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Technical Analysis Fallacy

  • #14,401
  • Apr 15, 2010 8:47pm Apr 15, 2010 8:47pm
Hi Guys,

Have a rather silly question that I've been trying to figure out.
Perhaps one of you guys can enlighten me.

In an uptrend, the sell side market makers are short cause they have to take the other side of the trade.
(yes, I know they'll try offload it immediately if they can rather than have to stomach a huge short building in their books. Just trying to keep it simple here)
So when the need to unload the shorts on their book, won't they have to go long and push price up further?

Fti has written ALOT of things, and I'm still making my way through the several thousand pages he's written (it's really that long. thank you again fti), so pse pardon my ignorance in this matter. Still doing my due diligence here.

Thanks again =)
Cy
One Mind, Any Market
  • #14,402
  • Apr 15, 2010 9:05pm Apr 15, 2010 9:05pm
Quoting Cyrus
Hi Guys,

Have a rather silly question that I've been trying to figure out.
Perhaps one of you guys can enlighten me.

In an uptrend, the sell side market makers are short cause they have to take the other side of the trade.
(yes, I know they'll try offload it immediately if they can rather than have to stomach a huge short building in their books. Just trying to keep it simple here)
So when the need to unload the shorts on their book, won't they have to go long and push price up further?

Fti has written ALOT of things, and I'm still making...
you wont know anything for sure, you'll just have clues or ideas of whats happening. when you have decided your directional bias based on the technical and fundamental information you collected, trade it and apply diligent trade management.

Many of us have not reached the level (may never will) where we could second guess what the big boys are doing, coz personally for me, i've never seen how a true market operation looks like. Only FTI has first hand knowledge/experience of this and what we have garnered are mostly his explanations of such events. Having an idea of how things work is not the same as knowing how things work.

You could say FTI has given us alot oh 'ahhh' moment. Im not sure if many would agree with me but when trading real time its more important for you to manage your lots then pondering what the market makers are up to, second guessing their actions could eventually put you in a backseat, concentrate more on market pulse and news. just my 1/2 a pip.

regards
  • #14,403
  • Apr 15, 2010 11:01pm Apr 15, 2010 11:01pm
Quoting Cyrus
Hi Guys,

Thanks again =)
Cy
hey thats a pretty good question ...
im not sure myself , but I think that is why we have double top or a swing failure

makers are short and they tend to fill the top of swings with shorts , to make a good average ...
we see retracement , they unload shorts , hitting ask price , market goes up again ...
1st yellow bubble , makers fills with short , 2nd yello releasing shorts , hitting ask price ...
same thing with 3rd n 4th
fifth everyone convinced a trend reverses and makers probably are clear of shorts already , squaring them all at 2nd and 4th ...
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To Live is the rarest thing in the world , Most people exist , that is all
  • #14,404
  • Apr 15, 2010 11:25pm Apr 15, 2010 11:25pm
Quoting maheswara
hey thats a pretty good question ...
im not sure myself , but I think that is why we have double top or a swing failure

makers are short and they tend to fill the top of swings with shorts , to make a good average ...
we see retracement , they unload shorts , hitting ask price , market goes up again ...
1st yellow bubble , makers fills with short , 2nd yello releasing shorts , hitting ask price ...
same thing with 3rd n 4th
fifth everyone convinced a trend reverses and makers probably are clear of shorts already , squaring them all at 2nd and...
Hmm. Perhaps. Thanks dude. I've got some thoughts abt this swimming around in my head from sitting on this question. Will share it when it turns into words.

Jest:
I'm not a noob to speculation and do recog the imptce of position management. I'm a pretty decent "baby sitter" in fact. Heh.

My point is that understanding the incentive of the other folks in the market helps me to speculate more intelligently. I've not read ALOT into this thread but have been studying & thinking about order flow & incentive for awhile. Fti's posts definitely have helped very much too.

It's helping me alot to ask, "how are the boys in the know thinking?" "where would they want to unload?"
How about the chap swinging a line of 1 yard. Where will he find liquidity?
Price action alone won't cut it cause there's more to price action than just the squiggles of price. @ the end of the day, the market is run by human beings.

Appreciate the reply either way =)

Just sharing my train of thought. I'm dont swing a line of 1 yard, so I'm just looking to hitch a ride. So to hitch a ride with the sharks... I gotta know how they swim. As fti might say, 知彼知己 百战百胜
One Mind, Any Market
  • #14,405
  • Apr 16, 2010 12:03am Apr 16, 2010 12:03am
Quoting Cyrus

It's helping me alot to ask, "how are the boys in the know thinking?" "where would they want to unload?"
How about the chap swinging a line of 1 yard. Where will he find liquidity?
Price action alone won't cut it cause there's more to price action than just the squiggles of price. @ the end of the day, the market is run by human beings.
I do the same myself , u understand market better if u understand the majority's MO ... and that understanding can reinforce ur feel of the market ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #14,406
  • Apr 16, 2010 12:19am Apr 16, 2010 12:19am
wow, lots of post to catch up these 2 days

@Fana, How about reduce size significantly? With really small size, you can really experience how the game works with a fear free mindset, also the small profit can build up your account steady, and it's not slow at all.

@jest, welcome back
  • #14,407
  • Apr 16, 2010 12:45am Apr 16, 2010 12:45am
Quoting maheswara
I do the same myself , u understand market better if u understand the majority's MO ... and that understanding can reinforce ur feel of the market ...
YUP. Very very much so mate. =)
One Mind, Any Market
  • #14,408
  • Apr 16, 2010 1:37am Apr 16, 2010 1:37am
Quoting imjscn
wow, lots of post to catch up these 2 days

@Fana, How about reduce size significantly? With really small size, you can really experience how the game works with a fear free mindset, also the small profit can build up your account steady, and it's not slow at all.

@jest, welcome back
Hi Imjscn. Agree. Some 3month before i trade 30.000unit. Now only 3000unit as first level. I conclude now i was crazy... Now i have "more muscles as Fti wrote..".
And as i observe, it is NP to make some 1-2% with it per day (with 1500equity)..
regards
  • #14,409
  • Edited 1:58am Apr 16, 2010 1:47am | Edited 1:58am
Hi Cyrus,

i get what you mean. Im not implying that you are a newbie. please dont get me wrong. Charts and prices, you could only understand when its already printed, how most of the lads here get 'the feel' when we first started? rigorous training of price watching. thats all...no guessing what the big lad is doing.

Quote
It's helping me alot to ask, "how are the boys in the know thinking?" "where would they want to unload?"

Once you can guess this please teach me coz i still have no idea. Yes im that stupid.

Quote
How about the chap swinging a line of 1 yard. Where will he find liquidity?
Price action alone won't cut it cause there's more to price action than just the squiggles of price. @ the end of the day, the market is run by human beings.

Im not sure, maybe i havent grasp the fti's teachings fully but im not gonna kid myself with these, its only after the prices are formed (backed with news) will i understand "ooohh so this is happening" other than that when the trade is on, its always an educated guess, so i'd rather put more effort into my trades rather than implanting theories of what the big boys are thinking. If you get the ride, then good! if you miss it or board the wrong bus? either you flip or you rescue. In what way can you see, or even fathom to understand what is happening within the works when you have ZERO access, ZERO experience to the inner works?

Im stressing this because, all of us here have received so much from the boss but i'll be honest with you, to be really understanding the works of these professionals , their minds, their tactics, you need to be in the seat to be there. So many times, when fti made trades i could even understand how or why he made it, but somehow it worked like a miracle, fti can take quite a big hit from the market and still come back profitable, if you've never seen, can any of us do that? I know i cant. So im not gonna put myself up to that level coz im green, very green

Its all good that you know somethings going on in the market, but its 'unhealthy' (in my opinion) to put yourself in their shoes. Would you be able to run a swing toe to toe with them? what if they are purposely letting the market sway 200pips? could you swallow that? You see there are probably so many things going on in there. So I'd rather stay the simple minded amateur, trade, take my profits and losses diligently so that i could trade another day in peace.

cheers.
  • #14,410
  • Apr 16, 2010 1:55am Apr 16, 2010 1:55am
Observation: Is it only my own feeling, that last FRIDAYS, big moves come unpredictably?? Like they know, that people are already "weekending"... ??
  • #14,411
  • Apr 16, 2010 1:59am Apr 16, 2010 1:59am
Quoting maheswara
I do the same myself , u understand market better if u understand the majority's MO ... and that understanding can reinforce ur feel of the market ...
Hi and good morning Friends!
@Maheswara: I'm there now ;-)

CU,
MaMood
  • #14,412
  • Apr 16, 2010 2:24am Apr 16, 2010 2:24am
Quoting jest1081
Hi Cyrus,

i get what you mean. Im not implying that you are a newbie. please dont get me wrong. Charts and prices, you could only understand when its already printed, how most of the lads here get 'the feel' when we first started? rigorous training of price watching. thats all...no guessing what the big lad is doing.



Once you can guess this please teach me coz i still have no idea. Yes im that stupid.



Im not sure, maybe i havent grasp the fti's teachings fully but im not gonna kid myself with these, its only after the prices are formed...
amen...
  • #14,413
  • Apr 16, 2010 2:59am Apr 16, 2010 2:59am
Quoting Fana
Observation: Is it only my own feeling, that last FRIDAYS, big moves come unpredictably?? Like they know, that people are already "weekending"... ??
Fridays often are a roller coaster. People squaring off etc but last weekend was special since there was a deal made for Greece on Sunday.
  • #14,414
  • Apr 16, 2010 3:04am Apr 16, 2010 3:04am
Quoting jest1081
Hi Cyrus,


cheers.
hey jest,
lol its not putting urself in their shoes thing ... noone cld know wat they upto , or wat they thinking ,
wat i meant was more in general term , lets say market been running up without any good retracements and we have a 4 days holidays coming up , we feel we can make money shorting since ppl be squaring before the holiday and there have been no good retracements ...
when the market shows short cld be profitable , these small thinking wld at least prepare u for the coming short ...
thats all ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #14,415
  • Apr 16, 2010 3:06am Apr 16, 2010 3:06am
Quoting Cyrus
Hi Guys,

Have a rather silly question that I've been trying to figure out.
Perhaps one of you guys can enlighten me.

In an uptrend, the sell side market makers are short cause they have to take the other side of the trade.
(yes, I know they'll try offload it immediately if they can rather than have to stomach a huge short building in their books. Just trying to keep it simple here)
So when the need to unload the shorts on their book, won't they have to go long and push price up further?

Fti has written ALOT of things, and I'm still making...
Hey Cyrus,
IMHO trying to guess what's what in the order flow will always include a lot of head scratching - this is OTC and unless you are in the market maker's chair there's hardly a way to see the orders fills. So there will always be some guessing, there's no other way. I think that's one of the main reasons for fti to insist that the feel of the market is critical - it will help you "filter" it.
Now as to who's taking the counter party when she's trending - there's always someone, otherwise the market will go wild (fti explained it back in the thread that market makers may be able to push it a bit, but they cant change it significantly as they get too exposed to painful arbitrage possibilities ) - FX is full of non-speculators looking simply for currency transactions via the major banks, banks and funds hedging their exposures, etc. Oh, and yes - the magic number of 95% crystal ball players are always there for you looking to catch the start of reversals, corrections, etc, LOL.
  • #14,416
  • Apr 16, 2010 3:15am Apr 16, 2010 3:15am
Quoting maheswara
hey jest,
lol its not putting urself in their shoes thing ... noone cld know wat they upto , or wat they thinking ,
wat i meant was more in general term , lets say market been running up without any good retracements and we have a 4 days holidays coming up , we feel we can make money shorting since ppl be squaring before the holiday and there have been no good retracements ...
when the market shows short cld be profitable , these small thinking wld at least prepare u for the coming short ...
thats all ...
Mahes buddy,

i get where you're coming from. i guess the examples above are common knowledge for most traders that somehow, these thing would probably be ingrained in season traders, we could even see such action when market nears close.

But the term people can be subjective, and the works or the market could be another different matter all together, we have to take into account plenty of things, for e.g. political forces, big news, etc.

I'd like to put this forth, when you see prices a tearing we could say ahhh, i know this coz FTI said so. but do we really know? No, coz we only have an idea, unlike fti, he made these tearing happen, so he knows whats going on. We cant even scratch the surface he walks on how are we to even guess what the market is doing or planning?

Again, i'd like to stress that im not saying that your thinking is wrong, its good that you are already mentally prepped for these things, which means you have garnered enough experience to be able to foretell things that are about to happen. Its just that im not a fan of crystal balling, id rather trade what i see and read. Coz that way its so much easier to call myself an idiot and recover from it asap when a trade fails.
  • #14,417
  • Edited 4:49am Apr 16, 2010 3:44am | Edited 4:49am
Quoting jest1081
Mahes buddy,

I'd like to put this forth, when you see prices a tearing we could say ahhh, i know this coz FTI said so. but do we really know? No, coz we only have an idea, unlike fti, he made these tearing happen, so he knows whats going on. We cant even scratch the surface he walks on how are we to even guess what the market is doing or planning?
yes , off course trading what u see on ur chart is the topmost priority , the simple thinking is just to reinforce ur feel and what u see in the chart ...

it shldnt be the other way around , a mistake wld be having those thinking and forcing ur trade to work out even if the chart is blatantly saying u r wrong ...
that wld ruin mindset and account ...

anyway im happy there are some valuable discussions around here ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #14,418
  • Edited 8:01am Apr 16, 2010 5:18am | Edited 8:01am
What was that within 5 sec after I pulled trigger, I dead!!!! No News. I forgot COILING. Learning to trade UJ.

Cheers,
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  • #14,419
  • Edited 6:20am Apr 16, 2010 5:26am | Edited 6:20am
Quoting fti
Dangerous
very dangerous in the long run.

Price spreads is 2 pips, slippage + spread , average 6 pips
risk tolerance 10 -15 pips means that as soon as you get in a position. Next few quotes you will be cutting. You profit range anything less than 50 pips then there is no flow.
you trading congestions. you are dependent on accuracy of your perceived support or resistence. you are scalping. Absolutely dangerous MO. Market makers will eat you alive for you trying to scalp them. Market makers range of swing is about 20 pips on bid and offer(averageing...
Hi, fti.
I don't trade the daily and 4h timeframes, I use them sometimes for reference, but not for entry signals. These days they just confuse me , so I don't even use them for reference.

My profit range is not 50pips, it is the range in which I think rescue is appropriate. By this I mean that if I am trading with the flow there will be impulse waves in my direction.Right? So I enter at a retracement of an impulse wave, lets say a pin bar near the S/R that was bashed by the impulse wave. I can withstand a 30pips move against me if it goes slow with small candles, waiting another impusle wave in my direction to enter a rescue. But if I get 2-3 impusle waves against me that go right through previous S/R levels and exceed the start of the first wave, then I don't question my timing, but my direction. This move could well be a stop swing, to shake of the cowards. But how can I know that 50pips move against me from the top of my perceived retracement is not actually a reversal.
60pips equals 2% of my capital with minimum position size that's why I use the 50pips range.

As for attacking, the first entry is the one that rides as much as possible, the additions are scalping trades( with same size, no skews) for 10-30 pips to forage foreign capital. Fti, I know this is different from your teachings here, but I have less ammo than most guys here and I'm trying to utilize it the best way I can. Do you still think I am going the wrong path?

@auxesis
How can I be sure that a S/R will hold? What kind of action should I see before I'm sure it will hold? Please tell me. I'm trying to learn. And be sure that I don't enter at S/R level when PA is running with momentum towards it. I'm not trying catch falling knives by no means.

Regards, MyTbo
  • #14,420
  • Apr 16, 2010 5:30am Apr 16, 2010 5:30am
Quoting pete.alfa
What was that within 5 sec I dead!!!! No News. I forgot COILING. Learning to trade UJ.

Cheers,
OUCH....
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