Technical Analysis Fallacy

Hi auxesis

I give set significant high and low to the diagonal square.

Rgs

Gro,

How have you been?

I was just suggesting to use the same settings continuously, what ever they be. So you would get a better feel for pulse, not so much as for squaring a chart.

regards

Hello Fti & everyone,
i'm a newbie for this thread. Hope will learn from and share with you guys.
i found this great thread about 2 months ago( that's the time i knew FF), really want to thank Fti giving us so good trade training. And i'm a little surprised that so many ppl are still active from 2007.
Fti, I read some recent posts and know you have healthy problem. 真心希望你身体早日康复！

sorry for poor English.

Everything was lost it seemed, evil had won the day........ but that was Friday.

Sunday's comin'!

Gentleman:

I have a question for some of the veterans of this methodology. We all agree that this is one of the better approaches to operating consistently in the fx market long term. Do you guys use any secondary methods that have no relation to skews and rescues and the like??

For example I have identified a pattern that is currently working extremely well that requires a very small stop. By using such a small stop risk is greatly reduced so I'm able to trade pretty heavy and the profits are exponentially outweighing my more normal consistent profits. I'm absolutely certain this is a short term fluke and the pattern will not last it simply can't. But under current conditions its working consistently well.

I'm just wondering how much effort you guys put into looking for patterns that are working in current conditions that use tight stops? Thank you have a great weekend.

i am relatively new to trading 3 months. but thanks to FTI, Crusial Point and independent research i am now consistently profitable.

granted im still perfecting the strategy of FTI and this is what my summary of the whole thread upto where i am is.:


Winning the war in forex.

Stop losses: not advisable due to lack of interbank liquidity on times of low volatility, a bump in spread can take you out of the game. (stop loss are to protect against uncertainty and one puts them on in case our judgment is flawed, but if we are actively managing our positions there is no need to have such stops. It only serves as a sitting duck level where unexpected spikes or stop loss triggers can take us out of battle. In other words to have stop losses in place means to have a vulnerability in the battle field for the enemy to see)

Technical Analysis: is the Analysis of charts and price movements, the market is bombarded with gurus, and magic bullet indicators, but the reason why most don't work is because they have taken the actual analysis of price out of the equation. Most lagging indicators impress upon the trader biases and opinions that can be lethal on a ever changing battlefield. And predictive indicators do a great disservice as well, giving traders illusions and targets, they both introduce rigidity to the mind, which becomes lethal, is like a smoke cloud covering the enemies movements. If we are unable to see the enemy and adapt to his tactics we might as well surrender before we get slaughtered.

Understanding why indicators were created is the key to victory, not all indicators will work all the time, in all market conditions. Most indicators have merit to analyze price movement and can be used successfully but tot clutter the mind and charts with them will hinder your ability to adapt tot the market. Laying battle plans in extremely important, knowing our selves and the enemy is the key to battle, for battles are won before they are fought.

Knowing yourself: Risk appetite, Capitalization, and how to use the resources available, psychology,
your style, your plans, and how to troubleshoot bad entries, understand when and when not to fight.

Knowing the enemy: Market structure, Time of the day your trading, trends, key levels, direction, strength and volatility. Feeling the rhythm of price waves, and capitalizing on them.

The backbone of profit is riding the trend: our system needs to be able to ride the trend and be aware of the trend changes, when it no longer makes sense to continue on the same attack tactics and when whe need to switch. However a nimble flexible system must allow us to profit from ranging market conditions as well.

Combining fundamental analysis with price action analysis gives us a great edge, understanding when our troops will be at most risk on release of Fed or CB statements, figures, interest rate hikes, understanding the direction of the USD will also be to our great advantage, as the reserve currency all the majors correlate to the strength and movement of the USD, and the FED are the keepers of the international floating exchange market. The Fed's are in charge of monetary policy of the green back affected by the overall economic conditions of the United States. Banks and Dealers are there to provide liquidity and spread risk among the market participants, orders flow moves price. Currencies are most influenced by open market operations, interventions by Central Banks.


On strategy: when an army enters the battle is a kill or be killed zone, being in the field puts you in the line of fire, there is no way around it. One needs to enter and look for time windows, re evaluate the entry and analyze if the position is still valid. To have the resolve to ride the and exploit the position with precision, if it goes our way, press the attack.

If ill timed then be ready to retreat, with minimal losses ( damage control) or commit your troops to rescue (average down the ill time position to either retrieve troops, or reposition).

Losing a trade is detrimental, both in morale and in damage to our book. One must be ready to rescue our troops and implement proper damage control, we must be careful not to let our rescues snowball into a damaging loss. That is why taking positions lightly, with lack of analysis and planning, is the same as putting your troops in a suicide mission, the objective is to defeat the enemy not your own army.


The art of war
by
sun tsu

The art of war is of vital importance to the state: Trading is War and is vitally important the the trader. Its a road to safety or ruin, to financial gain or crippling loss. As such it must be taking seriously.
Rule by 5 fundamental factors to be considered: 1 the moral law 2 heaven 3 earth 4 the commander 5 method and discipline.

The moral law: when trading is exactly that, one needs to examine one's own moral law and purpose for trading. This will gives us the will, courage and hunger to continue on our trading career. To do what it takes to become successful and once success is establish the purity or our purpose can prevent detrimental thinking to cloud our judgment. One need not lose focus of our goal even when accomplished.

Heaven: signifies time, seasons. Time frames, in which we are trading London open, Asian session, month and year.

Earth: comprises Market structure, ranging, trending, topping, bottoming, areas of support and resistance, all time highs and lows. Stop loss areas and TP areas where prices will become more volatile due to order triggering. Volatility, price structure, formations, price movement and price rhythm.

The commander: is us, stands for wisdom, benevolence, sincerity courage and strictness. This is our psychology our resolve patience, and the commander in us executes the plan and strategies set forth by the general in us.

Method and discipline: engulfs our strategy and tactics our plan and execution, our timing, our direction. Our plan to troubleshoot and rescue our trades when needed, or reposition our troops to capture victory.









%Loss intial capital % profit required to Recover
5----------------------5.3
10----------------------11.1
15----------------------17.6
20-----------------------25
25----------------------33.3
30----------------------42.9
35----------------------53.8
40----------------------66.7
45----------------------81.8
50----------------------100
55----------------------122
60----------------------150
65----------------------186
70-----------------------233
75------------------300
80------------------400
85------------------567
90------------------900

It is important to understand that the market moves in waves, we can research the original wave theory of RN Elliot, however be careful of commercialized guru wave count. The TR from each leg is important to measure volatility time and speed of thrust. We can use fib sequence to implement rescues. 1,1,2,3,5,8. one should be flexible on the management of resources. I would use 5, 5,15 as this seems to be my threshold for now. I would need a 50% retracement for break even, so awaiting that level can be dangerous for my mindset. and rescues should be implemented in a flexible nimble fashion, like tsun zu said out of basic tactics and movements one can combine them into infinite ways. i can use calculations to average down my entry to current inflection point, either to ride or extract my troops with minimal market movement, however, one needs to be very careful not to lead your army over a cliff. to lose a battle is painful, but to lose your entire army in a battle is a disaster. one can start with the smallest lots to perfect and drill, and move on to bigger lots as experience is gained. forget returns and greed, one must not worry about money but about knowledge.


To be profitable:

1 Mindset needs to be in place: commander and general need to be ready
2- identify the overall direction of price : by dollar strength via correlating pairs and factors affecting direcion of USD
3- trade in the direction of price movement
4 identify areas where entries can be made with least possible risk to your troops
5- one needs to know when to: initiate, hold, press, minimize exposure, and liquidate positions
6- trading is an ART not a science, therefore mathematical certainty cannot be attained, the markets are predictably unpredictable

Knowing this and implementing this is huge difference...

BTW i saw ur rescue Skew 1,5,15.....that in my opinion is little very aggressive....


V

i trade with mini lots, so is not agressive at all, 5 lots is .50 ct per pip

so the way i meet my target as far as money goes is 5 scout 10 level two 15 lots on level three.

but i find that i feel my army over exposed with 15 lots in the battle field so i will scale down my attack as to move more confidently and exploit the market better. when the mind feels threaten it is an internal battle that can leave me looking for exits and safe guard my troops even as the enemy flees, therefore limiting my advance.

so i will start a sequence of attack of 1,2,3,5
however the rescue needs to be nimble and flexible in my opinion so i dont have set parameters it depends on how far behind enemy lines my scout is trapped, then i calculate an oportunity where he can be rescued in a fast swift way as we never know when a corrective wave can turn against my position.

however if simply ill timed but the overall battle field seems to be in my favor still then i wouldnt call it a rescue but a repositioning of my army and i can press on attack sequence not rescue even if the scout is pinned down.

Yes, Friday is a Sad Day, but Sunday is Victory - Christ is Risen!!!

Auxesis,

Using the scaling you mentioned, or the scaling option period, do you find that it gives "better" price frequency with drawing tools like pitchforks, or is the primary benefit to gauge angle/momentum of the move?

Thanks in advance,

FX4Newbies

P.S. So much to learn...so little time...all these good nuggets .

FX4Newbies,

Your trying to find common ground between Apples and the rear bumper off a 58 Desoto, Lol.

Certain scaling of charts has several benefits for different trading styles, but for the reference of this thread, it was solely to aid the individual by establishing a base grid size to better judge price momentum. Simply said, keeping the same chart size so I'm comparing the moves in price action from the same everyday.

After enough time in the markets you should develop a better feel for them, visual will give way for intuitive understanding from the volatility, distance and speed of price change. Speed and distance in relation to time shows visually as an angle in price movement but there's a difference between seeing the angle and feeling it. It's more of a training aid, and actually discipline in thinking about every aspect of your trading.

Understand that Fork/Indicator trading is completely different than the Methods discussed here.

regards,

Thanks Auxesis...

Yes I do understand that Fork/Indicator trading is completely different from what FTI teaches (and there is MUCH more for me to read), was just wondering if the change in the scaling would have affected the logistics of the pivots in relation to the each other and therefore how the fork would appear.

Anxious to see the scaling in action this week. I can see how having the same scale on each axis would give a more accurate read on the momentum. I imagine there would be some advantage to a trading style with a more geometric approach (using angles etc.) since the chart has become as a graph page you would use in Math with equal spacing of the squares. Thought maybe there would be some added benefit for trading with forks .

Thanks again for those insights,

FX4Newbies

P.S. And yes, Sunday is coming!

I think everyone's making much more to this than need be....

Here's a workstation with 4 different charts of the same thing , a 5 minute euro chart........... while they all show examples of the same thing, they all look different.

When doing your analysis, charts can be zoomed in or out to see more history if needed, or switch to a higher time frame, but when your in the heat of battle just fix your screens size. Have a template preloaded with your 3k's, so your always looking at the same thing (chart parameters). it will help.

fwiw

you answered your own question to some degree but you havnt convinced yourself so Ill help.
your welcome to and glad to have ya at the site along with congradualation on your recent success.
One can set up a generic system to trade your identified pattern and you may not lose a trade in 6 months if your mm is right. However are you achieving the mental developement that fti has tried to teach which comes with thousands of hours of watching the charts and getting a feel for what its trying to accomplish 5 min. by 5 min. ?
Id say not.
Try starting at the first page.

guerrillawar,
here you go first page about the 6th paragaph.
some conditions not all.

Happy Easter Everybody!!!

Any word how fti is doing???

Thanks,
Jaro

well for all the people here a God(it's not Good it is god) book i read in one sitting...

lot of people i can see will love it...auxesis u come in my mind a lot when i was reading this book..

http://www.amazon.com/Heaven-Real-Li...2&sr=1-1-fkmr0


BTW u know how to get it....


V

seems like a good book...I missed the post on how to get it

btw, I just went on reading about mmakers nowadays. They are using algorithms to prey on market participants. It's actually very interesting, and shameful at the same time. Apparently they "ping" prices to find an upper limit acceptable price for a buyer, then buy up all the shares and manipulate price higher to sell. Mmakers used to be liquidity providers, for the better or worse. But the automated ones can shut down if the market is not doing well. Also, the liquidity the automated one provide seems mostly small scout orders, which they immediately retract.

Perhaps the playing field is changing...we best be prepared. Are there any inefficiencies in this system? Are the players the same? Has the core structure changed at all?

tom still a holiday ... i hate holidays X(

Hello All,

I have been silently reading this thread for the last month, am currently pass page 1000, and I'd thought it be a good time to extend my sincere gratitude to FTI to selflessly spending his time and effort in teaching others how to survive the current war fields. and off course to the others who contributed to this wonderful thread over the years.

I also wish FTI a speedy and wholesome recovery. Again, thank you for what you have accomplished, and I am sure, as many others here, your well-being will be in my prayers to the Almighty One.

祝您健康长寿

Wang