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Technical Analysis Fallacy

  • #15,141
  • Edited 11:07am May 10, 2010 10:48am | Edited 11:07am
Quoting Baifu
Plain English? That would be boring
................................

Forgot to say: If we attack and the market is with us we skip to the right (is this spiral in?) and do 8,5,3, to bring our avg price as far away from market as possible.
If we accumulate during a puffy retrace we skip to the left (spiral out?) and do 3,5,8, to bring avg price as close to market as possible.

Regards,
Baifu
Hi,

I think there is an old post from leighsww about this.

I have found it, it is not what you wrote about, but similar. See below.

Textor

********************************************************

leighsww
xoxo Member Since Mar 2007
Posts: 581

Okay, here's the various calculations that show 2 different scout sizes (.5 lot and 1 lot) and rescue troop sizes to obtain an X number of pips from break even. The reaveraged price is after the = sign.

RED = number of rescue troops
Numbers are rounded

If using .5 lot for scout and being 30 pips away ...
.5 @ 158.50 + 1 @ 158.80 = 158.70 (10 pips from break even)
.5 @ 158.50 + 1.5 @ 158.80 = 158.72 (8 pips)
.5 @ 158.50 + 2 @ 158.80 = 158.74 (6 pips)
.5 @ 158.50 + 2.5 @ 158.80 = 158.75 (5 pips)
If using .5 lot for scout and being 50 pips away ...
.5 @ 158.50 + 1 (rescue troop) @ 159.00 = 158.83 (17 pips)
17 pips away from break even is too far, in my opinion, to conduct safe and successful rescues, so I'd prefer to use one of the other below calculations to bring my basis to a more palatable range (either the 10 or 8 pips from break even calculations would be optimum).
.5 @ 158.50 + 1.5 @ 159.00 = 158.88 (12 pips)
.5 @ 158.50 + 2 @ 159.00 = 158.90 (10 pips)
.5 @ 158.50 + 2.5 @ 159.00 = 158.92 (8 pips)
--------------

If using 1 lot for scout and being 30 pips away ...
1 @ 158.50 + 2 @ 158.80 = 158.70 (10 pips)
1 @ 158.50 + 3 @ 158.80 = 158.72 (8 pips)
1 @ 158.50 + 4 @ 158.80 = 158.74 (6 pips)
1 @ 158.50 + 5 @ 158.80 = 158.75 (5 pips)
If using 1 lot for scout and being 50 pips away ...
1 @ 158.50 + 2 @ 159.00 = 158.83 (17 pips)
1 @ 158.50 + 3 @ 159.00 = 158.88 (12 pips)
1 @ 158.50 + 4 @ 159.00 = 158.90 (10 pips)
1 @ 158.50 + 5 @ 159.00 = 158.92 (8 pips)
1 @ 158.50 + 6 @ 159.00 = 158.93 (7 pips)
NOTE: There comes a point of what is called "diminishing returns" so keep that in mind when risking more troops to bring down the basis (ex: don't risk an extra trooper for only a 1 pip gain). If your currency pair makes a certain number of pip pullback moves easily, use the least amount of rescue troops to accomplish your mission (ex: for EUR/JPY, it makes 8 - 10 pip pullbacks easily in a short amount of time, so I would feel confident to use either the 10 or 8 pip range rescue calculations and not have to risk more than those amount of rescue troops).



Now, what if you've already put in a rescue and the market kept moving against you another 30 pips from the reaveraged price ...
1.5 (.5 scout + 1 rescue troop) @ 158.80 + 2 @ 159.10 = 158.97 (13 pips)
1.5 @ 158.80 + 2.5 @ 159.10 = 158.99 (11 pips)
1.5 @ 158.80 + 3 @ 159.10 = 159.00 (10 pips)
1.5 @ 158.80 + 4 @ 159.10 = 159.02 (8 pips)
3 (1 scout + 2 rescue troop) @ 158.80 + 2 @ 159.10 = 158.92 (18 pips)
3 @ 158.80 + 3 @ 159.10 = 158.95 (15 pips)
3 @ 158.80 + 4 @ 159.10 = 158.97 (13 pips)
3 @ 158.80 + 5 @ 159.10 = 158.99 (11 pips)
3 @ 158.80 + 6 @ 159.10 = 159.00 (10 pips)
... this is why you want to make sure that you try to get out your scout on the first rescue attempt if possible. Having to conduct multiple rescues costs a lot of troops!

Okay, I'll be back another time for a sample attack sequence.
  • #15,142
  • May 10, 2010 10:52am May 10, 2010 10:52am
Quoting Zoran
aux, I don't really discuss much in this thread unless I see a challenge like the one put by fti. As mentioned, he has presented what he has and I trade when I can, but whether it's good or bad, I tend to deal with it myself. It's all training and I already have the lessons, I just don't tend to discuss them as it is already in the thread.

My base skew is 1, 1, 2 and I just multiply it 5, 5, 10 or 10, 10, 20. It's as simple as that. Whatever I feel comfortable with based on many factors. When I make a mistake, I can hear fti in my head telling...
For me the kind of discussions Zoran tries to bring forth is more true to the thread than speculations of where the market is goiing, S & R levels etc.

But again, any kind of discussion is alright with me.

Regards,
Baifu
  • #15,143
  • Edited 11:30am May 10, 2010 11:06am | Edited 11:30am
fwiw, spirals within spirals, all are spirals don't be rigid

Level 1……….1, 2, 3, 5, 8, 13

Level1/.618

1.618, 3.326, 4.854, 8.090, 12.944, 21.035… or rounded 2,3,5,13,21

Level 2/.618

2.618, 5.381, 7.854, 13.09, 20.944, 34.474… or rounded 3,5,8,13,21,34 ................ compare these steps to this spiral 1, 1, 4, 9, 25, 64

Exponential spiral steps / 1, .618, .382, 236

1, 1.618, 4.235, 17.949…. rounded 1.2.5.18

Or in this case combine levels (*4 through 6* = 3+5+8 = 16) of level 1 for 3rd attack
And square out in reverse order.

But again, if you can't dance at the minimum, why cut yourself deeper?
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  • #15,144
  • May 10, 2010 11:07am May 10, 2010 11:07am
Thx to all my dancer friends

I am finally out of the rescure with a small profit. This mistake I have taken will stay in my head for a while... Seriously need some sleep... Will catch up on this thread in the morning.

Trade well
Life is a school for the soul
  • #15,145
  • May 10, 2010 11:29am May 10, 2010 11:29am
I don't know guys. The spiral stuff is fairly elementry. It's not something I tend to think about now but I just feel what I need based on many factors - like volatility. The fact that fti put emphasis on spiral within spiral and Gann's secret seems to be something else. I did some snooping around with his previous posts and thought it had something to do with hedging (the posts I reposted here). At that time we had a discussion on facebook regarding hedging also. Is it related or just co-incidence? I thought it was so I linked them. Doesn't mean I'm right.

I will post the facebook conversation here later (unless fti objects). It's there for all of his friends to see anyway. To me it was a hedge to protect my base currency. Is it related to spiral within spiral? I can see how it is.
  • #15,146
  • May 10, 2010 11:49am May 10, 2010 11:49am
Quoting Zoran
I don't know guys....
Just my take, the base spiral one uses for his skew, will be maintained throughout the trade and is based on the resources available at the time, during volatility one can jump levels or spiral the spiral so to speak, any hedging would be attempted in a relationship to whatever the current skew employed was.

My take although I haven't completely gotten my hands around the concept was using the 3k's against each other in forwards and backward waves in the direction of the 4th (your base currency) How the 3 balanced themselves would dictate which was taken or hedged in which direction, example I'm long US dollar, Euro is stronger than Cable at the moment, I'd want to short cable on the runs and long Euro on the retraces, Yen plays a part in this 4 way dance, but I haven't plugged that into the mix yet ........ hedging would only be deployed if in rescue mode, figure butterfly? was my thoughts. But this is way outside of basic dancing.

gotta take a break.

regards
  • #15,147
  • May 10, 2010 12:06pm May 10, 2010 12:06pm
Quoting textor
Hi,

I think there is an old post from leighsww about this.

I have found it, it is not what you wrote about, but similar. See below.

Thanks Textor. I enjoy Leighsww’s posts very much, too bad the TAF method does not suit her needs.

I wasn’t thinking so much rescue (due to time constraint zoom out rescue is difficult for my MO) as how to position size while dancing so my avg price is far away if with wind and close by if against wind, today I was in deep trouble with my EUR bear bias, when EUR turned south Wilder’s Table helped remind me to maximize exposure with wind relative to exposure against wind, squared with good demo profit.

Regards,
Baifu
  • #15,148
  • May 10, 2010 12:45pm May 10, 2010 12:45pm


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  • #15,149
  • May 10, 2010 7:44pm May 10, 2010 7:44pm
fti, just want to make sure I have this correct. The EU designates $1 Trillion to support the euro, and the euro jumps to 1.31, then just as quickly drops back to 1.2750. Does that mean the market isn't buying it, or are they just slow to catch on?
  • #15,150
  • May 10, 2010 7:51pm May 10, 2010 7:51pm
Quoting GEfx
fti, just want to make sure I have this correct. The EU designates $1 Trillion to support the euro, and the euro jumps to 1.31, then just as quickly drops back to 1.2750. Does that mean the market isn't buying it, or are they just slow to catch on?
Sounds like they're calling the raise and wanting to see them cards. Test of resolve.
  • #15,151
  • May 10, 2010 9:28pm May 10, 2010 9:28pm
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  • #15,152
  • May 10, 2010 10:13pm May 10, 2010 10:13pm
Quoting aiyahmarklah
Start another thread, not visible to to fti, preferably away from FF, invite only those you deem suitable to contribute. Then your combined brain power might work, as the risk of appearing like an idiot is contained.

I am half joking here...hope you know what I mean. What you intended probably would not work here.

Dude.. be rational.. what he said is cryptic coz most traders here are not as experienced as him.. no emotion in trading right
  • #15,153
  • May 10, 2010 10:39pm May 10, 2010 10:39pm
just trade whatever is benificial to your approach. some things if you just cant understand, let it go. if you're making money constantly for the past year, then surely you have done something relevantly correct.

fti is a different breed and plays a different field. And he can also be as volatile as the market at times . Jangan marah pakcik fti.

jacson101,

I intruiges me that you measure your confidence in percentage. (PS i did some digging) i hope you done mind ahaha!

you have a very interesting risk concept. i've been exploring the VAR as well and plan to integrate it into my trading. Hope that you could shed more light with regards to the above mentioned.

aux, firewall is blocking me from watching your video.
  • #15,154
  • May 10, 2010 10:53pm May 10, 2010 10:53pm
hi fti and all.
this is my first post here, but i have been viewing this thread a looooong time already. just that i'm on page 700+ only due to time contraints.

im very impressed and thankful for the teachings and contributions by everyone. During my uni sch term, i trade the daily timeframe and after incorporating some aspects from here, i have been doing very well.

and now its a long holiday break for me, i have been trading the 5min but still busy with outings and such and part-time job haha. nevertheless, this is a good time to train and build up.

i have been saving my progress and performance in my facebook album. http://www.facebook.com/#!/album.php?aid=14569&id=1706355741
please feel free to take a look and critique. its very unpolished. but its only been a few days since i started fti's style even though i have been reading for a long time.

eventually i hope to be a currency trader in the bank like u fti. i hope to contribute full-heartedly on this thread too, once i catch up this page, it may take awhile because i am also reading from the beginning to learn more deeply.

thanks fti and all. i will check back and see if theres any reply after 2 days as im off to a chalet.. sigh. i will have to forgo trading, but my mind will always be on fti and trading lol.
  • #15,155
  • Edited May 11, 2010 12:24am May 10, 2010 11:59pm | Edited May 11, 2010 12:24am
Quoting GEfx
fti, just want to make sure I have this correct. The EU designates $1 Trillion to support the euro, and the euro jumps to 1.31, then just as quickly drops back to 1.2750. Does that mean the market isn't buying it, or are they just slow to catch on?
Hi GEfx,

Although there is plan of Euro rescue, there seems no concrete evidence that they are doing anything yet, based on trichet 's statement that ECB is not participant of bond purchases. Seems ECB is declaring independence from any involvement to the euro rescues. So if thats the case, all the rescues are efforts by "friendly" euro countries.
Market's perception is of a divided Euro cohesion( esp from their CB), as evident in the eur/jpy exodus. So the European resolve may be TESTED to see if their plan is real or just lip service.

Market, she's buying the rumours and selling the fact. Its normal behaviour.

My perspective is that the euro will be defended. But weak holders would be weeded out by the increased volatility in thinning markets. And the situation will be improved for the euro when the euro "traitor" is out of office soon.
Panda's effort to rebasketing of her foreign reserves may weaken USD positions and may consolidate that effort.

With increased volatility,So the dance isn't in pips anymore, but on the big fig handles. Watch size.

regards
  • #15,156
  • Edited 12:45am May 11, 2010 12:09am | Edited 12:45am
Quoting Zoran
I believe I understand most of what was presented but as you know, fti tends to speak in cryptic terms....
Your discontentment on my methods is noted and taken under advisement. When I paint pictures, I do not normally draw the intestines.

When dogfights are envisioned. angels and bogeys, they jettison their external fuel pods. You like dogfights with full payload? Can you tell the difference between a dogfight and a kamikaze invasion?
  • #15,157
  • May 11, 2010 2:15am May 11, 2010 2:15am
Quoting fti
Your discontentment on my methods is noted and taken under advisement. When I paint pictures, I do not normally draw the intestines.

When dogfights are envisioned. angels and bogeys, they jettison their external fuel pods. You like dogfights with full payload? Can you tell the difference between a dogfight and a kamikaze invasion?
fti, with all due respect I am just questioning whether your method is effective and having the desired outcome at this point in time. I do know the difference between a dogfight and kamikaze invasion and I have a sense of what dangers may be involved. I'm not going to just blindly take something and carelessly use it. If that were the case, I'd be dead or bankrupt a long time ago. Of course we'll always have those who misuse something but that's life. I think you need to have a bit more faith in your students. These are your words in response to my comment about you and your friends climbing up a cliff face without safety harnesses:

"Nope, no harness , just bare hands and focus. Life isn't about safety, is about resolves and skills. Its doable. Since the 1950s we had been doing this, casualty records is zero. Dangerous, well yes, i do agree. So is boarding an aircraft. They are not harnessed as well. In fact the hike is less dangerous. We are not dependent on any one else for safety. Masters of our own fate."

All I'm saying is, show us the cliff and allow us to climb it as a team. If you want to lead, even better. If someone wants to use a safety harness then let them. Let us be masters of our own fate.
  • #15,158
  • May 11, 2010 2:33am May 11, 2010 2:33am
Quoting fti
Hi GEfx,

Although there is plan of Euro rescue, there seems no concrete evidence that they are doing anything yet, based on trichet 's statement that ECB is not participant of bond purchases. Seems ECB is declaring independence from any involvement to the euro rescues. So if thats the case, all the rescues are efforts by "friendly" euro countries.
Market's perception is of a divided Euro cohesion( esp from their CB), as evident in the eur/jpy exodus. So the European resolve may be TESTED to see if their plan is real or just lip service.

Market,...
Thank you the heads up. It will be interesting how they do it, they cannot print money like US does. Do you see the parity of E/U a possibility ? Many are speculating that it will.
  • #15,159
  • May 11, 2010 2:36am May 11, 2010 2:36am
Quoting fti
Hi GEfx,

Although there is plan of Euro rescue, there seems no concrete evidence that they are doing anything yet, based on trichet 's statement that ECB is not participant of bond purchases. Seems ECB is declaring independence from any involvement to the euro rescues. So if thats the case, all the rescues are efforts by "friendly" euro countries.
Market's perception is of a divided Euro cohesion( esp from their CB), as evident in the eur/jpy exodus. So the European resolve may be TESTED to see if their plan is real or just lip service....
Interesting times we live in, don't you think? Your comment re: Panda is really good and I had not thought about that, will watch for impact. Good trading and as they say in the war movies, watch your 6 o'clock! LOL
  • #15,160
  • May 11, 2010 2:44am May 11, 2010 2:44am
Quoting aiyahmarklah
Thank you the heads up. It will be interesting how they do it, they cannot print money like US does. Do you see the parity of E/U a possibility ? Many are speculating that it will.
Oh yes, they can. If they want to. Who is there to stop the ECB? They only need an excuse to do it.

Parity, if that happens, then Europe and US merges.
One World Order?
Like you said, there are many gamblers.
If only I know whats for dinner tomorrow?

regards
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