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Technical Analysis Fallacy

  • #17,281
  • Jul 3, 2010 12:18pm Jul 3, 2010 12:18pm
Hey Supreme,

Good to see you here. Didn't know you followed Sir. Fti's teachings as well.

Hope everyone here has a great 4th of July.

Good Trading
Mike
  • #17,282
  • Edited 1:01pm Jul 3, 2010 12:41pm | Edited 1:01pm
Quoting Gro
"Simple" can be very difficult to do
I found for myself ...
"There is no safe place in the markets, you come in then you have to manouver to stay alife. There are no safe levels, any level is as goodas the next. If your money management is good then you should survive. If you are egoistical then the markets will teach you humility. If you are sturborn it will teach you respect. If you think you have it all analysed, she will outwit you and show you the meaning of variance. There are many lessons in her that an average man will not be familiar with. The market it has wisdom and equilibrium , little intelligence. Oh and she is also very unforgiving to those who are impatience."

who is still looking for the "cycle in the cycle":
"I think you must have confused that you must always impliment rescue, even if the position was not emcumbered. Please reanalyse your position.

Further do not be confused that the attack sequence and the rescue sequence both take on the geometric basis. The purpose of rescue MO is to recover the scout , when encumbbered, therefore the minimum reponse is at least a fibo progression sequence.
The attack sequence is for press therefore should at least be a reverst fibo, to protect from possible retracement against possition.

Another point is that when a rescue gets into trouble, the next "spiral within a spiral" possibility would insist that the next rescue sequence , if attempted on would have to take the form of size of minimum next in order from the exposed base.
ie a martingale of base.
example.
if 1 scout was in trouble, u sent in 1 to rescue then 3 to rescue if unsuccessful, if more rescue was required then the next squad would be ?


ten,, did you get it right?
based on this progression what would be the next required rescue?
thirty, did you get this right?
what's next, ninety.... see now.

lets say you use a 1,2,3
then requried rescue is 18, 50, 150,

i best not show you level 3....

if you evaluate your rescue risk snowball....
now do a rough guesstimate for every pip run against you,it will cost your book?

By the 2 nd level at least a quarter of book is at risk.

So try not to get yourself into this often, for the sake of sanity, unless you are a bank.

The focus should however be on attack sequence, where you have foreign capital protection to a certain extend.
Pressing should however be initiated only once trend is entrenched, normally on wave 2 onwards.

and should be on reverse fibo summation up to limit, if foreign capital reserves allow.
Of course when you first set out, there is little foreign reserves to lean on, so then you must be very conservative, until you have the nesting.

As sitoca rightly pointed out, the MM is to hold to proper sizing, the profits comes from dancing correctly. Dance badly, and the most the MM can do for you is to minimise drawdown at very high risk of ruin. Maybe you would like to show if there was any other way?

And MM management on profitaking should be on LIFO as Lusan suggested.

I hope this helps you crystalise your thoughts."
  • #17,283
  • Jul 3, 2010 1:58pm Jul 3, 2010 1:58pm
Quoting Gro
Another point is that when a rescue gets into trouble, the next "spiral within a spiral" possibility would insist that the next rescue sequence , if attempted on would have to take the form of size of minimum next in order from the exposed base.
ie a martingale of base.
example.
if 1 scout was in trouble, u sent in 1 to rescue then 3 to rescue if unsuccessful, if more rescue was required then the next squad would be ?

ten,, did you get it right?
based on this progression what would be the next required rescue?
thirty, did you get this right?
what's...
Gro quoted from post #1716, something I can not figure out no matter how many times I read and read.

The first part is self-explanatory:
10 = 2 x (1+1+3)
30 = 2 x (1+1+3+10)
90 = 2 x (1+1+3+10+30)

a martingale of 2x

The next part is my waterloo

"lets say you use a 1,2,3
then requried rescue is 18, 50, 150,"

I don't get what kind of calc will give 18,50,150

Not that this is terribly important, but since Gro brought it up ....

Rgs
Baifu
  • #17,284
  • Jul 3, 2010 2:09pm Jul 3, 2010 2:09pm
Lesson 2 The Battlefield ( about MO and MM, post #840)

Once in a while I return to the following section of Lesson 2 for some fruitless speculation - why is so much detail given here?


2.01.02
Maximising tactical advantage in deployment according to the numerical strength of the army;

Classified sections omitted.

The Components

"The equivalent to an army corps, according to Ssu-ma Fa,
consisted nominally of 12500 men;
according to Ts`ao Kung,
the equivalent of a regiment contained 500 men,
the equivalent to a detachment consists from any number between 100 and 500, and the equivalent of a company contains from 5 to 100 men.

For the last two, however, Chang Yu gives the exact figures of 100 and 5
respectively."

"Whether to concentrate or to divide your troops, must be decided by circumstances."

This is the method of attacking by stratagem.
It is the rule in war, if our forces are ten to the enemy's one, to surround him; if five to one, to attack him;
if twice as numerous, to divide our army into two.

[Tu Mu takes exception to the saying;
and at first sight, indeed, it appears to violate a fundamental principle of war.
Ts'ao Kung, however, gives a clue to Sun Zi's meaning:

"Being two to the enemy's one,
we may use one part of our army in the regular way,
and the other for some special diversion."

Chang Yu thus further elucidates the point:
"If our force is twice as numerous as that of the enemy,
it should be split up into two divisions,
one to meet the enemy in front, and one to fall upon his rear;
if he replies to the frontal attack, he may be crushed from behind;
if to the rearward attack, he may be crushed in front."

This is what is meant by saying that
'one part may be used in the regular way,
and the other for some special diversion.'
Tu Mu does not understand that dividing one's army is simply an irregular,
just as concentrating it is the regular, strategical method,
and he is too hasty in calling this a mistake."]
  • #17,285
  • Jul 3, 2010 2:19pm Jul 3, 2010 2:19pm
Quoting fti
Gets deep.
Zoran will not understand.

http://www.youtube.com/watch?v=CqmkRrFYO1w&fmt=18
Thank you fti for your kind attention and allowing me to post again.
Your lessons are complete.

In fact, they always were except for the red herring you planted that seemed to have caused confusion. Thank you for clearing it up even if you did it indirectly. It was for the benefit of all, including you, right?

Now we can move along. I won't change and neither will you - so until our next clash.

Peace
  • #17,286
  • Edited 2:48pm Jul 3, 2010 2:35pm | Edited 2:48pm
Quoting Baifu
Lesson 2 The Battlefield ( about MO and MM, post #840)

Once in a while I return to the following section of Lesson 2 for some fruitless speculation - why is so much detail given here?


[color=black][font=Verdana]2.01.02
Maximising tactical advantage in deployment according to the numerical strength of the army;

Classified sections omitted....
Hi Baifu:

Fti: juniors 1,1,2
seniors 4,4,8
Chief 20,20,40 .................. 20(juniors 1,1,2, seniors 4,4,8)

And consider... The volatility and character of the market is? Another conditions, other solutions...
  • #17,287
  • Jul 3, 2010 2:39pm Jul 3, 2010 2:39pm
Quoting Gro
I found...
Hi Baifu
not rigid, only explaining numbers:
Initial rescue not too aggressive,fibo minimum in the second rescue(1,1,3).Another level the ratio of 1:3 for short range rescue.
  • #17,288
  • Jul 3, 2010 3:02pm Jul 3, 2010 3:02pm
I've been looking for this and I've found it. It's a story an ex-colleague once told me and I couldn't stop laughing.

http://lazyway.blogs.com/lazy_way/20...an_milita.html


PS. it doesn't work with internalising trading but could with getting answers.
  • #17,289
  • Jul 3, 2010 3:06pm Jul 3, 2010 3:06pm
Quoting Baifu
Gro quoted from post #1716, something I can not figure out no matter how many times I read and read.

The first part is self-explanatory:
10 = 2 x (1+1+3)
30 = 2 x (1+1+3+10)
90 = 2 x (1+1+3+10+30)

a martingale of 2x

The next part is my waterloo

"lets say you use a 1,2,3
then requried rescue is 18, 50, 150,"

I don't get what kind of calc will give 18,50,150

Not that this is terribly important, but since Gro brought it up ....

Rgs
Baifu
Hi, Baifu

I guess the calc is
1+2+3 = 6
6x3 = 18
(18+6) = 24 total exposure

24x2 = 48 which is rounded to 50

(50+24)x2 = 148 whcih is rounded to 150

The maths you do for that are simple and logical, but you have to have a huge account (compared to the first level of rescue), so that you can do such things without going out of your mind and blowing out the account.

The deployment of the rescues and attacks is the tricky part for me, since I can't gauge the development of PA as fti does. I can pick the top or the bottom, but I don't know when to enter the attack . I can't enter it too early, since market is too close to my initail entry, in the same time I can't enter it when market has gone a significatn distance from my entry, since the chance to retrace or reverse is greater.
  • #17,290
  • Jul 3, 2010 3:15pm Jul 3, 2010 3:15pm
Quoting Zoran
I've been looking for this and I've found it. It's a story an ex-colleague once told me and I couldn't stop laughing.

http://lazyway.blogs.com/lazy_way/20...an_milita.html


PS. it doesn't work with internalising trading but could with getting answers.
nice ... but General von Moltke divided the entire officer corps into four distinct types = General von Moltke is types 2
  • #17,291
  • Edited 3:59pm Jul 3, 2010 3:36pm | Edited 3:59pm
Quoting fti
I guess many of you will be having a headache already.
So here's something to cure you of it.
Only 6 pills.

This is a degree course.
I had recommended his cure before. This one of his later education. If you missed that in the earlier section of the thread.

DR. MURRAY BANKS was one of the most sought after speakers in America in the 1950/60s. He is amusing, exciting, always thought-provoking, and never fails to leave his audiences happier and more inspired.

Dr. Banks is a clinical psychologist, and was formerly a full professor of psychology...
my bad English = bad pills for me
  • #17,292
  • Jul 3, 2010 5:07pm Jul 3, 2010 5:07pm
Quoting Gro
nice ... but General von Moltke divided the entire officer corps into four distinct types = General von Moltke is types 2
I was told the story by an ex-colleague who served in the British Army. It wasn't quite the same but he mentioned the bright and lazy type would be put into logistics because they would figure out the quickest way to do the job.
  • #17,293
  • Jul 3, 2010 6:25pm Jul 3, 2010 6:25pm
Quoting fti
I guess many of you will be having a headache already.
So here's something to cure you of it.
Only 6 pills.
One day a time, I really needed to hear that, thanks for posting that fti. I'll be ordering up a tanker full of pill number 4 in the morning.

  • #17,294
  • Edited 2:22am Jul 4, 2010 1:06am | Edited 2:22am
Quoting MyTbo
Hi, Baifu

I guess the calc is
1+2+3 = 6
6x3 = 18
(18+6) = 24 total exposure

24x2 = 48 which is rounded to 50

(50+24)x2 = 148 whcih is rounded to 150

The maths you do for that are simple and logical, but you have to have a huge account (compared to the first level of rescue), so that you can do such things without going out of your mind and blowing out the account.

The deployment of the rescues and attacks is the tricky part for me, since I can't gauge the development of PA as fti does. I can pick the top or the bottom, but I don't know...
Thanks Mytbo. I like your explanation.
I got 18, but was baffled by 50 and 150 because I negelected the rounding. I am too literal, you are less rigid

For me the lesson is - skew number is not rocket scinece, just the best field gustimate based on PA (market form, volitility) and MM (exposure, foreign capital).

Me too I think attack is very difficult, it has to do with being able to feel impulse (not jerks or thrusts due to sweep), the best is to feel it as it breaks S&R but unfortunately S&R is also duck sweep area and false breakouts abound. Good read of R3K and old school TA skill (not one off analysis, real time bar by bar PA) help, as fti said, he cannot teach experience.

Damage control is also difficult, and a must. The basics for the commander - dance (TA skill without TA prediction) and active position managment.

Rgs
Baifu
  • #17,295
  • Jul 4, 2010 1:18am Jul 4, 2010 1:18am
Quoting Fana
Hi Baifu:

Fti: juniors 1,1,2
seniors 4,4,8
Chief 20,20,40 .................. 20(juniors 1,1,2, seniors 4,4,8)

And consider... The volatility and character of the market is? Another conditions, other solutions...
Hi Fana,
My speculation about Lesson 2 is why devote so much writing on the numbers of an ancient army:

army 12500
regiment 500
detachment 100 (or 100-500)
company 5 (or 5-100)

Is this one variant for spiral and spiral within spiral?

Rgs
Baifu

P.S. Congrats and best wishes for the Wimbledon final
  • #17,296
  • Edited 3:51am Jul 4, 2010 3:34am | Edited 3:51am
Quoting Gro
Hi Baifu
not rigid, only explaining numbers:
Initial rescue not too aggressive,fibo minimum in the second rescue(1,1,3).Another level the ratio of 1:3 for short range rescue.
Hi MyTbo,Baifu
Perhaps not clearly explaining ... but why do it "simply"?
  • #17,297
  • Jul 4, 2010 3:49am Jul 4, 2010 3:49am
Quoting Zoran
I was told the story by an ex-colleague who served in the British Army. It wasn't quite the same but he mentioned the bright and lazy type would be put into logistics because they would figure out the quickest way to do the job.
It was the first of what I was laughing at me but then I had to laugh at what I wrote ... you know, "divide in the divide"
  • #17,298
  • Jul 4, 2010 4:14am Jul 4, 2010 4:14am
Quoting Gro
Hi MyTbo,Baifu
Perhaps not clearly explaining ... but why do it "simply"?
Hi Gro,

If you are referring to skew I think each of us will have to find our way, whether "simply" or not. I dug up the fti post only because it happened to be an example that baffled me, but I think Mytbo provided a reasonable answer.

Rgs,
Baifu
  • #17,299
  • Edited 4:26am Jul 4, 2010 4:15am | Edited 4:26am
Quoting Baifu
Hi Fana,
My speculation about Lesson 2 is why devote so much writing on the numbers of an ancient army:

army 12500
regiment 500
detachment 100 (or 100-500)
company 5 (or 5-100)

Is this one variant for spiral and spiral within spiral?

Rgs
Baifu

P.S. Congrats and best wishes for the Wimbledon final
Yep, Berdych wins!
That army is example. Because when you are in the market, you consider volatility which changes... so these numbers are usefull only in ONE case... ore more cases, but not freely... regards

PS: dont go so deep in it, no magic please... These are examples to think, not to realize.
  • #17,300
  • Jul 4, 2010 5:30am Jul 4, 2010 5:30am
Quoting Baifu
Hi Gro,

If you are referring to skew I think each of us will have to find our way, whether "simply" or not. I dug up the fti post only because it happened to be an example that baffled me, but I think Mytbo provided a reasonable answer.

Rgs,
Baifu
probably not understand me,OK
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