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Technical Analysis Fallacy

  • #34,361
  • Jun 22, 2012 3:36am Jun 22, 2012 3:36am
with all the respect, by no means to offence you, Singapore is very different object of reference, it's a city-country, prosperous from international trading, and the Lee family‘s reign, while China is a diverse country, still very poor at the 80's, without a emperor when Deng passed away. It's difficult or say impossible for China to copy Sg's government success.

Is this topic go too political here? Just saw your talking about different situation for different area, drop by say a hello.
  • #34,362
  • Jun 22, 2012 4:28am Jun 22, 2012 4:28am
Quoting fti

i am too familiar with this chart to comment.

but i just leave you a thought.
if you feel unsure, aside is also a position.

if you insist risk a position, try make sure you have resources rescue if needed.
otherwise run away fight another day until when you have a feel.

regards
Hey fti, thanks for replying and the advice

reason for me being unsure was because I kept thinking how you would perceive the trend to be and I was on the wrong side.

I realise after this post http://www.forexfactory.com/showthre...61#post1928361. its my answer. even you would not get it right on the dot the first time.

Time to be more confident as a General and commander
  • #34,363
  • Jun 22, 2012 12:54pm Jun 22, 2012 12:54pm
Quoting Sampio
Hi all

wonder if anyone can shed some light into my dance or am I dancing blindly in the dark??

An eagerly and confused new trader,
sam

Sam, I will attempt how to tackle this chart, I am very new to trading not even demo account yet so mostly get fti views and others if my reasoning is in the correct direction to help us both.

Rgds
Attached Image
  • #34,364
  • Jun 22, 2012 6:59pm Jun 22, 2012 6:59pm
fti...thank you for comments.

They are a little over my head really, I still have much reading and understanding to do before I even demo, I have a lot of respect for this market, many many more people have better edge then myslef at present.

more learning to do
  • #34,365
  • Jun 23, 2012 12:42am Jun 23, 2012 12:42am
Thanks fti for your comments, helps me understand your point of view and reaffirm my thoughts as well. Let me see if I can summarize for Try and me.

Quoting fti
the key thoughts are all there.
but the mindset is a little predictive.

add thoughts.
you always scaling in positions.(may be forgeting scale out)
break highs or lows have no impact to decision process.
>do not play the breakouts as it could be a fake (dead cat bounce).

Quote
Breaking highs or lows only have impact your perspective if you trading on wind or in crosswinds.
> I do not know what is the wind you are referring to fti. The only winds I know is the north,south,east,west winds in the game of 'mahjong'

Quote
Entrys of positions have no baring on your decision process, that process is a continueous directional process.
Entrys of positions have important baring to your cost of positions.
Therefore entrys are attempted at any point you can feel that had maximised.
>keep attacking in the direction of trend until you have max out your bullets or change in trend. Do not enter blindly as this can affect MM

Quote
there are only 2 types of markets behaviours. One in motion' persistent and trending' and the other in distribution. Strategies for the different market modes
regards
>I feel in the chart posted we don't play the range rather wait for a buy opportunity based on the H1 uptrend.

PS: Try, hope you would have noticed that for e/u, g/u quite common to have a range due to Asian time zone.
  • #34,366
  • Jun 23, 2012 12:43am Jun 23, 2012 12:43am
Quoting Try
fti...thank you for comments.

They are a little over my head really, I still have much reading and understanding to do before I even demo, I have a lot of respect for this market, many many more people have better edge then myslef at present.

more learning to do
noted, no problem.
whenever you are ready.
Cannot be rushed, need get market experience first.
Do not trade real money until you ready for battles.

regards
  • #34,367
  • Jun 23, 2012 12:56am Jun 23, 2012 12:56am
Quoting Sampio
Hi all

wonder if anyone can shed some light into my dance or am I dancing blindly in the dark??

An eagerly and confused new trader,
sam

Hey Sampio Thought i would add my thoughts about your trade. im still learning so i may be wrong, but just my thoughts

From the position of your scout it seems that at this point in time you are looking for the market to move in your favour with that strong hourly downward push. If this is so then the time frame for your trade is “now”, in that moment. as time moved on the market did not make that push down you were expecting. There was opportunties for you to close postion at break even. It would be prudent in this situation to get out at break even/profit as the time frame for your trade has passed as you were “looking” for that strong push to occur now. The next 40 minutes passed with no movement backing up your postion and gave you many opportunites to exit. the market is still in accumulation phase moving in that slow, sluggish, back and forth movement.

The thing is we dont know when or even if that move will happen. To try and guess exactly the time of the move is not possible and more often than not you will be wrong. Rather you are trying to follow the “flow” of the market. You had an idea of where the general flow of the market was going when you determined the daily direction as down and the hourly as up but slowing down looking to possibly turn. So the position is badly timed, not necessarily wrong. This is what the tools of attack and rescue are for because we are never going to be able to guess exactly when the market is going to make that move. There have been many strong pushes down in your direction which at that moment in time appear to be the start of that strong directional move down you are looking for but never amount to anything. still the same back and forth movement.

As your position moved into a loss it was clear that the move you were looking for didnt happen, but you should expect that as we can never guess exactly when it will move, this is what the tools of attack and rescue are for to allow us to maneuver through the market managing our positions waiting for that key time to attack. In this case the strong push down you are possibly looking for.

At this point you say your mind is unclear where the trend is. Remember nothing has really changed about the trend, only that your timing was wrong, the move is not yet. Since the market is still moving in its back and forth sideways motion the move against you is natural the down part finished and now the up move starting we wait to see how far it goes untill the down side starts again etc... The move up is not a strong impulse wave move against you so need not panic just wait for it to see where it goes.when will the down part start again and how far will it go....etc you are with the major trend..

So you are waiting in this accumulation phase for the big push many times it will trick you, but that is what your scout is for. If he is in a good position when you think it is time you send your checker in, if wrongly timed you can escape without any casualties. wait for next time.

When the time eventually comes and the market changes into that aggressive trending mode, your scout and checker are in and you confirm the trend and changes in the market a different feel now, no longer the slow lethargic back and forth motion, it starts to come alive, you attack aggressively with your army. Now is the opportunity to make your killing. At this point in time you will be extremely exposed to the market. So do not overstay remove a large part of the army very quickly as to bank some foreign capital. With the remainder you can ride out the trend withdrawing postions as you see the trend slowing down.

I remember this quote "Even a powerful arrow at the end of its flight can not penetrate a silk cloth" think it is from red cliff
  • #34,368
  • Jun 23, 2012 6:27am Jun 23, 2012 6:27am
Quoting Sampio
Hi all

wonder if anyone can shed some light into my dance or am I dancing blindly in the dark??

An eagerly and confused new trader,
sam
rofl; boy, did I sweat over that one... But I've played differently; I thought London will trip the stops at the opening, so went short out of the gates.

but than greed overwhelmed me(lotsa greed lately...) and didn't get out when it turned. Stayed and fought 5 bloody hours(but at least got the big prize in the end, went with it till 1.255 - yet that was luck, not skill).

when momentum dies, get out; if the wind comes back, go back in. Even if it'll be at a worse level, you'll have the wind behind(hmmm.... maybe I should practice more often what I preach).


Regarding macro, my .02$:

1. Ben will print; like the sun and the moon, QE3 will happen.

As small trader, our job is to bet each time that QE3 won't happen. That way, you can make money 10 times betting against the big players who try to front run it with their big lines, while getting burnt once(when QE will actually happen). And even that time, probably you won't get burnt too badly, since QE is soooo front run.

But at 10% yearly deficit, don't get deluded. QE will happen. Biiig pile of debt; pile increases with speed of light - monetization incoming. Europe(the big social state, right?) has 3% deficit; US has 10%. Do the maths.

And when the time will be right, you can bet China will send back all the inflation Ben exported to them with interest. Which in the end is fair. Revenge is fair, though it sure keeps us back for millenias...

And in this particular case it's not even that fair; if it wasn't for US, China would still make a new "leap forward" or some other dumb state policy(sure, US was also self serving, but noone gives things for free).

2. The capital owners(the rich dudes) take advantage of the current situation: due to automation, there's barely work on this planet for, dunno, 0.5bln out of the 7bln population. So the rich dudes move production around taking advantage of cheap labor force.

The governments, instead of addressing the problem, taxes wealth via inflation to give everyone a bit to prevent riots(social security). The middle class is caught in between and gets all the $hit and than some more(doesn't have the money of the rich, doesn't have the power in numbers of the poor).

This labor problem is a new situation; never happened before in our history. It'll take some time to be solved(we won't catch the end of it anyway). So times will be pretty crappy for the foreseeable future.

3. like any leader from nowdays(that is, a clown governing by reading the polls and never taking a decision of his own), any US leader will do the same: sale the last asset(reserve currency status) for kicking the can another 10 years or so.

That's what's happening now: selling reserve currency to China for another 10 years of living under the coconut tree. When coconuts will stop falling... it'll be interesting.
  • #34,369
  • Jun 23, 2012 6:44am Jun 23, 2012 6:44am
Quoting snowly
rofl; boy, did I sweat over that one... But I've played differently; I thought London will trip the stops at the opening, so went short out of the gates.

but than greed overwhelmed me(lotsa greed lately...) and didn't get out when it turned. Stayed and fought 5 bloody hours(but at least got the big prize in the end, went with it till 1.255 - yet that was luck, not skill).

when momentum dies, get out; if the wind comes back, go back in. Even if it'll be at a worse level, you'll have the wind behind(hmmm.... maybe I should practice more often what...
Lot of guessing instead of trading the chart.
  • #34,370
  • Jun 23, 2012 6:50am Jun 23, 2012 6:50am
Quoting Sampio
Hi all

wonder if anyone can shed some light into my dance or am I dancing blindly in the dark??

An eagerly and confused new trader,
sam
Hi Sampio, just one more thought to share about your question. You were correct about the Day trend, and correct about the 1H trend. Problem is, you are looking at a 5M chart to "guess" the next move. If you want to trade the Day trend, you should be looking at the Day chart for the trade set-up (in this case, a signal that the 1H up move is over). Once you see it there, you can go to the 5M for your best possible entry. Until and unless you see it on the Day chart, you might consider the 1H trend to be still in force, and if you want to trade, you probably should be looking to trade with the 1H trend rather than guess. I've always considered the 5M chart to be an evil seductress, and the best way to resist her is to pop up the a 1H, 4H or Day chart to see what is really going on, and wait for your trades to develop there first.
  • #34,371
  • Jun 23, 2012 6:58am Jun 23, 2012 6:58am
Quoting snowly
But at 10% yearly deficit, don't get deluded. QE will happen. Biiig pile of debt; pile increases with speed of light - monetization incoming. Europe(the big social state, right?) has 3% deficit; US has 10%. Do the maths.
Actually, EU budget deficits are running at about 7%, US now about 9%.
  • #34,372
  • Jun 23, 2012 7:28am Jun 23, 2012 7:28am
regarding budget deficit:

http://www.bloomberg.com/quote/EUBDEURO:IND
http://www.bbc.co.uk/news/business-17812589

sure, I think part of it is bogus, since, well, there are so many unaccounted losses/liabilities, but than, that's the case everywhere.

sure, the euro area deficit is misleading, since there are so big internal imbalances, but, still, overall, seems much better than US(probably the fact that noone seems to be in a hurry to lend to half of EZ states also helps )
  • #34,373
  • Jun 23, 2012 7:28am Jun 23, 2012 7:28am
Quoting GEfx
You were correct about the Day trend
Hey guys.. may i clarify why the is the daily trend down?

Based on the definition of Higher High and Higher Low, isn't the daily trend still up?

I am asking cos i am still caught long from 1.2650 and am looking for suitable rescue.. my current DD is 1.5% and i think still have resources to fight..

appreciate all your comments..

Thank you!

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  • #34,374
  • Jun 23, 2012 8:34am Jun 23, 2012 8:34am
Quoting kinky
Hey guys.. may i clarify why the is the daily trend down?

Based on the definition of Higher High and Higher Low, isn't the daily trend still up?

I am asking cos i am still caught long from 1.2650 and am looking for suitable rescue.. my current DD is 1.5% and i think still have resources to fight..

appreciate all your comments..

Thank you!

Attachment
This is the E/$ Day chart. The way I look at charts, the section of the Day chart you are focused on is viewed as a bear flag on the Day and 4H chart, and is the up trend on the 1H chart. fti, I always feel uncomfortable posting charts on your thread, but here goes:
Attached Image (click to enlarge)
Click to Enlarge Name: euro.gif Size: 30 KB
  • #34,375
  • Jun 23, 2012 8:46am Jun 23, 2012 8:46am
Quoting GEfx
This is the E/$ Day chart. The way I look at charts, the section of the Day chart you are focused on is viewed as a bear flag on the Day and 4H chart, and is the up trend on the 1H chart. fti, I always feel uncomfortable posting charts on your thread, but here goes:
Attachment
i am not analyzing the charts... just asking about the definition of a Daily trend.

The chart that you have just posted can very well be 1H/4H that is zoomed out or a weekly/monthly that is zoomed in.

Based your definition, any chart (regardless of TF, as long as I zoom it out/in to your extent) will be a down trend..
  • #34,376
  • Jun 23, 2012 10:33am Jun 23, 2012 10:33am
since ECB's May last year press conference when it was 1.49, e/u constantly made lower highs. It as 1.42 in the stop hunt, than 1.35 something november or when it was, than was 1.34 this year.

also, lower lows - 1.31, than 1.26, now 1.22

it's a downtrend...
  • #34,377
  • Jun 23, 2012 10:37am Jun 23, 2012 10:37am
trend is subjective
  • #34,378
  • Edited 11:47am Jun 23, 2012 11:22am | Edited 11:47am
Quoting duyk20
trend is subjective
Sorry, my friend.
It is not.
If you dig deep into the thread you will find
that the trend is given by the DOW theory.
North is higher highs
South is lower lows. (Which you see clearly in GEfx chart)
The thing is to have clarity on the time frame that one chose to trade.
Some people trade the 1H/15M/5M other the 1D/H4/H1 and even other I know trade the 15M/M5/1M.
In consequence, all depends on the chart that you are trading.
I think that the problem is that when people talk about the trend
they tend not to specify the chart that they are using for their analysis.
Please go ahead and check it out.
All is alrelady explained a couple years ago.
Happy trading.
Empty as water and soft as a facing wind mountain
  • #34,379
  • Jun 23, 2012 11:40am Jun 23, 2012 11:40am
A very interesting find:
Quoting http://www.ft.com

France, Greece, Italy, Spain, et al have decided that socialism (spending money they do not have to support state welfare progams that they cannot afford) is the only answer to their fiscal problems and, therefore, they have to spend more money to solve the current economic problems that socialism has caused. The only problem is that they have spent all of their money plus all that anyone will loan them. Germany has money and has already spent a considerable amount of it to bail out the irresponsible socialist governments of the Southern tier of Europe, and is now balking at sending more because the Southern tier states have reneged on instituting the reforms that would put their fiscal houses back in order. Germany now recognizes that it has been had and does not want to waste more of its economic resources to temporairly avoid the inevitable collapse of the Euro by kicking the can a short distance down the road. So the rest of Europe is in a tizzy because it has run out of its own and eveyone else's (except Germany's) money; and it can't persuade Germany to let it spend all of their money too. Seems like the fundamental problem no one understands is that, in economic terms, the state is a parasite. It produces nothing, only consumes the fruit of the private sector's productivity. And once the state starts consuming more resources than the productive sector can produce, bankruptcy and default by the state are inevitable. So for Europe the only question is when is the collapse going to happen; before or after Germany is bankrupt.
Empty as water and soft as a facing wind mountain
  • #34,380
  • Jun 23, 2012 12:06pm Jun 23, 2012 12:06pm
china does not fund USA spending, USA prints it's own money does not need China to fund anything. China has two choices, do not get paid in US$ or get paid in US$ and leave US$ getting dusty in vault or swamp them for interest paying bonds. Think Japan budget defs and interest rates/inflation, there is none for 15+ years now


Quoting snowly
rofl; boy, did I sweat over that one... But I've played differently; I thought London will trip the stops at the opening, so went short out of the gates.

but than greed overwhelmed me(lotsa greed lately...) and didn't get out when it turned. Stayed and fought 5 bloody hours(but at least got the big prize in the end, went with it till 1.255 - yet that was luck, not skill).

when momentum dies, get out; if the wind comes back, go back in. Even if it'll be at a worse level, you'll have the wind behind(hmmm.... maybe I should practice more often...
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