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Technical Analysis Fallacy

  • #40,981
  • Jun 13, 2013 12:35pm Jun 13, 2013 12:35pm
Quoting -Michael-
{quote} Hi Indiaguyinny24 What do u mean by that ? With profit you can go to the store and buy something . It is not that ilussion .

When in the heat of the moment i had this thought in my head....just wrote it here.....in my so many years it is confirmed ...the risk is only thing i contain....Profits the market give...so Risk is real ......profit is illusion...



V
  • #40,982
  • Jun 13, 2013 1:45pm Jun 13, 2013 1:45pm
Quoting indianguyinny24
..the risk is only thing i contain....Profits the market give...so Risk is real ......profit is illusion... V
Frame it
+1
  • #40,983
  • Edited 3:55pm Jun 13, 2013 3:38pm | Edited 3:55pm
Seems to be a lot of Yen weakness.

I wonder if this is what is driving the market right now, its not selling of USD but heavy selling of YEN..??

Positive USD data today, market is long USD for about 5 minutes then huge spike in opposite direction a bit of dithering about and then back to huge short USD moves.
  • #40,984
  • Jun 13, 2013 4:23pm Jun 13, 2013 4:23pm
US data was not that special. Core retail sales as forecast. Jobless claims slightly better. Nothing there to turn the tide.
  • #40,985
  • Jun 13, 2013 8:43pm Jun 13, 2013 8:43pm
Well, I lost my head a couple days this week. Gave back everything from where I started 3 weeks ago. greed and revenge were key players.

I'm sure they fall into the "egor" catagory.

but all is not lost.

Started today back with about my original starting sum, $19 I lost $9 on one attempt. I closed my day with a trade in asia with $45.

I see the importance of being focused and not trading while other things need tending. I was up to $435 from $19 in 3 weeks and a couple days.

I gave much back one day, not enough sense to see the error of my ways even after posting that I had. Lost the rest after gaining about 85% back the next day.

Gotta have your mind right or you get your ass kicked. just because you got it figured out......don't mean you can win.

Fti. I love ya man! No better teacher than experience but you really did give all! I thank you once again.


P.S. I hope my telling what happened to me helps someone. I suck at writing but I try.
  • #40,986
  • Jun 13, 2013 9:27pm Jun 13, 2013 9:27pm
Quoting tubguy
Well, I lost my head a couple days this week. Gave back everything from where I started 3 weeks ago. greed and revenge were key players. I'm sure they fall into the "egor" catagory. but all is not lost. Started today back with about my original starting sum, $19 I lost $9 on one attempt. I closed my day with a trade in asia with $45. I see the importance of being focused and not trading while other things need tending. I was up to $435 from $19 in 3 weeks and a couple days. I gave much back one day, not enough sense to see the error of my ways...
Hey tubguy,

These are the most important times, When you make these mistakes is when you really learn.! Experience really is so important it teaches you over time. I think others can tell us things but only when we experience it for ourselves do we really learn.

I think it is sensible and smart to trade with $19. I can relate to it because I started with £100 and traded like that for just over a year before increasing my balance.

The reason I did this was to learn and practice with a small amount of money so that any lessons I face do not have to cost me, It also helps to remove any unwanted emotions with having larger capital.

I use to treat the money as if it was £100,000 though and traded it with that mentality. I want to practice with that mentality so that eventually if i can invest £100,000 i will be ready it will be exactly the same as what i have been currently doing and what i am use to. Just that i open positions 1000x the size etc. Nothing changes.


So i wanted to ask you Have you thought that your skew may be too aggressive? If you have $190,000 would be trading like you are now? you would have $4.35 million in 3 weeks if so.! Pretty spectacular right? If you goal is to practice and learn for the long term is it not better to trade with that view? otherwise when you increase your capital you will be disoriented by the new size and not use to it.

We are always going to make mistakes and get into trouble. I know it happens to me all the time, I do very stupid things some times that i know i should not have done, my lack of discipline. I actually did one of those today.

When the positive USD data came out I could not help my self but to start shorting the gbp/usd and went quite aggressively to get my size in quickly. I know I should not do this and its so stupid but could not help my self! It went down for about 30 seconds and then the rest of the day rallying up.

But i know its not a problem because my size is still small and I know that tomorrow or even if i have too into next week there will be opportunities for me to
improve the position and exit without taking any significant loss on the account.

With a small skew our profits are of course smaller but it means that when we make those mistakes and do those stupid things from lack our lack of discipline it is manageable. We can always deal with the situation. This lets us build the account steady and in a sustainable way.

This is just my thoughts and views from my own experiences I have been trading like this for almost 2 years now. Hope what I say
makes some sense.

Best of luck.!
  • #40,987
  • Jun 13, 2013 10:02pm Jun 13, 2013 10:02pm
Hi tubguy!

I don't participate much but i feel like i owe the thread after learning a lot from it. It doesn't matter to me if it falls on deaf ears, the thought is... I tried to give something back.

As you said, you probably figured it out..

1. Market Structure = check
2. You. = check
3. Capitalization. = XXXXXXX

The fact that you are undercapitalized, forces you to over-leveraged. This is like running a sprint race with knives on both hands. An accident waiting to happen. The result is unsustainable in the long run. It may not mean much for 19 to 435 but percentage wise applied to a 100k will be 2.2M+ in 3 weeks! I urge you to go back to your MM as it is very out of line with your capitalization. Either add more funds or go by the smallest size (.01 per pip)

[highlight=rgba(255, 255, 255, 0)]Sun Tzu said: Managing a big army is in principle the same as managing a small one: it is a matter of organization. Directing a large army is the same as directing a small troop: it is a matter of strict and impartial commannd.[/highlight]

It is not neccessarily ego that's responsible for the loss... Sometimes shit just happens. What matters is that we have contingencies in place to protect our balls. Live and fight another day.

Regards
  • #40,988
  • Jun 13, 2013 10:27pm Jun 13, 2013 10:27pm
personally, i feel nothing wrong with tub's mm. just have to withdraw some profit outta the account at suitable time.. rule number 1, preserve capital.
  • #40,989
  • Jun 14, 2013 12:51am Jun 14, 2013 12:51am
Quoting tubguy
Well, I lost my head a couple days this week. Gave back everything from where I started 3 weeks ago. greed and revenge were key players. I'm sure they fall into the "egor" catagory. but all is not lost. Started today back with about my original starting sum, $19 I lost $9 on one attempt. I closed my day with a trade in asia with $45. I see the importance of being focused and not trading while other things need tending. I was up to $435 from $19 in 3 weeks and a couple days. I gave much back one day, not enough sense to see the error of my ways...

Hi TubGuy
You know a read your post and i can see myself . i had that thing too . A few times a had almost blow my account . It was a learning experience. After every blow of account i did reassessment . To sit with myself and try to understand what went wrong.

Every time that i did that from i hindsight i understand that my entries were based on my believes and not on what i see in the market. When i say believes i mean i entered rescue blindly on points where historically was turning point or something, or big numbers i didnt gave the price or market to hint me or see a reversals.
Something interesting happened that every time i checked after the fact i saw that almost always i could at least bring the position to break even.
Stil fighting my own scorpions i have a bad days .I set a rules for myself to folow ( it is not ridgity) the rules are how much i am willing to go in negative teritory before i kill the position or times to trade (liquidity) or never be in the position before major news even if i am in negative teritory close before the news. This is something that defended me from a big losses.
I know for a fact there there will be another day to fight.

Preservation of capital is main goal.

I totaly agree with Acs_112 you have to trade like you have a big account. It is an ants job. it dont matter if you have 19$ or 190$ or 1900$ or 19000$ . it is how you execute things. My opinion you always have to trade with a thought f it was big accout would you take the same risk ?
You know 1% per day is outstanding performance even 0.5% per day is outstanding performance.
So if it take you a year to go from 19$ to 38$ from the point of view of your acount you outperformed many many peeps in this field. But as long as it stady and small advance and not a rolocoaster like you take.
I know that it is a bummer to sit all day just to add 1$ to your account but look 1$ is almost 5% to your account.
Think in percents not amount. What is your scout size ? For me my scout is the smallest position that i can open 10 cent per pip.

Grow your account slowly. Dont take big risks. Maybe if you will make a journal for yourself you could see the mistakes and correct them .
In the end of the day give someone that from this market explanation what you did and how you did you will see that in the back of your mind you will fill that if someone checking on you you make fewer mistakes you weight a little bit more your decisions before take actions

it is just my opinion
to all have a good trading day
Regards
Michael
Do not be victim to conflict of the General and Commander in you - by FTI
  • #40,990
  • Jun 14, 2013 1:28am Jun 14, 2013 1:28am
Quoting -Michael-
{quote}I totaly agree with Acs_112 you have to trade like you have a big account. It is an ants job. it dont matter if you have 19$ or 190$ or 1900$ or 19000$ . it is how you execute things. My opinion you always have to trade with a thought f it was big accout would you take the same risk ?
forgetting some mm??

regards
  • #40,991
  • Jun 14, 2013 1:40am Jun 14, 2013 1:40am
Hey Cuthbert
MM is of course with MO is the Key for all this
But for everybody it different . Because everyone eventualy adopt for himself special way of trading with experience
Michael
Do not be victim to conflict of the General and Commander in you - by FTI
  • #40,992
  • Jun 14, 2013 3:27am Jun 14, 2013 3:27am
Quoting tubguy
Well, I lost my head a couple days this week. Gave back everything from where I started 3 weeks ago. greed and revenge were key players. I'm sure they fall into the "egor" catagory. but all is not lost. Started today back with about my original starting sum, $19 I lost $9 on one attempt. I closed my day with a trade in asia with $45. I see the importance of being focused and not trading while other things need tending. I was up to $435 from $19 in 3 weeks and a couple days. I gave much back one day, not enough sense to see the error of my ways...

hi Mike.

i know what it feels.
sometimes, even with no overleverage we can get modest profit.
but when we get tremendous profit simultaneously in sequence of trading days, it may make our mindset slack.
hence, when inevitable losses comes, we can't stand for it.
revenge mindset prones to occur.

in my case,
if i face such inevitable losses, in the next trading i scale down my risk to appropriate skew of the left capital.
therefore, my risk exposure ratio is remain stable.
even though face a losses with stable ratio is uphill task, but there is no other way.
trading with revenge motive is very dangerous.

alternatively if our account grows up,
we can add 30% of risk exposure only if we meet 300% of foreign capital, as Fti has suggested.
it's help my mindset remain strong, because i can adapt with the new size.
increase risk exposure agressively will get our emotion uncontrolled as our scorpion growth rapidly.

as i believe nothing can beat experience, unless new thing emerge.
we'll become smarter and stronger as we learn from the experience.
"what doesn't kill me only makes me stronger"

good luck brother.

regards
steady as she goes
  • #40,993
  • Jun 14, 2013 4:55am Jun 14, 2013 4:55am
Quoting tubguy
Well, I lost my head a couple days this week. Gave back everything from where I started 3 weeks ago. greed and revenge were key players. I'm sure they fall into the "egor" catagory. but all is not lost. Started today back with about my original starting sum, $19 I lost $9 on one attempt. I closed my day with a trade in asia with $45. I see the importance of being focused and not trading while other things need tending. I was up to $435 from $19 in 3 weeks and a couple days. I gave much back one day, not enough sense to see the error of my ways...
Tubguy,
You know I was caught yesterday with my position it is already more then 1 day fighting
More over I understood well that I did 2 wrong things:
1. I did not respect my trading rules and entered till the Miss Market get naked herself
2. I did not just gave up 4 scouts bcz I understood that the Miss Market is going my way. I was right, you know, but my little daughter was to be taken from her KinderGarten. So i left my positions unattented, and I wish I could close while I took her from kindergarten, but....
So I'm still fighting...
Everything can happen, but I'm ok with it, bcz i'm not overleveraged.
it's o'k to win ...
  • #40,994
  • Jun 14, 2013 8:23am Jun 14, 2013 8:23am

This comes from 2 maths teachers with

a combined total of 70 yrs. experience.
It has an indisputablemathematical logic.
This is a strictly mathematical viewpoint

and it goes like this:

What Makes 100% ?

What does it mean to give MORE than 100%?

Ever wonder about those people who say

they are giving more than 100%? We have

all been to those meetings where someone

wants you to give over 100%.

How about achieving 103%?

What makes up 100% in life?

Here's a little mathematical formula that

might help you answer these questions:

If:
A B C D E F G H I J K L M

N O P Q R S T U V W X Y Z

Is represented as:
1 2 3 4 5 6 7 8 9 10 11 12 1314 15

16 17 18 19 20 21 22 23 24 25 26

Then...
H-A-R-D-W-O-R-K
8+1+18+4+23+15+18+11 = 98%

And...

K-N-O-W-L-E-D-G-E
11+14+15+23+12+5+4+7+5 = 96%

But...
A-T-T-I-T-U-D-E
1+20+20+9+20+21+4+5 = 100%


-be careful about what you allow to be put in your mind-
  • #40,995
  • Jun 14, 2013 8:26am Jun 14, 2013 8:26am
Good one ^^^

V
  • #40,996
  • Jun 14, 2013 8:55am Jun 14, 2013 8:55am
Quoting Acs_112
{quote} Hey tubguy, These are the most important times, When you make these mistakes is when you really learn.! Experience really is so important it teaches you over time. I think others can tell us things but only when we experience it for ourselves do we really learn. I think it is sensible and smart to trade with $19. I can relate to it because I started with £100 and traded like that for just over a year before increasing my balance. The reason I did this was to learn and practice with a small amount of money so that any lessons I face do not...
Thanks for your reply Acs.

Quote
So i wanted to ask you Have you thought that your skew may be too aggressive?

No I don't think that my skew is to aggresive because I adjust it according to the amount of risk I feel is acceptable for that particular trade.
I rarely have more than 5-20 pips I am willing to allow against me before I kill the scout. My skew while doing what I did was rarely more than 1,1.
When I placed my scout I would already have a price chosen that told me I was wrong and would enter my second soldier very near that level.
If price passed it then I killed both.
I lost my ass by not following what I have learned here. I got biased and then allowed greed and revenge to take over.
  • #40,997
  • Jun 14, 2013 9:00am Jun 14, 2013 9:00am
Quoting eraptheman
Hi tubguy! I don't participate much but i feel like i owe the thread after learning a lot from it. It doesn't matter to me if it falls on deaf ears, the thought is... I tried to give something back. As you said, you probably figured it out.. 1. Market Structure = check 2. You. = check 3. Capitalization. = XXXXXXX The fact that you are undercapitalized, forces you to over-leveraged. This is like running a sprint race with knives on both hands. An accident waiting to happen. The result is unsustainable in the long run. It may not mean much for 19...
Quote
It may not mean much for 19 to 435 but percentage wise applied to a 100k will be 2.2M+ in 3 weeks!

Thats the idea! LOL

Quote
Sun Tzu said: Managing a big army is in principle the same as managing a small one: it is a matter of organization. Directing a large army is the same as directing a small troop: it is a matter of strict and impartial commannd.

Exactly. The only thing different is the numbers.
  • #40,998
  • Jun 14, 2013 9:02am Jun 14, 2013 9:02am
Quoting phil13
This comes from 2 maths teachers with a combined total of 70 yrs. experience. It has an indisputablemathematical logic. This is a strictly mathematical viewpoint and it goes like this: What Makes 100% ? What does it mean to give MORE than 100%? Ever wonder about those people who say they are giving more than 100%? We have all been to those meetings where someone wants you to give over 100%. How about achieving 103%? What makes up 100% in life? Here's a little mathematical formula that might help you answer these questions: If: A B C D E F G H I...

excellent post.

regards
  • #40,999
  • Jun 14, 2013 9:04am Jun 14, 2013 9:04am
Quoting -Michael-
{quote} Hi TubGuy You know a read your post and i can see myself . i had that thing too . A few times a had almost blow my account . It was a learning experience. After every blow of account i did reassessment . To sit with myself and try to understand what went wrong. Every time that i did that from i hindsight i understand that my entries were based on my believes and not on what i see in the market. When i say believes i mean i entered rescue blindly on points where historically was turning point or something, or big numbers i didnt gave the...
Quote
After every blow of account i did reassessment . To sit with myself and try to understand what went wrong.

I do this as well. I think it helps.

Quote
Maybe if you will make a journal for yourself you could see the mistakes and correct them

Gonna give this some thought.
  • #41,000
  • Jun 14, 2013 9:07am Jun 14, 2013 9:07am
Quoting frz
{quote} hi Mike. i know what it feels. sometimes, even with no overleverage we can get modest profit. but when we get tremendous profit simultaneously in sequence of trading days, it may make our mindset slack. hence, when inevitable losses comes, we can't stand for it. revenge mindset prones to occur. in my case, if i face such inevitable losses, in the next trading i scale down my risk to appropriate skew of the left capital. therefore, my risk exposure ratio is remain stable. even though face a losses with stable ratio is uphill task, but there...
I agree.

I let egor in and slipped into revenge mode.
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