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Technical Analysis Fallacy

  • #22,981
  • Feb 11, 2011 9:20pm Feb 11, 2011 9:20pm
Quoting GEfx

Having financial resources to continually fund an account does not make you a trader, it makes you a successful traders best friend!
Quote of the week.
  • #22,982
  • Feb 12, 2011 1:40am Feb 12, 2011 1:40am
Hi guys, I am looking for scripts to do a quick buy/sell/flip. I would really love to have just a simple buy and sell button that prompts the number of lots.

Anyone have one that works? I tried an EA and all it did was continuously add new orders w/o my confirmation! (demo)
  • #22,983
  • Feb 12, 2011 5:53am Feb 12, 2011 5:53am
Hi folks,

first of all excuse me for my bad english, I'm from Italy.

I found great ideas and people here, especially Mr. fti to which I wish all the best.

I tried to read as much as possible, but unfortunately, I use the slowest internet connection all over the world so it is very difficult for me to read all interesting, but too many, posts here.

Could someone suggest me the key posts for trying to understand the fti approach?

Thanks to all
You learn something new every day
  • #22,984
  • Edited Feb 13, 2011 7:07am Feb 12, 2011 7:33am | Edited Feb 13, 2011 7:07am
@Fullperson
If your using Mt4, You can try this out. I'm not affiliated in any way and have not gotten to try it yet myself. I found it last night looking for a faster way to
execute orders in mt4.

Be sure to scroll down and use the free version 2 if you try it.

http://www.toolsfortradingtheforex.c...utproduct.html
  • #22,985
  • Feb 12, 2011 4:55pm Feb 12, 2011 4:55pm
Inserted Video
  • #22,986
  • Feb 13, 2011 9:06am Feb 13, 2011 9:06am
Quoting GEfx
I've been reading the posts today and thought I'd add my 2 pips. The discussion on capitalization, draw downs, implementation of the fti approach, etc. has been interesting.

I would suggest that anyone new to trading consider separating the "learning to trade" activities from the "learning to be a trader" activities. Both are presented here in fti's material. Start with the "learning to trade" activities. Study the first 200 pages of this thread, learn all you can about PA, study TA, and study technical indicators (to learn that their benefits...
Certainly needs to be approached as a business huh.
Rgds.
  • #22,987
  • Feb 13, 2011 9:20am Feb 13, 2011 9:20am
Quoting jacson101
Certainly needs to be approached as a business huh.
Rgds.
Hi jacson, this is a brilliant summary! Thank you.
  • #22,988
  • Feb 13, 2011 3:16pm Feb 13, 2011 3:16pm
Quoting jacson101
Certainly needs to be approached as a business huh.
Rgds.
Certainly !

To add some fighting spirit in the business (which is needed), I also count-

Daily Balance = Daily Profit - Daily Salary - Daily Life Cost - Daily Interests of Capital
  • #22,989
  • Edited 4:11pm Feb 13, 2011 4:00pm | Edited 4:11pm
Quoting imjscn
Certainly !

To add some fighting spirit in the business (which is needed), I also count-

Daily Balance = Daily Profit - Daily Salary - Daily Life Cost - Daily Interests of Capital
Heh yep, and that's if we're perfect day in day out.
Fwiw, A further assumption can also be made whereby all costs have equal weightings daily salary, daily cost and interest, etc.
So whatever we deem acceptable today as far as a figure, a multiplier of 3 should really be taken into consideration.
Ofcourse at that point, being that "good" should be more than enough.
  • #22,990
  • Feb 13, 2011 5:05pm Feb 13, 2011 5:05pm
Quoting jacson101
So whatever we deem acceptable today as far as a figure, a multiplier of 3 should really be taken into consideration.
yes, keep some for raining days.
Quote
Ofcourse at that point, being that "good" should be more than enough.
Need outliers to hit that point
  • #22,991
  • Edited Feb 14, 2011 3:32am Feb 13, 2011 9:29pm | Edited Feb 14, 2011 3:32am
I have been going over the early part of this thread again recently and although I have managed to incorporate elements of the mindset and tactical awareness into my MO, I have realised that in no way am I anywhere near to trading in the manner described.

My principal issue is actually a very big one, namely the attack progressions used. Whilst I see the sense of rescue sequences and have used them effectively on numerous occasions, I have always had a problem with the attack sequences.

Increasing your exposure in a non-linear manner to get closer to the current level of the market when you have made a mis-timed entry makes perfect sense to me but using something like a 1-2-5 sequence in an attack invariably lands me in trouble.

I know that the precise sequence should vary according to volatility and other conditions but given that we can never be sure things are going to unfold as we might think, it always seems counter-intuitive to bring your position much closer to the market when you are in profit, and it leaves very little room for error.

For example, if I bought 1 lot of cable at 1.6050 then decided that the subsequent move merited a sustained attack and bought another 2 lots at 1.6070, I have now brought my average entry price up to 1.6063, meaning that a small 7 pip retracement will see me with no profit and wondering whether to offload the positions before I get into negative territory, or hold on and hope.

I have tried to get round this by waiting until I am deeper in profit but that usually results in me missing the bulk of the move, and also by entering the 2nd lot of troops much earlier but that is very dangerous as 1 or 2 pips can see you with a loss and if the position subsequently needs resucing you now have to expend much more capital in the process.

To sum up, I guess I am saying that I actually cannot understand how phi and its skew work with money management to make me more profitable. Although I am happy to be profitable, I have spent a long time studying this thread so it is quite disappointing to me to have to admit that I still do not understand what might be at the very core of the MO.

I'd be really grateful for any advice or help regarding this point.

EDIT: Just in case anybody gets hold of the wrong end of the stick, I'm not making a criticism of the MO in any way, simply looking for help in understanding it.
Also, I don't want to get sidetracked into a discussion about the details of my example, e.g. people saying that 1-2-5 is overly aggressive. I used that progression as an example for two reasons: firstly because it is one that has been mentioned earlier in the thread and secondly because it is simpler to look at than say a 1-1-2-3-5-8 attack. The end result is similar in that the larger you get, the close to the market your position gets, which is what I was querying.
  • #22,992
  • Feb 14, 2011 5:00am Feb 14, 2011 5:00am
Quoting ukmanthailan
I'd be really grateful for any advice or help regarding this point.
You seem to be thinking in terms of a single sequence. What about previous trades and foreign cap booked? The more foreign cap you have then you can skip skews. Lets say you did a successful 1,1,2 sequence and booked some foreign cap. On the next wave, if it looks good you could skip and go for a 2,2,4 sequence. When you are using larger skews remember nimbleness, you're in for the quick pips so don't hold on and hope. If you don't feel comfortable then don't do it. Keep working within your abilities until they develop and you're ready to jump into the next level.
  • #22,993
  • Feb 14, 2011 5:47am Feb 14, 2011 5:47am
That's why it's important to time your attacks. Don't attack unless you see an opportunity-otherwise you risk bringing your average too close to the market. Again, the foreign cap is an important dictator of whether you can take extra risk or not.
  • #22,994
  • Edited 6:18am Feb 14, 2011 5:58am | Edited 6:18am
Quoting ukmanthailan
I have been going over the early part of this thread again recently and although I have managed to incorporate elements of the mindset and tactical awareness into my MO, I have realised that in no way am I anywhere near to trading in the manner described.

My principal issue is actually a very big one, namely the attack progressions used. Whilst I see the sense of rescue sequences and have used them effectively on numerous occasions, I have always had a problem with the attack sequences.

Increasing your exposure in a non-linear manner to get closer...
UK,

Regardless of small skew, or large skew ( skewing is just a dynamic, non-rigid math formula of adding to or establishing your position) the mechanics still work the same, cover with partials to ensure profit for remainders.... you're trying to time your hit/add when price breaks in your favor, the longer you wait for confirmation the farther price has moved away allowing any retrace distance to squeeze you. How many times have you watched the charts, seeing when price is making it's run that it will coil and break, you see this on all time frames, price makes makes most of it's run in breaks with ending patterns finishing the distance.

Refer to the famous FTI MO trade pic, he shorted with 20units, scout, checker, double and then hit the fall with 16, and just as fast he covered with 8 within or on the next candle. and followed again covering 5 on the next. Now that pic was hypothetical as it was drawn after the fact and for optimal performance. But there's much to gleam from that thought process summarizing FTI's trade MO. From skews,timing/ mistimed attacks, feeling a pulse (average #of bars in run) and overall intent.

Again there's nothing cast in stone, there's times to hit big, there's times to trade small skews, there's time to trend trade, there's times to trade the range (there's a difference). Experience will help tell you the difference and when to upsize, but the MO remains.

You want to position yourself as best as possible within the context of current PA, to limit your backside in relation to the charts (that point where your bias would be proved wrong on the charts) with the possibility for the best profit potential. ( How far that point is in relation to where you are now will determine your aggressiveness or even if logically your trade attempt is worth the risk). Ideally adding at the onset of price making it's run. ( If you see the break and you're not already positioned you're too late for large skewing) Taking profit with partials which will be used to ensure profitability for the remaining troops, as your backside ( bias' break point is now immediately behind the breaking PA) You can't hold troops in battle if price retraces past that point. You would exit and look to reestablish on signs of the retrace ending, or reevaluate your directional bias. The goal is to have captured enough with the those partials so that you have enough profit to cushion your remainders against your bias' break point. Obviously where you entered in relation to that point dictates your moves. If price is trending then it will stair step in your favor, after the current run, price will retrace (but not as far) you will have sufficient profit to protect any remaining scout or partial and position for the next break/run in the trend direction............ i.e. riding.

fwiw.
  • #22,995
  • Feb 14, 2011 7:20am Feb 14, 2011 7:20am
Quoting fullperson
That's why it's important to time your attacks. Don't attack unless you see an opportunity-otherwise you risk bringing your average too close to the market. Again, the foreign cap is an important dictator of whether you can take extra risk or not.
Another example would be to go heavier on the skew when markets are tending and retraces are small. Timing is important but one should always be prepared for rescues. Look at the terrain and see what it says. Move like water and be prepared. Experience will build confidence and a lot of questions get answered with practice.
  • #22,996
  • Feb 14, 2011 7:44am Feb 14, 2011 7:44am
Thanks guys. Some helpful advice...but out of interest does anyone actually know why I would want to base my attack sequences on Fibonacci numbers rather than any other sequence, such as 1-2-3-4-5 for example?

Cheers.
  • #22,997
  • Feb 14, 2011 7:56am Feb 14, 2011 7:56am
Quoting ukmanthailan
Thanks guys. Some helpful advice...but out of interest does anyone actually know why I would want to base my attack sequences on Fibonacci numbers rather than any other sequence, such as 1-2-3-4-5 for example?

Cheers.
I suspect that is the reason fti recommends studying the structure of the great pyramid. Remember, it's not only attacks but rescues also.
  • #22,998
  • Feb 14, 2011 8:06am Feb 14, 2011 8:06am
Quoting ukmanthailan
Thanks guys. Some helpful advice...but out of interest does anyone actually know why I would want to base my attack sequences on Fibonacci numbers rather than any other sequence, such as 1-2-3-4-5 for example?

Cheers.
Hi UK. Fibonacci is stabile. When you will be doing the same things at the market, you will have some ratio of success. Fibonacci is pure nature. For example.... 1failed, try it wit 1.... flat/or... failed both... In the same conditions you will need 2 to do the same and when OK, flat. Or failed....What do you need now, when the same conditions to be flat? regards
  • #22,999
  • Feb 14, 2011 8:06am Feb 14, 2011 8:06am
Quoting ukmanthailan
Thanks guys. Some helpful advice...but out of interest does anyone actually know why I would want to base my attack sequences on Fibonacci numbers rather than any other sequence, such as 1-2-3-4-5 for example?

Cheers.
UK,

The fib spiral gives so many variations for skipping levels and figuring rescues when needed. The spiral gives you the math with out having to figure actual $x.xx's of your position when you base you initial unit of entry. IMHO, FTI said that the fib spiral was the minimum viable skew available, meaning imho, you can gear it much more.

?
  • #23,000
  • Feb 14, 2011 8:11am Feb 14, 2011 8:11am
Outside of OANDA does anyone show a sweep below 9840 on Cad in the last few minutes?
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