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Technical Analysis Fallacy

  • #29,341
  • Nov 26, 2011 4:28pm Nov 26, 2011 4:28pm
Quoting Conceptual
What is the purpose behind your trading. At 2% aggregate risk per trade, unless you have opened an institutional trading account with several hundred to several million dollars, then the notional value per trade that you can move into and out of the market, almost becomes moot for any purpose beyond mere hobby.

Do you trade for a living, where you have financial responsibilities at the end of each month that must be resolved through the revenue you generate from your trading activity?
Hi Conceptual, I have enjoyed reading your recent posts. As for your questions:
The purpose of my trading is to make a living. Your assumption -- that a retail trader cannot make a living by risking 2% of their account balance per trade -- is clearly incorrect. I am not familiar with your background, so I can't comment any further. Good trading to you!
  • #29,342
  • Nov 26, 2011 4:38pm Nov 26, 2011 4:38pm
Quoting GEfx
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!


mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,343
  • Nov 26, 2011 4:40pm Nov 26, 2011 4:40pm
Hope everyone is having a good weekend. I have been catching up on my reading today and, as a result, have developed a more cautious attitude about trading next week. If you were trading on Friday, you probably saw the GBP/$ retracing its down move during the NY session. At about mid-session, the Greek government announced that they were in negotiations with creditors on the size of haircut that these banks would take (I think they were driving for a 75% cut), which was completely different from the agreement they had with the trioka. Equities took a dive and the dollar rallied.

The reason I bring this up, is that these news events can cause the markets to react sharply and quickly. Next week, we have a pretty heavy news week, but what really caught my eye is the number of European governments that are conducting debt auctions, spread throughout the week, with a really big one on Monday (can't remember who). If these go well, you might get a good reaction. If they go poorly, the reaction may be extreme. So, my hope is that someone can find the auction schedule and post it here so we can have that info before hand. MaMood, I hate to ask you this, but do you know? Or anyone else?

Thanks everyone and hope you are all well!
  • #29,344
  • Nov 26, 2011 4:50pm Nov 26, 2011 4:50pm
Pasted from DowJones.com:
--Friday, Nov. 25: Italian T-bill/zero-coupon bond auction.
--Tuesday, Nov. 29: Italian bond auction. Final Portuguese budget vote. Euro-zone finance ministers meeting.
--Wednesday, Nov. 30: European Union finance ministers meeting.
--Thursday, Dec. 1: Spanish and French bond auctions. Europe-wide manufacturing PMI data.
--Monday, Dec. 5: Europe-wide service-sector PMI data.
--Tuesday, Dec. 6: Third-quarter euro-zone GDP data, second estimate.
--Wednesday, Dec. 7: Portuguese T-bill auction. European People's Party meeting in Marseilles, France.
--Thursday, Dec. 8: ECB interest rate decision and press conference. Second day of European People's Party meeting.
--Friday, Dec. 9: EU leaders summit.
--Monday, Dec. 12: Italian T-bill auction.
--Tuesday, Dec. 13: First meeting of new Spanish parliament after election. A new PM must be elected by Dec. 28. Spanish T-Bill auction.
--Wednesday, Dec. 14: Italian bond auction.
--Thursday, Dec. 15: Spanish bond auction.
--Friday, Dec. 16: Greek T-bill auction.
--Monday, Dec. 19: EUR1.22 billion of Greek debt falls due.
--Tuesday, Dec. 20: Spanish T-bill auction.
--Wednesday, Dec. 21: Portuguese T-bill auction.
--Thursday, Dec. 22: EUR980 million of Greek debt falls due.
--Wednesday, Dec. 28: Italian T-bill, zero-coupon bond auction.
--Thursday, Dec. 29: EUR5.23 billion of Greek debt falls due. Italian bond auction.
--Friday, Dec. 30: EUR750 million of Greek debt falls due.
--Saturday, Dec. 31: Date by which Greek parliament votes on final 2012 budget.
  • #29,345
  • Nov 26, 2011 4:59pm Nov 26, 2011 4:59pm
This is an extract from "the way of the peaceful warrior" that Mamood had suggest in one of his posts.

Maybe can be relevant to the recent discussion, not sure.

"Use whatever knowledge you have but see its limitations. Knowledge alone does not suffice; it has not heart. No amount of knowledge will nourish or sustain your spirit; it can never bring you ultimate happiness or peace. Life requires more than knowledge; it requires intense feeling and constant energy. Life demands right action if knowledge is to come alive."

mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,346
  • Nov 26, 2011 5:02pm Nov 26, 2011 5:02pm
Quoting MaMood
Something to ponder about:

There’s an old trading adage that says,“One man’s staying power is another man’s foolish lack of discipline” ....



[size=3][font=Bembo][size=3]Also a nice story:
[indent]
[left]" [size=2][font=Bembo][font=Bembo][size=3]There’s a great story about a famous local trader at the Chicago Board [size=2][font=Bembo]of...
Hey Niels,

it doesn't mean that we have different opinions that you have to prove to everyone here that you're more elite than anyone else here. Just like you, i'm learning and just found this thread - so don't be hypocrite and tell everyone here that because in my opinion i don't really find it 'good' and contradicts your taste and belief --- that i should not follow fti's thread.

we should not be enemy, i thought an open mind is welcome in this thread... and hey, anything can happen while learning.

you just don't know me good riddance anyway. I am new to forex but doesn't mean I am new to this industry ---

regards,
carlo
  • #29,347
  • Nov 26, 2011 5:38pm Nov 26, 2011 5:38pm
Quoting Dmessenger
Hey Niels,

it doesn't mean that we have different opinions that you have to prove to everyone here that you're more elite than anyone else here. Just like you, i'm learning and just found this thread - so don't be hypocrite and tell everyone here that because in my opinion i don't really find it 'good' and contradicts your taste and belief --- that i should not follow fti's thread.

we should not be enemy, i thought an open mind is welcome in this thread... and hey, anything can happen while learning.

you just don't know me good riddance...
Hi Carlo

I think you got it all wrong mate. Niels is not like that.

All the Best
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,348
  • Nov 26, 2011 5:58pm Nov 26, 2011 5:58pm
Oh,,,, I am very pleased with this thread,,, all have to own your own overage and discussion of quality,
unfortunately its my native language is not English .. I can not join a discussion

Regards
suma
  • #29,349
  • Nov 26, 2011 5:59pm Nov 26, 2011 5:59pm
Quoting mla
Hi Carlo

I think you got it all wrong mate. Niels is not like that.

All the Best
mla
HI mla,

my apologies.

regards,
carlo
  • #29,350
  • Nov 26, 2011 6:03pm Nov 26, 2011 6:03pm
Quoting Dmessenger
HI mla,

my apologies.

regards,
carlo
No apologies, mate.

Just told you what I know. Actually I think in my view, Niels is the opposite of just that.

Cheers
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,351
  • Edited 6:43pm Nov 26, 2011 6:12pm | Edited 6:43pm
I was just chatting with a friend of mine about the dance.

We all dance differently, like we do when we make love.

This is how I do it: for me the dance is the way to feel the market and move in sync with it, guided by Pa and freeing my mind by concepts. Nothing else.

Also will be interesting to know how others dance.

mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,352
  • Nov 26, 2011 9:09pm Nov 26, 2011 9:09pm
Quoting Baifu
Pasted from DowJones.com:
--Friday, Nov. 25: Italian T-bill/zero-coupon bond auction.
--Tuesday, Nov. 29: Italian bond auction. Final Portuguese budget vote. Euro-zone finance ministers meeting.
--Wednesday, Nov. 30: European Union finance ministers meeting.
--Thursday, Dec. 1: Spanish and French bond auctions. Europe-wide manufacturing PMI data.
[size=3][font=Calibri]--Monday,...
According the the WSJ, there is one on Monday, but other pubs say that the auction scheduled for Monday was cancelled due to the poor German auction last week/all the other market jitters. Thanks for this excellent information. Now, one more request: what time of day are the auctions conducted and announced? We know when they are done and announced in the US, but I am not sure when these are conducted and when the participation data is released.

I'll try to dig up the WSJ article and post it tomorrow.
  • #29,353
  • Nov 26, 2011 9:47pm Nov 26, 2011 9:47pm
Quoting sumakianlee
Oh,,,, I am very pleased with this thread,,, all have to own your own overage and discussion of quality,
unfortunately its my native language is not English .. I can not join a discussion

Regards
suma
You just did mate

mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,354
  • Nov 26, 2011 10:08pm Nov 26, 2011 10:08pm
Indeed. Knowledge puffs up, but Love builds up.

He who has ears, let him hear.

Regards
  • #29,355
  • Nov 26, 2011 10:39pm Nov 26, 2011 10:39pm
Quoting Zoran
Hi Conceptual, how are you?
I'm doing just fine and how are you?

Quoting Zoran
My name is Zoran (yes, that is my real name). Just a simple question, just in case I have missed a leap in technological advancement, are you human or machine (i.e. an A.I. program)? I think I know the answer but I just want to make sure.
I am neither, in reality. I am a Spirit-being, having a Human-being experience. My physical existence came through my birth, but my spiritual existence was already in the mind of God, long before this world came into being.

Quoting Zoran
My native language is English and I believe I have a good understanding of logic but I still find it difficult to understand your points, so. I. have. to. read. it. slowly. just. to. get. a. grasp. of. it., just. as. the. little. voice. in. your. head. is. reading. this. slowly.
Slow, or fast, is ok. Just try to read in context, as many in the online trading community often times fail to do that - to their own disadvantage, of course.

Quoting Zoran
..,can you please let me know why I can't buy a car, where I can type in the destination, go to sleep and expect the car to wake me up when I get there?
That is precisely the paradigm for individual motorized transportation currently being studied, evaluated, tested and analyzed, as we type our respective posts and you can expect Daimler/Mercedes to be one of the automobile manufacturers who lead the tip of the technological spear on such 'guided transportation' technology for the masses. Some infrastructural changes in our roads, streets, bridges and highways, will be relatively minimal but necessary, in order to bring the new paradigm into existence and made ubiquitous in our transportation habits and routines.

For now, you can download one of many GPS Navigation Apps for your iPhone or SmartPhone, and experience a minor taste of what traveling by automobile will be like in the not so distant future.

However, in the world of aviation, such technology already exists and has existed for at least a couple decades, with the Boeing 757 being the prototypical example of the new age of the so-called Glass Jet. Today, most commercial aircraft are capable of CAT-III approach and landings w/auto throttle command and control issued via computer algorithms with zero pilot intervention.

I use an automated system when I trade, and I use an automated system when I fly:

Inserted Video


Do I have to? No. But, does it make me a more efficient, safer and informed pilot? Yes. Similarly, I don't have to use a trading system - but I do, so that I can obtain higher levels of profitability, by excluding increased levels of human error from the loop.

So, the question really is this: Why haven't you been able to produce a technical trading system that works for you and allows you the freedom of excluding most human error, that is almost guaranteed to creep into your overall results, sooner or later?
  • #29,356
  • Nov 26, 2011 10:49pm Nov 26, 2011 10:49pm
Quoting mla
I have only one question if you do not mind answering: Why did you choose Conceptual as your name?

All the Best
mla
Hello Mla,

The uid "Conceptual" speaks to the need to always remain intellectually curious, keeping a minds eyes on progressive concepts that might reveal ways to improve in all areas of life.

To produce new concepts, requires an acceptance of a state of perpetual learning, growing and developing - in order to be able to discern that which is Conceptual.

It speaks to bringing into human existence, that which did not exist in its primary form, before.

To "conceive" is to create.

And, thus, God created all mankind in His own image. And, because He can create, so to shall we. For creation is the very image of God.
  • #29,357
  • Nov 26, 2011 11:08pm Nov 26, 2011 11:08pm
Quoting GEfx
Hi Conceptual, I have enjoyed reading your recent posts. As for your questions:

The purpose of my trading is to make a living. Your assumption -- that a retail trader cannot make a living by risking 2% of their account balance per trade -- is clearly incorrect. I am not familiar with your background, so I can't comment any further. Good trading to you!

How one defines retail, defines whether or not one can generate a living from trading 2% of total equity, but I was not making a blanket declaration on all 2% traders. The general rule holds mathematically firm - the average retail opening account balance is significantly less than $8,000.00.

2% per day, on 8,000 = $160 equity used to place each trade. While you indicated that you never risk more than 2%, you never indicated your leverage ratio, which is equally if not more important. At $160 and 50:1 leverage, you can move $8,000 notional in and out of the market, but that won't net you more than 8 contracts in a $1k account, which places your PPV at roughly $0.80 per pip. So, if you target 57 pips per day, and score a perfect 100% trading accuracy to that target for the month, you will have [roughly] 22 viable trading days @ 100% success and a grand total of $1,003.20 net take-home pay for your trouble.

And, that's trading accuracy while guessing about direction!

Now, unless I just fell off the turnip truck, or unless I severely under-estimated the status of the average retail account size, then I would say that your total monthly bills, must be extremely low, to be able to trade for a living on $1,003.20 and a perfect month's worth of trade results.

At $16,000 account balance, the total doubles to $2,006.40 per month, but that still requires 100% accuracy to achieve. Not impossible, but not probable, either. Still, that's equivalent to an early 1990's first year college graduate salary.

Now, at $24,000, your take home from trading for a living goes up significantly to $6,019.20 for the month - still at 100% accuracy. Most people can make a decent standard of living on that type of income.

Of course, this all depends on what your reinvestment rate looks like. You can boost your net earnings significantly by reinvesting gains on a daily basis - not sure if you manage your capital that way, however.

With an institutional account and a paltry institutional balance of say, $300k; both 2% and a very good living are a piece of cake. Or, at least, it should be.

Retail, or institutional, I hope you are trading well in either case.
  • #29,358
  • Nov 26, 2011 11:25pm Nov 26, 2011 11:25pm
Quoting Conceptual
Hello Mla,

The uid "Conceptual" speaks to the need to always remain intellectually curious, keeping a minds eyes on progressive concepts that might reveal ways to improve in all areas of life.

To produce new concepts, requires an acceptance of a state of perpetual learning, growing and developing - in order to be able to discern that which is Conceptual.

It speaks to bringing into human existence, that which did not exist in its primary form, before.

To "conceive" is to create.

And, thus, God created all mankind in His own image....


Very well.

Yes to conceive is to create, but once we finish to create that creation turns into concepts and that concept is the end of creation.

Concepts in my opinion only limits our view in proportion on the bias of the concept.

Now I am not very good with words like you are so please be gentle with me.

Also I would like you do consider what I posted before:

"Use whatever knowledge you have but see its limitations. Knowledge alone does not suffice; it has not heart. No amount of knowledge will nourish or sustain your spirit; it can never bring you ultimate happiness or peace. Life requires more than knowledge; it requires intense feeling and constant energy. Life demands right action if knowledge is to come alive."

Cheers
mla
"The Heart is the hub of all dances; go there and chill out"
  • #29,359
  • Nov 26, 2011 11:56pm Nov 26, 2011 11:56pm
Quoting Conceptual
What makes them weird?




Did God "ask" you to look after the weak, or did He "command" you to look after the weak in His creation? If he merely "asked," would the response from you not be in "service" to God? And, if He "commanded," would the response from you be any less than "service" to God?




The God who created Abraham, Issac and Jacob, would be the same God who sent His Son into this world to make a way possible for the redemption of humanity. That through His Son, Jesus Christ, all of humanity could be freed from...
Hi con,
is very hard deal with insanity, but if you will stay point by point with me i will try clear your head of all the deceptions.
If i need to i will start a new thread just to answer your questions 1 by 1.
It would be easier if you hold your mind and discussion to 1 issue at a time to deal with the understanding of it. Talking in generalisation and non specifics makes everything so muddy. So try stay on topic, 1 at a time, so that we can deal with it clearly.

I am not a qualified phyco analyst , but i assure you i definately can handle the discussion on technical analysis.

so lets deal with the points you brought up in your 1st posting, then we move on.

1. why do I say your questions are wierd.
ok.
How am I not to think you are weird?
Firstly about God.

I really not know the form of God. He seems formless and no where to be seen.
That is because i not know his form that i can recognise or percieve.

picture this.
if i live in a cave because i am of chinese decend.
You would probably come to conclusion that i have no tables or chairs.
But to conclude that is erroness because i have stones where i put my things on and stones that i rest my butt on. They they not look like chairs to you because although they function as chairs they not look like a conventional chair that humans make to sit on. So the form may not be recogised by you.
But make no mistake that chairs do not exist.

so if you ask me about God , I cannot tell you how he looks like, or what form he may take. But i know of his existance because of his works. The life forms he had created in contrast to the inert things of the world. Even inert things that we percieve are actually alive, only that they not the same function as living things.But make no mistake that they in fact alive. Only not in the form as we define as alive.

You seem to think God commands his creation, like humans do. No he no need to. He gave all free will to live. But we confined in his little bottle cannot hurt other of his creation except that which is functioning similarly in our plane. He illuminates our mind with our mind sending thoughts to your mind if you allow. Only if you allow. Otherwise the rest of the living send you the signals if, your thoughts and actions are correct or not. So as you sow so shall you reap.

Whatever your mind can concieve or create, they must conform to the big picture, otherwise there will be forces to dismember your thoughts.

So to answer your question, no i receive no command from God.And i not think i am anywhere near his creative capacity. so i live submitting to his will, as it exerts its force on me thru the rest of his creation.

Unlike satan and his goons , that want be greater or equal to God, i submit to my limitations and capacity. So unlike them I worship my creator.

Will talk about your craziness in the 1st posting more before moving along.
But i will do it slowly, making sure that you can follow along the discussion.

regards
  • #29,360
  • Nov 27, 2011 12:32am Nov 27, 2011 12:32am
Conceptual,

I questioned whether you had read the first pages of this post because I thought that FTI dealt quite nicely with the issue of technical analysis there. Personally I would say that technical analysis is false... but it can be useful.

Further, in order to properly have this discussion, you need to first define exactly what TA is and is not. For example, is Price Action Technical Analysis? And are correlations between markets FA or TA? And by what criterion do you define it as one or the other?

However, since you seem to be a hard core algorithm fellow, I have a burning question. Perhaps you can answer it. Have you found a universal system? By that I mean a system that works on all crosses in all time frames? Or even on all crosses in one time frame or on one time frame on all crosses?
Kill the ego, or it will kill the mission.
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