Technical Analysis Fallacy

FTI,

Thank you for everything you've shared in this thread. God Bless You Always. Please take care.

f t i may your god be with you - and thanks.

Thanks for your teachings chief.
Regards

FTI,

Thank You Sir for your generous teachings. You will be missed.

Do take care of your health.

Best Wishes

Dear FTI,
Although we have not had any communication, I thank you for your philanthropic altruism.
Enjoy your recuperation.
Meanwhile back to battle!
Sincerely
Dan

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One nice track, which presents part of my life, when I traveled from korea to qatar and than to europe.

Chief, good luck enjoy you life, as much as you can

I think money and greed is mental disease for most people ^^

FTI, you have been like a father to us! We may not get to see you in real person, but in everyone of us, there is a subtle image of you. To me, I sense a Kitaro figure! Lol. Whatever you do in your present and near-future endeavours, i hope you never forget the projection of our blessings to you, blessings in every aspect of lives. Thank you and if you decide to retreat in Genting Highlands or Gohtong Jaya, well, I hope this song resonates with your .. spiritual growth.

!

Hi Chief,

Goodbye for now. You have created a phenomina here. Everyone who dropped by here will eventually become a better trader or at least a better person. Thanks for spreading the 'word'.

zz

Only pain can see the pain ... And I'm positive ... I'm alive :o)

福州人

Just putting in for thanks for you.

beautiful

Thnks for sharing ..

Hi Fti!
I like your avatar... Saved in my files!

Nice to see you.

Anyone,

This is long and might be unclear, but any help would be appreciated. I wanted to get this off before the thread was locked, etc.

(When I say "you" I am referring to FTI)

I am having trouble grasping the exact concept of “foreign capital” and how to use it. Sometimes you’ll say something like “use foreign capital,” but I do not really get what this means. A simple interpretation would be to only add certain level attacks and above while you are ahead for the day, and to close the entire position out if the market goes against you and hits your break even price. But, I don’t think this is what you advocate. Additionally, it seems it would be difficult to get high level attacks and high profits if you must close positions out if BE price hits, unless the market trends nicely and your entry points are timed extremely well and at the end of minor pullbacks.

At times you said things like “I booked some foreign capital to use for the next session.” How does this affect how you trade in that next session? For instance, say the quote above was in reference to trading for 2 hours at the start of the Tokyo open, and the next session will be the London open. When you start trading London, will your trades automatically be larger because of the previous gains booked? I would guess not, and that the size you use would be determined by the market and your confidence in certain trades and price action you see. But if that is the case, then why does the previous gain matter at all? I would guess, because of the skewing, that the previous gains would be small and not create much of a buffer for the trades in the London session, if you were to go large, so how exactly does the foreign capital gained in Tokyo session “USED” in your London session? If the market turned against you after adding attacks (that are larger because of the previous gains), I assume you do not automatically close the trades out at BE, and would only close the position (or flip) if price action told you the direction has changed. You may also quickly close a high level attack quickly but keep the rest of the position open. But in this case, where does foreign capital come in to play? How is this different than if you did not have any previous foreign capital and added a high level attack, only to close it out quickly because market went against you?

Here are some examples that might get my question/point across better:

Scenario: You gained $XXX in foreign capital in Tokyo session. The following is London session:

S x 1 x 1.3070 (scout)

Price action then indicates that a strong impulse is likely about to occur south.
S x 6 x 1.3060

You used 6 because of the foreign capital previously gained. (With no foreign capital you would have used 2 or 3 for the attack at 1.3060). However, if price goes up to 1.3064, you are at BE for the day (this is hypothetical). This is only 4 pips and not much of a buffer. Here it seems the foreign capital is useless. Additionally, when price action initially indicates the strong impulse, shouldn’t your confidence dictate the amount to sell at 1.3060? Shouldn’t you be selling 6 here always? The trade from the Tokyo session and the trade in the London session are independent events, why link them through math that is in your head, rather than just using price action for each independent event?

In a theoretically sense, I can grasp the foreign capital concept. In reality, I cannot. Where does the foreign capital start and why? What I mean is, does it only work on a daily basis, meaning whatever you earned for the current day is your foreign capital? It seems this is a type of mental accounting that dictates trade size when I can’t help but think only the price action should.

Example:

Scenario A: Say you are up $200 from Day 1. Now say you are up $100 from Tokyo session in Day 2. So, during London Day 2, you have $100 in foreign capital to “use” for the day. Because of this foreign capital, you used a 1-1-10 skew after a confident reading of price action and likely impulse.

Scenario B: NOW, say you are up $300 from Day 1, and $0 from the Tokyo session in Day 2. In both cases, you are up $300 for the week and at the start of London Day 2. However, in this case, you do not have any “foreign capital” to use, because you start counting foreign capital on a daily basis. Because of this, with the same price action as Scenario A, you use a less risky skew of 1-1-3.

THIS DOES NOT MAKE SENSE TO ME. Where does the foreign capital start? Sometimes you say you have a lot of foreign capital for the day, sometimes the week, etc. Why not say the year? Why not say ever? And why does it matter when at a particular moment, price action is saying “BET BIG” (6), but you insist on only betting small (3) because you don’t have FC, even though the buffer you gained from the FC is probably miniscule.

Scenario C:

S x 1 x 1.3070 1:00 GMT

S x 3 x 1.3050 2:00 GMT

In this scenario, it seems many posters would justify the selling of 3 because of the foreign cap gained, and also because they already had a scout out. However, the BE price becomes 1.3055, which means the scout gain is almost useless. However, most posters would not consider openly selling 3 at 2:00 GMT without having entered the scout and “gained foreign capital”. Thus, even though the price action is exactly the same at 2:00 GMT, the person with the scout will gladly sell 3, whereas the person that started trading at 1:57 GMT and did not have a scout out yet, will only sell 1 at 2:00GMT as a scout. In this case the time one started trading has dictated how one trades, rather than pure price action. THIS DOES NOT MAKE SENSE TO ME.
I guess my general and ultimate question is: How is foreign capital actually “USED”? When you or anyone says, “use foreign capital to increase size and add to the skew,” etc., this doesn’t help me as it is too vague and doesn’t make sense to me, as indicated above.

My Interpretation:
My current belief and use of the foreign capital concept and attack skew is: A-add strongly when it is likely there is about to be a strong move in my direction, B-add in a normal/conservative fashion/skew when price is going your way and when you feel that a it will continue to move in your direction soon after you add an attack level. C-Generally be aware of how much you are up (foreign cap) and to realize your actual BE level for the day, rather than your literal current position BE level. This does not mean automatically close a position at the BE for the day, but to be aware of it to assess your current risk. D-sometimes close at BE for the day if I add a very large attack. E-Sometimes be more aggressive in correlation to how much you are up for the day and in relation to price action.

Thanks if any of you bothered to read all that.

Just for info:

I started reading TAF in Sep 2011 but I haven't finished that or the lounge yet. I will reread the beginning of TAF when I finish it. I was going to hold off on asking the above questions until I reread the beginning, thinking I might find my answers there, but since this thread is probably going to be locked I decided to post them.

just my opinion
if you read the thread and copy print then practise
you will have no questions

rgs

Hi, the thread certainly is the best place to find the answer... but for me
this sums it up nicely.

Paraphrased from the art of war / Fti:
"You should put yourself in a position that it's impossible to loose"
(for me this is about foreign capital not entry point...)

i like your style...you bring out the best in all of us. even fti seems to be getting younger by the minute. your words have fountain of youth effect. rgds

for his own good. don't come in here anymore.

ask mod / admin to disable your account.