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Technical Analysis Fallacy

  • #34,381
  • Jun 23, 2012 1:33pm Jun 23, 2012 1:33pm
Quoting kinky
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..
Are you kidding me?
  • #34,382
  • Jun 23, 2012 1:57pm Jun 23, 2012 1:57pm
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
Remember you are trying to follow the general "flow". Most recent direction on the daily chart was a strong push down nothing to indicate it has stopped yet, and nothing to indicate if it will continue, so we most watch to see how it develops down on the 1 hour chart. wait for the up "part" to run its course then see how the "down" part develops etc. use the 5 min for your entries and timing.

The line on your chart helps to reinforce to the brain that it is a low point. But really it could be either we dont know so must watch how it develops, taking most favourable positions to help us manage exposure to the flow. I think timing is very important in context of trading.

just the way i see things

Also i dont think should over think the "definition" of trend nothing is certain dont apply it so rigidly. Also there are trends within trends within trends this is why timing is so important, the "up trend" you are referring to may very well be the end of that period of movement up and the next "down" period could start. Time frame window is still there, so much watch developments.
  • #34,383
  • Jun 23, 2012 2:45pm Jun 23, 2012 2:45pm
There are trends within trends and within trends.
Every time frame has it own trend.
Multiple time frame analysis are important, daily charts are slave to weekly and weekly are slave to monthly.
All shorter time frames are slaves to their bigger time frames. i.e. m5/ m15 to 1h.

Doing analysis on 1h and entries on m5 should be enough to make some good pips. If trading on m5 and analysing all the higher time frames than will have information overload.

Trend changes on shorter time frames first and than on bigger time frames.

Big boys make 70% trading income via trading shorter time frames.
  • #34,384
  • Jun 23, 2012 3:41pm Jun 23, 2012 3:41pm
Quoting simpleman
There are trends within trends and within trends.
Every time frame has it own trend.
Multiple time frame analysis are important, daily charts are slave to weekly and weekly are slave to monthly.
All shorter time frames are slaves to their bigger time frames. i.e. m5/ m15 to 1h.

Doing analysis on 1h and entries on m5 should be enough to make some good pips. If trading on m5 and analysing all the higher time frames than will have information overload.

Trend changes on shorter time frames first and than on bigger time frames.

Big boys make 70%...
That's answer without crap here
  • #34,385
  • Jun 23, 2012 3:43pm Jun 23, 2012 3:43pm
Quoting GEfx
Are you kidding me?
Nice ego. Good for the account balance
  • #34,386
  • Jun 23, 2012 3:43pm Jun 23, 2012 3:43pm
Quoting Try
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
Japan always had current account surplus; US... And if yen won't blow up in the next 5 years, I'd be surprised.

life's easy with current acct. surplus. China doesn't fund USD; China funds US consumption. Ppl. consume real goods, not bytes.

interest paying bonds - you're jokin', right? TSY has depth, which definitely helps; but interest? Nowhere to be found...
  • #34,387
  • Jun 23, 2012 4:11pm Jun 23, 2012 4:11pm
Quoting snowly
Japan always had current account surplus; US... And if yen won't blow up in the next 5 years, I'd be surprised.

life's easy with current acct. surplus. China doesn't fund USD; China funds US consumption. Ppl. consume real goods, not bytes.

interest paying bonds - you're jokin', right? TSY has depth, which definitely helps; but interest? Nowhere to be found...

China does not have to buy the bonds, although interest at historic lows they are still better to buy the bonds than to keep in non interest cash

My point is, if a nation as a free floating exchange rate system therotically it does not need to sell bonds or raise taxes to fund spending. Bonds are sold more as interest rate mechanism and a cash control mechanism to some degree.

China or anyone else cannot demand more interest from USA bonds, the fed is in control of that. The only thing the fed must watch for is inflation this could, if not kept in check cause an interest rate spike to control it. Right now USA no inflation problem until balance sheet recession is repaired.
  • #34,388
  • Jun 23, 2012 4:37pm Jun 23, 2012 4:37pm
100% agree; however, if any of the creditor nations decides to dump their TSY, than... inflation will skyrocket. And sooner or later, it'll happen.

inflation doesn't exist in the US because it was exported. But definitely QE caused a ton of inflation; just not in US.
  • #34,389
  • Jun 23, 2012 4:52pm Jun 23, 2012 4:52pm
Quoting snowly
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 )
Thanks for the information!
  • #34,390
  • Jun 23, 2012 4:53pm Jun 23, 2012 4:53pm
Quoting snowly
100% agree; however, if any of the creditor nations decides to dump their TSY, than... inflation will skyrocket. And sooner or later, it'll happen.

inflation doesn't exist in the US because it was exported. But definitely QE caused a ton of inflation; just not in US.

If any nation decides to sell their treasuries than they would have to do something with the cash dollars they would get. But lets say China turns to USA tomorrow and sells all their T's, no problem china here is your non interest barring cash $ and we will retire all the interest barring T's. USA will just print the cash needed to buy them.

Correct QE did caus real inflation in Asia through commods, in the USA it was deflationary.

One other point on QE, it is an asset swap with the banks..you give me your interest barring paper I will give you cash. The cash is not entering the real economy because banks only lend to credit worthy borrowers.

It will be interesting to see if BB will do QE again, I am not sure it is not as easy as before to implement, political pressure is higher
  • #34,391
  • Jun 23, 2012 5:09pm Jun 23, 2012 5:09pm
Quoting GEfx
Are you kidding me?
Actually, you were asking for help. I was commenting that the day trend is down and not up, based on my view of the day chart. If you are trading the day chart, and you are in a long position since Thursday, then you are trading against the day chart and now you are also trading against the 1H chart. Also, IMHO, the E/$ is being technically traded now, but you never know when a FA will turn things in your favor. And you are correct, I guess, that you can find a trend to support anything you are currently doing in the forex. The trick is to establish a view of the trend that the bankers are trading, and trade in that direction. As my friend LuSan has implyed, the trend is not subjective.

I've said more in the last 12 hours than I have in quite a while. Signing off.
  • #34,392
  • Jun 23, 2012 5:11pm Jun 23, 2012 5:11pm
agree; with 2 observations:

1. cash is now on the sidelines in banks; however, somewhere down the road, things will start to be "good" again. All that sidelined cash will explode in the system(with the assorted leverage, right?).

sure, the Fed will be all wise and manage to withdraw the excess before. In reality, I think there are higher chances that I'll be elected Pope. Noone can pull that stunt up.

2. I don't talk about what China will do with their dollars. What I'm saying is that it's taken for granted that China will be happy, ad infinitum, to provide real goods in exchange for paper.

I find there are two memes going on right now:

a. ECB doesn't print because Germany has a fear of inflation due to Weimar. Bam - produce a poll in which the average german says he thinks inflation sucks.

BS I say - do that poll anywhere, in any country, and the average citizen will say the same - inflation sucks. Why? Because the average citizen pays the tab.

The reason Germany doesn't want inflation in EZ is not due to Weimar or some bs like that; it's simply because they're the creditor and inflation dilutes their claims. So... they're simply trying to be paid as close to par as possible. Rest... rest is legend.

b. Case of a recession creditor nations economies(China/Germany mainly) will be so badly affected that they'll keep providing goods in exchange for worthless paper till kingdom come.

Also I think this is BS. Sooner or later(I say sooner), they'll get fed up. It isn't written somewhere in the skies that China has to export till the end of the world and be paid in dollars and be happy with that.

if there was a goal(become the manufacturing power house and destroy the other economies)... the goal was already achieved. They don't have to keep delivering.

There's only one asset left worth pursuing. Reserve currency status; manufacturing power - already got that.
  • #34,393
  • Jun 23, 2012 5:33pm Jun 23, 2012 5:33pm
1. The cash is currently held in the banks reserve accounts at the Fed. Banks do not lend reserves, they are used to pay each other, they most be kept balanced ( My friend pays me $10 I pay into my bank, in the reserve account this is credited and debited between the banks)

Remember we just had inflation in the USA 14K dow, high house prices etc, until the balance sheets are repaired and some taking on of credit memory of consumers erazed, inflation probably stay low.

China still needs exports no question.

The $ it is common thinking that the $ is done. But think about the USA this way (I am not American)
Largest economy in the world by far
Issuer of it's own currency in floating exchange rate system
Costco, Microsoft, amazon, Expedia,Boeing,starbucks, eddie bower. Now please name me one Chinese company that can compete with these that any one as heard off and what is more all these companies are located in just one US state washington.
largest defence

The usa is the most powerful, flexible and innovative economy in history. beware to short this nation it's time is not up.

China one party structuer, operates in currency peg, is not innovative, gained power through cheap labour so far. 60% of the gdp is construction

Europe: Unified political union, no central treasury, operates on quazzie gold standard.

we all exchange goods & services for paper, china will continue to also, what else would they do accept, Euro's ok if they dare at this point.

Europe is in the social and political phase now. If they come together in unified nation, euro bonds, central treasurie. can they do , who knows keep watching.

Quoting snowly
agree; with 2 observations:

1. cash is now on the sidelines in banks; however, somewhere down the road, things will start to be "good" again. All that sidelined cash will explode in the system(with the assorted leverage, right?).

sure, the Fed will be all wise and manage to withdraw the excess before. In reality, I think there are higher chances that I'll be elected Pope. Noone can pull that stunt up.

2. I don't talk about what China will do with their dollars. What I'm saying is that it's taken for granted that China will be happy, ad infinitum,...
  • #34,394
  • Jun 23, 2012 5:39pm Jun 23, 2012 5:39pm

really interesting discussions.
if only i can trade the discussion may be i can scalp all of you for a couple of pips.

but ai ya gotta wait see what market makers up to on monday instead.

yes although has birds eye view of sea tides is important,
but could become disadvantages, when river meanders its way to it.
The big boys plays their macro games, and we ants just get our buckets filled for our needs only.

When low tides we play the rivers flows.
when high tide we play the tidal influences.
This the only way survive.
If caught against the rivers, then shore up wait for tides in.
If caught against the tides, then shore up wait tides receeds.

For every buyer will be a seller, and vice versa.
That the markets.
In between is the "industry"making fees and spreads.

the trnd conponent influences your trades.
It mostly not what market trend that seems so important to me.
It more my book's trend which i am more interested in.

regards
  • #34,395
  • Jun 23, 2012 5:44pm Jun 23, 2012 5:44pm
Quoting Try
China still needs exports no question.
I say nationalism/protectionism everywhere; you say it won't happen. Frankly, hope you're right.

and one more thing; that will all the paper they've got, they can afford to buy enough resources(they're actively buying africa afterall) to cater for their internal market. Which would be consistent to the way China always acted through history.

Middle kingdom - the barbarians around us don't matter.

Quote
really interesting discussions.
if only i can trade the discussion may be i can scalp all of you for a couple of pips.


p.s. - sorry if I've spammed your thread too much
  • #34,396
  • Jun 23, 2012 5:54pm Jun 23, 2012 5:54pm
Oh no I do not disagree with that. This is quite possible, but China will be the very big big losser in this case.

The longer high unemployment drags on in the west, the higher possibility we could some these kind of measures

Quoting snowly
I say nationalism/protectionism everywhere; you say it won't happen. Frankly, hope you're right.



  • #34,397
  • Jun 23, 2012 5:59pm Jun 23, 2012 5:59pm
They can buy commods, but these assets are inflexible
http://www.bloomberg.com/quote/CRY:IND/chart

The point is don't look at the fact that is hold 1tril in reserves and USA as high debt/gdp...look at the entire flexibility of nation


Quoting snowly
I say nationalism/protectionism everywhere; you say it won't happen. Frankly, hope you're right.

and one more thing; that will all the paper they've got, they can afford to buy enough resources(they're actively buying africa afterall) to cater for their internal market. Which would be consistent to the way China always acted through history.

Middle kingdom - the barbarians around us don't matter.



p.s. - sorry if I've spammed your thread too much
  • #34,398
  • Jun 23, 2012 6:01pm Jun 23, 2012 6:01pm
That's right fti I can't trade this at all, infact I can't trade . Still trying to figure out if I should give it a go, working hard at understanding

Quoting fti

really interesting discussions.
if only i can trade the discussion may be i can scalp all of you for a couple of pips.

but ai ya gotta wait see what market makers up to on monday instead.

yes although has birds eye view of sea tides is important,
but could become disadvantages, when river meanders its way to it.
The big boys plays their macro games, and we ants just get our buckets filled for our needs only.

When low tides we play the rivers flows.
when high tide we play the tidal influences.
This the only way survive.
If caught...
  • #34,399
  • Edited 6:27pm Jun 23, 2012 6:04pm | Edited 6:27pm
Quoting snowly
I say nationalism/protectionism everywhere; you say it won't happen. Frankly, hope you're right.

and one more thing; that will all the paper they've got, they can afford to buy enough resources(they're actively buying africa afterall) to cater for their internal market. Which would be consistent to the way China always acted through history.

Middle kingdom - the barbarians around us don't matter.



p.s. - sorry if I've spammed your thread too much
exports. yes sure, only when there is surplus productivity export.
no one exports what they need consume.

barbarians? where?
we all well cultured little ants, no worry.
only sometimes powerful peeps want act some barbaric only,
like not want pay for their consumption or want payment for non consumption.
mostly everyone pays for their consumption mostly.
Sometimes jostling for discount only.

no one's coming with sword demand yet. i hope
Ok time open restuarant. The cashier has sword, no worry.

regards
  • #34,400
  • Jun 23, 2012 6:30pm Jun 23, 2012 6:30pm
Quoting snowly
it's taken for granted that China will be happy, ad infinitum, to provide real goods in exchange for paper.
The purchase of Manhatten Island springs to mind.

I buy a nice flat screen TV from China. It gives me a few moments of pleasure. China uses the money to buy some land just down the road from where I live. This gives them food and resources. Thing is, in 5 years, my TV will be in the tip but ownership of that land may last for centuries.

Land for trinkets. Funny the things we value. What has happened to right judgment?
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