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Technical Analysis Fallacy

  • #15,021
  • May 9, 2010 10:22am May 9, 2010 10:22am
Very true, if I remember correctly fti said Gann threw out red herrings as marketing ploy to promote himself as a forecaster.

Regards,
Baifu
  • #15,022
  • May 9, 2010 11:09am May 9, 2010 11:09am
Quoting Zoran
It's mentioned by Gann, in DOW theory and elsewhere. How do we use it is the bigger question.

If anyone would like to express their thoughts, I'm all ears.
Hi Zoran,

Yes, I can share what you mean, I read this weekend
The Tunnel... and 1st, I don't know if I understand
what "I have to understand", and 2nd I don't know how to use
in the daily trading what I think that I understood...

Rgs,

Textor
  • #15,023
  • Edited 12:34pm May 9, 2010 12:17pm | Edited 12:34pm
@fti sir,
money u can make la , skill u cant copy easily ,
all I am sure you is that u lived and are living a great life , with great friends around and amazing experiences , those things money can never buy , so finger burnt on trying out new things are not always a bad thing ...
sir , I might talk about spiral within spiral , please dont take it bad

@zoran,
this is my understanding alone , and might not even be the right thing

spiral within spiral is changing your relative base as u add up position
say ur rescue spiral is 3x base , Im gonna put one scenario now

got 1 (scout) out there,
market moves against scout , wait for a good moment to save
attempt 1 : put 3 out to get out at BE ... (total in : 4)
misjudged , market still moves against , close half of total to preserve cap
so total position in is 2 , this becomes a new base
3rd attempt will be 3 x new base , 3 x 2 =6
total positions 6+2 = 8
rescue and make some money there covering that failed 1st rescue attempt

this is the case when u feel 3x base will work... and this is just one scenario wer u think market still strong and closing half is the best course of option to rescue,
market feel , momentum , longer tf , trend , pulse , time of the day , news info , gut feeling , and you will have 100 ways to manage a losing positions ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #15,024
  • May 9, 2010 12:42pm May 9, 2010 12:42pm
Quoting maheswara
@zoran,
this is my understanding alone , and might not even be the right thing

spiral within spiral is changing your relative base as u add up position
say ur rescue spiral is 3x base , Im gonna put one scenario now

got 1 (scout) out there,
market moves against scout , wait for a good moment to save
attempt 1 : put 3 out to get out at BE ... (total in : 4)
misjudged , market still moves against , close half of total to preserve cap
so total position in is 2 , this becomes a new base
3rd attempt will be 3 x new base , 3 x 2 =6
total...
Hi Mahes,

I never gave much importance to the issue "spiral" because
still try to focus on doing well the basics ....

But I always thought he was referring to different time frames,
cycles within cycles in "Gann words".
What I mean is: similar to your above mentioned approach, but
in a bigger time frame.

Rgs,

Textor
  • #15,025
  • Edited 2:06pm May 9, 2010 1:25pm | Edited 2:06pm
Quoting esuffw
Sorry to hear about the properties thing. I guess we all get burned in somthing to let us realize who we really are. Anyway, what do I know, I'm just a kid! lol

How did you feel when you were starting as a dealer? Were you addicted in your work? Or you just saw it as a way to make a living? I never worked in a bank, so I wouldn't know...

*fearless dogfights ---- Are you the cat??? lol
ya,esuffw, lessons in life. But when the wound is a deep, the trust factor gets high degree burnts,. hard to heal.

I started trading life as grain oils trader trading for a group conti grain & commodities. before the banks and after they splashed my flying stint. So i started in the banks at middle management. Was entrusted to created and develop a new section of treasury. For that I even side-lined marrying a girl that i was very fond of.

In someways way i the cat. I stalk the markets fearlessly. The Dogs, no problem, they my friends. I am big cat.

regards

@ all,
Although I will not discuss the "HOT" topic that all are so eagering wanting. That doesn't mean that its forbidden. Its only technique and mm to me. Nothing so spectacular. As above , so below. Just didn't want many to be distracted from basics , which is more important for your survival. You can discuss anything you like, but be wary not to make too much of it.

Now awaiting the political resolves for the euro. Lets see if it concrete.

regards

www.youtube.com/watch?v=A1G0FkJCfgs
  • #15,026
  • May 9, 2010 1:41pm May 9, 2010 1:41pm
A 100 pip move up already on the EUR/USD but with a 20 pip spread on Oanda I will not be trading it. I will wait for the dust to settle. All the best for the new trading week. Ray
  • #15,027
  • May 9, 2010 1:46pm May 9, 2010 1:46pm
Yeah, however it was just released that Merkel's party lost he elections in northern Germany which automatically leads to changes in the upper house of the parliament . Guess what that means for the bailout plans
Political risk aversion ahead, LOL
  • #15,028
  • May 9, 2010 2:36pm May 9, 2010 2:36pm
"One image is more than a thousand words" ... maybe two ... maybe someone help.
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  • #15,029
  • May 9, 2010 3:08pm May 9, 2010 3:08pm
Quoting fti
Whatever the opinion.
Readcarefully about his bad cotton trsde and how he survived it.
understand spirals and the maths of spirals.
Gann is a very good mathematician.
You see the predictive perspective, which is a smoke screen, you missed the real maths behind the trading.
Abuility to stay objective on message is important. Do not be distracted from the read.

Its hard to teach who is not receptive to the principles.
kybalion.


regards
I'm just trying to put everything in place. This is not a direct reply to fti.

After reading about the cotton trade, starting at page 90, Robert recommended to buy cotton in early Feb and it was fairly slow until late Feb when it started to move up quickly and making a nice unrealised profit. By the middle of March cotton decline back to a level where all profit was lost but Robert bought more (with Marie's money). Price had not gone any lower and I assume price was just consolidating in that price region until late April, when the floods came, cotton shot up again.

My interpretation is that he correctly picked the low and the action over the weeks indicated a trend reversal, the emphasis on price not falling any further (an exhaustion of sellers) - even though it went up and came back down (lack of nimbleness to take profit), but not below his entry level (retesting the low). He waited for the expect event for the new up-trend to take effect.

Are there any other cotton trades? How did he survive it? He held until the new trend took effect. Comments anyone?
  • #15,030
  • May 9, 2010 3:21pm May 9, 2010 3:21pm
I took it he survived because although his unrealized profit was wiped out his capital was intact. He didn't add until Marie sent him some more money. I think if she hadn't sent him more money he would of just waited(no reason to chase losers) until some confirmation which he got with the stall.

So the lesson as I took it was that he always pyramided up when he was right and price went his way aka using foreign capital to build up. And so when it went against him it just took away his profit but his capital(which is the most important to preserve going back to the wilders' table because it takes alot more to get it back once you take a hit on capital) remained intact.

Also from fti's post "kybalion"

http://en.wikipedia.org/wiki/Kybalion#Principle_of_Vibration
  • #15,031
  • May 9, 2010 3:22pm May 9, 2010 3:22pm
Quoting Zoran
I'm just trying to put everything in place....
... maybe ask women, know cycles better than men.
  • #15,032
  • May 9, 2010 3:23pm May 9, 2010 3:23pm
Sorry to be off topic guys but I know there are a lot of good and experienced traders in the thread.

Since EURUSD and USDCHF are so heavily correlated, if for instance you were watching the chart and see a SNB intervention on USDCHF would it be reasonable to use this as a leading indicator of where EURUSD is headed?
The greatest force on earth is compound interest.
  • #15,033
  • May 9, 2010 3:32pm May 9, 2010 3:32pm
Quoting luSan
Check page 78
"In every law of nature there is a major and a minor;

a positive, a negative, and a neutral. Therefore, in
cycles there must be a lesser, a greater and intermediate
cycle, or cycles within cycles. Like Ezekiel says:

"Wheel within a wheel.”

Thanks Lusan. Keeping this in mind - The Basic tenets of Dow Theory:

1. The Averages Discount Everything (except "Acts of God"). I believe this is the basis for fti's "Three Kingdoms". They are used as the "Averages".

2. The Three Trends: The Primary Trends (generally lasting over a year), The Secondary (Intermediate) trends (lasting months) and the Minor Trends (lasting days and weeks).

We generally trade the minor trends in our daily short sword battles. The spiral within spiral.

I believe the secondary and primary trends are other spirals.

As above, so below.

Any other thoughts here? Also, thanks to those putting in their bits so far.
  • #15,034
  • May 9, 2010 3:33pm May 9, 2010 3:33pm
Quoting Zoran
I'm just trying to put everything in place....
I went back and started rereading Tunnel with focus on the numbers and dates, it will take a few more days to compile the data, but for the cotton trade........

Robert bought 100 price moves in his direction and then after the retrace purchased 100 for Marie once price started back up. Robert added once again 100, then price makes another 40/50 retrace and then he looks to square at the high. In the interim a quick wheat and corn trade is put on .

3 waves? linear addition?

Somewhere in the dates I believe is a correlation to his timing, which can be transferred or similarly seen in intra-day, which would go along with FTI's comment about the news reports and the frequency of trades. 45 days, 45 minutes? or 45 degrees? Can't be a hard and fast rule, but more of a common pattern regarding normal oscillations of price.

What is above is below.

fwiw
  • #15,035
  • May 9, 2010 3:34pm May 9, 2010 3:34pm
Quoting sebastionay
Sorry to be off topic guys but I know there are a lot of good and experienced traders in the thread.

Since EURUSD and USDCHF are so heavily correlated, if for instance you were watching the chart and see a SNB intervention on USDCHF would it be reasonable to use this as a leading indicator of where EURUSD is headed?
The function pf CB intervention is to arrest run on illiquidity. ie riots in markets.
the function of CB is not to speculate the direction or level of markets. That is function of the ministry of finance and govt. Policys for interbational trade and their effectiveness or ineffectiveness directs value of currencies.
Although these days CBs may be speculating in covert. I not know. But its not their function.


regards
  • #15,036
  • May 9, 2010 3:47pm May 9, 2010 3:47pm
Quoting Deusomega
I took it he survived because although his unrealized profit was wiped out his capital was intact. He didn't add until Marie sent him some more money. I think if she hadn't sent him more money he would of just waited(no reason to chase losers) until some confirmation which he got with the stall.

So the lesson as I took it was that he always pyramided up when he was right and price went his way aka using foreign capital to build up. And so when it went against him it just took away his profit but his capital(which is the most important to preserve...

Thanks Deusomega, yes, I did notice the pyramiding and you are correct in his use of foreign capital. I was thinking he survived because the low did not break, indicating no trend continuation. Once the intermediate or primary trend took effect, the next part is the pyramiding. This is the spiral within spiral - right? Foreign capital is used with the short sword battle of the minor trends? The Hedge being the entry and correct detection of a secondary/primary trend reversal with foreign capital to play with in the minor trends..
  • #15,037
  • May 9, 2010 4:01pm May 9, 2010 4:01pm
Quoting fti
The function pf CB intervention is to arrest run on illiquidity. ie riots in markets.
the function of CB is not to speculate the direction or level of markets. That is function of the ministry of finance and govt. Policys for interbational trade and their effectiveness or ineffectiveness directs value of currencies.
Although these days CBs may be speculating in covert. I not know. But its not their function.


regards
Thanks fti I hoped you would reply.

What im trying to ask is, because the two pairs have such a strong correlation, in those moments where USDCHF moves so quickly and temporarily comes out of whack with eurusd somewhat, would it be a reasonable assumption to assume that you can take a trade off the basis that they will achieve equilibrium again.
The greatest force on earth is compound interest.
  • #15,038
  • May 9, 2010 4:05pm May 9, 2010 4:05pm
Quoting Deusomega
Also from fti's post "kybalion"

http://en.wikipedia.org/wiki/Kybalio...e_of_Vibration
Thanks for the reminder, quote:

The Principle of Vibration embodies the idea that motion is manifest in everything in the Universe, that nothing rests, and everything moves, vibrates, and circles.[3] This principle explains that the differences between different manifestations of Matter, Energy, Mind, and even Spirit, are the result of only different "vibrations".[4] The higher a person is on the scale, the higher the rate of vibration will be. Here, The All is purported to be at an infinite level of vibration, almost to the point of being at rest. There are said to be millions upon millions of varying degrees between the highest level, The All, and the objects of the lowest vibration.[5]
Mental Transmutation is described as the practical application of this principle. To change one's mental state is to change vibration. One may do this by an effort of Will, by means of deliberately "fixing the attention" upon a more desirable state.[6]

Regards,
Baifu
  • #15,039
  • May 9, 2010 4:15pm May 9, 2010 4:15pm
Quoting luSan
Check page 78
"In every law of nature there is a major and a minor;

a positive, a negative, and a neutral. Therefore, in
cycles there must be a lesser, a greater and intermediate
cycle, or cycles within cycles. Like Ezekiel says:

"Wheel within a wheel.”

Reading the above and going back to the three kingdoms, we are trading currency pairs. What is the neutral currency? How do we hedge?

In the Tunnel book, Robert went on to buy wheat and corn alongside cotton. Hedging?
  • #15,040
  • May 9, 2010 4:25pm May 9, 2010 4:25pm
Quoting auxesis
3 waves? linear addition?

Somewhere in the dates I believe is a correlation to his timing, which can be transferred or similarly seen in intra-day, which would go along with FTI's comment about the news reports and the frequency of trades. 45 days, 45 minutes? or 45 degrees? Can't be a hard and fast rule, but more of a common pattern regarding normal oscillations of price.

What is above is below.

fwiw
Interesting and not something I normally considered. I was thinking his dates were just a diversion but if there is mathematics in there and you have the capacity to work it out then I'm all ears. Here is something to consider.

THE PRINCIPLE OF POLARITY.
“Everything is Dual; everything has poles; everything has its pair of opposites; like and unlike are the same;
opposites are identical in nature, but different in degree; extremes meet; all truths are but half-truths; all
paradoxes may be reconciled.”–The Kybalion.
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