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Technical Analysis Fallacy

  • #22,741
  • Feb 4, 2011 2:10am Feb 4, 2011 2:10am
Interesting Mamood! I have not taken a look at the full info yet, but at first glance it is this kind of managing that I enjoy most about trading. So far, I have leveraged flip, and cutting largest position & waiting for a chance to do basis averaging for rescue. Also, I know about (but have not used) the rescue of one pair on another more volatile pair.

Was there another method I missed? I think fti mentioned some others, but that they would require significant capital.

The Vhands simulator is an EA that mimics the movement of the market. You can place trades ect on the EA as if you were actually trading. I have been doing this simulator just to get an idea of the behavior of the the E/U. It essentially allows me to practice on my off time when I do not have school.

Unfortunately, it only allows you to see one chart. It also only allows position sizes of 1,2,5,10,20. This is extremely rigid, but at my stage it takes out the guess work of having to calculate the necessary skew. When I go live, I will not be using these sizes.

At the end of your selected period of trading simulation, there will be a printout of your blotter and your equity curve.

Finally, I wanted to note that while the equity curve is positive, my trading was terrible in the examples I have provided. But the good news is, that having my past history will keep me focused and know what to work on.


Quoting MaMood
Good morning Friends,

I want to share a little excerpt from the book "Beat the forex dealer" with you. The chapters headline: "How to trade out of a losing Position".

Reading some of your posts and looking back on my own postings, I probably have promoted the (leveraged) flip a little to strong. There are some other methods in fti's aresenal of strategies. One of them is described in the attached pdf.

Well -...
  • #22,742
  • Feb 4, 2011 2:23am Feb 4, 2011 2:23am
I do not plan on using stats for FX spot. In fact, modeling the one minute frequency I trade has way too much noise. I find that fti's method is most helpful (managing the trades is really what I'm interested in) for 1 min.

Yes, I am studying stats because employers seem to be looking for some sort of quant experience. I am also studying stats because I figure that you have to understand the models to know when they don't work. I figure that at some point I will encounter an instrument needing models (If I ever make it into the industry).
  • #22,743
  • Feb 4, 2011 2:31am Feb 4, 2011 2:31am
Quoting fullperson
I do not plan on using stats for FX spot. In fact, modeling the one minute frequency I trade has way too much noise. I find that fti's method is most helpful (managing the trades is really what I'm interested in) for 1 min.

Yes, I am studying stats because employers seem to be looking for some sort of quant experience. I am also studying stats because I figure that you have to understand the models to know when they don't work. I figure that at some point I will encounter an instrument needing models (If I ever make it into the industry).
Best of luck to you, fullperson
  • #22,744
  • Feb 4, 2011 2:32am Feb 4, 2011 2:32am
Quoting MaMood
Good morning Friends,

I want to share a little excerpt from the book "Beat the forex dealer" with you. The chapters headline: "How to trade out of a losing Position".

Reading some of your posts and looking back on my own postings, I probably have promoted the (leveraged) flip a little to strong. There are some other methods in fti's aresenal of strategies. One of them is described in the attached pdf.

Well -...
Good morning, MaMood,
thanks for the article.
  • #22,745
  • Feb 4, 2011 2:33am Feb 4, 2011 2:33am
Quoting lovecraft

The outliers count and represent real windfalls.
and real ruins

Great post like all your other posts

Regards,
Baifu
  • #22,746
  • Feb 4, 2011 2:36am Feb 4, 2011 2:36am
Quoting MaMood
Good morning Friends,

I want to share a little excerpt from the book "Beat the forex dealer" with you. The chapters headline: "How to trade out of a losing Position".

Cu,
Niels
Thanks Mamood.

I would really like to read it but I cannot open this file does anyone else have the same problem?

Edit: never mind, I can open the file using another notebook, strange. Thanks again

Rgs,
Baifu
  • #22,747
  • Feb 4, 2011 2:57am Feb 4, 2011 2:57am
Quoting Baifu
and real ruins

Great post like all your other posts

Regards,
Baifu
Thanks a lot, Baifu. Really appreciated. It's great that everyone here offers their own perspectives on fti's teachings, because I have re-learned so many of those lessons while reading through everyone's anguished first few posts. The path towards creating a psychological make-up necessary to manage a different trade every day can take a long time while on the job, but it seems that fti can teach people with no training how in a few months.
  • #22,748
  • Feb 4, 2011 3:05am Feb 4, 2011 3:05am
Quoting lovecraft
[...]
We used statistical models at work, but only because we knew when to ignore them.
[...]
Hi Lovecraft,

you are a real enrichment to our small Family here in.
I like the way you bring things straight to the point.
Cool!

Niels
  • #22,749
  • Feb 4, 2011 3:39am Feb 4, 2011 3:39am
Quoting MaMood
Hi Lovecraft,

you are a real enrichment to our small Family here in.
I like the way you bring things straight to the point.
Cool!

Niels
Hey, MaMood,
I'm humbled by your graciousness. If I knew, I would have registered and said hello earlier. The real enrichment for everyone (including me) is being witness to your taking charge here. Capital markets knowledge is something that can be taught over a long weekend, but I think your natural inquisitiveness and fearlessness should be an inspiration to others. Okay, now I'm talking too much, so I'll shut up for a while.
  • #22,750
  • Feb 4, 2011 3:48am Feb 4, 2011 3:48am
Hi again,

just another excerpt of the above mentioned book. This chapter is about "How to use Crosses". It gives a good idea what fti is referring to, when he is mentioning that "some big guys are engineering something via the crosses".

Cu,
Niels

p.s.: I hope it can pe opened without problems now. It is compatibel to AcrobatReader 5 and above ...
Attached File(s)
File Type: pdf Beat-the- Forex-Dealer_excerp02.pdf   627 KB | 877 downloads
  • #22,751
  • Feb 4, 2011 4:03am Feb 4, 2011 4:03am
Quoting lovecraft
Hey, Fana,
Not sure why that would refute what I said. Certainly wasn't trying to be snarky. Maybe you can enlighten me? before I wear out my welcome with the other senior members here.
Hi Lovecraft. Do you use "snowballing(1,1,2,5...)?" For managing positions? How fast are your actions(trades?) How long do you hold positions and how big? Do you use rescues? Regards
  • #22,752
  • Edited 4:30am Feb 4, 2011 4:19am | Edited 4:30am
Quoting MaMood
Hi again,

just another excerpt of the above mentioned book. This chapter is about "How to use Crosses". It gives a good idea what fti is referring to, when he is mentioning that "some big guys are engineering something via the crosses".

Cu,
Niels

p.s.: I hope it can pe opened without problems now. It is compatibel to AcrobatReader 5 and above ...
Thanks Niels! Another info to add in my book. Guess If I start monitoring the crosses I should buy 1 more monitor(and here I was expecting to squeeze everything in with just 2 -_-!)

eureka moment? :Holy grail batman! I just had a light bulb! that sneaky fti...time to hit fti's notes again........
  • #22,753
  • Feb 4, 2011 4:25am Feb 4, 2011 4:25am
Happy trading day everyone! MaMood, thanks for the pdf files this morning. I enjoyed the reading assignment -- lol. I have my own view of rescue and flipping, and I use them sparing, but enjoy the discussion on this topic. It's good to see that lovecraft has joined the family and you are a welcome addition. I hope we earn your continued participation.

NFP later today (have I mentioned how much I hate NFP? I think I do every first Friday lol). Just a reminder that Canada will announce their employment data 90 minutes before the US, so some CAD trading my shape up then.

Hope you are all trading well (were there any trades today?). Time for a cup of coffee.
  • #22,754
  • Feb 4, 2011 4:28am Feb 4, 2011 4:28am
Thanks Mahood for the article. I like the following:

Minimize your loss and get out. Don't try to turn a losing trade into a winner!

Often in the past I waited for a losing position to turn into a profit, only to end up with a larger loss. Now when rescuing I close at break even or take a small loss and leave the attack to a make profit.
I especially like the last paragraph:
The "gut" simply represents your subconscious mind. Which is constantly processing and storing information that you may not be aware of. The longer you trade, the more reliable your gut reaction will be, since it will have accumulated a vast knowledge base of charts and patterns over all those years. You've probably seen similar set-ups before but cannot remember them, and your gut feeling is your subconscious flashing warning signs.

For any of us who have been trading for some time, it is good to know that we have this vast knowledge inside us. Ray
  • #22,755
  • Feb 4, 2011 4:58am Feb 4, 2011 4:58am
Quoting 1234
Thanks Mahood for the article. I like the following:

Minimize your loss and get out. Don't try to turn a losing trade into a winner!

Often in the past I waited for a losing position to turn into a profit, only to end up with a larger loss. Now when rescuing I close at break even or take a small loss and leave the attack to a make profit.
I especially like the last paragraph:
[font=Arial]The "gut" simply represents your subconscious mind. Which is constantly processing...
so true Ray! Thanks Niels

regards,
eddy
Success consists of going from failure to failure without loss of enthusiam
  • #22,756
  • Feb 4, 2011 6:21am Feb 4, 2011 6:21am
Quoting MaMood
Hi again,

just another excerpt of the above mentioned book. This chapter is about "How to use Crosses". It gives a good idea what fti is referring to, when he is mentioning that "some big guys are engineering something via the crosses".

Cu,
Niels

p.s.: I hope it can pe opened without problems now. It is compatibel to AcrobatReader 5 and above ...
That's a great book about FX, maybe on of the best I have read. There is part of the book for the important times in the day, and I still can't understand the significance of LIBOR Spot fixing and London FIX for FX traders.
  • #22,757
  • Edited 6:44am Feb 4, 2011 6:30am | Edited 6:44am
Quoting MyTbo
That's a great book about FX, maybe on of the best I have read. There is part of the book for the important times in the day, and I still can't understand the significance of LIBOR Spot fixing and London FIX for FX traders.

Yeah it is a great book.
But most of it we (should) know already. But is a good idea to to recapitulate it from time to time.

For all, who are interested in the complete book, here it is on ebookee:

http://ebookee.org/search.php?q=beat+the+forex+dealer

CU,
Niels

p.s.: But here is one more excerpt "How to trade price action". Once again a few pages only for recap. (Maybe of use, when trading the NFP later the day. But you have to wait till PA has calmed down a little....)
Attached File(s)
File Type: pdf Beat-the-Forex-Dealer_excerpt03.pdf   595 KB | 1,062 downloads
  • #22,758
  • Feb 4, 2011 6:31am Feb 4, 2011 6:31am
NFP

Wishing all my fellow TAF members a good trading session later
"Thinking Heart & Feeling Brain"
  • #22,759
  • Feb 4, 2011 6:38am Feb 4, 2011 6:38am
Interesting excerts Niels - thanks.

I don't see the need to open up charts on the crosses though. If sterling is holding firm against the dollar whilst the Euro is tanking then I don't need an EUR/GBP chart to show me that sterling is rallying strongly against the Euro - it couldn't possibly be doing otherwise.

Having said that, I suppose a look at the charts would show possible resistance and support levels more clearly as he mentioned, but I don't think fti ever used them in this manner did he?

EDIT: As an example - right now I would assume that if I opened a 5M EUR/GPB chart it would be on an upward slope - I can see that from the movements of each one against USD. I can also see that GBP is drfiting down against JPY and CHF but not as much as against EUR (not in the case of CHF for sure).
  • #22,760
  • Feb 4, 2011 6:50am Feb 4, 2011 6:50am
Quoting ukmanthailan
Interesting excerts Niels - thanks.

I don't see the need to open up charts on the crosses though. If sterling is holding firm against the dollar whilst the Euro is tanking then I don't need an EUR/GBP chart to show me that sterling is rallying strongly against the Euro - it couldn't possibly be doing otherwise.

Having said that, I suppose a look at the charts would show possible resistance and support levels more clearly as he mentioned, but I don't think fti ever used them in this manner did he?

EDIT: As an example - right now I would assume...
Hi Mark,

I guess that fti does not use the "Cross-charts" itself very often. He is able to know what has to happen there to result in a certain behavior in the 3kgds.

It was meant more as a recap to be aware that "missbehaving" in the 3 kgds may have some explanation/reason in the crosses. And that might indicate some "engineering" or manipulation of the major players ...

CU,
Niels
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