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Technical Analysis Fallacy

  • #16,301
  • Jun 10, 2010 2:37am Jun 10, 2010 2:37am
Quoting MaMood
Hi Jest,

that sounds reasonable to me.
But this kind of scaling does make sense only, if you are going for mid term positions, or you are in a multiday rescue .... ?

BTW: Still have my problems with this fixed steps of scaling. I myself throw in troops that are sized by the trend and momentum. Means that I skip several levels of the fibo skew, if the market feels right ...

CU,
MaMood
what do you mean by mid term? trade is always there bro, its a matter of how long you can afford to be in the game. cheers!
  • #16,302
  • Jun 10, 2010 3:07am Jun 10, 2010 3:07am
The following quotes date back to May 20 2008, when fti was exploring his own MO_MM as retail trader.
Post #2735, Green David asked:
“fti, If you use leverage, say 10 times, you will have at least 400% gain for your bank, right?

Can you tell me your positions size now after you add attack positions, say, if your capital is 10,000, how many mini lots will be for E/U? 20 mini lots?”

Post # 2738 fti reply:

@ Green_David,

The skew is still in infancy experimental stage.
Generally We are working on the multiples of 1,1,2,3,5,8 skew with the base of 2 and the rescue sequence of inward skew to two attempts of the higher (eg 5= 2&3, 8=3&5 ) with residue as attack to two of lower. Although it is comfortable the ROI is not expected to be high, as we are working on 5X on deposits and gearing of positions margining at 50:1 (the max allowed in Sg). There is much scope for improvement, But for the moment we are comfortable and reading at 100% accuracy. Will be looking to tweak the exposures , when we are able to see the downside risk possibilities, when it happens.
If we are able to be stable on the 100% performance , we will review the exposure this December, in line with the annualised volitility . We are not deluded to the fact that the 100% performance is due to the short tenure, so I can say that there will be tweaks.
For each we must find our own equilibrium. Try not to duplicate each other , as all are different in many aspects. My personally feeling is 10K USD is too tight for proper MM, nevertheless each of us have to work within our own financials.

I underline “Generally ………….with residue as attack to two of lower” to invite input of interpretation. Not saying we copy what fti did in May 2008, but it might help in advancing our general understanding .
My interpretation: if base of 2 troops (1,1) is in trouble , rescue with 5 (total 1+1+5= troops), if successful, follow up with attacks of inward skew of 3 and 2 (total 1+1+5+3+2=12 troops)? If rescue of 5 fail, next rescue is 8 (total 1+1+5+8=15 troops), if this rescue is successful then follow up with attack of 5 and 3 (1+1+5+8+5+3=23 troops)? There will only be 2 rescue attempts. This mode incorporates skips to the right for rescue (spiral out?) and inward skew for attack (spiral in?)
Correction of my interpretation welcome.
Rgs,
Baifu
  • #16,303
  • Jun 10, 2010 3:18am Jun 10, 2010 3:18am
baifu, generally there is no attack after a rescue. but a retrival exercise followed by re-alignment towards market action...

the schematics and mindset applied for a rescue should based on the fact that you are already trading against the market flow. so what do you mean by putting in an acttack skew in it? not trying to be rigid here, your actions can be applied but it also means that the stability of your directional bias and mindset will risk the possibily of being impaired due to this. just my 2 rigid cents, id rather not mix apple and orange in the same basket, when rescue i concentrate on limiting losses, when attack i concentrate on making pips. thats all

k time to show off my dance and earn ego points lol!
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  • #16,304
  • Jun 10, 2010 3:25am Jun 10, 2010 3:25am
Quoting jest1081
baifu, generally there is no attack after a rescue. but a retrival exercise followed by re-alignment towards market action...

the schematics and mindset applied for a rescue should based on the fact that you are already trading against the market flow. so what do you mean by putting in an acttack skew in it? not trying to be rigid here, your actions can be applied but it also means that the stability of your directional bias and mindset will risk the possibily of being impaired due to this. just my 2 rigid cents, id rather not mix apple and orange...
nice
Success consists of going from failure to failure without loss of enthusiam
  • #16,305
  • Jun 10, 2010 3:41am Jun 10, 2010 3:41am
Quoting jest1081
baifu, generally there is no attack after a rescue. but a retrival exercise followed by re-alignment towards market action...

the schematics and mindset applied for a rescue should based on the fact that you are already trading against the market flow. so what do you mean by putting in an acttack skew in it? not trying to be rigid here, your actions can be applied but it also means that the stability of your directional bias and mindset will risk the possibily of being impaired due to this. just my 2 rigid cents, id rather not mix apple and orange...
Jest,
My interpretation is based on reading the text as best I can, I can be totally wrong. I guess I am biased by my own MO which scales in and out as market breathes in and out, not worrying so much whether it is attack or rescue, for me "attack" and "rescue" is interchangeable depending on distance of average price to current price. My reading is also biased by my own philosophy of always assuming I make the wrong calls (I give no mark for my chart reading or TA analysis, I see short charts as more noise and sweep than reason) and let my troops (MM) direct the flow.

Not arguing, just explaining why I read as I do. Your 0.02 $ can well be worth more than my 0.02 €, if the E/U trend continues.
  • #16,306
  • Jun 10, 2010 3:45am Jun 10, 2010 3:45am
Quoting Baifu
Jest,
My interpretation is based on reading the text as best I can, I can be totally wrong. I guess I am biased by my own MO which scales in and out as market breathes in and out, not worrying so much whether it is attack or rescue, for me "attack" and "rescue" is interchangeable depending on distance of average price to current price. My reading is also biased by my own philosophy of always assuming I make the wrong calls (I give no mark for my chart reading or TA analysis, I see short charts as more noise and sweep than reason) and...
whatever floats your boat my friend

edit: bot l2 gbpusd 84
  • #16,307
  • Jun 10, 2010 4:07am Jun 10, 2010 4:07am
Quoting jest1081
whatever floats your boat my friend

edit: bot l2 gbpusd 84
I do not disagree with your understanding of the rescue mindset - TAF rescue is for BE or damage control, there after to reset mindset and re-evaluate. I use rescue / attack loosely depending on whether it is skew in or skew out, my bad.

rgs
  • #16,308
  • Jun 10, 2010 4:13am Jun 10, 2010 4:13am
If technical indicators work, why still so many people lose money in forex?
  • #16,309
  • Jun 10, 2010 4:23am Jun 10, 2010 4:23am
Quoting Haymaker
If technical indicators work, why still so many people lose money in forex?
Because so many people use it incorrectly

edit: these are measuring tools, not predictive tools. We need more, having a good measuring tape does not a good tailor make.
  • #16,310
  • Jun 10, 2010 4:24am Jun 10, 2010 4:24am
Quoting Haymaker
If technical indicators work, why still so many people lose money in forex?
So indicators are all it takes to make money?

They all work and they all don't work. It's up to the TRADER not the indicator.
One Mind, Any Market
  • #16,311
  • Jun 10, 2010 4:30am Jun 10, 2010 4:30am
Quote
edit: bot l2 gbpusd 84

bot gbpusd, l3 600
  • #16,312
  • Jun 10, 2010 4:31am Jun 10, 2010 4:31am
Quoting Haymaker
If technical indicators work, why still so many people lose money in forex?
Hello. Indicators can quickly make illusions... You adopt that illusions and loose money. They are just only tools. Without understanding how the market works, it is dangerous to trade. With indicators and without knowledge, you drive a car with only GPS. And you dont watch throw a window...
  • #16,313
  • Jun 10, 2010 4:41am Jun 10, 2010 4:41am
Quoting Fana
Hello. Indicators can quickly make illusions... You adopt that illusions and loose money. They are just only tools. Without understanding how the market works, it is dangerous to trade. With indicators and without knowledge, you drive a car with only GPS. And you dont watch throw a window...
Well said! Hahaha!
  • #16,314
  • Jun 10, 2010 4:50am Jun 10, 2010 4:50am
Quoting Baifu
Because so many people use it incorrectly

edit: these are measuring tools, not predictive tools. We need more, having a good measuring tape does not a good tailor make.
Good point!
  • #16,315
  • Jun 10, 2010 4:52am Jun 10, 2010 4:52am
Quoting aiyahmarklah
However from the post you indicated, it does not seemed like the case, what's your take may I ask ?
I was under the impression that this was clear to some people on this thread so my follow-up.

My take is (MM based):

1. It is a rescue spiral (nothing new here)
2. Trading different currency pairs (USD being the neutral against EUR/GBP/JPY) - three kingdoms
3. Based on Gann - indicates different time frame cycles (lesser, greater, intermediate)
  • #16,316
  • Jun 10, 2010 5:21am Jun 10, 2010 5:21am
Quoting Zoran
I was under the impression that this was clear to some people on this thread so my follow-up.

My take is (MM based):

1. It is a rescue spiral (nothing new here)
2. Trading different currency pairs (USD being the neutral against EUR/GBP/JPY) - three kingdoms
3. Based on Gann - indicates different time frame cycles (lesser, greater, intermediate)

hi zoran,

since you mention about 3 kingdom, i have a question for you, since USD the neutral against EUR/GBP/JPY, why most of the time these 3 pairs are in syncrony... where supposedly USD/JPY must be go against the 2 pairs?

like eu & gu should be most of the time in sync, while UJ on the otherhand must move the other way?

thanks and regards,
dongsky
Success consists of going from failure to failure without loss of enthusiam
  • #16,317
  • Jun 10, 2010 5:27am Jun 10, 2010 5:27am
I think UJ is being manipulated. Most of the time the yen doesn't follow any rule pertaining to the movements of GU and EU. Why is that so? I think the japs traded the UJ heavily, sometimes they synchro but only temporarily. Most of the time, the yen has a mind of its own. This brings me to the point that I haven't found any indicator to trade the yen properly. Any ideas?
  • #16,318
  • Jun 10, 2010 5:51am Jun 10, 2010 5:51am
Firstly, be sure you understand the relationship in the way pairs are quoted as EUR/USD and USD/JPY. Here US Dollar relationship is inverted and will be on the charts.

The relationship of the Dollar in it's movements, when trading it is what is key.

If you expect to see strength in the dollar (Dollar Bull), you'd expect to see Euro, Cable charts fall, Yen charts rise. Movements can also be seen in one of the 3k's just like the Dollar, Cable strong and rest weak, thus tearing on it's crosses. If you were to set up a 3k's for each pair it would show, much like a Dollar index for each kingdom. The 3k (as mentioned in the thread) relationship shows you who's strong and who's weak in relation to the Dollar and which way and who to trade.

There are reasons why you see Dollar and Yen in tandem against Euro and Cable.

regards.
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  • #16,319
  • Jun 10, 2010 5:59am Jun 10, 2010 5:59am
Sold l3 625
  • #16,320
  • Jun 10, 2010 6:06am Jun 10, 2010 6:06am
Quoting auxesis
Firstly, be sure you understand the relationship in the way pairs are quoted as EUR/USD and USD/JPY. Here US Dollar relationship is inverted and will be on the charts.

The relationship of the Dollar in it's movements, when trading it is what is key.

If you expect to see strength in the dollar (Dollar Bull), you'd expect to see Euro, Cable charts fall, Yen charts rise. Movements can also be seen in one of the 3k's just like the Dollar, Cable strong and rest weak, thus tearing on it's crosses. If you were to set up a 3k's...
Hi Aux,

Thanks for the detailed explaination, now i understand. Cheers mate.

regards,
dongsky
Success consists of going from failure to failure without loss of enthusiam
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