Technical Analysis Fallacy

Thanks, yes what I was trying to say was if you have a scout going one way and you get a spike in the opposite direction, do not panic and wait before adding to the trade. In this case I waited for 7 or so 5 minute bars before doing anything. Fti has mentioned this kind of thing in the thread.

Of course there are other options that Fti mentions in the thread, I could have flipped with a larger size trade in the direction of the spike but today I choose not too.

Anyway it is all in the thread. Regards Ray

Hi 1234
It's nice to see your posts.
Rgs

oh yes, I did the similar thing what you did with the scout and the spikes.

Regards

So am I supposed to believe that because "Euro leaders agree to open funds without austerity programs" the Euro is saved? As a banana republic citizen the only thing I see is more money going down the drain to satisfy the politics of those in power. Am I so stupid? Maybe I am.
Be careful. If gambling, I would fade it.

Yes Lusan you are right.

no, we're just supposed to trade it; believe... that's for politicians

We have been here before......have to wait until the dust settles

Hi luSan
What will happen?When a similar situation occurs in the garden?
Rgs

@lusan, @gro





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CORE ELEMENTS OF TECHNICAL ANALYSIS.

My take on technical analysis...(i already posted this somewhere...i will have to paste/modify)

With regards to models, testing, crossreferencing, etc...as it pertains to technical analysis....

Classic technical patterns do not need to be tested before you can assume them to be valid. They are all valid. It is just a matter of knowing when and where. Yes, you are reading that correctly. why then, you may ask, do they fail? ANS: You are simply trading them incorrectly. You cannot use a scalpel to do the job of a hammer. What do i mean?

Let us take breakouts for example. Like i have written before...breakouts fails alot.....but a breakout in a clear, strong, bull market or a downward breakout in a clear, strong bear market will hardly fail. e.g 2008 economic meltdown.

Conclusion:You need the right technical pattern for the right trading environment, i.e, only trade breakouts in a strong, clear trend--and only in the direction of that trend. when should you trade head and shoulders? when should you trade gartley pattern? or a megaphone? or three valleys or .......?

You only need to test a technical patterns --to the extent to understand under what market conditions it works and doesnt work.

How about candlesticks? when should you trade a pinbar or a harami or a engulfing bar?

Let us break this down further....isolate any candle or candle patterns....mark its boundaries...then, go to lower and lower time frames...that candle or candle pattern will morph into a classic technical pattern for you. basically, candles and classical technical patterns = the same. Put this to the test. Isolate any candle or candle pattern...then change time frames...that candle pattern will change into a classic chart pattern.

BASICALLY, it boils down to: where should i trade that classic chart pattern. Candles is just a different way of looking at the same thing.

Now, let us take this one step further: ALL CHART PATTERNS...ALL CANDLES PATTERNS....ARE SIMPLY TWO THINGS: Trendlines and/or Support and resistance levels. It is either one or combination of TL and S/R or just one of them. THAT IS IT. that is all of technical analysis pattern. Look at any classic chart pattern...really look at it...what is it? TRENDLINES...and in other cases..trendlines with S/R levels.

Conducting backtest is just conducting backtest on various configurations/permutations of TL and S/R. This is also why i said that ALL CLASSIC TECHNICAL PATTERNS ARE VALID. Because they are all trendlines(linear regression analysis)and S/R levels.

This is the building block of classic technical analysis.

If you are trying to determine positive expectancy on a combination of technical patterns or some sort of "new" technical patterns or candles...really...all that really is....is Trendline or Trendline with S/R that has been re-juggled, re-shuffled, or re-arranged. Nothing more or less. That is what all technical patterns/candles are. TL or TL + S/R. Instead of running backtest to oblivion on this "interesting technical pattern" to determine their positive expectancy...frankly, i can think of a number of solid ways to robustly trade TL and S/R.

I like to reduce things to their core elements and see what makes sense out of it. Trendline are simply linear regression analysis. That has a robust data supporting it(we use it in physics, engineering, etc.) the important thing is knowing how to do good linear regression analysis. S/R has been studied to death in academic circles. I can post academic links supporting their veracity.

It is all about knowing how to use them. You cannot use a hammer to do the job of a chainsaw and then complain about poor results.

respectfully,

skynet

http://www.forexfactory.com/images/buttons/quote.gif

Word!

I've been attempting to catch up...currently on page 200 - to say this thread is an eye opener is really an understatement!



Assuming I ever catch up to the current page (2000 + posts!!), I may have some questions.

Good wording, I use myself support and resistances (levels) but don't make it my holy grail. Price will not go to support / resistance and reverse every time, sometimes it will sometimes it will not. Which support resistance? I use where big boys central bankers are interested and that is the levels where price has reacted in the past on times frames mostly higher time frames but again not necessarily it will reversed, it all depends on Price Action what price does near those levels.

http://www.cnbc.com/id/48008281

http://www.spiegel.de/international/...-a-841769.html

My tomatoes dry out. More fertilizer please.

How did you know that in two hours I go to the Cherokee reservation in the smoky mountains to enjoy a pow wow?

In-tuition

Hi indianguyinny,
ya,ya, We will meet in the wild
BestRgs

Hi luSan

Ya,I see it the same
See you in the wild ...
BestRgs

We are in wild....there is nothing sane anymore


V