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Technical Analysis Fallacy

  • #15,621
  • May 27, 2010 3:14pm May 27, 2010 3:14pm
Quoting aiyahmarklah
The question that disturbs me is that, I profited from the move, but I don't know it's CB intervention. Does it matter that I know if CB is involved ? Will knowing CB interventions or lack of knowledge affect my future performance ?
Hey Mark, you just love bringing those questions, don't you
To be honest with you I don't really have a general answer to you question. Much like anything else in trading it varies from person to person.
My personal philosophy is to always exploit my knowledge, always look for my personal pattern behind the market pattern, always ask myself "what's in it for me, how do I exploit what's happening in the market".
So looking at the circumstances (NY afternoon - low liquidity and floppy moves) it turns my red light on when I see such a rally - chances are it's a CB and CBs are rarely satisfied with 50 pips. So I jump in.
I know a lot of people would call trading that intervention a stupid move. And maybe it is. But to me what matters is what does my account statement show at the end of the day.
  • #15,622
  • May 27, 2010 3:37pm May 27, 2010 3:37pm
Quoting MaMood
From my point of view it is just nice to know, but does/should not effect your trading and decision making. You have always listen to the music and dance it.
If it is going against the prevailing trend respectively your bias, you know your options like flipping or bite the bullet ....
Correct, however when CBs intervene, it's usually against the prevailing trend isn't it ? Bottom line you are right about dancing with the flow. I only wished I could statistically qualify these type of plays in terms of long term profitability, the difficulty is that the parameters are so hard to define. Ok..i admit i hate the uncertainty part.

Quoting Setebos
Hey Mark, you just love bringing those questions, don't you
To be honest with you I don't really have a general answer to you question. Much like anything else in trading it varies from person to person.
My personal philosophy is to always exploit my knowledge, always look for my personal pattern behind the market pattern, always ask myself "what's in it for me, how do I exploit what's happening in the market".
So looking at the circumstances (NY afternoon - low liquidity and floppy moves) it turns my red light on when I see such a rally...
Hi Setebos, my answer to MaMood is directed to you as well, I don't think playing those moves are stupid by any definations. As long as the play makes sense and risk parameters well defined.

damm my mind is so stoned by all the trading. Btw that chinese post from fti, I am chinese but I don't really get the message either, def referring to somebody, maybe me, I don't know. Do all great traders like to talk like that ? I can't imagine what will happen if Gann starts a thread....maybe he will join the planetary cycle thread as well.
  • #15,623
  • May 27, 2010 3:49pm May 27, 2010 3:49pm
Quoting MaMood
Ah ok - I see.
Thx for the explanation.
Setebos explained well. For euro to jump like 200pips on just "china is still long term investor of euros" seems artificial. I'm not buying into this and i think the worse is yet to come.

edit: also SNB wants there CHF cheap there buying euros also.
  • #15,624
  • May 28, 2010 1:42am May 28, 2010 1:42am
Quoting M-H Trader
Setebos explained well. For euro to jump like 200pips on just "china is still long term investor of euros" seems artificial. I'm not buying into this and i think the worse is yet to come.

edit: also SNB wants there CHF cheap there buying euros also.

Hi M-H, Setebos and Mark.

Thanx for your answers.

I agree with Setebos: If you have any "insider information" about a market move we should not hesitate to make some pips out of it (all that counts are the pips in our book). But we have to be very nimble, because we are acting with a kind of prediction that could be proved wrong quickly.

Due to the fact, that we have no relevant Volume information: How can we know that there is an CB acting and it is not only a egineered price in a very very thin market?

CU,
MaMood
  • #15,625
  • May 28, 2010 2:45am May 28, 2010 2:45am
Sometimes you can detect intervention by the way the market moves. It might feel a bit machanical and unnatural.
  • #15,626
  • May 28, 2010 3:51am May 28, 2010 3:51am
limit reached... my scout still in the fight
Success consists of going from failure to failure without loss of enthusiam
  • #15,627
  • May 28, 2010 3:51am May 28, 2010 3:51am
oppss sorry posted on wrong thread
Success consists of going from failure to failure without loss of enthusiam
  • #15,628
  • May 28, 2010 4:15am May 28, 2010 4:15am
Quoting Zoran
Sometimes you can detect intervention by the way the market moves. It might feel a bit machanical and unnatural.
It could be just some low price stock picking from the East..
  • #15,629
  • May 28, 2010 4:19am May 28, 2010 4:19am
Quoting MaMood
Hi M-H, Setebos and Mark.

Thanx for your answers.

I agree with Setebos: If you have any "insider information" about a market move we should not hesitate to make some pips out of it (all that counts are the pips in our book). But we have to be very nimble, because we are acting with a kind of prediction that could be proved wrong quickly.

Due to the fact, that we have no relevant Volume information: How can we know that there is an CB acting and it is not only a egineered price in a very very thin market?

CU,
MaMood
Good morning MaMood,
What you're asking is a very good question and as a matter of fact I don't think that in the spot FX that we (retailers) trade one could be dead stone sure that what we see on a situation like last night's it is really a CB intervening in the market. Even with ECN's L2 you still see just a small fragment of the order flow. So that means you are making a probability guess - there's still a (statistical) chance involved. But after all that's forex, right

I have noticed that fti alarmed on several occasions that CBs had already intervened where the charts had actually moved in a much smaller basis compared to last night, but that's fti knowing the business inside out. What's left for us is to look for those much more obvious signs and try to ride the opportunity (even with one hand holding the plug ).

Regards
  • #15,630
  • May 28, 2010 4:25am May 28, 2010 4:25am
Btw guys, I know some of you also trade gold so I was wondering if any of you had the same sort of spikes last night (hmm, some 12 hours ago) or is it just my bucket shop being a bunch of %$#@$ again...
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  • #15,631
  • May 28, 2010 6:52am May 28, 2010 6:52am
Quoting Setebos
Good morning MaMood,
What you're asking is a very good question and as a matter of fact I don't think that in the spot FX that we (retailers) trade one could be dead stone sure that what we see on a situation like last night's it is really...
reuters.com thinks:
Euro lifted by month-end position squaring

so it can be anything..
  • #15,632
  • May 28, 2010 7:16am May 28, 2010 7:16am
Quoting piccolo
reuters.com thinks:
Euro lifted by month-end position squaring

so it can be anything..
Yeah, it makes perfect sense to dump your gains in a thin market causing a market spike which basically means you are reducing your own profit...
Eh, Reuters...
  • #15,633
  • May 28, 2010 12:05pm May 28, 2010 12:05pm
Squared after 8 hours tough campaign, short E/U from 7:15 to 15:30 CET. Danced with 2 left feet today – I was too reckless adding positions during E/U bull, the mistakes and loss of confidence got me out of sync and made me timid and passive when market turned. Mindset failure.

1405 troops, 808 in battle at highest gearing 39, highest DD 17% (climbed from 9.6% to 17% in 15 minutes at E/U top). Booked -287 pips (market rose 50 pips during my bear campaign) but 1.5% profit, skew saved the day. High DD due to poor dancing and failure to control exposure.

This is the last report of my high skew experiment, will now ponder what I have learnt. One thing I know – THE GENERAL MUST PROVIDE TROOPS WITH BACKUP, OR FLEE IF OUTNUMBERED. In the beginning I experimented with 50, 100, later settled on 500 then 1000 troops and up (#troops increase because I did not reset troop size).
There are 39 demo campaigns – the first 3 campaigns I traded both long-short, after that short only. I danced M1 in the direction of the daily trend and reduce exposure if M1_M5_M15 come into bull phase. No losing campaign, 14% added to book last week.

I began trading long E/U in the afternoon in a separate account starting May 18, when the morning campaign was not too protracted. 7 campaigns, 6 win 1 loss (-42%, dangerous cocktail of high skew and insufficient troops due to negligence to reset troop size).

Rgs,
Baifu
  • #15,634
  • May 28, 2010 12:34pm May 28, 2010 12:34pm
Quoting Baifu
Squared after 8 hours tough campaign, short E/U from 7:15 to 15:30 CET. Danced with 2 left feet today – I was too reckless adding positions during E/U bull, the mistakes and loss of confidence got me out of sync and made me timid and passive when market turned. Mindset failure.

[font=Verdana][size=3]1405 troops, 808 in battle at highest gearing 39, highest DD 17% (climbed from 9.6% to 17% in 15 minutes at E/U top). Booked -287 pips (market rose 50 pips during my...
My friend, I have been watching your demo's.
And I am puzzled.
I know that you are aware that real learning
starts when money is on the table.
Until then,
Forex is just a computer game.
Real trading starts when the trader soul
is engaged in the fight
and
this only happens when
there is money on the table.
If so...start very small
because the inner devils will get activated
and you will not be able to deploy the full army
as you did in many of your tests.
-Which a terrible idea!-

Fear and terror on a 5 % DD.
Fear and terror when I am behind
50 pips. My blood pressure jumps at the
thoughts of charts with 100 pips on the red.
Why? It clearly means that I am against the trend
or in my stupidity I trade during a news announcement.-
Man, I have been there
and that is not fun.

What I mean?
Demo campaigns do not count.
My humble thoughts.

Good luck.
Empty as water and soft as a facing wind mountain
  • #15,635
  • May 28, 2010 12:53pm May 28, 2010 12:53pm
Quoting luSan
My friend, I have been watching your demo's.
And I am puzzled.
I know that you are aware that real learning
starts when money is on the table.
Until then,
Forex is just a computer game.
Real trading starts when the trader soul
is engaged in the fight
and
this only happens when
there is money on the table.
If so...start very small
because the inner devils will get activated
and you will not be able to deploy the full army
as you did in many of your tests.
-Which a terrible idea!-

Fear and terror on a 5 % DD.
Fear and terror when...
101%

training must be as "fight for their lives!!!"
  • #15,636
  • May 28, 2010 1:41pm May 28, 2010 1:41pm
Quoting luSan
My friend, I have been watching your demo's.
And I am puzzled.
I know that you are aware that real learning
starts when money is on the table.
Until then,
Forex is just a computer game.
Real trading starts when the trader soul
is engaged in the fight
and
this only happens when
there is money on the table.
If so...start very small
because the inner devils will get activated
and you will not be able to deploy the full army
as you did in many of your tests.
-Which a terrible idea!-

Fear and terror on a 5 % DD.
Fear and terror when I am...
micro lots doesn't cut it either.
  • #15,637
  • Edited 2:15pm May 28, 2010 1:53pm | Edited 2:15pm
Quoting luSan
My friend, I have been watching your demo's.
And I am puzzled.
I know that you are aware that real learning
starts when money is on the table.
Until then,
Forex is just a computer game.
Real trading starts when the trader soul
is engaged in the fight
and
this only happens when
there is money on the table.
If so...start very small
because the inner devils will get activated
and you will not be able to deploy the full army
as you did in many of your tests.
-Which a terrible idea!-

Fear and terror on a 5 % DD.
Fear and terror when...
Thanks for the comment.

I have to crawl before I can walk, and walk before I can run

Until I have learnt to put the pieces together there is no hurry to rush into battle.

Agreed when real money is on the table it is another ball game, but one step at a time - even fti started with demo when he switched to retail

Rgs
Baifu

Edit: Agreed demo account does not count (definitely not in manhood test ) but can be valuable as learning and testing tool.
Am I to deduce nobody else explores skew, demo or real money? Or is this off topic?
  • #15,638
  • May 28, 2010 2:19pm May 28, 2010 2:19pm
Quoting aiyahmarklah
micro lots doesn't cut it either.
Sure. However here is a quote from the man:

Quoting fti
Watch your size, find your comfort size and stay there for at least a year.
This is to give yourself a chance to be really tested in mindset and mo.
More important , is that your mindset will change as your size changes.
Be assured that you shall be tested by a million possibilities.
You need to see how you fare in different scenarios.

KISS (keep it simple, strong) and relaxed.
Steady as she goes. Know that you are doing the ants job and is by leaps, probably out performing manywho are losing.
Try not to spend your foreign capital in one place.

........... but watch out for the curve ball that
auxesis mentioned will come one day, You need to know how you will deal with that when it happens.( a few may come in a year) Remember to remain nimble to change if required.
No stop loss order does not mean no stop loss.
Try to find your own threshold for pain. Let that be within your zone of accumulated profits and you will be fine.
Never lose your composure and respect for market.
It is always right, even when traders think that its wrong.
Empty as water and soft as a facing wind mountain
  • #15,639
  • May 28, 2010 2:22pm May 28, 2010 2:22pm
Quoting aiyahmarklah
micro lots doesn't cut it either.
Is this the manhood test thingy?

Didn't fti say if our palms sweat or hearts thump then we are probably betting too large ............ remember ants work.

On the other hand he did say even his hands shook, and his juniors volmit, ....

Rgs
Baifu
  • #15,640
  • May 28, 2010 2:26pm May 28, 2010 2:26pm
Quoting Baifu
.
Am I to deduce nobody else explores skew, demo or real money? Or is this off topic?
I do not say that.
I just warned you to be careful
with jumping to conclusions when
your inner devils have not been engaged.
Of course, anyone is free to test to their heart content.

-I tested trading during the news several times
and I got severely burned.
I tested trading against the impulse
and my behind got deeply kicked.
etc.
Sometimes pain is the best teacher.

Regarding the off topic...
nothing is off topic for me if it is about trading
even though I do not write much here anymore.

Happy trading, my friend,
Now
I am going back to my cave.
Empty as water and soft as a facing wind mountain
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