members here should decipher it from my postings, instead of me giving it outright in a PUBLIC forum, for fear that this may be modified and sold as a black box scam.

To confirm your understanding, as per your example.
1. Leg of trend is x to y.
2. If trade went against the trader 161.8% at 6th level, you would find my junior and senior dealers already "finished for the day" and I would be carrying the book. This would have to mean that both the juniors and seniors were trading sgainst the major trend. It also would mean that the book base would have changed for the third time. ( no dealers would have the book line to carry the necessary rescue). For Juniors thry would have liberty only for 1,1,2 and for seniors 3,5,8,(4,4,8), then my book comes into the picture.
3. If you noticed the 6th level is not 13 but 8.
4 8X book is way beyond any individual trader could afford to trade, unless the base is at unreal small, and unless trading for fun, its not ROI wise possible to happen in real life.(unless you were a bank, or the likes of.)

In reality , for this to haappen , it already saw two levels of novices risk managers (junior & senior). As a matter of fact , if this happen, you would mostly find that I was already trading against them in the first instance.
Assuming that this can happened, then they( senior) would have to explain to me why they continued trading against the trend.

If you are privy to RN Elliot's studies, you would understand that the trend direction of any market is by virtue of the impluse wave, and a 3 legged abc retracement. If any impluse wave was determined, then the snowballing of positions would be limited to the 3 retrace leg. impluse to 1, AB failure swing and retrace leg BC.

If there was a failure swing CD, and subsequent retrace leg DE, then the whole impulse sequence would have deemed the original impluse non impluse.
Correct?
So if senior dealers averaged the trades into the failure CD. and averaged into leg DE, they would be in effects trading against trend.
So thats why it cannot happen. The snowballing would be limited to 3 levels wrongly implimented by the juniors.
When the seniors take over their book, upon the junior being "finished for the day". They would inherit the loss book and would in sffects be repositioning for the impulse starting from AE as the impulse base with a progression base of 4X. and with a sequense of 4,4,8.
And if the same unfortunate turn of events happened for the senior traders to become "finished for the day" then the book would land on my lap.

And I would inherit a book which carry a loss for both events.
But when I come into the picture , I would have to deal with two failed impluse waves.which put market in a sequense of a broad congestion.

So i would have to deal with the situation as from that point onwards.
My base size would now be 20X junior base of 1X, right?
So guess what my sequense of size will be? (20,20,40)

About Elliot,Please be aware that I use the elliot studies true to Elliots 1st published findings as in the compiled working papers of "The major works of R.N Elliot" and that I am not a subscriber to his latter added study sequenses of multi wave-curve fitting techniques. AND that I am total adverse to the tweakings by latter day Elliot students and researchers, who I am to the opinion have adulterated Elliot's initial published research as well as those tweaks that Elliot did in his later years, when he was believed senile. Therefore I totally do not believe in "alternative counts" and stuff like double zig-zags and compounded counts.Neither do I subscribe to the widely commercialised publishcations of that wave 4 must be above wave 1 for the elliot count to be effective nor the predictive aspects of the elliot wave count. I use the elliot wave study to compliment the implimentation of fibo generated sequenses for timing of position rescue size, as a limiter of position snowballing only. As you may realise also to skewing of the progression from dealer to dealer. "

In respond to Zoran....

" counting waves?, well no, not like in the elliot methodology that's being taught commercially.
but they seem to appear to the mind when strong wave trend appears. "


Any inputs ?

?!
Those long "Impulsive waves", which start somewhere around 1,3500 are impulsive?
Or they can be classified as strong retracement. Question is if does exist "strong retracement"...?

EUR weakness is maybe only manipulation and its real value is much higher than now, but they need to "trade"...

Mike's post is EJ, not EUR.
You have eur on mind, then, EJ chart become EUR

For the same reason, from time to time, we can percieve obviouse trend in wrong direction just because we carry bias on mind

Stumbled upon this blog post by the founder of Oanda....TAF fans will find this interesting...his points are not too far from fti's concepts

Link to the full article..... http://www.olsenblog.com/2010/03/how...ging-exposure/

Some key points I find useful and are close to fti's concepts

- When he opens his position based on his trading idea, he should split the initial trade into three tranches, because there is no way to know the optimal timing for an opening a trade, so it is better to diversify this risk into three opening trades. (skews...scouts etc)

- A losing position can be turned into a winning trade by turning the negative development into a positive and take advantage of the new price level to add to the existing position thus improving the price average of the whole position. In doing so, the trader shortens the distance between price average and current price thus increasing the likelihood of a price bounce that is sufficiently large to turn his position into a profit. (reaverage, rescues)

- In liquid financial markets up to 98% of all the trading is based on speculative positions and the hedging of those positions. These positions being speculative are temporary and any opening trade will need to be closed. When the closing trade happens, this has the effect of inducing a price reversal. Due to the duality of the opening and closing trade the price movements are never fully one sided. At some stage, sooner or later, positions will be closed and then the price rebounds occur. (fti had a lengthy explanation somewhere in the thread)

-A trader can use these reversals to turn a losing trade into a winning position. The method of increasing the position size to turn a losing trade into a winning position has, however, big drawbacks, which the trader has to be fully aware off. (most are not)

- A trader needs to take into account that his sense of timing is skewed when under pressure: he needs to lean back and slow his natural instinct and wait for a price overshoot that is in sync with his regular trading frequency. Patience is of essence. (that is why balls of steel required)

-If a trader has increased his position size to improve the average price of his position, he has to reduce the size of his position at the next opportunity, when the price rebounds. This is important because he has to free up margin capital, so that he can increase his position, when the price falls back again. By carefully managing the position size during the ups and downs in the price, he earns incremental profit that turns a losing position into a winning trade.

Enjoy...read the whole article man its good....

[quote=aiyahmarklah;3575292]
...

To confirm your understanding, as per your example.
1. Leg of trend is x to y.
2. If trade went against the trader 161.8% at 6th level, you would find my junior and senior dealers already "finished for the day" and I would be carrying the book. This would have to mean that both the juniors and seniors were trading sgainst the major trend. It also would mean that the book base would have changed for the third time. ( no dealers would have the book line to carry the necessary rescue). For Juniors thry would have liberty only for 1,1,2 and for seniors 3,5,8,(4,4,8), then my book comes into the picture.
3. If you noticed the 6th level is not 13 but 8.
4 8X book is way beyond any individual trader could afford to trade, unless the base is at unreal small, and unless trading for fun, its not ROI wise possible to happen in real life.(unless you were a bank, or the likes of.)

In reality , for this to haappen , it already saw two levels of novices risk managers (junior & senior). As a matter of fact , if this happen, you would mostly find that I was already trading against them in the first instance.
Assuming that this can happened, then they( senior) would have to explain to me why they continued trading against the trend.

...

Thank you for this.

Interesting, good to remind... Thank you Aiyahmarklah

eyes open e/u 3402 area,watching how 3421 area reacts.

along with 3 kingdoms watching a/u 9165 area.

Nothing is exactly as it seems to be. trading a life account has ma de to understand that in technical analysis sometime most of the indicators in some cases does not actually represent the market direction at that point in time as i was thought by my mentor.



best regards

Dance?

Are you bullish on the aussie dollar ?

Since yesterday, Oanda platform lost connection during strong move. This trick is normally done by other brokers, but now, Oanda started playing this trick. Not sure what does it mean. Maybe they start having problem managing risk?

Having similar issues at the moment, went through this last year with them but everything has been fine until lately, connection status has been at about 85% most of the time last 3 weeks but have always been able to get filled, this morning all it does is crash. Was able to close a good one on the euro before boom, but missing out atm

Oanda's having problem, their boards are filling up with complaints

edit, back up, green bar