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Technical Analysis Fallacy

  • #14,561
  • Apr 22, 2010 12:10pm Apr 22, 2010 12:10pm
Quoting auxesis
Or Throat!

@GEfx, you stated that the better position would have been to cut or flip. Flip would have been the better choice, but that decision should have been made way before when it was brought up. Once decision is made to rescue, you have to wait for the move to show sighs of correction that could be 100, 150 pips or more at times. So you'd better have a good reason why, hugh. coz you could be making good pips going in the other direction.

My target area was where I felt price was going taken from hourlies, leveraged...
You saw what I saw on my charts. Again, sometimes it's like watching your kids run with scissors.
  • #14,562
  • Apr 22, 2010 12:11pm Apr 22, 2010 12:11pm
Quoting auxesis
Or Throat!

@GEfx,...
Thank you Auxesis. This is 100% true. I was looking for tops and bottoms and in my head was "enter to the EUR long, it has to change now...this is the chance....".... I have to reveal, i did it for the last 3months.... It was "unbelievable.." hard work... My trades were 90% long EUR/USD. And there are hundreds of such trades... Strong scorpion this is. After Maheswara kicked me fortunatelly, i didnt give up and i saved more than 50% of possible today's DD. So the reason is not -16,5%, but -6,8%.

Thank you for help. Best regards.
  • #14,563
  • Apr 22, 2010 12:36pm Apr 22, 2010 12:36pm
I maybe see it differently?
I see only one danger.

Price is for me - moving point in time.Change that harmonizes with the extremes.
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  • #14,564
  • Apr 22, 2010 12:43pm Apr 22, 2010 12:43pm
Quoting Setebos
The rescue? From what I see on Fana's chart it's...
The basics are not there. Market structure, textbook TA stuff and chart reading skills. After that the "feeling" will come, I don't like the word feel though, for me it is about making good judgements. All that while handling the stress that the market throws at you.


Quoting auxesis
Or Throat!

@GEfx,...
Gotta respect you for breaking this down...I've learn something myself
  • #14,565
  • Apr 22, 2010 12:55pm Apr 22, 2010 12:55pm
@aiyahmarklah - that wasn't my point, however I do agree with you.

@Gro - I'm looking at your chart and I can't see how that can be used while things are happening. I mean in real time there's no way for you to judge dead right that a specific price will become an extreme - you only see it as such later one. Or am I missing something?
  • #14,566
  • Apr 22, 2010 1:13pm Apr 22, 2010 1:13pm
Setebos, my apologies....very distracted and spoke too fast. I do not agree or disagree with you at that post. My interpretation of your reply is such that these "fti teachings" are advanced stuff and that those without basic knowledge or experience will misapply them.


Turning in...good night everybody
  • #14,567
  • Apr 22, 2010 1:13pm Apr 22, 2010 1:13pm
Quoting Setebos
@aiyahmarklah - that wasn't my point, however I do agree with you.

@Gro - I'm looking at your chart and I can't see how that can be used while things are happening. I mean in real time there's no way for you to judge dead right that a specific price will become an extreme - you only see it as such later one. Or am I missing something?
Hi Setebos
You understand?
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  • #14,568
  • Apr 22, 2010 1:48pm Apr 22, 2010 1:48pm
@aiyahmarklah - yes, that's what I meant in general even tho I wouldn't use the word "advanced".
@Gro - That's basically a way to describe momentum and floating s/r, it does make sense to me now, thanks. It's been a VERY long day, thank you for your effort
  • #14,569
  • Apr 22, 2010 2:37pm Apr 22, 2010 2:37pm
Quoting Setebos
@aiyahmarklah - yes, that's what I meant in general even tho I wouldn't use the word "advanced".
@Gro - That's basically a way to describe momentum and floating s/r, it does make sense to me now, thanks. It's been a VERY long day, thank you for your effort
?!?
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  • #14,570
  • Apr 22, 2010 4:05pm Apr 22, 2010 4:05pm
Quoting Gro
Hi Setebos
You understand?
Who is this chap?
Likes drive against traffic?

Prepare paramedics and AMBULANCE.
quick
  • #14,571
  • Apr 22, 2010 4:08pm Apr 22, 2010 4:08pm
Trend kicking in again coming out of twlights,

flush perhaps
  • #14,572
  • Apr 22, 2010 5:54pm Apr 22, 2010 5:54pm
the whole world missed out this canddle, too early, now we wait

@Fana: Read and think on Auxesis's comments on your chart. Even if you pay high fee to a guru, you rarely get such a detailed comments regarding your real trades.
On the first leg down (Auxesis marked as cyan color), as he commented, it should be a place to flip. Or, a place to make resuce decission.

The rescue decission must mostly based on your capital capacity, not just based on trend analysis. At this decission point, you must make sure your capital allows you to fight and you are willing to suffer. Please notice what auxesis said "the decission must make at early stage". Because you can't try your luck on trend analysis. If you decide to resuce and not determined to suffer, then, you will quit with bigger loss at later point.

Once rescue decission is made, tell yourself one thing--- as long as you don't add, it can't harm you. Then, sit back and wait patiently till you see the market momentum actually turns up, then, deploy first rescue troop. Wait again. If things go well, decide to take profit on the 1st rescue or decide add another rescue and so on.... dance.

Time is a very important matter. We need to wait, give it time. If a move spend only a short time against you, you don't even need to rescue at all.
You sent several rescue in the cyan box, I think that's a very bad action which make the rescue eventually fail-- with size adding up, you lost holding power.
  • #14,573
  • Edited 6:49pm Apr 22, 2010 6:18pm | Edited 6:49pm
i dont know lah. but this is what i think and i feel that i may get some stick for this, nonetheless...

Its not a matter of fana trading against the trend or not, everyone gets caught one way or another...sometimes. Its how he responded towards the trade that needs some tutoring.

he already decided from his analysis that he want to go long...which was already a bad decision to begin with but that aside when he started going into rescues, in my opinion, theres absolutely nothing wrong with that. Like i said its how he approached the rescues that caused the problem.

I can only identify these few errors here

1. skewed analysis, im not sure why he dedided to go for long trades but i believe he has his own reasons.

2. entries/exits which are too quick & random (this is normal for ones who are just beginning the practise), he did not give much allowance for the trade to mature, probably still building his market feel...wow i talk like as if i can feel it lol.

3. He did not analyse the size of his battle ground, thus not knowing when and where to flip or place the best rescue troops. A good rescue is all about timing, it must be swift but it takes alot of time (price watching, volitility analysis etc), he should have sat back and watch the possible buyer levels on the hourly charts and calculating average trading range to identify areas where sellers would probably exhaust their purchase, i read from the venerated gann, "Water seeks its level, you can force it higher with a pump, but when you stop pumping it requires no force to cause it to return to its former level." Also on the way down (during the tearing), fana should have took the chance to release some lots to lighten his exposure before jumping into his rescue. No entries are perfect but neither should be random too,

Fana, don feel too bad. Its a good attempt. im sure you'll do better as time goes by. Gambate!

Quote
Once that 5 minute PA failed to make a new high and took out the low (your original entry) the trend south was back on. Now you are rescuing against the trend. You rescue against the corrections not trends. You need to understand this.

Aux made a good point here. rescue only when you are trading with the trend. else you're fighting against a stampede. Which i believe you could now identify with by now. cheers.

But i'd like to pose a question of my own, how do you guys approach a trend that is turning then? rescue or flip? I'd just like to think that all of this boils down to trade management. rescue or flip, if one is nimble and carries a mind logical enough to accept facts like loss, he/she should get by.

There are times where I would get caught by price, (proly due to bad analysis) whats worse, it happens when i hade built a sizeable position but i have never used flip as an option. At least not until i have completed the campaign (rescues, loss taking whatever), once that is done would i do a re-analysis, i dont know it just felt funny, im fighting against an enemy and then since the enemy is too big, i decide to join them...george washington liberated america thru guerilla warfare. ok...im bullshitting. lol
  • #14,574
  • Apr 22, 2010 7:11pm Apr 22, 2010 7:11pm
Quoting GEfx
"So I'll stand with arm high and heart abandoned in awe of the One who gave it all."

Good trading everyone!
I really like this. Much meaning in few words.
Might I ask where they are from please?

This is a long thread, not read everything here yet. Pardon the ignorance. =)

Quoting Fana
Help. i am caught in terrible DD with big snowball EUR long. Kill it?

Now minus 4,5%, but 20.000unit in battle (1,500account...)
Dude! Have you checked out the bigger TF charts? I'm not uber well versed with the terminology of this thread, on skew, attack defence, etc... but I do know that it's not a smart idea to be long in the 5min/15min if the 1hr,4hr and daily are DOWN.

It goes against all sound market principles.
If you're doing 5min, use the 30min/1hour TREND as your bias.

Bulls make money, bears make money. If you can't make up your mind mate, you be a pig... and those folk make the bacon for breakfast. =P

I'm not a super pro, but here's somethings that hv helped me alot.
(1) when you learn something from a pro like fti, ask yourself, what is he REALLY trying to teach me? Inevitably the pros have assimilated their principles into their bones and will be talking to you from their perspective.
What are they REALLY trying to teach you?
How do you make it your own?

Absorb what is useful, discard what is useless, add what is specifically your own

(2) Break things down into modules. Work on one thing @ a time.
The market is neigh infinite. Trying to bite off more than you can really chew and you'll choke. Keep nibbling and eventually you'll still be full.

(3) Maybe it's just me and perhaps I'm not good enough... but I personally find it impossible to go long short, long short, long short. Gives me a massive brain fart.

Pick a side buddy! Bull or bear! These animals are NOT supposed to mate!!
One Mind, Any Market
  • #14,575
  • Edited 7:39pm Apr 22, 2010 7:18pm | Edited 7:39pm
Jest, I think you'll find your answer in here.

http://www.forexfactory.com/showpost...&postcount=882

Imho, the flip is done when positioning is small. There's nothing wrong with trying to trade the correction, if you understand what it is. But one can't hold that directional bias once it turns in the major direction. Here is where I'd flip, when I'm caught opposite the trend and it's kicking in. A quick view of hourly chart should give a view of possible terrain and distance. There's always going to be one leg that dosen't follow through, that old trend is your friend until it ends.

Entering with the trend, on the correction after the last wave... you'll be caught as it will not follow through. Entering on the smaller waves of a larger leg, you must be careful if your not established from the start catching the initial reversal impulse or from the turn of the 3rd, the initial push normally confirms the trend reversal, followed by a second impulsive or (3rd wave). The next leg in trend direction(5th) can be who knows? ( anywhere from extended to failed), any following waves should be bonus and rode from positions already established not areas to enter.

Next level up should tell you if your caught in next leg of retrace or full reversal.

regards,
  • #14,576
  • Edited Apr 23, 2010 12:05am Apr 22, 2010 11:54pm | Edited Apr 23, 2010 12:05am
I just read the discussion on Fana's experience. I would always recommend to kill it when caught off guard. I was surprised to see that people recommended rescue instead (with some price levels, very rigid). Anyway, each trader is responsible for his own actions and the advice he takes. The advice could have worked out. Only difference between the advice giver and taker is that the giver knows what do to if he/she is wrong (if trend line, s/r level breaks).

Hindsight analysis is like yesterdays newspaper, good for toilet.

I am not saying that you can't trade against the trend but when you do, keep that in might. Always be ready to kill or flip.

PS - it is very hard to guide somebody out of a bad position in 5min charts..
  • #14,577
  • Edited 12:19am Apr 23, 2010 12:09am | Edited 12:19am
Quoting piccolo
I just read the discussion on Fana's experience. I would always recommend to kill it when caught off guard. I was surprised to see that people recommended rescue instead (with some price levels, very rigid). Anyway, each trader is responsible for his own actions and the advice he takes.

Hindsight analysis is like yesterdays newspaper, good for toilet.

I am not saying that you can't trade against the trend but when you do, keep that in might. Always be ready to kill or flip.

PS - it is very hard to guide somebody out of a bad position in...
my friend,
if you are referring to me, just say so. I dont like people being shady so please be direct.

i've already mentioned that fana should have taken some losses during the tearing. I believe everyone has brought their own set of experiences along the way. I have already stressed the fact that he is trading aganist the trend and im not here to teach him whats right or wrong (im just a learner here and his trade is up for everyones dissection and a case for study), i was merely stating that his approach towards rescuing is flawed, in some ways, the entries are very random, and he will need to exercise some practise in that arena. He failed to watched volitility and calculate average ranges, which fti mentioned is of some use.

Im not interested in his trade but im more concerned about the approach he took during the campaign. Hell, he already know what he should have done...like most pros here state..flip. But lets look at this objectively what could he have done to make that flawed trade better...

if he had traded down with the trend, no one would have had a problem with him, so he trade wrongly and all knives are suddenly out? IS there only one way to skin a chicken? Are watching price levels a sign of rigidity?

Quote
Hindsight analysis is like yesterdays newspaper, good for toilet.

are you really sure? then how do you define the trend?


deark fana,
what you really should have done is to trade down...then if the market goes against you, you would really have some solid reason to conduct a rescue. It would not get you into such a mess with the lads here.

im assessing you (to whatever limited and possibly herectical knowledge i have) in accordance to your trade actions, i.e. your approach towards rescuing. i hope you understand.

regards
  • #14,578
  • Apr 23, 2010 12:23am Apr 23, 2010 12:23am
Quoting jest1081
my friend,
if you are referring to me, just say so. I dont like people being shady so please be direct.

i've already mentioned that fana should have taken some losses during the tearing. I believe everyone has brought their own set of experiences along the way. I have already stressed the fact that he is trading aganist the trend and im not here to teach him whats right or wrong, i was merely stating that his approach towards rescuing is flawed, in some ways, the entries are very random, and he will need to exercise some practise in that...
Hi friend,

It is interesting that you take it personal but, no, I was not referring to you, lol.

Flipping would be an ill advice as well. This time it would have worked, next time it could cost the account.

If you remember, there is a ton of discussions from fti about being a pig and very little about "change on wind".. I believe it's for a reason.

regards,
  • #14,579
  • Apr 23, 2010 12:36am Apr 23, 2010 12:36am
Quoting piccolo
Hi friend,

It is interesting that you take it personal but, no, I was not referring to you, lol.

Flipping would be an ill advice as well. This time it would have worked, next time it could cost the account. If you remember, there are a ton of discussions from fti about being a pig and very little about "change on wind".. I believe its for a reason.

regards,
i did because as far as i could see and read i was the only one supporting the rescue issue, i offer you my greatest apologies since i have erred.

From what i could re-collected you did mention "kill or flip". Thus my assumption. If Fana had flipped he wasnt pigging because he'd be trading in the direction of the trend. Right?

I have to ask you this. Since you stated that he got caught off guard. How many more times does he have to be caught off guard before he could completely conduct a proper trade with skews. Is his only form of defense in the form of loss taking? Prottracted campaigns are tiring, it weakens the mind and resolve but it can also help to create men with balls of steel. lol.

anyway, why do we conduct rescues?

1. coz we already know we are wrong with the price action.
2. coz we need to quickly limit our lossses.
3. coz we know that once this is done and cleared, we will be heading to the boss's office regardless the result

let it be known that rescues are not used to bring the account back to green but to limit casualties, those injured still can be saved those dead still must be brought back for proper burial. I believe fana already knows that he was wrong to be trading on the long side. Thus the rescue.
  • #14,580
  • Apr 23, 2010 12:38am Apr 23, 2010 12:38am
Quoting piccolo
Hi friend,

If you remember, there is a ton of discussions from fti about being a pig and very little about "change on wind".. I believe it's for a reason.

regards,
Cause generally, we know when we see a pig (literally & figuratively) but seldom can know where and when the wind is going to blow? (barring hurricanes...LOL) Being facetious. haha

The short term 5mins are good if one can see the big picture. No point grabbing the leaves if the tree is falling // fighting a skirmish when a nuke's coming.
One Mind, Any Market
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