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Technical Analysis Fallacy

  • #24,561
  • Apr 26, 2011 9:13pm Apr 26, 2011 9:13pm
Quoting Jaro
No Evolution can correct me. It has no mind! I believe in Creator. I saw what Evolution - No God - did in the former Soviet Union.

What is happening with E/U???
Good Traiding,
J
eu trying to reach the gods... nimble is required! lest we forget the tower of babel... just my pointless cents ....
Success consists of going from failure to failure without loss of enthusiam
  • #24,562
  • Apr 26, 2011 10:34pm Apr 26, 2011 10:34pm
Quoting dongsky
eu trying to reach the gods... nimble is required! lest we forget the tower of babel... just my pointless cents ....
Hope we speak the same language after this experience
  • #24,563
  • Edited Apr 27, 2011 12:23am Apr 26, 2011 11:58pm | Edited Apr 27, 2011 12:23am
Quoting MaMood
Hi Friends,

this discussion always drives me somehow crazy.

One thing is for sure:
Not everyone out there is ready for driving a highend Ferrari. But I'm sure it is possible to drive such a car carefully and slowly. But in case you need some extra power, cause of a dangerous situation evolving around you, you have some extra HorsePowers at hand and can save your a...

I would also consider it as somehow strange, to complain against a sportscar manufacturer, cause someone got killed by driving too fast ...

But that's just my very personal...
hey Niels , i had the same analogy of leverage with supercars
just that when u want to get to point B from point A , any car will do , supercars will get u there faster if u r a skilled professional supercar driver
but its completely unnecessary to use it just to get to point B

point A is ur starting capital and point B is ur target capital after a period of time
[if u use no leverage at all , u r walking , well u will get to point B but it will take forever , of course if ur point B is a continent away , u ll probably never get there ]

about saving urself using very high leverages , it will work from time to time , and honing ur skill in using it will improve ur chance of success , but as I said at such high leverage the risk of it not working is ur demise , eventually u will kill yourself simply because u cant be perfect all the time , however good u r ...

although this is my personal opinion , I think its the truth ,
also with 1:50 , u can make great money , n will get to point B however far it is , antswork all the way , preserve capital , n aim for consistency

good trading

edit:
1:400 is a freakin spaceship , u only use it to go to mars or venus
To Live is the rarest thing in the world , Most people exist , that is all
  • #24,564
  • Apr 27, 2011 12:44am Apr 27, 2011 12:44am
There seems some one caught very short usd/yen ,(refer the aticle) and trying to buy back. Seems is a big player and muscle down to buy. I can't get in touch with fti, so does any body know who this US party is?

TOKYO, Apr 27 (IFR) - TOKYO, Apr 27 (IFR) - From the early low of 81.27, USD/JPY has rallied strongly. The push down earlier with stops sub-81.40-50 hit was apparently initiated by an US player, perhaps the same one recommending USD/JPY shorts and moves to and below for some time now. They were vindicated when USD/JPY shot down to 76.25 on March 17. Despite the concerted intervention thereafter which saw USD/JPY trade back up above 80.00 and to as high as 85.53 on April 6, this player has continued to talk USD/JPY lower. Despite the sales this morning and this recommendation, USD/JPY saw a solid bounce and very good bids remain below towards 81.00. The bids are seen concentrated just ahead at 81.10 where Japanese institutional investors including life insurers lay in weight. Japanese importers were good buyers into the Tokyo fix too as were investment banks and asset managers ahead of more investment trust (toshin) launches today. Nomura will launch a Y120 bln fund and Daiwa a Y20 bln fund today. Dealers also noted rumors earlier of a "Kamei bid" when USD/JPY traded through 81.40. Mr Kamei was PostTelComm minister in a previous cabinet, and the "Kamei bid" is an euphemism for Japanese Kampo and/or Yucho purchases of USD (Kampo is the postal insurance system and Yucho the postal bank). USD/JPY currently trades 81.55/57.
  • #24,565
  • Apr 27, 2011 12:46am Apr 27, 2011 12:46am
Quoting maheswara
hey Niels , i had the same analogy of leverage with supercars
just that when u want to get to point B from point A , any car will do , supercars will get u there faster if u r a skilled professional supercar driver
but its completely unnecessary to use it just to get to point B

point A is ur starting capital and point B is ur target capital after a period of time
[if u use no leverage at all , u r walking , well u will get to point B but it will take forever , of course if ur point B is a continent away , u ll probably never get there ]

about...
hi maheswara,

and 1:1 leverage would be an armored tank. no speed but safe.

when you compare high leverage with a sports car.. there is one more similarity - when in danger and you step on the gas, you will more likely crash due to stress and excessive speed..
  • #24,566
  • Apr 27, 2011 1:03am Apr 27, 2011 1:03am
Quoting piccolo
hi maheswara,

and 1:1 leverage would be an armored tank. no speed but safe.

when you compare high leverage with a sports car.. there is one more similarity - when in danger and you step on the gas, you will more likely crash due to stress and excessive speed..

One is super speed car and one is total armored tank....


I guess i can live with a Bullet proof Mercedes (50:1) ....

I think i can live with it...

V
  • #24,567
  • Apr 27, 2011 1:08am Apr 27, 2011 1:08am
Quoting piccolo
hi maheswara,

and 1:1 leverage would be an armored tank. no speed but safe.

when you compare high leverage with a sports car.. there is one more similarity - when in danger and you step on the gas, you will more likely crash due to stress and excessive speed..
yup , this analogy of cars to leverages probably the best analogy there is ...
super-fast car crash - mostly death
fast car crash - probably impaired for life (unrecoverable loss) , if lucky survive with a few months in the hospital to recover
slow car crash - a shock n a scratch , u ll be okay the next day
tank crash - u will kill the object u crashed into
To Live is the rarest thing in the world , Most people exist , that is all
  • #24,568
  • Edited 5:27am Apr 27, 2011 1:23am | Edited 5:27am
Quoting maheswara
1:400 is a freakin spaceship , u only use it to go to mars or venus
More like to the moon, me think

It's the yin yang equilibrium thingy I guess, a bit like not using stop loss yet have the discipline to cut when we are dead in water. 三十六計，走為上策 (if everything else fails, retreat) this is what I grow up hearing yet I find it the most difficult to practise.

To have the horsepower of high leverage available and not abuse it with over gearing is another equilibrium we must learn. Fti said for beginners and rescues spend max 10% capital, for the more experienced and attack max 30%. If we interpret "capital" as deposit x leverage, 1:50 leverage means capping with 5 troops for rescue (out of 50, gearing=5), and 16 troops for attack (gearing=15). For 1:400 leverage it will translate to gearing of 50 and 150, any ordinary intraday swing against us will give a margin call, we are doomed to defeat before we engage in battle.

May 20 2008 (post #2735 ish) fti on his own MM:
"The skew is still in infancy stage. Generally we are working on the multiples of 1,1,2,3,5,8 with the base of 2 ................... Although it is comfortable the ROI is not expected to be high. as we are working on 5X on deposits and gearing of positions margining at 50:1.....................we will review the exposure this December, in line with the annualized volitility."

Postings of later battlestations (esp. the ones on Aug 7 2008) make me think base of 2 means he generally employs 40 troops giving 1:5 gearing, this would imply his troop size is 1/8 deposit. If he means base 1 (20 troops) is 1:5 gearing then his troop size is 1/4 deposit. This is way more conservative than most of his followers (I suspect troop size = deposit is the norm, on the other hand limiting skew to 1,1,2 or 1,1,3 will fit 1:5 gearing). Just my guess work of early fti MM, I welcome disagreement if peeps have a different interpretation.

Regards,
Baifu
  • #24,569
  • Apr 27, 2011 1:37am Apr 27, 2011 1:37am
What just happened to the GDP???
  • #24,570
  • Apr 27, 2011 1:39am Apr 27, 2011 1:39am
Quoting Atomic_Sheep
What just happened to the GDP???
check the calendar...


V
  • #24,571
  • Apr 27, 2011 1:45am Apr 27, 2011 1:45am
Nice discussion about leverage guys.

My opinion is that you should not restrict yourself to "vehicle" usage. That would be a reflection of rigidity in your trading system.

It would be great if you could walk (1:1) from point A to B where a scooter (1:5) is waiting to take you to point C where you find an armored mercedes (1:50) which will, market gods willing, reach point D where you find your shiny ferrari (1:100). By this point any risk of crash will get you back to your feet ready to walk again. The reward if the ferrari handles well is next time you want to go places from point A you don't walk, you take your scooter which is now at point A.

Also, the type of vehicle to be used at varying points will depend on the surface of the road (market conditions).
  • #24,572
  • Apr 27, 2011 1:51am Apr 27, 2011 1:51am
Hi Friends! There are twoo camps in this. One think that at the beginning loosing money is inevitable, the second that it is nonsence. Me personally from the first camp. I think that is very difficult to obtain the real risk attitude without losing own money... regards
  • #24,573
  • Apr 27, 2011 1:54am Apr 27, 2011 1:54am
Quoting indianguyinny24
check the calendar...


V

I did... the news came out as expected? Bernanke is speaking today as well, but I imagine thats sometime during the US day & its currently 5am in NY.
  • #24,574
  • Apr 27, 2011 2:13am Apr 27, 2011 2:13am
Quoting Vourvoul
Nice discussion about leverage guys.

My opinion is that you should not restrict yourself to "vehicle" usage. That would be a reflection of rigidity in your trading system.

It would be great if you could walk (1:1) from point A to B where a scooter (1:5) is waiting to take you to point C where you find an armored mercedes (1:50) which will, market gods willing, reach point D where you find your shiny ferrari (1:100). By this point any risk of crash will get you back to your feet ready to walk again. The reward if the ferrari handles well is...
Why not just one vehicle -a crash proof armoured tank that can rev up to Formula One speed and brake in nano seconds. We the driver decide the speed according to the terrain. Wishful thinking
  • #24,575
  • Apr 27, 2011 2:23am Apr 27, 2011 2:23am
Quoting Baifu
Why not just one vehicle -a crash proof armoured tank that can rev up to Formula One speed and brake in nano seconds. We the driver decide the speed according to the terrain. Wishful thinking
I think the wishful thinking is that we are the driver. We are just hitchhikers picking up rides.
  • #24,576
  • Apr 27, 2011 2:26am Apr 27, 2011 2:26am
Quoting Vourvoul
I think the wishful thinking is that we are the driver. We are just hitchhikers picking up rides.
yes, otherwise why would you drive a ferrari in a jungle?
  • #24,577
  • Apr 27, 2011 2:30am Apr 27, 2011 2:30am
Quoting Atomic_Sheep
I did... the news came out as expected? Bernanke is speaking today as well, but I imagine thats sometime during the US day & its currently 5am in NY.
Federal Funds Rate, maybe some maneuvering before it.

sometimes the news itself does not play any role and it is just used by a bigger player for volume.
  • #24,578
  • Apr 27, 2011 2:32am Apr 27, 2011 2:32am
Quoting Vourvoul
I think the wishful thinking is that we are the driver. We are just hitchhikers picking up rides.
Not wishful thinking, mindset. Speed is our exposure (pip value), the ONLY thing we can control.

Edit: the wishful thinking is our mindset is so strong we can rev up to Ferrari and down to snail pace in seconds/minutes to suit the terrain we drive in
  • #24,579
  • Apr 27, 2011 3:44am Apr 27, 2011 3:44am
Hi friends!

Found the following in a book, that was recommended to me by IndianGuyInny...

[...]

In familiar environments and routines, we operate on autopilot. Nothing changes.


When you act as your own trading coach, your challenge is to stay fully conscious, alert to risk and opportunity.


One of your greatest threats will be the autopilot mode in which you act without thinking, without full awareness of your situation. If you shift your trading environment, you push yourself to adapt to new situations: you break routines. If your environment is always the same, you will find yourself gravitating to the same thoughts, feelings, and behaviors. We are mired in repetitive patterns of thought and behavior because we are mired in routines: the same emotional and physical environments. Indeed, we repeat the same patterns—for better or for worse—precisely because those patterns are adaptations to our current settings.


[...]



If your environment is comfortable, it probably isn’t conducive to change.




In short, it’s the mental routines—the mental environment—that we most need to change to break unwanted and unprofitable patterns of thought and behavior.



[...]



And that's the book:

http://www.amazon.com/Daily-Trading-...3901056&sr=8-1


All the best,
Niels
  • #24,580
  • Apr 27, 2011 5:03am Apr 27, 2011 5:03am
Some very strange posts about leverage recently. The only figure that matters is your real leverage, calculated from your open positions and cash balance, not the figure that your broker is willing to offer you.

Frankly, if you need the government to restrict the leverage available to you because you would otherwise overextend yourself then you really don't have the right mindset or attitude to succeed as a trader (in my humble opinion).
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