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Technical Analysis Fallacy

  • #15,041
  • May 9, 2010 4:36pm May 9, 2010 4:36pm
Quoting sebastionay
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.
there is corelations, but is more because of the swiss gold holdings than economics. Swiss is not much as an economy. But is big "Gold currency".
In so far as the cross with euro, they are very different animals. Chf is wild wild lady , when she lets her hair down. Dangerous lady. This is que to liquidity problems. If yo trade gold then this is the other kingdom.


regards
  • #15,042
  • May 9, 2010 4:47pm May 9, 2010 4:47pm
Quoting Zoran
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?
To talk about hedging is digging into a black hole....
however, let us supposed that we open trades in opposite directions on the same or hightly correlated currency.
We wait and see which direction the market is going...and then we implement a fibo attack on that direction...
then we are carried in that direction always having a hedge in the opposite direction...
we could keep going with the attack until the main trend is over...
we close the attack waves and restart with a new wave in the opposite direction....
this seems to be a wave within a wave similar to new avatar.
Would I do it?
Only if I have plenty of time for long dances..
Besides...
I do not hedge but dance the main trend.

Another way is to see the market as a fractal universe...
it means: the parts are similar to the whole
(by the way, Kybalion theory too)
So we have waves within waves
then
we see the momentum of the high time frame
and join with the momentum of the middle frame
and join with the momentum of the lower frame
then
we have a sutnami wave that would carry us to heaven.
Etc.
So are we into multiple momentum trading?
and also, another random thought,
are we aware that a wave have a frequency
and a frequency have a period
and the definition of a period
is time?
Time, time, time....
What is the time we are talking about!
-Being wondering for the last 3 days about it-
Would I do it?
That sounds more appealing to me.
Be one with the market.

Regards,

Luis
Empty as water and soft as a facing wind mountain
  • #15,043
  • May 9, 2010 4:53pm May 9, 2010 4:53pm
Quoting luSan
To talk about hedging is digging into a black hole....
however, let us supposed that we open trades in opposite directions on the same or hightly correlated currency.
We wait and see which direction the market is going...and then we implement a fibo attack on that direction...
then we are carried in that direction always having a hedge in the opposite direction...
we could keep going with the attack until the main trend is over...
we close the attack waves and restart with a new wave in the opposite direction....
this seems to be a wave within...
hedging
you people not even know how to calculate fair pricing.
And you want to do hedging.

regards
  • #15,044
  • May 9, 2010 4:58pm May 9, 2010 4:58pm
A hedge can be used to profit during a retrace or reduce risk. If for example long euro and price has caught you off timed, your waiting for rescue attempt as price dives south. An opposite trade can be introduced in a correlating pair to cut the cost of the retrace.

I would think that in using the 3k's Euro & Pound would be the normal positioning pairs... given their inner strength relation to the Dollar would be your pick, based on your overall Dollar bias. On pair will be stronger going with the dollar the other in opposition. I still haven't plugged in the Yen into the mix, unless it's used to offset off-balances in the hedge.

But here is the problem to incorporate the above means you have master the basic TAF method. It could be used to great profit, but in the hands of the novice, would be jumping out of the frying pan into the fire.

fwiw
  • #15,045
  • May 9, 2010 5:11pm May 9, 2010 5:11pm
Hedging in spot currencies only... hmmm, a bit of a long shot.

Anyway, anyone watching what's happening? 500 billion EUR bailout program with the EU coordinating it (having in mind their notorious flexibility) announced just before the market opened. It would've been better if they came out and screamed "We are desperate, please stop selling euros, for Christ sake!"
  • #15,046
  • May 9, 2010 5:12pm May 9, 2010 5:12pm
Lusan, I believe we can hedge in two ways. Once we have foreign capital on a pair in a major trend:

1. We can use that capital in minor trends of the same pair - somehow calculating a neutral MM value.

2. Use other pairs to hedge but having a neutral currency.

Here it is again - Take note and see example video below:

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.

Here is my "Polarity" response to fti on facebook

Inserted Video


Did anyone find his original one? There are clues in there. It seems pretty straight forward.

fti, I know you like deleting but please don't do it!
  • #15,047
  • May 9, 2010 5:14pm May 9, 2010 5:14pm
Quoting Setebos
Hedging in spot currencies only... hmmm, a bit of a long shot.

Anyway, anyone watching what's happening? 500 billion EUR bailout program with the EU coordinating it (having in mind their notorious flexibility) announced just before the market opened. It would've been better if they came out and screamed "We are desperate, please stop selling euros, for Christ sake!"
They started talking Saturday, price increases were seen as early as Saturday evening, the jump was inevitable, we will see what happens in the Asian
  • #15,048
  • May 9, 2010 5:14pm May 9, 2010 5:14pm
Quoting fti
hedging
you people not even know how to calculate fair pricing.
And you want to do hedging.

regards
Chief, I am not kidding,
I said, "...I do not hedge but dance the main trend."

If I wanted to hedge I would be combining
spots and options.
But I have no interest in options at this time.
Why?
It is too complex. I believe that just normal trade
is sufficient to bring bread to the table.
Regards,
Luis

Edit: I confess that the concept of hedging make me feel uneasy.
Why? I feel that it might affect my self confidence.
If I know how to judge the main trend and have confidence in my MM.
Why shoud I take an insurance policy?
I could easily just flip
after accepting that I missed judge the trend.
Empty as water and soft as a facing wind mountain
  • #15,049
  • May 9, 2010 5:34pm May 9, 2010 5:34pm
Quoting luSan
Chief, I am not kidding,
I said, "...I do not hedge but dance the main trend."

If I wanted to hedge I would be combining
spots and options.
But I have no interest in options at this time.
Why?
It is too complex. I believe that just normal trade
is sufficient to bring bread to the table.
Regards,
Luis

Edit: I confess that the concept of hedging make me feel uneasy.
Why? I feel that it might affect my self confidence.
If I know how to judge the main trend and have confidence in my MM.
Why shoud I take an insurance...
tell AIG customers that. also ING also lloyds. Mr O?


regards

PS: they slaughtering the crosses, I like this.
yes teach them the lesson.
  • #15,050
  • May 9, 2010 5:35pm May 9, 2010 5:35pm
Quoting fti
hedging
you people not even know how to calculate fair pricing.
And you want to do hedging.

regards
Teacher, it is time you taught us!
  • #15,051
  • May 9, 2010 5:38pm May 9, 2010 5:38pm
Quoting Zoran
Teacher, it is time you taught us!
thats major league.
you there already?
Cost you millions for that lesson, sorry!
And even then I need consider carefully.
Arbitrage and hedging is power game. Big boys with muscles , gunning for low %s.
your book need make usd in yards to do that.

regards
  • #15,052
  • May 9, 2010 5:46pm May 9, 2010 5:46pm
Quoting fti
strategically wrong, when elephants fight, either stay out if you are newbie, or impliment butterfly strategies. Ride strategies have little chances for survival, so is long sword, other strategies are to write options for time decay. but you have to be at least intermediate strategist to do that safely.

short euro is wrong way,you will be unable to have cable leg to cross out.
note: short euro/usd short cable = long usd
to leg
short cable long euro is long euro/cable.
first leg is on cable, to squeeze euro for leg.
usdyen plays to pitch or yaw.

This...
Zoran,

Here's a key I believe, I'd too would love to dig into it, but this thread is probebly not the place.

regards
  • #15,053
  • May 9, 2010 5:48pm May 9, 2010 5:48pm
Quoting fti
thats major league.
you there already?
Cost you millions for that lesson, sorry!
And even then I need consider carefully.
Arbitrage and hedging is power game. Big boys with muscles , gunning for low %s.


regards
Millions? No problem. Do you prefer Indonesian Rupiah or Vietnamese Dong?

We don't have to use options to hedge? Besides, what is Gann's secret? Was that something you figured out yourself or were you assisted?

PS. Bed time for me.
  • #15,054
  • May 9, 2010 5:54pm May 9, 2010 5:54pm
Quoting Zoran
Millions? No problem. Do you prefer Indonesian Rupiah or Vietnamese Dong?

We don't have to use options to hedge? Besides, what is Gann's secret? Was that something you figured out yourself or were you assisted?

PS. Bed time for me.
I was specialist in that field.

Get it right, there is no secret,only mindset.
All knows, but doing and knowing is 2 different things.

Like I said before, I can give you the flight plans and a hornet. But you'll probably splash on taxi.

Goodnite.
regards
  • #15,055
  • May 9, 2010 6:08pm May 9, 2010 6:08pm
Quoting fti
I was specialist in that field.

Get it right, there is no secret,only mindset.
All knows, but doing and knowing is 2 different things.

Like I said before, I can give you the flight plans and a hornet. But you'll probably splash on taxi.

Goodnite.
regards
Please, teach me how to fly or at least provide clear links to the instuctions - I'll try a flight simulator first and when ready, the flight plans and hornet! Name your currency, Indonesian Rupiah or Vietnamese Dong, and millions will befall you...

Have a pleasant night/day - Good night to all.
  • #15,056
  • May 9, 2010 6:24pm May 9, 2010 6:24pm
If I figure out how to dance properly I'll be plenty happy I think options are probably even more difficult. I know some stuff about barriers, DNT, vanillas, and stuff but thats about it.
  • #15,057
  • Edited 6:58pm May 9, 2010 6:36pm | Edited 6:58pm
Quoting Zoran
Please, teach me how to fly or at least provide clear links to the instuctions - I'll try a flight simulator first and when ready, the flight plans and hornet! Name your currency, Indonesian Rupiah or Vietnamese Dong, and millions will befall you...

Have a pleasant night/day - Good night to all.
trying rip off treasury specialist/market maker in currencies deals.good try.any currency USD equavivent.and remember is high digits mios and i need HR & back office ops, a whole dept. and need operate from beach house.and room profit sharing.
Its given already. do ground school, get your wings first. there goes my retirement.

ps:forgot health care insurance and travel (business class, accomodation 6 stars) and ...............the works. pay me in brunei.

Just jesting, my health won't survive me.so + hardship allowance+contractual shares options.

ai ya, just read thread la.
  • #15,058
  • May 9, 2010 7:19pm May 9, 2010 7:19pm
Quoting fti
trying rip off treasury specialist/market maker in currencies deals.good try.any currency USD equavivent.and remember is ....ps:forgot health care insurance and travel (business class, accomodation 6 stars) and ...............the works. pay me in brunei.

Just jesting, my health won't survive me.so + hardship allowance+contractual...
I've got work for you, just say the word
Regards.

@Zoran,
In your spiral study there is zero profit condition or a Nash equilibrium that a market making desk may follow, probability study more than anything with its various fair value calculations, probability algorithms and risk methodologies.
All the rest is, as fti, said calculating true value.
In the grand scheme, there are two types the informed(market makers flow) and the uninformed(everyone else).

Here's a spiral for ya, e/u 1.14 bids, offered through 1.45
But, first 500 bio needs to be absorbed.
  • #15,059
  • May 9, 2010 7:27pm May 9, 2010 7:27pm
Quoting jacson101
I've got work for you, just say the word
Regards.

@Zoran,
In your spiral study there is zero profit...
hi jacson,
the operating out of beach house part , that one's difficult to swallow?. Auditors will hang me. The security protocol would have to be the works.
Then again can always move banks HQ to beach?
I mean anythings possible. City CE works for USD1, what's not possible these days. Thank God , it didn't happen on JR's watch. I would have to be working for 10 cents.

regards

i wonder, are they engineering the reverse of last weeks fiasco? some bumps are going to fry. Just a feeling.Best get my euros while still cheap enough. Where they going get the money? PRINT?
  • #15,060
  • Edited 7:48pm May 9, 2010 7:33pm | Edited 7:48pm
Quoting fti
hi jacson,
the operating out of beach house part , that one's difficult to swallow?. Auditors will hang me. The security protocol would have to be the works.
Then again can always move banks HQ to beach?
I mean anythings possible. City CE works for USD1, what's not possible these days.

regards
Hi fti,

Anything is possible, they have "groupware" these day's from the beach house.

And for the record,
your not the only one with bad real estate bets, opps I mean exposure.
-Set me back a bit too.

Re; your question of last week fiasco. I'm not sure, LDN and NY boys need an out. They may just try slowing it down.

Good trading, and God bless.
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