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Technical Analysis Fallacy

  • #29,281
  • Nov 24, 2011 3:26pm Nov 24, 2011 3:26pm
Quoting sergiu
...The indicators may provide the trader with some help in making the trading decisions but in no event are the signals provided by those indicators responsible for the outcome of the trade, simply because they can not influence the outcome...
When you enter a trade, what do you use to make your decision to be either Long or Short the market? I ask the question only rhetorically (unless you are still around to respond), because I think the answer is that you use some kind of information to aid you in your decision to enter, hold or exit the market.

So, my next question is this:

What is the difference between information contained in your head, and information contained in a computer managed algorithm?

Since we don't blindly enter any market at any time, for no reason at all, we all must be in the business of using information of some kind to place our trades. So, all I would like to know is, how you differentiate the information flowing between neuronal input to neuronal input inside your brain, to that of external inputs flowing between algorithmic modules managed by a computer?

And, if you decide in your response to reduce the question down to one of human instinct, then my reply question will be: upon what principle is human instinct driven?

I'm trying to get to the essence here, for the root cause of the discrimination of technical analysis as a proper source of decision support information, as opposed to the use of information flowing through the human brain, as the proper source of decision support.
Quoting sergiu
If one is trading based on TA there should be a set of rules/indicators that one uses in the same manner all the time. In no event will those indicators provide perfect signals and to try and tweak them until they do is a waste of time. One should take the indicators for what they are and try to exploit the little edge that they provide the trader with. We all want consistent profits yet most fail to be consistent in their approach, because they want their indicators to give them perfect signals.
Does consistency as a trader come from not having and/or relying upon technical indicators, in favor of intuitive feelings about what the market will do next?

Lastly, how is "perfect signal" defined? If the target goal is 57 pips per trade and the target is struck more than 90% of the time (consistently), would that qualify as the near perfect signal - or - would that same target need to be struck 100% of the time, before it is deemed to be perfect?

If such a target, on a daily basis, were being struck with routine regularity for the past 1.3 years, using nothing but Technical Indicators, would that at least be something of a contradiction to the belief that: "In no event will those indicators provide perfect signals and to try and tweak them until they do is a waste of time."

Thanks for your replies.

My only regret is that I was not able to participate in this thread from the very first day!
  • #29,282
  • Nov 24, 2011 4:34pm Nov 24, 2011 4:34pm
Quoting the redlion
that a great piece mamood, makes you think on the minds of the central banks, keeps things in perspective. happy thanks giving to you mine freund
Good morning all

It is a very raining day here, has been for a while now.

Redlion, good to see you posting back here. Open up mate, open up.

How big is your ego? and how do you deal with it?

your Mate
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,283
  • Edited 7:28pm Nov 24, 2011 4:53pm | Edited 7:28pm
Quoting Conceptual
When you enter a trade, what do you use to make your decision to be either Long or Short the market? I ask the question only rhetorically (unless you are still around to respond), because I think the answer is that you use some kind of information to aid you in your decision to enter, hold or exit the market.

So, my next question is this:

What is the difference between information contained in your head, and information contained in a computer managed algorithm?

Since we don't blindly enter any market at any...
everyone apparently internalized fti's teaching differently

however, i believe you are in fact technically correct, as the human mind and a computer need data to compute and trigger buy/sell according to processed information.

what i gather is that we must not use indicator to blindly follow them, the goal here is if i am not mistaken is to look at the market in more objective terms, and not rely solely on indicator read for signals with out processing that information and making a calculated conscious decision based upon experience and in context with the idea that because humans make price humans cannot be mathematically predicted in their actions and behaviors.

and if indicators are used, then one must understand the purpose, how its calculated, and the statistical value is offered to filter that information and act on current market conditions.

this sounds a bit ambiguous, but i understand the dance to be the market waves and oscillations, taking into account the time, and distance hence the tempo. as well as order flow and directional PREDICTION.

as fti mentions to aligned on self in the direction of the daily bar, so if you are predicting a daily directional continuation, then you trade only in the direction of expected price movement to reduce becoming a "pig". in more mathematical sense to reduce the probability variance.

however fti mentions to not be rigid, or marry that bias, always think you are wrong till proven right and so the question here becomes, to always probe the alternatives. as he says to use the fresher foot prints of the market.

the information i take to be the dance is the momentum of price by order prevalence, point of inflection, loss of momentum correction, so one wants to short at loss of upward momentum, anticipating a downward correction and attacking upon proof of being correct and scaling back as this correction decelerates, this is as i understand the dance.

so what is predicated is a closer look at objective analysis, however where this thread begins to rigid is in the fact, that you dont have to act from intuition and blindly be in the market on the "feel", the concept becomes second nature it is correct.

like driving a car but conscious information is used in order to follow traffic, first of all direction, if you are in the lane going south you dont have to predict cars coming north on that lane unless they are drunk or some odd random chance some one is driving the wrong way, and if you brake as traffic slows is because you notice the speed reduction and the back break lights turning on. so information is ALWAYS PROCESSED.

(then again i will be called an asshole face, and piece of ungrateful shit for thinking and adapting these teachings to my style and identifying the rigidity , prediction, and ambiguity, as well as the need to have his massive ego stroked blindly)
AVT INVENIAM VIAM AVT FACIAM
  • #29,284
  • Nov 24, 2011 5:01pm Nov 24, 2011 5:01pm
Quoting mla
Good morning all

It is a very raining day here, has been for a while now.

Redlion, good to see you posting back here. Open up mate, open up.

How big is your ego? and how do you deal with it?

your Mate
mla
my ego is big, i do accept that fact.

however i dont think it was my ego that initiated the whole fight.

but mla lets move on from that, because i am not the one in the wrong here and proving my point is heresy.

of course we owe fti so much, and as i have said before, i will always owe him all my success as he changed my philosophy in trading, my trading skills and my path would be tremendously different with out fti, and hold him in high regards.

but wrong= wrong
i see much contradiction in many things, and i see an attempt to blame me, and cover his actions, by editing his words post facto, i believe that the concept of he can do no wrong, and he is a god i should praise and accept unacceptable behavior from to be utter bull shit. respect and gratitude where gratitude is due, but one must always act as a MAN, with honor and integrity.
AVT INVENIAM VIAM AVT FACIAM
  • #29,285
  • Nov 24, 2011 5:05pm Nov 24, 2011 5:05pm
Quoting Conceptual
Hello, GEfx!

How long do you dance with the market, when the market is going against your position? And, what percent of your total equity are you willing to pay for the dance lesson?
i draw the line when price is no longer acting within standard deviations, and how committed i am to the position to even be worth salvaging.
AVT INVENIAM VIAM AVT FACIAM
  • #29,286
  • Nov 24, 2011 5:25pm Nov 24, 2011 5:25pm
This is a 1972 song by Mina "la trigre" named the tiger.

The song is called
"Parole, parole, parole"
soltanto parole, e niente altro, soltanto parole tra noi


" Words, words, words"
only words, and nothing else, only words between us.

Inserted Video


your mate
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,287
  • Nov 24, 2011 5:33pm Nov 24, 2011 5:33pm
Quoting mla
This is a 1972 song by Mina "la trigre" named the tiger.

The song is called
"Parole, parole, parole"
soltanto parole, e niente altro, soltanto parole tra noi


" Words, words, words"
only words, and nothing else, only words between us.

http://www.youtube.com/watch?v=9ZNsXU_80xU

your mate
mla
mla venire della terra di roma, il imperio antico, el padre di civilizasione occidentale?
AVT INVENIAM VIAM AVT FACIAM
  • #29,288
  • Edited 11:39pm Nov 24, 2011 6:10pm | Edited 11:39pm
Quoting the redlion
mla venire della terra di roma, il imperio antico, el padre di civilizasione occidentale?


Your Italian is not bad, but need some improvement.
Are you asking where I am from? Deep south, tough peoples, where brigante
originated. Fighters against the power and corruption. The real Robin hood. Nowadays they will call them terrorist.

You know, when one of my kids trying to do things and cannot make it right, I often tell them "you know nobody is perfect and specially you".

After that we all laugh and they release the tension and I think they start to understand more.

In life we cannot take yorself so seriously, we need I bit of humour.

Absolute truth does not exist in my view and we will be very arrogant if we think that we old it and at the same time ww will make it difficult for ourself.

What is right for me is not necessary right for others. Is all about perception.

What I have learnt from Fti is the fluidity, the mutation of every instant, in life as in trading. I was not aware of the dance before him. Once I applied the dance I found it easier, I look at nothing, no news, nor bias, not bigger time frame, If I do I make less, because I found that external information has a influence on my mind and creates concepts.

I only look at 1 and 5m TF.

Look I tell you, when I able to feel the pulse, the is not chance for me to do it wrong. I can get is and out at the right exact pip, in range, in trend, in no where, everywhere.

If the is not tension in me, I become the market and viceversa. That is what I learned from Fti and I grasp that from him, only but chatting in the morning our time.

I have to rush out now, I will be back in 3 hours.

Your mate
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,289
  • Nov 24, 2011 6:18pm Nov 24, 2011 6:18pm
Quoting Conceptual
Hello, GEfx!

How long do you dance with the market, when the market is going against your position? And, what percent of your total equity are you willing to pay for the dance lesson?
Hi Conceptual,
I never risk more than 2%, and 90% of the time less than that. As for the duration of the dance, I will dance as long as PA does what I expect it to do, and when PA stops doing what I expect it to do, I exit my positions. This has nothing to do with my ego (that I think I know where the market is going); instead, I've watched PA develop for well over 8 years, so I've heard the music, and witnessed the dance, many times.

Happy Thanksgiving to everyone, everywhere. God bless, and good trading!
  • #29,290
  • Nov 24, 2011 6:23pm Nov 24, 2011 6:23pm
Quoting the redlion
mla venire della terra di roma, il imperio antico, el padre di civilizasione occidentale?
Happy Thanksgiving redlion. You've probably answered this before, but where in the US do you live? Send a PM if that is too personal. Good trading!
  • #29,291
  • Nov 24, 2011 7:20pm Nov 24, 2011 7:20pm
Quoting GEfx
Happy Thanksgiving redlion. You've probably answered this before, but where in the US do you live? Send a PM if that is too personal. Good trading!
California

happy turkey day to you too

i hope god, brings you wisdom and illuminates your path, always, and i wish you all the best.
AVT INVENIAM VIAM AVT FACIAM
  • #29,292
  • Nov 24, 2011 8:38pm Nov 24, 2011 8:38pm
Quoting the redlion
California

happy turkey day to you too

i hope god, brings you wisdom and illuminates your path, always, and i wish you all the best.
Hey next door neighbor.
  • #29,293
  • Nov 24, 2011 10:28pm Nov 24, 2011 10:28pm
Quoting the redlion
my ego is big, i do accept that fact.

however i dont think it was my ego that initiated the whole fight.

but mla lets move on from that, because i am not the one in the wrong here and proving my point is heresy.

of course we owe fti so much, and as i have said before, i will always owe him all my success as he changed my philosophy in trading, my trading skills and my path would be tremendously different with out fti, and hold him in high regards.

but wrong= wrong
i see much contradiction in many things, and i see an attempt to blame me,...
Hi Redlion,

Welcome back

I am full of respect and gratitude towards fti, but I do not worship him as god. You do have courage and a brave heart and I admire that too.

Let's try to let go of the past behind and move on. Sometimes, it's really not about who's right and who's wrong. At times, being wrong could be the right thing to do.

Just my 2 pips worth

Trade well and trade safe.

regards
  • #29,294
  • Nov 24, 2011 10:31pm Nov 24, 2011 10:31pm
Quoting N_Trader
Hi Redlion,

Welcome back

I am full of respect and gratitude towards fti, but I do not worship him as god. You do have courage and a brave heart and I admire that too.

Let's try to let go of the past behind and move on. Sometimes, it's really not about who's right and who's wrong. At times, being wrong could be the right thing to do.

Just my 2 pips worth

Trade well and trade safe.

regards
Wise man.

mla

Inserted Video
"The Heart is the hub of all dances; go there and chill out"
  • #29,295
  • Nov 24, 2011 10:42pm Nov 24, 2011 10:42pm
Hello,,

I just want to share a story

I read this thread,,,
I just use whatever I can adapt from this thread
I read this thread and see where and how I can fit it for my use
Im not totality carbon copy fti

And I just use what fit with my style

As fti always say ;;
There is no rights and wrongs.
what makes pips is right , what loses is wrong.




But .. but

If you're right, not too bold and
if you're scared, do not be too scared.
Because balance is a determinant of attitude
precision success of your trip




Just sharing I once read an article as follows ;;
;;;

Once, in a house in a secluded hut beautiful mountains, there lived an old man known for his wisdom. Many people from various places come to him to ask the old man's advice. One day, there came a man who had traveled three days by foot. Arriving at the front of the old man, the man pleaded for advice on how to control emotions or anger rapid and uncontrolled burning.

Having briefly looked at the man, the wise old man nan it was said, "Young man, every time you offended, angry or provoked emotions, remember patience seven steps. Ie stepped back seven steps and seven steps forward again, and do it seven times in a row. Do it with steady steps while counting. After that, then you take the decision to act. "

Perceive some wise counsel, he happily went back to her village. He believes once controlled a difficult emotional problems suffered must be solved. The three-day trip back home should he take. Day was late when he got home. With shabby clothes, body tired and sore, and very hungry stomach, he entered the room his wife. In her mind imagined dinner and warm water to bathe normally provided by his wife. But such was thunderstruck, he found his wife was fast asleep under the covers with someone else.

 In order to see a sight like that, immediately relapsed disease duration; emotions blinding his senses, "Damn! New left briefly alone had dared to put someone else into the room ...!" With an overwhelming anger, the man pulled out a dagger intend to kill them both. However, he spontaneously remembered the old man's advice is wise and right to practice; holding up his hand wielding a dagger and anger outward breath, pounding feet and the sound was immediately heard the count. Commotion finally woke his wife.

When his wife woke up and reveal a blanket, how surprised and relieved because it turned out the man who accompanied his wife to sleep is his own mother. That instant gratitude that shook out of his mouth. He has succeeded in preventing an act of emotional and stupid. I wonder what would happen if he followed his emotions alone, does not follow the advice of the wise grandfather, he might have killed the people who most loved, and his life will be plagued by a lifetime of regret.

regard
suma
  • #29,296
  • Nov 24, 2011 10:48pm Nov 24, 2011 10:48pm
Quoting sumakianlee
Hello,,

I just want to share a story

I read this thread,,,
I just use whatever I can adapt from this thread
I read this thread and see where and how I can fit it for my use
Im not totality carbon copy fti

And I just use what fit with my style

As fti always say ;;
There is no rights and wrongs.
what makes pips is right , what loses is wrong.




But .. but

If you're right, not too bold and
if you're scared, do not be...


mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,297
  • Nov 25, 2011 3:11am Nov 25, 2011 3:11am
Quoting Conceptual
Hello fti,

And, thanks for creating this thread.

Let me ask my questions in reverse:

1) What "God" do you serve? Would that be the God of Abraham, Issac, Jacob, Noah, Jushua and Joseph?

2) You indicate that market "Structure," is one of the important ingredients to successfully trading the markets. So, my question in that regard is whether or not you believe that market structure is a random technical anomaly, or a mathematical and quantifiable (numerical, if you like) fact, derived from empirical evidence taken directly...
wierd line of questions, but lets see if i can help.

1. I not serve God. If thats what you thinking. God never did ask me serve. God created me, asked me look after the weak in creation. I do my best just be part of what God created. Was Abraham, Issac , Noah......mankind created by different Gods? Oh maybe i not understand you. All I know is we all same design and created of rainbow colours. By the way what colour is skin?

2. Believe. What i believe is if you long and markets going down , surely lose pips. Numbers means nothing. Only bottom line means anything. At any time anything can be logically seems right or wrong. But my job is make pips, not make headache.

3.I am trained and certified Technical Analyst, so technical studies is my bread butter. So am i qualified discuss technical analysis? What about technical analysis would you like discuss?
But of course is better discuss that subject with the engineers of those forms of analysis. I haven't got any formed named after me yet.

4. Price? has no delta. Positions have delta. Exposure has delta. So i not know what you talking about. Greeks is hard to understand. What you ask is way way off league.

Thanks asking me all this, but really you and I , seems like duck talking to chicken. Lets see if we can find common ground talk.

regards
  • #29,298
  • Nov 25, 2011 3:24am Nov 25, 2011 3:24am
fti sir,

what do you mean by 'Delta'? sorry for asking, just that i always encounter this word but don't really have a clue... and also you mention about 'sigma', eon's ago if you won't mind me askin' funny questions.

thank you dear sir.

carlo
  • #29,299
  • Nov 25, 2011 3:35am Nov 25, 2011 3:35am
Ok this is our dance most of the time.

I felt expansion (fart) and I got in (I was a bit late, you know I am hold slow man).

My exit was based on the last 5m candle.

+18

Thanks Fti.

mla
Attached Image (click to enlarge)
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"The Heart is the hub of all dances; go there and chill out"
  • #29,300
  • Nov 25, 2011 4:58am Nov 25, 2011 4:58am
My trading day is finished.

Make pips for me also.

mla


Inserted Video
"The Heart is the hub of all dances; go there and chill out"
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