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The Ultimate Fallacy in Technical Analysis 99 replies

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Technical Analysis Fallacy

My advice would be not to have a target at all. If you decide you want to make 2% a day you might find yourself closing a profitable trade too quickly because you have already made your 2% or what would be far worse, keeping one open longer than was wise because you were just short of your target. Perhaps you are not as childish as me but I was guilty of the latter sin many times.
Quoting ukmanthailan
My advice would be not to have a target at all. If you decide you want to make 2% a day you might find yourself closing a profitable trade too quickly because you have already made your 2% or what would be far worse, keeping one open longer than was wise because you were just short of your target. Perhaps you are not as childish as me but I was guilty of the latter sin many times.
thanks Ukman.

my plan is:
if my target was achieved, i scale down my risk until my trading hours is finished.
if it is not achieved until trading hours finished, i would trade another day another battle.
i make my target is simply as benchmark in order to limiting my expectation.

hmm. i would think about your advice.
you're not childish anyway. hehe.
steady as she goes
Quoting frz
then i start my 3rd demo, which is started today. i was think a lot about my 2nd account, why it was still wrong? then i got a clue about my scorpion, my biggest enemy. so, i limiting my daily expectation. if i trade agressively, i could get xxx pips a day with flat attack modus (1:1:1) but it would ended with the big hole and uncontrol exposure in the end of weeks as the result, because my scorpion grows bigger and the unmeasurable expectation factor because greed has no limit. so, i set down my daily expectation to xxx pips a day with...
Hi frz, why is your daily target 2%? And, more importantly, why is your pain threshold 10%? Given these numbers, you need to be right in your trading about 84% of the time, just to break even. I understand you may not get 2% each day, nor lose 10% each loss, but in general this is what you've set up for yourself.
Quoting GEfx
{quote} Hi frz, why is your daily target 2%? And, more importantly, why is your pain threshold 10%? Given these numbers, you need to be right in your trading about 84% of the time, just to break even. I understand you may not get 2% each day, nor lose 10% each loss, but in general this is what you've set up for yourself.
what are you suggesting?
Quoting piccolo
{quote} what are you suggesting?
That these numbers should be based on your expectation from your trading, which is based on your experience with your trading strategy.
Quoting ukmanthailan
Thanks for the advice, appreciated. (I live in Thailand) I have the side open with a fan blowing onto the motherboard at the moment due to the fact that I have no air-con downstairs since I moved house, so ventilation shouldn't be a big problem (dust is another matter but I can clean it out easily enough) An SSD drive sounds like a good idea, will take a look at them when I go to buy some cables tomorrow morning. How is your trading and the rest of your life going? Cheers
Hi,

Rest of life is doing good. I have pretty much suspended my trading at the moment. While it was sort of profitable it had taken a toll on me. I have a much better emotional feeling when I get paid after the work is done. With trading you put in the same amount of work but the end result is not always positive. Maybe I will get back in the game with time, who knows.

Best regards
Quoting GEfx
{quote} That these numbers should be based on your expectation from your trading, which is based on your experience with your trading strategy.
It is exactly that. He (or she, haven't paid attention) risks a weeks profit (+/-), which is is inline with a decent MM.
Quoting GEfx
{quote} Hi frz, why is your daily target 2%? And, more importantly, why is your pain threshold 10%? Given these numbers, you need to be right in your trading about 84% of the time, just to break even. I understand you may not get 2% each day, nor lose 10% each loss, but in general this is what you've set up for yourself.
thanks GEfx.

honestly, i don't know..
i pick it because i make profit around 2% a day this month..
but big possibility in future i have dry month of profit. because it hasn't tested in every terrain.

i pick 10% so i could deploy some rescue before it hit my threshold pain.
but, i would reconsider it back.. i think it is so big.
but, i have no clue.
steady as she goes
Quoting frz
{quote} thanks GEfx. honestly, i don't know.. i pick it because i make profit around 2% a day this month.. but big possibility in future i have dry month of profit. because it hasn't tested in every terrain. i pick 10% so i could deploy some rescue before it hit my threshold but, i would reconsider it back.. i think it is so big. but, i have no clue.
This % is just a scorpion killer when you have lost control. In reality, it should never be hit.. a couple of times a year, maybe. So if you make it small and rely on it to be hit regulary, you have lost already (like all those stop loss trading ducklings).
Quoting GEfx
{quote} Given these numbers, you need to be right in your trading about 84% of the time, just to break even.
by the way, 84% is not a big number for this strategy.. most poeple here should have over 90% anyway..
Quoting piccolo
{quote} It is exactly that. He (or she, haven't paid attention) risks a weeks profit (+/-), which is is inline with a decent MM.
That is true, in general, if you get 2% on every positive trade, and limit losses to 10% on losing trades, and win on 84% of your trades. If you don't average 2% on every positive trade, and you are not getting 84% positive trades, then you might want to consider reducing the 10%. If you get 3-4 losing trades in a row, you are going to work for free the next month or so to dig out of the hole, assuming you can string together 3-4 weeks of winning trades in a row. If your trading strategy can accommodate that kind of trading, then all is well.
Quoting frz
{quote} thanks GEfx. honestly, i don't know.. i pick it because i make profit around 2% a day this month.. but big possibility in future i have dry month of profit. because it hasn't tested in every terrain. i pick 10% so i could deploy some rescue before it hit my threshold pain. but, i would reconsider it back.. i think it is so big. but, i have no clue.
2% is a pretty high expectation. Of course it depends on how you go about achieving this 2% but i would be worried that you would have to take on too much risk to hit this target daily. just for comparison I consider 3%-5% a month to be a very successful month. Remember that sustainability is the most important thing. No good making money for a few months/years only to lose it the next. Keep risk as low as possible.
Quoting piccolo
{quote} This % is just a scorpion killer when you have lost control. In reality, it should never be hit.. a couple of times a year, maybe. So if you make it small and rely on it to be hit regulary, you have lost already (like all those stop loss trading ducklings).
hi Piccolo.

yes, i think about it too.. its function limiting exposure of emotion.
steady as she goes
Quoting frz
{quote} thanks GEfx. honestly, i don't know.. i pick it because i make profit around 2% a day this month.. but big possibility in future i have dry month of profit. because it hasn't tested in every terrain. i pick 10% so i could deploy some rescue before it hit my threshold pain. but, i would reconsider it back.. i think it is so big. but, i have no clue.
Yep, I understand what your going through. Take time to think through what your strategy will support when considering these numbers. I don't know what numbers are reasonable for you, so I can't suggest any. But if you have questions, look to your track record of trading to help. If 2%/10% works, that is great, but if not, work through what makes you comfortable, and run with that for a while. Analyze again when you see your margin account growing, and you are more comfortable with executing your strategy.

Just my opinion and I bet fti has an better idea on this then me.
Quoting Acs_112
{quote} 2% is a pretty high expectation. Of course it depends on how you go about achieving this 2% but i would be worried that you would have to take on too much risk to hit this target daily. just for comparison I consider 3%-5% a month to be a very successful month. Remember that sustainability is the most important thing. No good making money for a few months/years only to lose it the next. Keep risk as low as possible.
hi Acs..

yes, you're right.
survival is paramount.

i trade 2% per single trade and deploy flat attack modus (1:1:1).
and deploy some of rescue if it is bleeding.
but, i might scale down if it's not working.

Edit: i think about your expectation of 3%-5% a month.
i presume that is very stable skew in the short term as well as in the long term,
my plan is to sustain my living first, then if my capital grows i will set down my expectation as you do.
but, if my plan is not working i would think to get a job.. i don't know.
many thanks for your input Acs.
steady as she goes
Quoting GEfx
{quote} Yep, I understand what your going through. Take time to think through what your strategy will support when considering these numbers. I don't know what numbers are reasonable for you, so I can't suggest any. But if you have questions, look to your track record of trading to help. If 2%/10% works, that is great, but if not, work through what makes you comfortable, and run with that for a while. Analyze again when you see your margin account growing, and you are more comfortable with executing your strategy. Just my opinion and I bet...
yes, indeed.
managing risk is my concern now.
i still attempt to find my niche skew.

many thanks for your advice GEfx, Ukman, Piccolo and Acs.
steady as she goes
I couldn't resist having another little short on cable. Only a couple of levels and nicely controlled. A very small profit compared to earlier loss but allows me to go to bed feeling a little more positive.
Quoting frz
{quote} the thoughts of youth are bright lights that shine forth like the meteors that oft make brilliant the sky, but the wisdom of age is like the fixed stars that shine so unchanged that the sailor may depend upon them to steer his course. Regards
Thanks frz,
Use this wisdom wisely
rgs

PS Something you tell.Young people yearn for distant, distant stars and the old people know that it is the past, history
Quoting mr.kho
{quote} average of all philosophy and quotes is remarkable depending on the level and interests and perspectives on the person who implies salaam
Never forget that!
rgs
Quoting Gro
{quote} Thanks frz, Use this wisdom wisely rgs PS Something you tell.Young people yearn for distant, distant stars and the old people know that it is the past, history
you're welcome.
i will keep remember it.

Regards
steady as she goes
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