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Technical Analysis Fallacy

  • #23,461
  • Mar 17, 2011 3:09pm Mar 17, 2011 3:09pm
Hi Fti & Friends!

Hope you have all survived that JPY tsunami last night.
Unfortunately I was not in my trading room at that time ....

Glad to read some valuable comments from you, fti.

I'm very busy these days.
The certification to become a professional fund manager takes all my energies. Have never been working so highly focussed and with proper mindest, like in the past few weeks. So most of the time I'm only checking the FF calender and read your postings.

Hope I'll find some more time to spend in TAF in the future again.

All the best,
Niels.

p.s.: When trying to survive in a professional trading environment, it shows the real worth of fti's teachings: Not only the market structure, the technical aspects of trading but also the MO of dancing respecting some very strict risk parameters. And the development of your own trading personality. All these building blocks are necessary to have at least a chance to survive. Wished I would have had the chance to get trained by fti in his bank days.

So my message to you all:
Take all the time you need to grasp all of fti's teachings and insights and it may open you a door into a very promising world of trading. I have tried a lot of deviations to his teachings, cause I thought that they would offer some advantage compared to fti's original teachings. But none of these meanders have survived, but they have brought me closer to his teachings finally. It has taken me more than 3 years now and I'm still not there. Probably it will take another 3 years or more to get settled as a successful Pro-trader. But to study this thread and do some research and training (training, training, training, training, training, training) of fti'S MO is worth every hour.

THANK YOU FTI!!
  • #23,462
  • Mar 17, 2011 3:50pm Mar 17, 2011 3:50pm
Good to hear from you mamood! It is nice to see your initiative in a challenging industry. I am working very hard to excel in university (and am currently completing the ACI dealer's handbook and options training). Perhaps I will see you someday, if not in person, then on the battlefield in a different capacity from yours. Please contribute as you see fit. Best wishes.

Quoting MaMood
Hi Fti & Friends!

Hope you have all survived that JPY tsunami last night.
Unfortunately I was not in my trading room at that time ....

Glad to read some valuable comments from you, fti.

I'm very busy these days.
The certification to become a professional fund manager takes all my energies. Have never been working so highly focussed and with proper mindest, like in the past few weeks. So most of the time I'm only checking the FF calender and read your postings.

Hope I'll find some more time to spend in TAF in the future again....
  • #23,463
  • Edited 4:26pm Mar 17, 2011 4:13pm | Edited 4:26pm
Hi again,

have you ever seen such a clean chart?
It's the M15 from Oil today.
Have never seen that before ...

.
Attached Image
  • #23,464
  • Mar 17, 2011 4:44pm Mar 17, 2011 4:44pm
I don't follow oil unless there's a clear correlation at the moment. That cleanliness is actually concerning, a strong force might be in play.
  • #23,465
  • Mar 17, 2011 6:20pm Mar 17, 2011 6:20pm
Quoting MaMood
Hi again,

have you ever seen such a clean chart?
It's the M15 from Oil today.
Have never seen that before ...

.
UN backed the resolution to put the 'no-fly zone' over Libya. Which is another word for another war.

I have only seen such systemic charts on usd/chf and eur/chf before. Somebody is definitely in control.
  • #23,466
  • Mar 17, 2011 6:29pm Mar 17, 2011 6:29pm
Quoting Atomic_Sheep
Lost my account for the first time on that blip... I don't get the yen... japan is getting hit hard every day and the yen just keeps rising... sigh! Then again... I knew I was going to get knocked out tonight... so my fault for not getting out... but I was long for 2-3 months and was down a lot anyway so I just thought... bugger it... let it burn if it burns. So much for long USD. Everyone keeps raving about how good of a trade it is... and yer... obviously not.
I believe you understand your problem very well already.

Just don't label a bad trade "long term" and forget about it. From the moment your trade went wrong till today you were biased every day. We all are if we have open positions.
  • #23,467
  • Mar 17, 2011 7:28pm Mar 17, 2011 7:28pm
thanks to BOJ for the profits.
  • #23,468
  • Mar 17, 2011 7:32pm Mar 17, 2011 7:32pm
Quoting fti
thanks to BOJ for the profits.
  • #23,469
  • Mar 17, 2011 7:33pm Mar 17, 2011 7:33pm
Quoting fti
thanks to BOJ for the profits.
double that....


V
  • #23,470
  • Mar 17, 2011 7:34pm Mar 17, 2011 7:34pm
BOJ woke up and is letting everyone know who's in charge.
  • #23,471
  • Mar 17, 2011 7:36pm Mar 17, 2011 7:36pm
Quoting MaMood
Hi again,

have you ever seen such a clean chart?
It's the M15 from Oil today.
Have never seen that before ...

.
remember it, the form
is call manipulation.
only 1 word, cartel.

next time you see such a chart.
square out pronto.
We had some of this also in euro recently.


regards
  • #23,472
  • Edited 8:06pm Mar 17, 2011 7:51pm | Edited 8:06pm
Quoting GEfx
BOJ woke up and is letting everyone know who's in charge.
the last time they intervene markets, got backlash from G nations.
This time they have disaster, more humbled.
So they asked G7 for approval.
Just came this morning.
BOJ is getting better now.
so brace for more after shocks.

put on helmets.
wonder who was it that blocked Japs from repatriating funds by making morkery of market price.
Now his donkey burns. Would love see yen at 90s again
remember to flow, bias is bias only hor.
With the need for rebuilding , the old prices of 130yen would be nice.
I believe no jap exporters would challenge that now.
there's need to give reasons to people buy from them now.
cheap would be good excuse.
they have good track record for quality.
so quality and cheap is very powerful strategy.


regards
  • #23,473
  • Mar 17, 2011 8:20pm Mar 17, 2011 8:20pm
I attached a very interesting article from bloomberg. Who do you think was selling those call options to the jittery market?? The best of the best you guessed it. A few hours later they are so far in the black the printing press is running at full speed ahead. That is the real speculative fx market none of this retail spot market business. Other than your broker no one cares about your stop on your 1 standard lot or maybe even less.

Demand for options that protect against gains in the yen versus the U.S. dollar surged to a nine-month high as the Japanese currency climbed to a record on concern the nation’s nuclear crisis is escalating.

The yen strengthened for a fifth day on speculation Japan will delay intervention to limit the currency’s advance to counter the repatriation of assets by insurers and investors seeking to pay for damages after the nation’s worst earthquake.

The so-called risk reversal rate for one-month options on the dollar versus the yen surged today to as much as a 2.5 percentage point premium in favor of calls granting the right to buy Japan’s currency over puts giving the right to sell, the largest since June. The premium has expanded from as small as 0.21 percentage points on March 11.

“The violent surge in yen really scared the market and induced demand for options as a hedge of further appreciation,” said Neil Jones , head of European hedge-fund sales at Mizuho Corporate Bank Ltd. in London. “Volatility is much higher as there is also demand from investors using these options as a proxy hedge for other long assets, not just exchange rate positions.”

The yen soared 4.5 percent in 26 minutes as markets closed in New York and re-opened in Asia amid speculation automated trades to limit losses were taking place. The yen reached 76.36 per dollar before erasing its gains, and traded at 78.72 today. The currency resumed its rally as Finance Minister Yoshihiko Noda said Group of Seven officials will meet today to discuss the aftermath of last week’s earthquake in Japan.

Implied Volatility

One-month implied volatility on options for the dollar-yen jumped to as high as 20.1 percent, the most since March 2009. The rate was 8.50 on March 10, a day before the magnitude-9 earthquake hit. Implied volatility is a measure of expected price swings and the key gauge for option prices.

The G-7 discussions will begin at 6 p.m. New York time and encompass currencies, Noda told reporters in the capital. Japan will brief officials on the damage to the economy, he said. Noda declined to comment on any possible intervention.

The yen had tumbled from a 15-year high versus the dollar on Sept. 15, sliding the most in almost two years, after the Bank of Japan sold 2 trillion yen ($25 billion) in September in the nation’s first currency market intervention since 2004.

The dollar-yen risk-reversal rate averaged minus 1.67 percentage points since October 2003, with Japanese exporters traditionally the buyers of U.S. dollar puts, or equivalently yen calls. A negative rate shows greater relative demand for yen calls compared with yen puts as gauged by differences in implied volatility. The options provide corporations insurance against dollar depreciation, which cuts into export profit when they are converted back to yen.

Movements in implied volatility, a gauge of traders’ expectations for future currency swings and used in setting options prices, is a barometer of option demand.
  • #23,474
  • Mar 17, 2011 8:46pm Mar 17, 2011 8:46pm
Quoting Guerrillawar
I attached a very interesting article from bloomberg. Who do you think was selling those call options to the jittery market?? The best of the best you guessed it. A few hours later they are so far in the black the printing press is running at full speed ahead. That is the real speculative fx market none of this retail spot market business. Other than your broker no one cares about your stop on your 1 standard lot or maybe even less.

[b]Demand for options that protect against gains in the yen versus the U.S. dollar surged to a nine-month high...
Bloomberg said nothing except about options volitility.
And your accusations are unfounded, my friend.
But as usual , no one is wiser to the truth.
We wait see which dealer bellys up, then maybe a glimpse at the truth.


regards
  • #23,475
  • Mar 17, 2011 8:49pm Mar 17, 2011 8:49pm
the markets are try to decoy, with currency rallys.
That cannot be strong. Unless all had given up on the devauation plan against panda. Unlikely.
3 corner battles?
Romancing 3 kingdoms?
careful with the volitility.
remember, stability is soup of the day.

regards
  • #23,476
  • Mar 17, 2011 8:58pm Mar 17, 2011 8:58pm
Quoting fti
Bloomberg said nothing except about options volitility.
And your accusations are unfounded, my friend.
But as usual , no one is wiser to the truth.
We wait see which dealer bellys up, then maybe a glimpse at the truth.


regards
I guess I got carried away. My thoughts were just the ramblings of a drunk on St. Pattys day one to many Johny Walkers in me But, in all seriousness this is going to be a interesting story to follow. Its my haunch the same institution the initiated that massive run on the stops that snowballed was the same one selling the calls. Only time will tell.
  • #23,477
  • Mar 17, 2011 9:03pm Mar 17, 2011 9:03pm
price hinted up move numerous times, if not already long by 79.13, not feeling price enough.
  • #23,478
  • Edited 9:18pm Mar 17, 2011 9:07pm | Edited 9:18pm
Quoting Guerrillawar
I guess I got carried away. My thoughts were just the ramblings of a drunk on St. Pattys day one to many Johny Walkers in me But, in all seriousness this is going to be a interesting story to follow. Its my haunch the same institution the initiated that massive run on the stops that snowballed was the same one selling the calls. Only time will tell.
No harm done.
But to speculate on the participation is dangerous.
The facts is that some one tried a fast one on the market, at twinlight zone.
These peeps are ill xperienced to believe that the owners of these markets will do nothing.
I suspect them big boys, but inexperience lot.

And bloomberg is not prudent to try light that fire.
You see the options markets are synthetics and derivatives , so is miniscue compared to the international trade and underlying bricks and mortar cash weight.
Many futures contract traders has that same illusion.
Be advised, it is the spot that drives the forwards and synthetics, and not the other way around.
although mostly you may findforward markets overshoot, This is due to the volitility of thin markets.


regards
  • #23,479
  • Edited 9:48pm Mar 17, 2011 9:34pm | Edited 9:48pm
Quoting fti
The facts is that some one tried a fast one on the market, at twinlight zone.
These peeps are ill xperienced to believe that the owners of these markets will do nothing. I suspect them big boys, but inexperience lot.
This type of insight is what makes this thread hands down the best on the net. Its a genuine value to have the extreme movements and their implications explained in such a manner from a seasoned professional.

I personally respect the options market greatly. It just my opinion that its not a mere derivative of the cash market but has become a integral part of the organism that is the modern day fx market. The same thing with the treasury market as well. I was working on the CME floor during the month of december and I was introduced to the edges of the options market. If its approached in a professional manner the possibilities of low risk edges are immense. There are just so many possibilities when you actually have real capital to back your ideas. I was amazed at some of the skills that a few of these guys possess.
  • #23,480
  • Mar 17, 2011 9:47pm Mar 17, 2011 9:47pm
Fti,

Wanted to post when I saw you online and thank you for presenting your knowledge here.
I spent my first 2 trading years with the James16 group and had some success but I did not have the patience to wait sometimes days for a trade to appear. I started exploring a million other ways to trade and lost my ass. Then I found this thread and everytime I went elswhere I could not quit coming here. I met my now good friend Sylar who explained some things my western brain could not grasp and now it is all beginning to come together. I have had one losing trade in the last 3 weeks and dug myself out of one very deep hole. I could never had done that had it not been for you sir, my friend sylar,and some great explanations from the seniors here.

Thanks to all of you. I'll go back to lurking now.

Good trading
Mike
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