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Technical Analysis Fallacy

  • #22,581
  • Jan 27, 2011 10:21am Jan 27, 2011 10:21am
Quoting MaMood
Hi again,

just want to share some experience, that I have made while I'm trading the VG challenge.

The first time in my very short fx trading endeavour I felt what fti and others are meaning with "under capitalisation". Yeah it is possible to trade a 5.000 USD account with 0.1 lotsize scout. And yeah you can do it successfully.

But it is really very very much easier to trade 0.1 lotsize scout on a 250.000USD account. All actions (rescues and attacks) can be done much easier, because mindset is not affected that much by fear.
You are able...
Hi Niels

I have been keeping an eye on the VG Challenge. Are you at nos 3 ? If you are, very well done !

Regards
Bak
  • #22,582
  • Jan 27, 2011 10:30am Jan 27, 2011 10:30am
Quoting Bakuli
Hi Niels

I have been keeping an eye on the VG Challenge. Are you at nos 3 ? If you are, very well done !

Regards
Bak
Hi Bak,

yeah - that's me: Barbara.

Thx for kind words!
I'll do my very best to defend that rank till the end at Febr. 28th ...

CU
  • #22,583
  • Jan 27, 2011 10:45am Jan 27, 2011 10:45am
Hi, guys. Are you experiencing the food price inlfation at the places you live. I'm talking about food prices in retail stores and supermarket chains. MaMood, how is it Germany, Fana how about prices in your country? Aux and GeFX has the food prices inflation gotten the stores in USA already?

Oil and Gold to be in a correction now and iflationary pressure seems to ease but food prices don't agree.

MaMood is Barbara still holding to the 3rd place?

Regards, MyTbo
  • #22,584
  • Jan 27, 2011 10:56am Jan 27, 2011 10:56am
Hi! Does anyone know a web address of the VG challenge? Tried to google it, couldn't find any site.
  • #22,585
  • Jan 27, 2011 10:57am Jan 27, 2011 10:57am
Quoting MaMood
Hi again,

just want to share some experience, that I have made while I'm trading the VG challenge.

The first time in my very short fx trading endeavour I felt what fti and others are meaning with "under capitalisation". Yeah it is possible to trade a 5.000 USD account with 0.1 lotsize scout. And yeah you can do it successfully.

But it is really very very much easier to trade 0.1 lotsize scout on a 250.000USD account. All actions (rescues and attacks) can be done much easier, because mindset is not affected that much by fear.
You are able...
I agree, the larger the account, the easier it is to trade. The trick with a smaller account is to stay within the profit levels. Easier said done than done. I often find that I get over confident, increase the size of the scout, rescue or attack, too much, lose a large amount of profit, fear sets in and I lose some more. Then I really have to work hard to get out of the losing cycle no mather how large my account is. Ray
  • #22,586
  • Jan 27, 2011 11:00am Jan 27, 2011 11:00am
Quoting Mr.Bear
Hi! Does anyone know a web address of the VG challenge? Tried to google it, couldn't find any site.
http://www.trading-challenge.com/dow..._TC-201012.pdf
  • #22,587
  • Jan 27, 2011 11:04am Jan 27, 2011 11:04am
Quoting ukmanthailan
Sorry if this has already been covered but did everyone else read this?

"LONDON (Dow Jones)--Moves in the yen's exchange rate in the immediate runup to the Standard & Poor's downgrade of Japan's sovereign debt rating raised eyebrows in global currency markets Thursday....
Thanks for the article!
So, seems their dirty deals finally caught public attention.
I would suggest auditors checking the period in last year when EUR was about to reversal up. Obviously the rating agency was helping Jorge Soros pushing down the market to take profit on his short eur positions. The timing were perfect.
  • #22,588
  • Jan 27, 2011 11:53am Jan 27, 2011 11:53am
Quoting MaMood
Hi Bak,

yeah - that's me: Barbara.

Thx for kind words!
I'll do my very best to defend that rank till the end at Febr. 28th ...

CU
May I ask why you call yourself Barbara?

(At weekends I wear women's clothing and call myself Samantha so I'm not judging you, I just wondered)
  • #22,589
  • Jan 27, 2011 12:18pm Jan 27, 2011 12:18pm
Quoting MyTbo
Hi, guys. Are you experiencing the food price inlfation at the places you live. I'm talking about food prices in retail stores and supermarket chains. MaMood, how is it Germany, Fana how about prices in your country? Aux and GeFX has the food prices inflation gotten the stores in USA already?

Oil and Gold to be in a correction now and iflationary pressure seems to ease but food prices don't agree.

MaMood is Barbara still holding to the 3rd place?

Regards, MyTbo
Hi MyTbo. In my country no changes of food-prizes. Regards
  • #22,590
  • Jan 27, 2011 12:21pm Jan 27, 2011 12:21pm
Quoting fti
they rigging the euro and cable via the ec cross.
i was watching.
seems they aware of the MO.
marketmaker is using countermeasures.
youmust adapt to changed timing.

watch that ec crosses.
rate hikes very likely on the table already.

playing 50 pips volatility

they swinging wild volatility to unseat the euro and cable holders.
They now waiting ny in market sweep down to buy.
looks like big boys gang up playing against retail books
be vigilant.

could be CB against CB. but i doubt it.
now they using flash news to trap positions.
open interest seems...

ya using volatility correctly
argument for fair val. higher, but not one decision alone, market decides.

BIG week next week for me, thank you for helping Fredde.
Fortune be with us all.
Please take it easy and quick recovery please.
Regards,and God bless.
  • #22,591
  • Jan 27, 2011 12:58pm Jan 27, 2011 12:58pm
Quoting ukmanthailan
May I ask why you call yourself Barbara?

(At weekends I wear women's clothing and call myself Samantha so I'm not judging you, I just wondered)
  • #22,592
  • Jan 27, 2011 1:30pm Jan 27, 2011 1:30pm
Quoting ukmanthailan
May I ask why you call yourself Barbara?

(At weekends I wear women's clothing and call myself Samantha so I'm not judging you, I just wondered)

hmmh - yeah I know that's strange. :-)
But that will be my secret till I die
Maybe Jessica Alba can help you with that question
  • #22,593
  • Jan 27, 2011 3:06pm Jan 27, 2011 3:06pm
Quoting MyTbo
Hi, guys. Are you experiencing the food price inlfation at the places you live. I'm talking about food prices in retail stores and supermarket chains. MaMood, how is it Germany, Fana how about prices in your country? Aux and GeFX has the food prices inflation gotten the stores in USA already?

Regards, MyTbo
Nothing out of the ordinary here.
  • #22,594
  • Jan 27, 2011 3:27pm Jan 27, 2011 3:27pm
Anyone feel like this method is a bit like being a ant trying to constantly dodge a gigantic steamroller and with one wrong rescue you'll be flattened?
  • #22,595
  • Jan 27, 2011 3:34pm Jan 27, 2011 3:34pm
Quoting Nverstop
Anyone feel like this method is a bit like being a ant trying to constantly dodge a gigantic steamroller and with one wrong rescue you'll be flattened?
You're focusing on the wrong side of the coin, most at first are excited by the rescue, a way to never have a losing trade..... all focus, energy, study on how to rescue......... the hidden gem in all these studies is the art of timing and attack. Where you see danger, (respecting the market is a wise caution) the opposite is an unlimited opportunity for profit.

You should never be in a position to be wiped out by rescue, some of the first studies were about this very subject.

fwiw.............
  • #22,596
  • Jan 27, 2011 3:39pm Jan 27, 2011 3:39pm
Quoting auxesis
You're focusing on the wrong side of the coin, most at first are excited by the rescue, a way to never have a losing trade..... all focus, energy, study on how to rescue......... the hidden gem in all these studies is the art of timing and attack. Where you see danger, (respecting the market is a wise caution) the opposite is an unlimited opportunity for profit.

You should never be in a position to be wiped out by rescue, some of the first studies were about this very subject.

fwiw.............
Yeah perhaps I worded wrong. Since I'm new I've started with very conservative attack and rescue protocols. 1-1-1 attack and 1-3-5 rescue(then I take loss).

I guess what I mean is one profits the entire week but on one bad rescue his profits for the week is wiped out.

So you say one should never be in a position to get wiped out.. so what is the normal drawdowns one should expect?
  • #22,597
  • Jan 27, 2011 5:37pm Jan 27, 2011 5:37pm
Quoting Nverstop
Yeah perhaps I worded wrong. Since I'm new I've started with very conservative attack and rescue protocols. 1-1-1 attack and 1-3-5 rescue(then I take loss).

I guess what I mean is one profits the entire week but on one bad rescue his profits for the week is wiped out.

So you say one should never be in a position to get wiped out.. so what is the normal drawdowns one should expect?
I have tried to remove myself from discussions in the thread, but will chime in this once with my own interpretation, others may have their own, the one to seek advice is FTI when he's up and feeling able (will say it's good to have you back amongst the living, FTI... you are an object of answered prayer).

Conservative skews are great for dancing with training wheels, but the skew can be much more geared on the attack side when timing is correct. In doing so you will find the ability to ride partials much easier as captured capital is much easier to obtain... again timing issues are essential, high skews are never kept in the field of play for long, but capturing a quick 15-20 pips with a high level 3 or 4+ attack can cover a lot of ground for the remaining levels and scout. Remember you don't have to climb the skew ladder as you can skip levels.

Of course in doing the backside rescue level would be astronomical, so they either hit the timing and make ground quickly or are pulled out just as quick in retreat.

You are right in thinking little gain, little gain, little gain, possible big loss equals nada. The original MO is that of a big bank, with nearly unlimited capital and time to devote to positions. While the bank has several weapons at it's disposal to help neutralize the pain, you as as individual are limited, so think about the downside when you decide to enter the markets, do you have the time to see the trade through? Where do I get out if it's going bad, in looking at the chart, whats the possible downside drawdown, (where's the next possible floor if this thing rockets in reverse?) IMHO, 5-10% should be max when working with limited funds, best to live and play another day, but working with limited funds, is it worth it? If you adhere to the original MO, levels 3 and higher on rescue will take you out of this drawdown limitation quickly.

Rescues are not just adding at certain levels in hopes of averaging out on the next retrace, they are just as much about timing the hit as attacks, hitting it hard, bringing your position average close to market and getting out. That opening is decided by the market - not your account balance.

Max drawdown, should only happen once in a blue moon, not every week.

Fwiw.........

regards,
  • #22,598
  • Edited 5:47pm Jan 27, 2011 5:40pm | Edited 5:47pm
Quoting Nverstop
I guess what I mean is one profits the entire week but on one bad rescue his profits for the week is wiped out.
Remember that a rescue should not even be attempted unless you are very confident that your initial read of trend is correct. It is often better to sacrifice your scout if he is caught badly offside.

Also I think if you have such a heavy rescue skew and a timid attack then probabilities will tend to work against you in the long run. As you have experienced, a single disastrous loss will kill many small wins.

I use 1-5 for rescue's with my small demo account and will not even commit my 5 rescue troops unless I see an excellent opportunity to deploy develop. Patience is key.

Edit : Auxesis has posted a more comprehensive answer than me at the same time. Balance in attack and defense and confidence in your read of the dance is necessary.(can only come from experience)

Perhaps the best advice Fti has given is to practice diligently and trust your brain to learn. Experience cannot be transmitted only earned with persistence and attention.
  • #22,599
  • Jan 27, 2011 6:22pm Jan 27, 2011 6:22pm
Quoting auxesis
I have tried to remove myself from discussions in the thread, but will chime in this once with my own interpretation, others may have their own, the one to seek advice is FTI when he's up and feeling able (will say it's good to have you back amongst the living, FTI... you are an object of answered prayer).

Conservative skews are great for dancing with training wheels, but the skew can be much more geared on the attack side when timing is correct. In doing so you will find the ability to ride partials much easier as captured capital is much easier...
Thanks Auxesis. I'm going to read Hill's book I've seen you recommend to maybe help with my timing issues and terrain survey.

The conservative attack skew is rubbish I think in the long run. If one is going to have a rescue sequence that is fairly aggressive one must also have a strong attack skew or otherwise as FTI has said just doing rescues won't be worth the effort. Might as well practice strong attack skews on demo no reason to use conservative ones when in the long run weak attack skews combined with aggressive rescues will certainly be counterproductive.

I'll think about what you've said and I appreciate the input.

I don't want to bother FTI because he has probably already explained what I'm looking for and have only not seen it due to my impatience or ignorance.
  • #22,600
  • Jan 27, 2011 6:57pm Jan 27, 2011 6:57pm
Quoting Nverstop
Thanks Auxesis. I'm going to read Hill's book I've seen you recommend to maybe help with my timing issues and terrain survey.
Hill's "Ultimate trading guide" the first few chapters only 1-6, the back half deals with automating a trading system, tear that part out and throw it away.

Hill's "Scientific Interpretation of Bar Charts", a harder book to find, is not a read but more of a study of hand drawn charts, with notation. This one is best to take in small chunks trying to understand the traders rational behind the setup or chart pattern. Caution if you try to match real time charts to the book. The "gem" is in the understanding of the chart movement, not enter at point "A" when you see this.

Hope that makes sense.

Good luck, good trades.

a
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