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Technical Analysis Fallacy

  • #20,681
  • Dec 20, 2010 4:48pm Dec 20, 2010 4:48pm

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  • #20,682
  • Dec 21, 2010 6:08am Dec 21, 2010 6:08am
hi just a quick question I had while reading fti's posts, do you guys understand what fti means by a time window? In the post where he led us through his dance, he used the romance (to confirm his moves via mirrored patterns/volatility & bottom/tops in other pairs), but he mentioned "the time window has began" or "has ended". Does he mean that a pattern has developed in his directional bias (giving him about 1/2 hour or more for impulse until selling fizzles out from dealers?)

Has anyone figured out the hips and lops pattern w/ their interpretations?

Finally, is it possible that fti trades using the romance such that one position's risk is essentially hedged by another pair (due to nature of correlations). I know he mentions never to miss the bus standing there, but maybe in times of great volatility. This should maximize the effect of the romance.
  • #20,683
  • Dec 21, 2010 7:03am Dec 21, 2010 7:03am
Hi friends,

just for info:

Euro becomes increasingly popular choice to fund Carry Trades

By Stephen L. Bernard Of DOW JONES NEWSWIRES NEW YORK

(Dow Jones)--The euro's struggles could become more pronounced in coming months as traders increasingly use the beleaguered currency to fund so-called "carry trades."
That may sound surprising, given the yen and the dollar's singular appeal as currencies is that they cost next to nothing to borrow. But the euro is perceived to be so vulnerable to further declines on the foreign exchange market that big market participants are zeroing in on trades to bet against it.
"The main emphasis is a short euro play," said Phil Streible, senior market strategist at Lind-Waldock. Streible said the lack of a plan to solve the ongoing sovereign debt crisis, more than interest rates, is the deciding factor in the carry trade right now. The euro is expected to continue its decline against other major currencies because its economy will likely remain weak.
Streible recommended a trade that shorts the euro and goes long the Australian dollar as one of the best moves right now. For traders also seeking to capture the difference in interest rates, he predicted Australia's central bank will raise rates in the first quarter while the European Central Bank won't be in a position to raise rates anytime soon.
Citigroup, one of the world's biggest banks in foreign exchange, is now recommending the euro as a funding currency as well.
Steven Englander, global head of G10 FX Strategy at Citigroup, said Citi's decisions to make a change in strategy about which currency would be best to fund the carry trade were based on fundamentals.
The carry trade entails selling a certain currency to fund the purchase of a different one. The trader is trying to capture either the difference between interest rates of the two currencies or the expected change in the exchange rate as one weakens and the other strengthens.
Englander called Citi's change in strategy a "tactical short," rather than a long-term change. "Short" positions are bets that an asset will fall in value, while "long" positions are wagers it will gain.
Over the past month, Englander said Citi has recommended a 15% short position in the euro, compared with a 5% long position a month ago.
A main beneficiary of the euro's woes is the U.S. dollar. Citi moved to a 5% short position on the dollar from 25% over the past month.
Strategists say looking at short positions can provide a good indication of which currencies are popular options for funding a carry trade. Net speculative euro shorts had been increasing recently, though they dropped during the week ended Dec. 14. That decline was primarily due to traders closing out positions for the end of the year and is likely to be only temporary, strategists said.
The weak economic outlook for the euro zone is the primary factor driving the change in that trade. Minor differences in interest rates between the euro and either the dollar or the Japanese yen are less important right now, strategists said. Rates in the U.S. and Japan are near 0%, while they are at 1% in Europe.
Rates in the United States, Japan and the euro zone are all extremely low, making them somewhat interchangeable as funding options, said Vassili Serebriakov, foreign exchange strategist at Wells Fargo. Investors will fund deals in the currency they consider the weakest among the group because the low rates make little difference on profiting from the trade, he added.
"While the dollar was the weakest link in September and October, the euro is becoming the most vulnerable of the three at the end of the year," Serebriakov said.
During the third quarter, the dollar was a popular choice for funding a carry trade because the currency was losing value as expectations grew that the Federal Reserve would launch a bond-buying program to try to stimulate the U.S. economy. But as the fallout from the launch of the program waned and Europe's sovereign debt crisis re-ignited, the dollar rallied.
European leaders' lack of progress in controlling the sovereign debt crisis will likely continue to be a drag on the currency for the immediate future, making a carry trade funded with euros more profitable, analysts said.
-By Stephen L. Bernard, Dow Jones Newswires; 212-416-4528; [email protected]


Disclaimer: Be aware of possible Cow Dung included ;-)
  • #20,684
  • Dec 21, 2010 7:35am Dec 21, 2010 7:35am
Quoting fullperson
hi just a quick question I had while reading fti's posts, do you guys understand what fti means by a time window? In the post where he led us through his dance, he used the romance (to confirm his moves via mirrored patterns/volatility & bottom/tops in other pairs), but he mentioned "the time window has began" or "has ended". Does he mean that a pattern has developed in his directional bias (giving him about 1/2 hour or more for impulse until selling fizzles out from dealers?)

Has anyone figured out the hips and lops pattern w/ their interpretations?

Finally,...
Hi fullperson

What do you see?
http://www.forexfactory.com/showpost...ostcount=20635

Rgs

PS time window, impulse is only a word ...
  • #20,685
  • Edited 9:04am Dec 21, 2010 8:42am | Edited 9:04am
Quoting fullperson
hi just a quick question I had while reading fti's posts, do you guys understand what fti means by a time window? In the post where he led us through his dance, he used the romance (to confirm his moves via mirrored patterns/volatility & bottom/tops in other pairs), but he mentioned "the time window has began" or "has ended". Does he mean that a pattern has developed in his directional bias (giving him about 1/2 hour or more for impulse until selling fizzles out from dealers?)

Has anyone figured out the hips and lops pattern w/ their interpretations?

Finally,...
Fullperson,

Time Window, to my knowledge that question has been left unanswered, and I have asked it myself. There was a lengthy debate about the issue a few months ago which derailed the TAF discussions, most have their own thoughts on "time window" which relate to their own specific interpretation of FTI's teachings. I felt either FTI saw something in the charts, or possibly times of day corresponding to current PA situations. But the exact definition has never been answered by FTI.

Romance, your book is comprised of total position across market, therefore all pairs and positions are available for use. 3K's move and shift between them, in so that certain pairings move faster, farther, some slower shorter being seen in their current 3k relationship, that can be used to your advantage, think butterfly.

Hips/lops were never discussed as they are copyrighted. But swing high swing low, fractals study should get you what you need.


regards
  • #20,686
  • Edited 11:19am Dec 21, 2010 11:04am | Edited 11:19am
Quoting auxesis
Fullperson,

Time Window, to my knowledge that question has been left unanswered, and I have asked it myself. There was a lengthy debate about the issue a few months ago which derailed the TAF discussions, most have their own thoughts on "time window" which relate to their own specific interpretation of FTI's teachings. I felt either FTI saw something in the charts, or possibly times of day corresponding to current PA situations. But the exact definition has never been answered by FTI.

Romance, your book is comprised of total position across...
Hi auxesis, fullperson

maybe help

fti:
"This is different for trader who , chose their positions.
The fact that, their chosing of the trade, is an interplay of hope and expectations,
grounded on whatever the analysis for the taking of the position in the first instance.
Analysis is a complex thought process and should be only done
within the time window of the chosen time frame.
and in accordance with the chosen Modus operandi.
The resultant of that analysis is a binary resolve."

"When a position is establish, most traders instead of continuously probing to find time window (opening),
if such was still valid, normally resigns to exploring the alternatives to his analysis.
Even at the expense of accumulating losses. "

"... Time window for selling EUR/USD opens now.
watching levels 1.4825/00
Now waiting for GBP/USD to top out ..."

"This can also be constructed from a phi start point which begins not from the fibonacci progression but a user determined base. Only that the spiral growth then coils into a 1.618 constant of itself. The exact technique of determining that range window leg is classified for my own use as it may not be suitable for individuals."

"This is akin to the using ATR of a run leg of a trend ( note: run leg and not bar range). And the spiral growth becomes a function of the windowed range. To do this requires much capitalisation ... "

Rgs
  • #20,687
  • Dec 21, 2010 12:24pm Dec 21, 2010 12:24pm
Quoting fti
Hi Zoran.

Now fron this continuation chart, you can see that truly the support gave for a speed seller .and we are nearing syupport. There is no evidence that a bottom is found yet .So the exposure must be reduced
as we enter the Support time window where more clues will surface.

The important point was how important the waiting into the right top was.
Where a compounded stepping top form to reverse the market into a full bear.

It would now behove the trader to start looking for clues in his short chart for likely strength points, whereas...

Mentions time window. For chart FTI posted, go to pg.30...post # 436
  • #20,688
  • Edited 1:37pm Dec 21, 2010 1:04pm | Edited 1:37pm
Also a mention with Zoran's chart on page 29..post# 434


If you know about measured moves A - B = C - D in price movement and the same applies to time, then the lengh in time of a past correction could equal the time of the present correction. This could be the time window that FTI was marking on chart.. We attack the impulse (legs) and take profits and reposition on corrections for next leg. This time window should roughly equal the time of last correction...(symetry). If the correction last longer in time , it could signal a deeper correction or reversal on that time frame. Time to rescue or put in new scout or flip.

If the price action continues within the past corrective time span, the move is more likely to continue the price measured move.

price - measured moves..... used with impulse and correction
time - measured moves....used with both impulse and correction



These were just some thoughts and were put out only as my ideas. I can not speak for FTI
  • #20,689
  • Dec 21, 2010 2:33pm Dec 21, 2010 2:33pm
Quoting seeit
Also a mention with Zoran's chart on page 29..post# 434


If you know about measured moves A - B = C - D in price movement and the same applies to time, then the lengh in time of a past correction could equal the time of the present correction. This could be the time window that FTI was marking on chart.. We attack the impulse (legs) and take profits and reposition on corrections for next leg. This time window should roughly equal the time of last correction...(symetry). If the correction last longer in time , it could signal a deeper correction...
A very good insight. I like it. Ray
  • #20,690
  • Dec 21, 2010 3:42pm Dec 21, 2010 3:42pm
Quoting seeit
Also a mention with Zoran's chart on page 29..post# 434


If you know about measured moves A - B = C - D in price movement and the same applies to time, then the lengh in time of a past correction could equal the time of the present correction. This could be the time window that FTI was marking on chart.. We attack the impulse (legs) and take profits and reposition on corrections for next leg. This time window should roughly equal the time of last correction...(symetry). If the correction last longer in time , it could signal a deeper correction...
Hi seeit

carefully for symmetry, my point of view ...

Page: 293:
Originally Posted by nzcine http://cdn.forexfactory.com/images/buttons/viewpost.gif
I believe I understand what you mean now. Allow me to recap :
In the ATR indicator, the steeper the gradient in a time window , the higher the volatility towards the particular wave direction in the time window.
If only minimal gradient change in a time window, that means its a stage of congestion/consolidation ( range bound).
Correct me if I'm wrong.
Thank you for your enlightenment Fti! Much appreciated. Are you waiting for Us lunch time to be over ?
Edited:
So the volatility may be part of the reason to bias a certain direction?


Hi nzcine,
In principle, you are right.
But I have no indicators to tell me anything, onlty the price and its bundle and behaviour. The gradient (compounded true range)of the legs, is a aid which helps me time the hit. I never trade against trend impulse, only rescue badly timed hits.
I never wait for breakouts and or confirmations for entry or exit.

If positions turns bad I shift to higher time frames to recover. And I never leave my baby unattended.

I get a funny feeling that you are unfamiliar with my protocol. My directional bias is controlled by the 3 kgds. My volatility bias controls my attack or rescue aggression.

Hi nzcine,
yeah, thats right, the 3k is the dow theory, in its most primitive.

No they don't confirm each other. In combination , they tell you a very clear story of whats happening on the dance floor. When crosses behaves weird, you have to check the market for news and info, mostly somethings going on.
Of course not all people have access to cutting edge info, but MaMood had been helping with much of it. He's very on the ball with his morning talk show and info updates.
Unfortunately I lack the energy to check unless something squeeses my position, but you can relay on MaMood and Dutchangel for new flashes, they are very energetic.

As you develop you should chip in too when able. Not so much as to help others but to be checked that your info feed is ON. If you are reading bs, they will tell you.

3K takes much experience to get it right.When you do that, don't relay on others opinions, you must think for yourself. Initially, you may want to see how others are viewing it as a guide.

Initially, esp when you 3k is not to mark, you will find that th rescue MM will save your butt , much times.

regards

Lazy old me just missed a chunk of the cable slide.
Nevertheless I am happy with the pocketmoney I got.
Finished for the day. .....tom will see if my 'feel; improves, seems I got a little rusty.
  • #20,691
  • Dec 21, 2010 3:44pm Dec 21, 2010 3:44pm
Quoting seeit
Also a mention with Zoran's chart on page 29..post# 434


If you know about measured moves A - B = C - D in price movement and the same applies to time, then the lengh in time of a past correction could equal the time of the present correction. This could be the time window that FTI was marking on chart.. We attack the impulse (legs) and take profits and reposition on corrections for next leg. This time window should roughly equal the time of last correction...(symetry). If the correction last longer in time , it could signal a deeper correction...
Thanks for putting that out, I feel FTI's phrase "Time Window" has a specific definition and I would lean towards some type of TA approach for it's equation. But every time I started down that path, I felt the big "RIGIDITY" hammer about to be swung on my head.

regards,
  • #20,692
  • Dec 21, 2010 3:59pm Dec 21, 2010 3:59pm
Quoting auxesis
Thanks for putting that out, I feel FTI's phrase "Time Window" has a specific definition and I would lean towards some type of TA approach for it's equation. But every time I started down that path, I felt the big "RIGIDITY" hammer about to be swung on my head.

regards,
Hi auxesis

existing formula TA

Sigma + Vega / Time

Rgs
  • #20,693
  • Edited 4:20pm Dec 21, 2010 4:10pm | Edited 4:20pm
Quoting Gro
Hi auxesis

existing formula TA

Sigma + Vega / Time

Rgs
or

"Then under teir 1 banks will be tier 2 banks, and tier 3 banks, they function as the lines of distribution. If as in the eg above, alarge corp comes selling dlr and the CB dealers do not intervene, then the tier 1 banks will start selling the dollar down to tier 2 banks in smaller packages, and tier two banks will like wise start selling to tier 3 banks in smaller packages. In 20 to 30 mins that process who fizz out and most dealers would be short of dollars. to a certain extent.

So that means. What goes up that will go down one day and vice-verse.
We need just a strong catalyst to change the trend.
But why Gann used 20 minutes for interval?
Wrong.
Law of motion.
Law of vibrations.
20 mins is his average hold.
It is average not fixed.
Change can only come about, when change happens with effects of law of motion.
Remember, Sun Zi Bi Fa?
reread water motion.
  • #20,694
  • Dec 21, 2010 4:18pm Dec 21, 2010 4:18pm
Quoting Gro
or

"Then under teir 1 banks will be tier 2 banks, and tier 3 banks, they function as the lines of distribution. If as in the eg above, alarge corp comes selling dlr and the CB dealers do not intervene, then the tier 1 banks will start selling the dollar down to tier 2 banks in smaller packages, and tier two banks will like wise start selling to tier 3 banks in smaller packages. In 20 to 30 mins that process who fizz out and most dealers would be short of dollars. to a certain extent.

So that means. What goes up that will go down one day and...
helped me to this story:
"The world under heaven, after a long period of division, tends to unite;
after a long period of union, tends to divide
This has been so since antiquity."---The Romance of Three Kingdoms.

The mkt is not out of sync in terms of the movement, the out of sync is in the volitility. There seems to have movement in "turn based" style. Normally the Eur move first , then the GBP follows when the Eur stalls. Did you noticed this?
From experience, this signify , lack of liquidity. So the same monies is moving from one market then to another. Under this circumstances, traders must be careful as the volitility becomes very uneven and manipulation can surface.
Noticed how the market can do sudden and fast change in directional thrust then sudden lose the same momentum as suddenly as it came. This is deep sweeps..... lack of liquidity again. So volitility increases with wild and swift swings but prices are locked in a band.

A turtle can survive in the water environment, because it is her nature. A scorpion, however well trained, will ultimately, meets it own fate, because that is its nature."
  • #20,695
  • Dec 21, 2010 4:33pm Dec 21, 2010 4:33pm
Quoting Gro
helped me to this story:
"The world under heaven, after a long period of division, tends to unite;
after a long period of union, tends to divide
This has been so since antiquity."---The Romance of Three Kingdoms.

The mkt is not out of sync in terms of the movement, the out of sync is in the volitility. There seems to have movement in "turn based" style. Normally the Eur move first , then the GBP follows when the Eur stalls. Did you noticed this?
From experience, this signify , lack of liquidity. So the same monies is moving from one market...
definition trend is an individual (individual time frame) = definition turn the trend is an individual
  • #20,696
  • Dec 21, 2010 6:19pm Dec 21, 2010 6:19pm
thanks for the replies, I'm sorry if I almost derailed the thread again (I'm just very picky about every word fti says). Anyways it seems that the romance is a huge part of his ,method, could someone go over it? I really don't mean to derail the thread so feel free to pm me. I have yet to get experience with the romance so your personal thoughts or advice would be greatly appreciated

I find it harder to type than to speak, so perhaps whenever any of you have time we could skype and discuss fti? My ID is: william.fan7
  • #20,697
  • Dec 21, 2010 7:04pm Dec 21, 2010 7:04pm
If you go to the top of the page and use "search this thread" you will find Romance of the 3 Kingdoms is well covered.

However I'm very thankful you asked your first question. Thanks to all those who responded.
Good Trading
  • #20,698
  • Dec 22, 2010 3:40am Dec 22, 2010 3:40am
Hi Friends!

Hope you are all doing well.
I'm very busy with trading th VG challenge atm and of course with XMas preparations.

Was a very nice read, that last postings.
Remembered me for things, that I have nearly forgotten.
Thanx!

Wish you all the best!

CU,
MaMood
  • #20,699
  • Dec 22, 2010 4:37am Dec 22, 2010 4:37am
Quoting fti
Hi everyone,
Thanks for all the prayers and well wishing.
For those of you, who are worried.
Let me tell you whats happening.
...
hope your situation has improved.

let's all pray & stay positive!
Happy holidays all
  • #20,700
  • Edited 5:59am Dec 22, 2010 5:06am | Edited 5:59am
Quoting fullperson
thanks for the replies, I'm sorry if I almost derailed the thread again (I'm just very picky about every word fti says). Anyways it seems that the romance is a huge part of his ,method, could someone go over it? I really don't mean to derail the thread so feel free to pm me. I have yet to get experience with the romance so your personal thoughts or advice would be greatly appreciated

I find it harder to type than to speak, so perhaps whenever any of you have time we could skype and discuss fti? My ID is: william.fan7
Hi fullperson

Absolutely all OK, not a bad question.You wrote:"I'm just very picky about every word fti says".
I'm copying words FTI because my English is poor but I'll try describe it using own words.
TIME WINDOWS = two words together.
Why the "time" and not something else? ... S/R window, price level window, range window etc.
Why the "window" and not something else? ... hit , breakout etc.


Rgs

PS What we know about the time?

The good mood just five minutes a day Birdsong
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