Technical Analysis Fallacy | Page 997 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Ultimate Fallacy in Technical Analysis 99 replies

"Technical Analysis Fallacy" thread people, I need your help 54 replies

Technical Analysis Fallacy Redux 23 replies

Statistical analysis fallacy 33 replies

Attachments: Technical Analysis Fallacy
Exit Attachments

Technical Analysis Fallacy

  • #19,921
  • Oct 28, 2010 1:41am Oct 28, 2010 1:41am
Quoting hcong168
I do.

Just my personal experience:

I rank the trading components of this tactic in term of difficulty to master from easy to difficult:

1. rescue
2. attack
3. flip

Flipping, if not done properly will end up get caught at both ends. And when that happen, I will hold on to my mouse and reacess - thinking how to out myself out of the hole .
Hi and good morning hcong,

thanx for your answer.

Very interesting that many of us rank attacking as more difficult than rescueing. Not sure about the reason.

Basically we need a very good timing for both MO's. But only when things are going against us there is the inevitable need to act respectively to deploy a rescue, cause we are losing our money. And that is directly correlated to inconvinience and pain. So we are much more focussed and concentrated to work for a solution and find the right moment.

In contrast, if we are in profit, there is no inevitable need to do anything, cause we are earning money already. But that's wrong attitude (at least in my opinion)! We only have chosen to trade FX to make money. So first priority is to keep our book save. But second is already to make money!
fti mentions very often "foreign capital". He is going his strong rescues based on foreign capital. He is scaling his agressiveness based on the foreign money he has made already....
My point is, that we should push our mindset to accept that an attack is as neccessary for surviving in the long run as the rescue is. Only with foreign capital (based on well timmed attacks), we can use fti's MO of dancing the market in its full bandwidth.
And from my experience I can add, there is no difference between attacking and rescueing. You have to scan the charts for the same opportunities. It is a problem of our mindset only.

Well - back to my charts now.
I hope no one feels offended by my agressive wake up call.
Just my 2 cents....

All the best to you!

MaMood
  • #19,922
  • Oct 28, 2010 1:54am Oct 28, 2010 1:54am
Quoting indianguyinny24
Well the Man of this thread for some time......... ....



I am planning to write a big post later today or on weekend what i found/felt for not trading for a month....some of the important things it has made me realized.....


Nice job Mamood...keep it up.......

V
I was up all night waiting for your post, lol. Just kidding.

Was up last night building aud/usd longs. Let's see if it wants to dive down again. Otherwise will add again.
  • #19,923
  • Oct 28, 2010 2:04am Oct 28, 2010 2:04am
Quoting MaMood
Hi and good morning hcong,

thanx for your answer.

Very interesting that many of us rank attacking as more difficult than rescueing. Not sure about the reason.

Basically we need a very good timing for both MO's. But only when things are going against us there is the inevitable need to act respectively to deploy a rescue, cause we are losing our money. And that is directly correlated to inconvinience and pain. So we are much more focussed and concentrated to work for a solution and find the right moment.

In contrast, if we are in...
There are similarities between attack and rescue - but only mechanical (we add to position). The mindset in both cases is very, very different. It is much harder to take an early loss and go out for a walk than it is to "bite profit", lol. While riding profit is easy in on the mind, it is much harder to be focused and committed the the trade - so that you add and ride it to the moon.

I had to literally force myself to a) take small losses, b) leave profitable trades open for longer. good old fear & greed. Of course it is a double edged sword - any loss can turn to profit and any profit can turn to loss, that is where experience comes in. Anyways, I noticed that I cannot sit on my hands even when I set a stop loss at +2 pips. I should be able to leave such a trade open forever.. at least till the weekend, but no.. any sudden fluctuation in price feeds the scrorpions and sooner than later I close that trade. Its all in the mind.

So I had to force myself to sit on my hands and its much better now.

About flipping, next post.
  • #19,924
  • Oct 28, 2010 2:33am Oct 28, 2010 2:33am
Quoting piccolo
There are similarities between attack and rescue - but only mechanical (we add to position). The mindset in both cases is very, very different. It is much harder to take an early loss and go out for a walk than it is to "bite profit", lol. While riding profit is easy in on the mind, it is much harder to be focused and committed the the trade - so that you add and ride it to the moon.
Hi Piccolo,

fine, so we both agree: The problem in adding to a positive position (attacking) is solely based in mindset. I tried to lay out, that the objective mindwork/chartwork, that has to be done is (very) similiar:
- looking fro little retracements to scale in (attacking) or deploy rescue.
- looking for increasing momentum to scale in more attack troops. In opposite to reduce exposure, when going against troops.
- and so on ....

Yeah - we nedd the same commitment to our scout when in profit, as when he is in loss. Exact that is what I tried to say :-)


Quoting piccolo
I had to literally force myself to a) take small losses, b) leave profitable trades open for longer. good old fear & greed. Of course it is a double edged sword - any loss can turn to profit and any profit can turn to loss, that is where experience comes in. Anyways, I noticed that I cannot sit on my hands even when I set a stop loss at +2 pips. I should be able to leave such a trade open forever.. at least till the weekend, but no.. any sudden fluctuation in price feeds the scrorpions and sooner than later I close that trade. Its all in the mind....
Agree, to let the profits run is very very difficult.
To be honest: there are much more situation in my daily trading to train rescueing, than to train for running profits :-)
  • #19,925
  • Oct 28, 2010 2:42am Oct 28, 2010 2:42am
Quoting MaMood
My point is, that we should push our mindset to accept that an attack is as neccessary for surviving in the long run as the rescue is. ... You have to scan the charts for the same opportunities. It is a problem of our mindset only.

I hope no one feels offended by my agressive wake up call.
Mamood:

Thanks for the reply, no offend taken, don't worry. I understand what you are talking about, and has been pushing myself too.

I just voices experience from my learning path, not that I am saying any one is more important then the other. They are equally important for our survival inthe market in the long run.

I don't know about others, but now my feel is this trading tactic is "dynamic position management", ie: adjust and change position size in relation to the changes in the chart terrain while balancing risk and reward. There are times that the attack/rescue/flip are not distingishable, just the net position size vs direction & speed of move.

Hope that I didn't get it wrong on this.
  • #19,926
  • Oct 28, 2010 2:44am Oct 28, 2010 2:44am
In the very early days of this threat fti has written the follwoing lines:

"Try to feel the market, ask yourself questions all the time.
You are not crazy if you ask the questions , only if you listen.

Look at the chart, ask yourself,
what did the market do when it was last at this level, historically?
was this levels significant chart wise?
which direction is the market trending?
try to feel if its try to go up or down?"

Especially the bold marked line was important for me this morning:
You all know that at 0700 GMT german XETRA trading is started with the related index DAX. We have seen 3 times this week, that there was an opening gap in DAX, based on late moves in NY session.
This week DAX has closed the gap till 10 GMT latest.
So today there was a good propability, that it would happen again.
Also we know that equities (DAx/DOW) are correclated with USD.
Knowing the behavior of the other situations from this week, I was prepared to ride a strong attack USD long.
I only had to wait, if the Ladies would do it again.
And they have done it again ...

This is not a call for being predictive, but to know the standard market behaviors in standard situations. It gives the opportunity to be prepared. For example, knowing this would have you provided a strong rescue opportunity ...

But only the chart has pushed my triger for USD long this London morning and not my expectation ...

CU,
MaMood
  • #19,927
  • Oct 28, 2010 2:48am Oct 28, 2010 2:48am
Quoting hcong168
Mamood:

[...]

I don't know about others, but now my feel is this trading tactic is "dynamic position management", ie: adjust and change position size in relation to the changes in the chart terrain while balancing risk and reward. There are times that the attack/rescue/flip are not distingishable, just the net position size vs direction & speed of move.

Hope that i didn't not get it wrong on this.
From my understanding of the presented teachings you are very on the point with it.


Cu,
MaMood
  • #19,928
  • Edited 3:01am Oct 28, 2010 2:50am | Edited 3:01am
Quoting MaMood
Hi Piccolo,

fine, so we both agree: The problem in adding to a positive position (attacking) is solely based in mindset. I tried to lay out, that the objective mindwork/chartwork, that has to be done is (very) similiar:
- looking fro little retracements to scale in (attacking) or deploy rescue.
- looking for increasing momentum to scale in more attack troops. In opposite to reduce exposure, when going against troops.
- and so on ....

Yeah - we nedd the same commitment to our scout when in profit, as when he is in loss. Exact that is what...
Yes, it is also very similar in chart reading, zooming out to hourly chart etc.. I agree 100%.

Now let's discuss practical details:
Let's say you have committed a buy postion with 1,1,2 lots.. each level being at a higher price (attack) and now the price has stalled at the resistance level. Exit the 2? Wait? Square? It is all about dealing with the unknown, will it hold or break, or maybe stall for hours to tease your nerves. Like now, the 1.3853 was a nice resistance level to scale out. It could have shot through, then where to add? Immediately or on the retrace if seen. Probably depends on PA but that can also be misleading.

At the end of the day, all you can do is manage your exposure.

Squared my AUD/USD longs, +2%. Scout was +90 pips, so I am happy for holding it. Training the nerves, lol.
Edit: I squarred because of PA in E/U and G/U, not A/U itself, hehe.
  • #19,929
  • Oct 28, 2010 3:02am Oct 28, 2010 3:02am
whether its rescue or attack , its critical that ur position weighed where r/r is greatest thus turning points/reversal
if attack that wld be retracement end , if rescue that wld be swing end ...
in both cases u r required to take position against the current tick trend , and that is the hardest for ppl to do ...
To Live is the rarest thing in the world , Most people exist , that is all
  • #19,930
  • Oct 28, 2010 3:08am Oct 28, 2010 3:08am
About flipping, I flip only to the next level.

Meaning that if I have two bad scouts and an ill timed rescue, let's say again 1,1,2, then I would flip only with 3 lots, maybe add 5 later if the move is sustained.

I cannot add size exponentially. What if the 3 gets in trouble? I can still rescue or flip with 5, but I cannot do that if I would flip with 20 lots.

The flipped postion does not always cover the loss taken from the flip but at least this way I am not sitting 8 hours at the wrong train station, wishing I had crossed the rail track earlier, lol.
  • #19,931
  • Oct 28, 2010 3:24am Oct 28, 2010 3:24am
Quoting piccolo

[...]
Now let's discuss practical details:
Let's say you have committed a buy postion with 1,1,2 lots.. each level being at a higher price (attack) and now the price has stalled at the resistance level. Exit the 2? Wait? Square? It is all about dealing with the unknown, will it hold or break, or maybe stall for hours to tease your nerves. Like now, the 1.3853 was a nice resistance level to scale out. It could have shot through, then where to add? Immediately or on the retrace if seen. Probably depends on PA but that can also be misleading....
Cool - your AUD action. 2% is a real good number!

I would take out at least the last level (2 in your example), when momentum is fading out. Depending on the strength of the resistance (based on historic observations), I would reduce exposure, when there is no PA indicating a break soon. But I would add again, when PA is goin up with re-charged momentum.

To get a "mid-term" position running with good profits "up to the moon", you need some foreign capital again. Based on that cushion you can stay with some more levels in after fading out of any new impulse cotinuation, while waiting for the next leg ...

move 1: 1,1,2
stall : 2 out
move 2: (1,1),2,4
stall : 4 out
move 3: (1,1,2),4,8
stall : alll out ;-)

But thats's not my cup of tea yet.
I scale out allmost all troops execpt scout and add very agressively, when there is an impulse continuation.
  • #19,932
  • Oct 28, 2010 3:25am Oct 28, 2010 3:25am
Quoting maheswara
whether its rescue or attack , its critical that ur position weighed where r/r is greatest thus turning points/reversal
if attack that wld be retracement end , if rescue that wld be swing end ...
in both cases u r required to take position against the current tick trend , and that is the hardest for ppl to do ...
Hey Dika,

thanx for your input!
Everything ok on your side?

Niels
  • #19,933
  • Oct 28, 2010 3:31am Oct 28, 2010 3:31am
Quoting MaMood
Cool - your AUD action. 2% is a real good number!

I would take out at least the last level (2 in your example), when momentum is fading out. Depending on the strength of the resistance (based on historic observations), I would reduce exposure, when there is no PA indicating a break soon. But I would add again, when PA is goin up with re-charged momentum.

To get a "mid-term" position running with good profits "up to the moon", you need some foreign capital again. Based on that cushion you can stay with some more levels in after fading...
I must admit that more often than not I do the same. I square either all or all except scout. Problem is when the momentum suddenly resumes and you are out. It takes a bit of courage to jump on a moving train.

But I got the feeling that if the market should go up for 4 consecutive days, I should have a scout or even a "base" in the market for the whole 4 days.. out of reach of retraces and stop hunts. Some sort of pyramid.

But its very very hard to do it.

"mid term"
  • #19,934
  • Oct 28, 2010 3:35am Oct 28, 2010 3:35am
Quoting MaMood
Hey Dika,

thanx for your input!
Everything ok on your side?

Niels
yup yup, as usual unable to get out of losing cycle ... but it ll be over eventually
also bored with fb if u wonder where i went
To Live is the rarest thing in the world , Most people exist , that is all
  • #19,935
  • Oct 28, 2010 3:39am Oct 28, 2010 3:39am
should we start to worry about FTI?
  • #19,936
  • Oct 28, 2010 3:44am Oct 28, 2010 3:44am
Quoting maheswara
yup yup, as usual unable to get out of losing cycle ... but it ll be over eventually
also bored with fb if u wonder where i went
"losing cycle" - sounds not good.
Hope everything is inside your risk parameter.

If not - kill it and start a little eralier into the weekend.
However - I keep my fingers crossed!!!!
  • #19,937
  • Oct 28, 2010 3:46am Oct 28, 2010 3:46am
Quoting piccolo
should we start to worry about FTI?
Hmmh - difficult question ...
Have no insider information, only the lines he has left on facebook some weeks ago. Relating to that he is very busy with some "family-affairs" ...

Whatever that means - I hope he is able to bring it to a good end!
  • #19,938
  • Oct 28, 2010 3:52am Oct 28, 2010 3:52am
Training the nerves, lol. Piccolo

I agree with this. Today I was going short on the EUR/USD at 1.3818 and price started going north, I took at a rescue at the Asian high at 1.3830 and price kept going up. I looked at a second attempt at 1.3850 but when price went to 1.3853 I got nevous and decided to see if it would reach 1.3860 area. Price went quickly down to 1.3835 and I decided to wait and see. After a few bars up and down it reached my BE and I closed everything. It was a nervous time.

Also for me there was no clear direction. At the time of writing the price appears to be going up after hit 1.3800 but I am out at the moment.

Good trading to all. Ray
  • #19,939
  • Oct 28, 2010 3:55am Oct 28, 2010 3:55am
Quoting MaMood
"losing cycle" - sounds not good.
Hope everything is inside your risk parameter.

If not - kill it and start a little eralier into the weekend.
However - I keep my fingers crossed!!!!
ah no worries,
I get into this screwy cycle of losing day n self doubts , usually starts when i make too much in a day n feels like superman ...
it ll all end though , I just need to survive the phase ,either that or ill just have to start from scratch again
To Live is the rarest thing in the world , Most people exist , that is all
  • #19,940
  • Oct 28, 2010 4:02am Oct 28, 2010 4:02am
Quoting 1234
Training the nerves, lol. Piccolo

I agree with this. Today I was going short on the EUR/USD at 1.3818 and price started going north, I took at a rescue at the Asian high at 1.3830 and price kept going up. I looked at a second attempt at 1.3850 but when price went to 1.3853 I got nevous and decided to see if it would reach 1.3860 area. Price went quickly down to 1.3835 and I decided to wait and see. After a few bars up and down it reached my BE and I closed everything. It was a nervous time.

Also for me there was no clear direction. At the...
good job on the rescue.

what would you have done at 1.3860?
100 traders viewing now