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Technical Analysis Fallacy

  • #22,701
  • Feb 3, 2011 6:17am Feb 3, 2011 6:17am
Quoting ukmanthailan
@ imjscn - Do you mean an hourly reversal bar on the 27th? If so I can see that and I also see it as a HIP on the daily charts...

However, taking the average of the previous day's high, low and close then multiplying it by 2 and subtracting the high to find the next day's resistance seems a bit arcane and moreover predictive, which I thought we didn't do.
I meant daily. It's last Friday. Different brokers open/close might different, so we might get a different bar, but that day was the first impulsive down day since the run up.

yes, we TAF chaps don't pay much respects on pivot levels
Quote chief's words-- "support/resistance are alive".
When a price level is difficult to crack, we know that somebody is putting money there to defend that level-- that's the living support/resistance. If we detect him, we still need to see how strong he is, then, we decide to join him or not.
  • #22,702
  • Feb 3, 2011 6:22am Feb 3, 2011 6:22am
Quoting ukmanthailan
[...]
Regarding pivot points - taking the average of the previous day's high, low and close then multiplying it by 2 and subtracting the high to find the next day's resistance seems a bit arcane and moreover predictive, which I thought we didn't do.
[...]
Hi Mark,

I think we have to look at this pivot lines a little different. From the calculation of these lines your are right for sure: Stupid formula and a very silly idea of predicting the market this way.

But there is also the effect of self fullfilling prohecies to consider. When maybe 2/3 of the liquidity or let'S say capital pay attention to these lines, we have to respect them also as some knowledge about the "terrain".

But thats just my view and of course very subjective :-)

Cu,
Niels
  • #22,703
  • Feb 3, 2011 6:23am Feb 3, 2011 6:23am
@ imjscn OK, thanks. I've got 1.3745 as the high for Friday. Mine runs from midnight GMT I think.

@ Niels - Yes, if plenty of others are using them then they have some relevance, but do institutional traders use pivot points?
  • #22,704
  • Feb 3, 2011 6:30am Feb 3, 2011 6:30am
Happy trading day everyone. It is good to see so much conversation here today. Enjoying the discussion. I had to remove 4 foot drifts of snow from my drive way yesterday, and now the temp outside is down to -6F, so I am comfortably sitting here with a cup of coffee reading and enjoying.

I have no trades yet today, and am watching the GBP/$ and E/$ for trades now. Cable has squared the entire move after the announcement today, so lets see where we go from here. Good trading!
  • #22,705
  • Feb 3, 2011 6:33am Feb 3, 2011 6:33am
Quoting triger88990
If you think in term of oreder flow, above the high and below the low of the previous day there will always be some cluster of stop order,sometimes it might be a couple of ticks below/above, but in that general area.

So traders are inclined to drive to market in that direction, is a great and efficient way of finding liquidity, that's what trading is all about, finding liquidity

It's about knowing the market structure and the enemy and how they use to operate in the battle field!

all the best!
Very well said!

Mark, if you carry trigger88990's view on mind when watching the market at levels, you will gain more sense about those levels.
  • #22,706
  • Feb 3, 2011 6:34am Feb 3, 2011 6:34am
Quoting ukmanthailan
@ imjscn OK, thanks. I've got 1.3745 as the high for Friday. Mine runs from midnight GMT I think.

@ MaMood - Yes, if plenty of others are using them then they have some relevance, but do institutional traders use pivot points?
We should ask LoveCraft for that info.
But according to my little knowledge floor trader do and many other institutionals too. But I'm very curious about first hand info from LoveCraft about that ...
  • #22,707
  • Feb 3, 2011 6:37am Feb 3, 2011 6:37am
@ imjscn - I will certainly keep it in mind.

From now on, you guys are all my enemies!

@ Barbara - I'd be very interested too.

@ everybody - stop posting when I'm writing a reply, my "@" button is becoming worn out and I don't have time to edit all my posts like this.
  • #22,708
  • Feb 3, 2011 7:01am Feb 3, 2011 7:01am
Quoting ukmanthailan;4368229[...

@ Barbara - I'd be very interested too.
We will see, Samantha
  • #22,709
  • Feb 3, 2011 8:07am Feb 3, 2011 8:07am
I like to trade Mr. Trichets Press Conferences very very much.
He is so easy to translate into market reactions.
I'm following him for more than 2 years now.
Unfortunately he is going to leave this year ...
  • #22,710
  • Feb 3, 2011 8:09am Feb 3, 2011 8:09am
@sylar, thanks.
@fana, pleasure to meet you.

Quoting MaMood
We should ask LoveCraft for that info.
But according to my little knowledge floor trader do and many other institutionals too. But I'm very curious about first hand info from LoveCraft about that ...
Mamood, I wouldn't want fti to ban me for promoting rigidity, but I'm flattered that you would think to ask me. I was not a spot forex trader, so fti should be the go-to-source. My guess would be that he'd have no recollection of attributing any of his profits from correctly playing a pivot level. With apologies to fti, I'll say that as an index trader , I'd watch the levels where most of the volume is transacted. Pivot calculations would usually nail the most significant level, so a lot of scalpers seemingly trade the pivot level, whereas in reality they are trading the congested volume-at-price. But because of the subjectivity, I think most bookrunners ignore specific levels. Too rigid.

Index trading has huge INTRADAY bumps in open interest, and when the underlying index makes a sharp afternoon u-turn, the DAYtrading positions will be squared into the direction of the reversal, because that congestion level represents the line between profit and loss for DAYtraders, which has implications for financing costs. If you had gamma exposure, you wouldn't want to be caught on the wrong side of the pivot before the close, because if open interest is still elevated, the index could gap in the direction of the reversal the following morning. This is especially true if institutions are long the strike prices at those levels. Again, those more experienced in forex should chime in.
  • #22,711
  • Feb 3, 2011 8:19am Feb 3, 2011 8:19am
Quoting lovecraft
@sylar, thanks.
@fana, pleasure to meet you.



Mamood, I wouldn't want fti to ban me for promoting rigidity, but I'm flattered that you would think to ask me. I was not a spot forex trader, so fti should be the go-to-source. My guess would be that he'd have no recollection of attributing any of his profits from correctly playing a pivot level. With apologies to fti, I'll say that as an index trader , I'd watch the levels where most of the volume is transacted. Pivot calculations would usually nail the most significant level, so a lot of scalpers...

Sorry Lovecraft,
was not my intention to cause you any problems with giving an answer.
But I don't think that fti will "ban" you for doing that.

I see it this way:
We have our ideas and understanding of the markets structure and how it is functioning according to fti's teachings. But we are also very happy, when a Pro shows up and gives his ideas for discussion.

I feel it was a great fortune, that you have shown up in here.
I consider you as a kind of "Guest- or keynote speaker".
You give us some new material for thoughts and valuable discussions

Thanx for that, Lovecraft!

Niels.
  • #22,712
  • Feb 3, 2011 8:35am Feb 3, 2011 8:35am
Just for Info:

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  • #22,713
  • Feb 3, 2011 8:38am Feb 3, 2011 8:38am
MaMood, thanks for the extremely kind words, but I am in the same boat as you. I'm here to partake of fti's wisdom (hope he's doing ok now). As you say, we all come here with our own ideas and understanding of the markets. From my viewpoint, I devoured all of his posts easily because my own life experiences (both successes and failures) helped shape and visualize the narrative in my mind that he was constructing.
  • #22,714
  • Feb 3, 2011 8:43am Feb 3, 2011 8:43am
Quoting MaMood
Sorry Lovecraft,
was not my intention to cause you any problems with giving an answer.
But I don't think that fti will "ban" you for doing that.

I see it this way:
We have our ideas and understanding of the markets structure and how it is functioning according to fti's teachings. But we are also very happy, when a Pro shows up and gives his ideas for discussion.

I feel it was a great fortune, that you have shown up in here.
I consider you as a kind of "Guest- or keynote speaker".
You give us some new material for thoughts...
@ Lovecraft

We are all here to learn & share.

As the late Bruce Lee would say "Absorb what is useful & discard the rest"

It's up to each of us to found whether the info is useful of our own MO... Do continue to share further "Pro" info with us

P.S. What craft are r in Love with?
"Thinking Heart & Feeling Brain"
  • #22,715
  • Feb 3, 2011 8:48am Feb 3, 2011 8:48am
Quoting lovecraft
MaMood, thanks for the extremely kind words, but I am in the same boat as you. I'm here to partake of fti's wisdom (hope he's doing ok now). As you say, we all come here with our own ideas and understanding of the markets. From my viewpoint, I devoured all of his posts easily because my own life experiences (both successes and failures) helped shape and visualize the narrative in my mind that he was constructing.
@lovecraft
Your posts are really very refreshing....thanks for joining TAF.....at the end we all here are students.....

@Mamood:

Congrats for number 2 position......u r scaling new heights in ur head...i can see it...congrats man..


V
  • #22,716
  • Feb 3, 2011 8:58am Feb 3, 2011 8:58am
Quoting Sylar
@ Lovecraft

We are all here to learn & share.

As the late Bruce Lee would say "Absorb what is useful & discard the rest"

It's up to each of us to found whether the info is useful of our own MO... Do continue to share further "Pro" info with us

P.S. What craft are r in Love with?
Another Bruce Lee quote I like and which is quite applicable to those of us under fti's tutelage is this:

"A teacher is never a giver of truth – he is a guide, a pointer to the truth that each student must find for himself. A good teacher is merely a catalyst."
  • #22,717
  • Feb 3, 2011 10:06am Feb 3, 2011 10:06am
Anyone heard from fti recently? I am very worried and scared for him. Given his recent family history, I do not want him to be alone now.
  • #22,718
  • Feb 3, 2011 10:13am Feb 3, 2011 10:13am
Quoting GEfx
Anyone heard from fti recently? I am very worried and scared for him. Given his recent family history, I do not want him to be alone now.
Hi GE, i also share your worries...
  • #22,719
  • Feb 3, 2011 10:21am Feb 3, 2011 10:21am
Quoting GEfx
Anyone heard from fti recently? I am very worried and scared for him. Given his recent family history, I do not want him to be alone now.
He went to his mother's home for Chinese New Year. His sister drove him there. So, at least he's not alone.
  • #22,720
  • Feb 3, 2011 10:41am Feb 3, 2011 10:41am
Quoting imjscn
He went to his mother's home for Chinese New Year. His sister drove him there. So, at least he's not alone.
Hi Imjscn. Thank you very much for this message. Thats good. I pray for him still, hope he will be ok. Once thanks
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