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Technical Analysis Fallacy

  • #24,881
  • May 12, 2011 3:02am May 12, 2011 3:02am
Quoting usw
While I'm not necessarily a beginner, I have to disagree. Being prepared for a possible move that could swallow your whole account is one of the first details that should be worked out.
Hi Usw. So it is a problem of Moneymanagement imho. Regards

I dont know your skills, but ask yourself a question what you are, when you are not a begginer? Shortcuts doesnt exist... And ego can easily eats you in the markets... Being honest to yourself is required to reach goals. And 98% peoples fail!
  • #24,882
  • May 12, 2011 3:09am May 12, 2011 3:09am
Quoting Fana
Hi Usw. So it is a problem of Moneymanagement imho. Regards
It was a question about position sizing.. so it is part of MM.

Unless you trade demo, MM is like the base of your trading business..
  • #24,883
  • May 12, 2011 3:09am May 12, 2011 3:09am
Quoting piccolo
SNB intervention 2 years ago made eur/usd move 240pips in 1 min. I don't remember what was the "gap" exactly but you could be lucky to get out at -200 I guess.. not sure what was the spread.

9/11 move was even bigger but I did not trade then.

That is why 200 was my recommendation.
Yes that seems sensible, but then Guerrillawar suggested 1000 pips, so that's quite a range.

And if we worry about a 15% move, really makes you reconsider what's safe...
  • #24,884
  • May 12, 2011 3:13am May 12, 2011 3:13am
Quoting piccolo
It was a question about position sizing.. so it is part of MM.

Unless you trade demo, MM is like the base of your trading business..
Correct, that is what i was trying to tell him:-)
  • #24,885
  • May 12, 2011 3:16am May 12, 2011 3:16am
Quoting usw
Yes that seems sensible, but then Guerrillawar suggested 1000 pips, so that's quite a range.

And if we worry about a 15% move, really makes you reconsider what's safe...
There are a lot of big moves but very rarely they are "gaps" that you can't act upon.

Just remember to check the charts while on the toilet seat, lol.
  • #24,886
  • May 12, 2011 3:17am May 12, 2011 3:17am
Quoting piccolo
SNB intervention 2 years ago made eur/usd move 240pips in 1 min. I don't remember what was the "gap" exactly but you could be lucky to get out at -200 I guess.. not sure what was the spread.

9/11 move was even bigger but I did not trade then.

That is why 200 was my recommendation.
Success consists of going from failure to failure without loss of enthusiam
  • #24,887
  • May 12, 2011 3:19am May 12, 2011 3:19am
Quoting piccolo
There are a lot of big moves but very rarely they are "gaps" that you can't act upon.

Just remember to check the charts while on the toilet seat, lol.


Of course I never leave a trade unattended, and I love big moves. It's precisely that gap that I can't act on that worries me.
  • #24,888
  • Edited 4:27am May 12, 2011 4:00am | Edited 4:27am
Quoting usw
Hi FTI,

Thought I might ask while you're here if you don't mind, what is the largest gap you've seen in your career where prices instantly jumped X cents before liquidity could be found? I'm wondering as I'm not quite sure what exposure would be considered safe given we can't really predict black swan type moves. Certainly your experience will give me a better clue than just a random guess though.



I've seen you mention something like historical volatility is 10-15%, but I never really understood what you meant. Is that in any way related,...
hi usw,
normally unless is figs or some big event, the !st blood tear would be about 25 to 30 pips.then the volatility builds up as volatility begets volatility.
In about 30 seconds would had shaded near to 200 pips. The wildest run i had sat on was about 750pips.
in 20+ minutes.
then after mild jerks in range.
Normally then if markets ran 750 pips Buba starts checking names.
These days seems Cbs are very particular about stability. Would suspect they in checking any where within 100 pips. There is speculation that some CBs are doing covert ops. So they would be already in.
Also these days is very different.
Used to be when weak tiers start quoting bumb quotes , we know they trying to eat their customer stops. Thiese days you see all the bum quotes because retail brokers are eating the stops. I suspect all the pin high/lows you see on charts happened after interbank had moved away, they try fast grab the stops and rejoin the markets. Is good sclaping for retail market makers.

I suspect the retail prices seen and where the markets are could have a basis of about 25 up to 50 pips. The fact that algos are trading in nanao seconds mean no human can compete for the bump runs. Of course stops will as always be sitting ducks.

Did you noticed that these days the markets always have counter impulse jerks of which you can never get fills in. I suspect is electronically blocked. Unleess you was a competeing computer is harly ever can get fills. Thats why the issue of latency is become so critical to them , as Zoran mentioned. This my suspicions. Also because the prices in piptits, is become even more impossible to press fills and the piptits are gyrating in nano seconds. 1 second latency may put you behind the swing by miles.


regards
  • #24,889
  • May 12, 2011 4:11am May 12, 2011 4:11am
Thank you much, just the answer I was looking for. A 20 minute wave doesn't worry me, should be plenty of time to react and perhaps profit, just those gaps. I suppose I was being overly cautious, I had not considered that the CBs would step in so soon.
  • #24,890
  • Edited 4:53am May 12, 2011 4:30am | Edited 4:53am
Quoting usw
Thank you much, just the answer I was looking for. A 20 minute wave doesn't worry me, should be plenty of time to react and perhaps profit, just those gaps. I suppose I was being overly cautious, I had not considered that the CBs would step in so soon.
Those gaps are likely because markets moved but your datafeed not show until afew quotes had passed. As the Ceo of a broking firm had confirmed. It is impossible for them show you every price. So they show you selectively. Maybe only those shades against your blotter. Is easy program computers to do that.

The fact is markets do not move in seconds, mostly hardly move in minutes. But the electronic game seem impress player of nano second piptit jerks. To fill a 500 mio ordr could take a dealer up to 24 hours. Across a couple of shifts. Mostly the they are being honoured and booked for managing. After that all sorts of tricks are executed to bring to squared books.

its hard visualise what these electronic algos can do.
But if youtrading impulses in direction of trend and have good mm to capitalise counter swings, you should be in good stead


regards
  • #24,891
  • May 12, 2011 4:30am May 12, 2011 4:30am
Quoting fti
Did you noticed that these days the markets always have counter impulse jerks of which you can never get fills in. I suspect is electronically blocked. Unleess you was a competeing computer is harly ever can get fills. Thats why the issue of latency is become so critical to them , as Zoran mentioned. This my suspicions. Also because the prices in piptits, is become even more impossible to press fills and the piptits are gyrating in nano seconds. 1 second latency may put you behind the swing by miles.
regards
Yes, sweeps outside ranges very often are impossible to hit, as if the prices are indicative only so as to sweep stops, but had no intention to trade there otherwise.
  • #24,892
  • May 12, 2011 4:36am May 12, 2011 4:36am
Quoting fti
Those gaps are likely because markets moved but your datafeed not show until afew quotes had passed. As the Ceo of a broking firm had confirmed. It is impossible for them show you every price. So they show you selectively. Maybe only those shades against your blotter. Is easy program computers to do that.

The fact is markets do not move in seconds, mostly hardly move in minutes. But the electronic game seem impress player of nano second jerks.

regards
Perhaps it was mainly an issue with my broker, but the most recent example I can think of was the ECB intervention in EUR/JPY, I had a small EUR/USD long and rode the wave up 50 pips, I actually tried to take profit somewhere near the middle of the spike, but was unable to square till the end.
  • #24,893
  • May 12, 2011 4:43am May 12, 2011 4:43am
Quoting fti
Those gaps are likely because markets moved but your datafeed not show until afew quotes had passed. As the Ceo of a broking firm had confirmed. It is impossible for them show you every price. So they show you selectively. Maybe only those shades against your blotter. Is easy program computers to do that.

The fact is markets do not move in seconds, mostly hardly move in minutes. But the electronic game seem impress player of nano second jerks. To fill a 500 mio ordr could take a dealer up to 24 hours.


regards
Hi fti,

seems that is a problem of certain brokers only or maybe of your sizes...
I have not had any problems to get very competitive fills even with 50 lots sizes.

But I have to say; I have invested some time and money to optimize my hardware and connection to broker as well.

BTW: I still do not get, how traders, who are several thousand kilometers
away from the computer center of their broker, could believe not to get requotes. That is of course a matter of latency ....
And there is of course a huge difference in signal runtimes, when you are connected through satellite, leased line or radio network. That are topics that should be added also onto the list of topics a retail trader should know very well about ...

All the best,
Niels
  • #24,894
  • Edited 5:27am May 12, 2011 4:58am | Edited 5:27am
Quoting usw
Perhaps it was mainly an issue with my broker, but the most recent example I can think of was the ECB intervention in EUR/JPY, I had a small EUR/USD long and rode the wave up 50 pips, I actually tried to take profit somewhere near the middle of the spike, but was unable to square till the end.
yes, it seems that is a problem. At good prices, normally my experimental platform hangs or some wierd internet block thingy. whereas the interbank acesss is not impaired. But may need a couple seconds for dealers figure out where markets are at. Normally i can square of lager interbank exposures while the retails play electronic games. ( either re booting OS or clearing caches)This was observed during the experiments. Sometimes plaforms are quoting away from where interbank is quoting. But thereis no remedy for this in an OTC structure.

It was for this reasons i concluded that i cannot take this infant industry seriously.Only for educational purposes. I sometimes arbitrage them against the cash just to send the brokers into hyper. ( I have the financial capacity to string them against the impulses over nights even over week ends, while i am in fact squared and brokers exposed.)Esp during figs, when interbank access is still quoting steady and the electronic is gyrating. So many instances where the electronic seems going wrong way on release of figs. or when it stalls while the primary markets are impulsing.

I did that alot to GFT and they forced me close accounts.

What one dealer told me is very true, No dealer can survive streaming continueous running quotes in fine spreads, without having some safety countermeasures to protect one self. You see brokers motto is "service" whereas dealers motto is " my word is my bond."

regards
  • #24,895
  • May 12, 2011 5:12am May 12, 2011 5:12am
Quoting MaMood
Hi fti,

seems that is a problem of certain brokers only or maybe of your sizes...
I have not had any problems to get very competitive fills even with 50 lots sizes.

But I have to say; I have invested some time and money to optimize my hardware and connection to broker as well.

BTW: I still do not get, how traders, who are several thousand kilometers
away from the computer center of their broker, could believe not to get requotes. That is of course a matter of latency ....
And there is of course a huge difference in signal runtimes,...
Latency shouldn't be an issue, I generally ping about 20ms to the trade server. I do suspect however there may be an issue with how the the broker routes orders out through STP.
  • #24,896
  • Edited 5:43am May 12, 2011 5:32am | Edited 5:43am
Quoting usw
Latency shouldn't be an issue, I generally ping about 20ms to the trade server. I do suspect however there may be an issue with how the the broker routes orders out through STP.
how long does it takes you get out of platform clear cache and come back into running markets? How long does it take reboot OS?
Anyway, is non issue for me. I just trlling you about my experiment findings.

I was just thinking, if i quoted you in running piptits, if fact you will never get a fill unless i allowed you.
Previously in TMU(treasury marketing unit) this holding of dealing prices became so much of a problem that we implimented adding 2 pips to widen customer quotes because they normally held dealing prices for up to a few minutes to deal. And dealing at TMU , minimum ticket is 2 mio USD. I was privy that some desk added 3 pips.



regards
  • #24,897
  • May 12, 2011 5:38am May 12, 2011 5:38am
Quoting fti
how long does it takes you get out of platform clear cache and come back into running markets? How long does it take reboot OS?
Anyway, is non issue for me. I just trlling you about my experiment findings.


regards
Yes much too long, a backup computer logged in and ready to go on a separate connection is key.
  • #24,898
  • May 12, 2011 5:43am May 12, 2011 5:43am
Quoting fti
how long does it takes you get out of platform clear cache and come back into running markets? How long does it take reboot OS?
Anyway, is non issue for me. I just trlling you about my experiment findings.


regards
I have never had to do any of these steps. I guess its Oanda specific.. (and my ping is crappy 130ms across the Atlantic)
  • #24,899
  • May 12, 2011 5:45am May 12, 2011 5:45am
Quoting usw
Yes much too long, a backup computer logged in and ready to go on a separate connection is key.
before building bullet proof bunkers, just call the brokers dealing desk
  • #24,900
  • Edited 6:23am May 12, 2011 5:54am | Edited 6:23am
Having made those findings public, i would like add that because of marketable tickets, retail may have to operate inspite of these disadvantages. Just make sure you trading in direction of trend. What ever basis they tear away,, ultimately the basis have to converge. And if you have viable MM strategy will probably still be alright.

Its justthat if you are trading professionally, then seems the interbank access is still the primary access. But piptits in my opinion is a big negative forward.

regards
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