Technical Analysis Fallacy

return to Roots ...


http://www.youtube.com/watch?v=ellbP7bS9uk&NR=1&feature=fvwp

Happy trading everyone. Market is a kill zone today, hope everyone's playing safe. Euro wiped stops on both sides already...

The dam breaks.
Invest in usd at your own risk.

Hi All,

Nice to see the thread alive and kicking. I have been a little busy lately (got married, lol) and just now read the last 3 weeks of posts.

I see that the subject of security protocols has been brought up again. Private chat rooms, forums.. from my experience it doesn't help. My 2 attempts to create a "safe heaven" have failed. In both cases there were black sheep among the white, thus killing the purpose.

The Skype chat room is still alive but not very active. Most people are still sitting in this thread and repeatedly hitting the refresh button in hopes of a post from fti.

It is very sad that fti cannot post freely for all to see.

Security is always inversely proportional to usability.

Regards,

Congratulations!

Rgs,

Textor

Agreed chief,

BTW i am happy to be hot in kitchen...at the end its the beauty of cooking your own feast and eating it yourself ....thats just another charm....

Congrats Piccolo....

may u have blessed life

V

Hey piccolo, congratulation, she should be singing the song even more often to you now

Hi guys, recently found this thread and have been reading it from page #1, up to page 76 at the moment and have slowly started rereading from the beginning. LOTS of great information and I've still got a long long way to go. Since I've read up to Lesson 3 (don't know if any of you can remember that far back) but basically, based on Lessons 1 and 2, I can say that I've got a good understanding of what those lessons intend for rookie traders to understand although putting it into practice as FTI pointed out

"From what I am reading , for those of you that are posting, I think the main points are clear to you.
Its the putting it all together, that seems to elude you traders.
That comes from experience and market structure knowledge."

has eluded me for now. In other words, I think I understand what I have to learn/what skills I need and how to do it all, but I've been unable to do so up to now. I've been trading for quite some time now (probably around 4 years although I've been more off than on it for close to 2 years) and my initial experience with it was looking for a holy grail system. Anyway, cut a long story short. I do have some experience with it but I can honestly say, I've still got next to 0 feel for the dance for some strange reason despite burning many many hours of the night. Last week for example, I was baby sitting a losing trade the whole week (was short EUR) and with the help of FTI's recovery strategies and a lot of luck as I'm sure I didn't apply the principles totally correctly, I did manage to finally get out of it with a small profit on the 30th (had I stayed in, I would have made around 8-9% but that's would've could've should've thinking).

The breakdown of last weeks trading can be seen in the attachment. I entered each subsequent trade at levels above the previous one.

To recap, my trades were, 0.01, 0.01 (I didn't exit out of the trade partly to test the recovery strategy I believe but there were opportunities before the price rise for me to get out at break even), 0.02 & 0.04.

Would like an unashamed breakdown of my mistakes.

On a different note, I would like to question exactly how this whole getting the feel of the markets works. I always try to enter when I have a gut feeling for where the market is going, but today and yesterday I ended up entering around 3 or 4 times perfectly at the tops (once again almost to the pip) or the bottoms of price moves and I'm ashamed to admit that this happens a lot. I've managed to save all of them up to now but I'm in a few trades right now that I'm kind of worried about. I've been entering with the best intentions, but so far, I've ended up in protracted battles and I'm just getting more and more tired as a result and making more and more mistakes. Although I know you guys will immediately advise to rest up a bit, I'm trading 0.01 lots mainly so that's small enough to keep practicing in my opinion. I got EGOR to get the better of me this week after my first ever save last week.

Anyway. The thing I don't quite understand is, how can I, with my probably thousands of hours of screen time, still be making such perfect calls in the wrong direction? I was trading a practice account in parallel to the live account yesterday and I noticed I had double the profit in the practice account to my live account and I've had this happen to me before. The interesting point to make is that, I've looked back on my trades and I've realised that based on a profitable automatic system that I developed, I've been entering trades at stochastic levels that the system does exactly the opposite to what I do (to be more precise - selling at the bottoms of stochastics and buying at the tops and I've been noticing this after entering the trades so really although I've been trading as naked as possible, I've realised that I've been almost perfectly wrong for going against my developed system... not entirely sure how this works).

I've also got a strange tendency to remain at my starting balance. When I first started trading, I doubled my account a few times in a few weeks with little sweat and then each time when I started to care I suppose, I ended up dropping back down to break even. With this current live account, I initially lost half of it and have just today finally got back to break even and lo and behold, the very first trade that I did after getting to break even has landed me in hot water and I've been only going south from there. I'm sitting pretty on positions that I'm not quite sure how I even ended up on. It seems I've got some deeply seated saboteur inside my psyche somewhere, who is preventing me from making sound judgments.

The final and probably most important question that I've been meaning to ask is this. How do we use the three progressions (martingale, fibonacci and linear). To be a bit more specific... how do we decide between them? At the moment I'm just randomly applying some Frankenstein versions of all of them at once I think and so far I've been getting away with it mainly due to the relatively low volatility and generous retracements, but I certainly don't feel like i know which one to use when. Nor am I totally sure of how to exactly utilise them.

Let's take the Fibonacci one for example. As far as I can tell, that's the one that I used to get out of last weeks trade. I entered the first bad trade at 0.01, then my first recovery trade was 0.01 and the way I understand it, you're meant to get out of both of these as soon as you get a retrace of 0.5? As that gets you to break even? So let's say that rather than a 50% retrace, it retraced less than would have been necessary for break even... then 1.) how do you determine at which level you enter the next recovery trade because the way I see it, if you enter based on purely technicals... it'll end up being a crapshoot and you'll enter somewhere that is inappropriate and you'll just be increasing your risks at a time when it wasn't prudent to do so are we meant to blindly enter recovery trades at levels set out by fibonacci retracements? 2.) if that level isn't based purely off fibonacci retracements, then are we meant to adjust the ratios? i.e. the multiplier of our original bad trade? e.g. lets say you are in a bad short trade and you feel like theres going to be a serious move up, so you wait until it happens (lets assume it does) but then because it's so much higher than a fbonacci retracement would have suggested, then entering simply x1 or x2 or whatever recovery trade that you are up to wouldn't be sufficient as the subsequent retracement is unlikely to be for example 50%.

P.S. I know I've got some sort of fundamental flaw in my thinking but when I was reading through other peoples experiences and posts, I could see approximately what they were doing wrong. Being so brutally honest with thyself is a lot more difficult. As they say, you can see the spec in someone elses eye, but you can't see a log in yours.

thanks for the reply. However, i don't understand what you mean.
s=?
b=?

Thanks

hey atomic_sheep,
your post is pretty long and maybe you should ask a more specific question to get a better answer than mine....
first of all, it's a good thing that you reflect on your self... i did also and i found out Fti-s way is not good for me.

i could be very wrong, but... maybe the flaw in your thinking is "not switching to a higher time frame" ...when you see the bigger picture you often know what to do.
bite the bullet or wait and rescue.
the marginale or fibonacci numbers don't realy matter if you don't get the dancing.

kind greets pax

reading back i realize this great thread is like life ....very bitter and realy sweet...
@piccolo my best wishes for you and your wife.
@jest 1081 thank you for sharing your fathers teaching....
my condolences, jacco

Congratulations, wish all the best for the both of you. Ray

piccolo,
grats!

supremechaos,
to be exact, its metastatic thryoid cancer

jacco,
thank you.

back to trading
welcome atomic sheep.

to summarise, its not abt being right abt directions, those are just biases derived from information gathering, its abt managing it correctly/diligently/reliably/sensibly.

Hello Piccolo. Congratulations

Why fti cannot post freely? regards

Hi piccolo

I wish you both a happy and harmonious life.

Regards

a very accurate summary. trading starts when you stop chasing directions.

Thank you all for the well wishes! Feels like it's my birthday, lol.

@Fana, I'm sorry about your loss. As always many people have given you good advise here. Let me just add this little thingy:

You cannot treat capital as money you spend in a grocery store. Loosing $2000 is painful but it is something you can get back easily. Now imagine you would have lost 90% of $200 000. Then $180 000 is not something you can recover from by taking a part time job at McDonalds (except in Norway). What I am trying to say is that there is a psychological difference between money and capital. There must be.

Use the Wilder's table as a guide. 20% loss is a soft stop and you would need to make 25% from the remaining capital to recover, which is doable. 50% loss is hard stop where you would need to make 100% from the remaining capital, which is a challenge. Loosing more is a point of no return.

Learn from it. Otherwise it will happen again. Blowing small accounts in trading is like a tuition for education.

Good luck.

there no movement to trade on, its best to window shop..