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Technical Analysis Fallacy

  • #15,241
  • May 12, 2010 6:23pm May 12, 2010 6:23pm
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  • #15,242
  • Edited 8:05pm May 12, 2010 7:51pm | Edited 8:05pm
Madman or the truth???

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  • #15,243
  • May 12, 2010 10:49pm May 12, 2010 10:49pm
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  • #15,244
  • May 13, 2010 1:07am May 13, 2010 1:07am
Quoting Zoran
AOW

IV. TACTICAL DISPOSITIONS....
This is good stuff dude. Where'd you get it from?
Got a link pse? =)
One Mind, Any Market
  • #15,245
  • May 13, 2010 1:50am May 13, 2010 1:50am
Quoting Cyrus
This is good stuff dude. Where'd you get it from?
Got a link pse? =)
http://www.amazon.com/Art-War-Sun-Tz...3733385&sr=8-1
  • #15,246
  • May 13, 2010 2:02am May 13, 2010 2:02am
Quoting Cyrus
This is good stuff dude. Where'd you get it from?
Got a link pse? =)
Hi Cyrus

I recommend you read this thread. Art of War is foundational to trading.

Here is a link: http://www.chinapage.com/sunzi-e.html

No need to purchase it, it's freely available on the internet.
  • #15,247
  • May 13, 2010 2:06am May 13, 2010 2:06am
Quoting Zoran
Hi Cyrus

I recommend you read this thread. Art of War is foundational to trading.

Here is a link: http://www.chinapage.com/sunzi-e.html

No need to purchase it, it's freely available on the internet.
I just like to look at it in the bookshelf.

I am not a fan of PDF books etc..

This is my favority quote:

2. To secure ourselves against defeat lies in our
own hands, but the opportunity of defeating the enemy
is provided by the enemy himself.
  • #15,248
  • May 13, 2010 2:10am May 13, 2010 2:10am
Quoting Zoran
Hi Cyrus

I recommend you read this thread. Art of War is foundational to trading.

Here is a link: http://www.chinapage.com/sunzi-e.html

No need to purchase it, it's freely available on the internet.
Sweetness mate. They got the I-Ching too.
Thanks!

I happen to be working on my bagua zhang... LOL. K, out of point.
One Mind, Any Market
  • #15,249
  • May 13, 2010 2:30am May 13, 2010 2:30am
Quoting Deusomega
Print screen works fine for me. Print screen then paste in mspaint. Then save as jpeg.
Forgot about Paint, thanks, works now

Regards,
Baifu
  • #15,250
  • Edited 3:40am May 13, 2010 3:10am | Edited 3:40am
Quoting piccolo
To secure ourselves against defeat lies in our
own hands, but the opportunity of defeating the enemy
is provided by the enemy himself.
ok guys, just wanna share some things with further regards to risk.

have tabulated some charts and i would loike to share it with you guys how you could variably determine your risk measures.

some data collated since Jan 07
These are the chances of the possible drawdowns you may face based on daily movement of eurusd, the chances that you will hit a >200 pip DD is 4.7% which would be quite sound. Thus i reckon skew progression should at least be this big.

>100 --- 26.4%
>125 --- 17.4%
>150 --- 11.6%
>175 --- 7.8%
>200 --- 4.7%

lets just base this on fib progressions,
for a 5 level skew (which i doubt could handle 200pip) you will need
33 troops @ $1per troop
33 * 200 = 6,600
if you are willing to push skews to 10% of equity then you will proly need 66,000

for a 8 level skew, (preferable coz it allows more flexibility)
you will need
1+1+2+3+5+8+13+21+34+55
135 * 200 = 27,000
at 10% will mean 270,000

happy planning, see why the VAR is so low when the banks use it but scarily high when it comes to us retailers at 50:1 leverage we basically increased value at risk to 235% lol! See why accounts blow out?

fti managed 40% in a year by doing fx with NO leverage. Thats a freaking MEAN feat! give him .02 lev its equivalent to 2000% on the retailers side.

this ultimately explains...why many people are attracted, practised this method but in the end eventually fallout, its basically due to bad risk measurements and greed due the presence of, leverage.

cheers!
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  • #15,251
  • May 13, 2010 3:35am May 13, 2010 3:35am
If 90% of traders lose $. What can we deduce about the chart patterns and technical indicators we stare at everyday?
  • #15,252
  • May 13, 2010 3:48am May 13, 2010 3:48am
Quoting jest1081

this ultimately explains...why many people are attracted, practised this method but in the end eventually fallout, its basically due to bad risk measurements and greed due the presence of, leverage.

cheers!
14. Hence the skillful fighter puts himself into
a position which makes defeat impossible, and does
not miss the moment for defeating the enemy.

15. Thus it is that in war the victorious strategist
only seeks battle after the victory has been won,
whereas he who is destined to defeat first fights
and afterwards looks for victory.

16. The consummate leader cultivates the moral law,
and strictly adheres to method and discipline; thus it is
in his power to control success.

17. In respect of military method, we have,
firstly, Measurement; secondly, Estimation of quantity;
thirdly, Calculation; fourthly, Balancing of chances;
fifthly, Victory.

18. Measurement owes its existence to Earth;
Estimation of quantity to Measurement; Calculation to
Estimation of quantity; Balancing of chances to Calculation;
and Victory to Balancing of chances.

When I put myself beyond defeat I calculate it at 0 leverage. This however requires a lot of capital but I cannot see any other way of doing it. I can do it under certain circumstances and tend to choose suitable terrain but sometimes I just have to stay on the sidelines. There are probably ways to do it in all market conditions but it's not something I've figured out yet - unless I just accept the higher risk.
  • #15,253
  • May 13, 2010 4:05am May 13, 2010 4:05am
Quoting Usdjpy
If 90% of traders lose $. What can we deduce about the chart patterns and technical indicators we stare at everyday?
well im not sure of that statistic. but it could also be tre reason why the other 10% became very very rich!

historical patterns as basically statistics. which may provide valuable insights to the informed. as to the charts i presented above, same case.

i dont want to get into the TA part coz the model has already been presented and fully explained by the boss

just sharin some possibilities on how we could exercise due diligence.

Zoran,
im sure you have, coz if you havent, i wouldnt be seeing you posting here anymore. This model is not only relevant to those who practises skews but also applied by the general masses as well. cheers.
  • #15,254
  • May 13, 2010 4:14am May 13, 2010 4:14am
Yesterday was a tough day because my bias was short and from 7:00 when I started to 11:00 the lesser trend was long (I am 6 hours behind Singapore, 6 hours ahead NY). At the worst point I had 15% DD – not too worried because that was half of last 3 days profit, plus we were at a confluence of resistance levels. My highest skew was level 11 (89 troops) max gearing 39 (high gearing usually in minutes, if not seconds). After market finally snapped back it went into a protracted retrace and I had to wait until after 17:00 to square. 10 hour battle, booked 7.6% profit, 54 positions (higher than usual due to PA).

This morning was no drama by comparison, not much DD to take note, squared early to do mid day walk, missed the last waterfall, booked 2.8% profit to call it morning. Highest skew level 10 (55 troops), 20 positions.
Attached charts, to show despite my less than stellar execution dance with MM works, provided market comes back. What if it doesn’t? That’s another story.
Regards,
Baifu
Edit:sorry, did not realize "Bold" was on, corrected
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  • #15,255
  • May 13, 2010 4:35am May 13, 2010 4:35am
apologies for my previous deletion of post. i had not scrutinized your charts properly.

thats some really neat work done on the cross.

basically any type of logical mm can work. its the risk carried forward that is an issue for most.

welldone baifu.
  • #15,256
  • May 13, 2010 4:38am May 13, 2010 4:38am
Baifu, very nice work, very tiring also, no ? Like you said, what if it doesn't come back ? That story need to have an ending nonetheless.
  • #15,257
  • May 13, 2010 4:45am May 13, 2010 4:45am
Quoting Zoran
III. ATTACK BY STRATAGEM


1. Sun Tzu said:...
Hi Zoran
If you do not understand the "strategy" (Key Features) of the enemy,can repeat endlessly AOW.
Regards
  • #15,258
  • May 13, 2010 4:53am May 13, 2010 4:53am
Quoting jest1081
apologies for my previous deletion of post. i had not scrutinized your charts properly.

thats some really neat work done on the cross.

basically any type of logical mm can work. its the risk carried forward that is an issue for most.

welldone baifu.
Thanks jest. I was replying to your post while your were deleting it I was going to say you are not rude at all, I welcome all critique. And thanks for your thoughtful post on risk.

I am risk adverse by temperament. The point of my experiment:

1) if we say TA has no predictive power why do we still cling to it (unknowingly). I agree my entries look random and bad, in hindsight. I can assure you in real time, when chart patterns are forming and mutating, it is not so apparent. My search is to find a method, first never be defeated, then be sure to win when the enemy allows us, without dependance on chart reading prowess. Good prowess helps, not disputing that. But I want to start out assuming I am always wrong.

2) I am trading with the daily trend, the prudent thing is naturally to stay out during intraday counter trends. In practice I find myself averaging into intraday countertrends, because of my scorpion and impatience (misread top of Wave A or runaway wave B as completion of wave C, for example.) Sometimes I am not worried if I am re-entering the same skew level at a better price, it's all part of a process of continuously stepping on the brake or gas pedal.

Will discuss this MO experiment when there is more time, I value your critique, I am a newbie in this method (not a newbie in TA though) and welcome all critique and feedback.

regards,
Baifu
  • #15,259
  • May 13, 2010 4:57am May 13, 2010 4:57am
Quoting Baifu
In practice I find myself averaging into intraday countertrends, because of my scorpion and impatience (misread top of Wave A or runaway wave B as completion of wave C, for example.) Sometimes I am not worried if I am re-entering the same skew level at a better price, it's all part of a process of continuously stepping on the brake or gas pedal.
gladyou noticed that, if so then i have nothing further to input. surely a good lesson to book. could see that the eurjpy trade was placed to hedge your euro losses.

ever wondered why your hedge looked more sensible than your main trade?
  • #15,260
  • May 13, 2010 6:10am May 13, 2010 6:10am
Quoting jest1081
ever wondered why your hedge looked more sensible than your main trade?
You are talking about somebody else I only post in this thread.

I never hedge, one instrument, one direction, cannot walk and chew gum at the same time
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