Technical Analysis Fallacy

I found it easier to get naked when I thought about patterns as a "heads up" instead of something to act on, kind of like a "caution" sign. Meanwhile, I focus on the task at hand (the behavior of the 5min as it tests previous levels/patterns or how energetic it is throughout the move). It's important to focus on the 5min because you need to be in the "now". If you think about the future or the past too much, you will be sitting at the desk paralyzed until you see what YOU want to see instead of what the market is telling you.

What's more important than the pattern is how the price on the 5min behaves as it forms the pattern. It is within the formation of that pattern that gives "hints" to what may happen.

However, you should be able to see basic chart patterns (head and shoulders, dbl top/dbl bottom, falling/rising wedges).

Constantly trying to probe is ok. In fact it is necessary to watch things as they form. But don't probe the legs/patterns, probe the movement of the price in the 5min (how is it reacting compared to the last time it reached this price? Is it moving sluggish? Does it feel too quiet? Does it feel too fast? Are we losing momentum in the bar? Is the bar being hyper & jumping up and down like it's scrambling to go somewhere? Is price moving up and then being hammered down hard?)

Also it might help to understand how institutions move prices. Did the price sweep out a level for easier movement in a direction? Do institutions seem to be buying heavily (usually at large support areas or extreme lows/highs). Do they seem to be pushing price to a certain level to better price to load up? *I am still trying to learn this*

These are the questions that I constantly ask myself. I am not as experienced as others here, but the key is to be trained to the level where it become second nature.

If I'm wrong please correct me

It will be interesting to hear what others have to say about your post. I do not think about most of the things you listed, and instead try to keep it much more simple than all of that. More recognition of patterns than you seem to do, but the narrative is more along the line of "using liquidity" or "creating liquidity" as PA moves along, in a much larger scale. Today's action on the E/$ was an good example as it broke south for a while, backed up a bit, and broke again (several times). Classic movement with familiar patterns -- price action -- where no tools are needed just flow with it (ok, I do use some tools but I am a hopeless case). LOL.

http://mobile.engadget.com/

fti (post you need to find )
"... there are only two possibilities, so watch out for tell tale signs, She will signal you at least 3 times before her move, probably more. so you may want to prepare another scout, the earlier scout had done his job.
If the other scout deploy, also gets in trouble , based on your reading then we know that we are on the wrong trail. Otherwise the trend is intact.

... but if the trend remains intact, do not be decieved that a Eur run is eminent. Note that we are on the forth day of bear usd run.so be prepared for a fight at the tops. Let the mkt show where it resists, do not have R/S or lines. You will truely be able to feel where it truely resist. Failing that it resist , you will have windfall profits. Then take opportunity to slowly diffuse any attacks that you may had implemented during the run, if any.

If resistence is detected, bail out scout and army in a hurry.

making any sense?"

Back to trading first time this year....Hope pipping well


V

May the PiPs be with you

same 2 u

Welcome on the dancing floor, Vick!
Be the rythm with you!

Hi and good Morning FullPerson,

there are a lot of questions that you can ask you while trading. How much and which depends on your very specific way of thinking. It comes down to the question: How can I get my brain and attention on track. So this is a very personal matter.

When I do a little critic self reflecting on my way of trading, I tend to make it to complicated too. It's very specific, cause I still have not much confidence in my skills. All the tools I use and all the questions I ask myself are just the approach to make me feel more safe ...

Finally the two statements above of yours are key, at least from my experience...

CU,
Niels

Have done my news scanning now - seems there has not happened that much in the world since yesterdays NY afternoon session.

Or do I have missed something?
However, starting my chartwork now ...

Thx,
Niels

Just for info.
Something we should mark in our calenders ...

WASHINGTON (Dow Jones)--Ben Bernanke will take questions from journalists next month in a rare move for a Federal Reserve chairman who's raising his public profile as he defends the U.S. central bank's controversial policies.
Bernanke will speak to reporters at the National Press Club in Washington Feb. 3 at a news conference that's likely to focus on the Fed's latest effort to boost the economy by buying $600 billion in government bonds. The planned purchases have been attacked by politicians at home and abroad.

A short summary of the trading day so far:

TOKYO (Dow Jones)--The dollar edged up to a fresh two-week high against the yen in Asia Thursday as investors in the region bet that the U.S. economic recovery will buoy the currency, after a labor report overnight came in much better-than-expected.

But the dollar's rise was blunted as Japanese exporters sold it, dealers said. Any further gains in the unit will likely remain moderate for the rest of the week, as expectations for further improvement in economic indicators appears now to have been largely priced in, they added.

In morning trade in Tokyo Thursday, the U.S. currency rose to Y83.40, its highest since Dec. 23.
Selling by Japanese exporters and short-term players locking in profits later ate into the gains, bringing the unit to Y83.26 as of 0450 GMT compared with Y83.25 late Wednesday in New York.
Dealers said the dollar may trend up, but likely only gradually, if weekly jobless claims later in the global day and the non-farm payrolls report for December due Friday add to signs of improvement in the labor market.
The median estimate in a survey of economists by Dow Jones Newswires is for the report to show 150,000 jobs added in the month, with the unemployment rate falling to 9.7% from 9.8% in November.
The dollar soared overnight, along with Treasury yields, after a report from the payroll giant Automatic Data Processing Inc. showed employers added 297,000 private-sector jobs last month, far exceeding the 100,000 gain forecast.

"It seems that risks of positive surprises in indicators like the U.S. new jobless claims today and the employment data tomorrow have been factored in now to a large extent, given the rise in U.S. yields and the dollar yesterday," said Osamu Takashima, chief foreign exchange strategist at Citibank Japan Ltd.
"At this stage, I don't think the dollar has room left to rapidly regain the Y84 mark," Takashima said.

[...]

Disclaimer: Be aware of possible Cow Dung included ;-)

Just for info:
Asian sentiment ..

Nikkei +1.4%;
S&P/ASX +0.2%;
HSI flat;
Kospi down 0.2%;
Taiex +0.4%;
Sensex down 0.3%;
Shanghai Composite down 0.6%;
STI +0.6%;
Indonesian shares down 0.8%;
Philippine shares +0.1%;
SET down 0.4%;
NZX-50 +0.1%;
KLCI flat.

Thanks for the check mamood, I see that you are scanning the news. I appreciate that very much because that helps me focus more on the EU at my stage of learning.

btw, was that last impulse a spike sweep or an actual impulse wave?

ok is very obvious the g nations plans

http://www.bloomberg.com/news/2011-0...-a-cliff-.html

you should know what to do whenever encounter usd favorable news.
starting with aud

wooo caught wave down... 1,1,2 completed. Possible support coming up. hope I wasn't squeezing blood from stone, but big impulse feel

catching that south bound train made me warm and fuzzy all over. great way to start off my second morning.

the first morning i was trading at 04:30 GMT trying to get feel for the asian market but was on the wrong side of the market and Saxo server locked me out until 05:10. closed out positions at the first opportunity with small loss which i recovered in my second morning. does anyone have similiar experience? i am now not going to dibble and dabble the asian market hours until i get some answers. it was scary. (hind sight, it would have been smarter if i tried with a demo acct first)

Good morning fti!
Thanx for that link.
noted!

Hi FP,

yeah that was a good strong move down. Nothing wrong in adding troops, as long as you are fast and nimble.

Was caught on the wrong side and had to flip to save my ass.
But finally made some pips too.

Now we are facing strong support.
So we have to stay nimble till some new momentum shows up ...