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The Ultimate Fallacy in Technical Analysis 99 replies

"Technical Analysis Fallacy" thread people, I need your help 54 replies

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Technical Analysis Fallacy

Quoting indianguyinny24
My company wants to provide bloomberg terminal to me...i hope i can remote access into it as well... worth it for guys like us??? V
Do you need it?

May be just more info to process. If not, I say no.
Quoting ukmanthailan
{quote} My opinion, for what it's worth, is that if you have still been trading on the long side of USD/JPY whilst it has dropped 800 points, you aren't really paying enough attention to the intermediate daily trends ( if you are just making an observation, that's a different matter). I think it is good that you are asking questions of yourself and the markets, and I believe that a little obsession is a good thing. Not many people become great at something unless they are obsessed with it to a certain degree. The only thing you need to watch is...
Hey ukmanthailan,

Thanks for the reply. I'm not trading long USD/JPY for that very reason, but was rather looking for a discussion about what was going on, weather you think trend will continue, is it a pull back, is it some sort of intervention (USD dropped against all majors), etc. I know no-one can see the future, just wanted to hear what people were thinking on the matter.

Will keep an eye on that obsession. But as I said before, things are coming along fine (so far)
Quoting nomadic123
{quote} Hey ukmanthailan, Thanks for the reply. I'm not trading long USD/JPY for that very reason, but was rather looking for a discussion about what was going on, weather you think trend will continue, is it a pull back, is it some sort of intervention (USD dropped against all majors), etc. I know no-one can see the future, just wanted to hear what people were thinking on the matter. Will keep an eye on that obsession. But as I said before, things are coming along fine (so far)
http://articles.economictimes.indiat...dex-yen-shorts

I wasn't warning you about your obsession, just making a positive comment with a small qualification - that's what it was supposed to sound like anyway
oh I see. anyway thanks again. and thanks for the article

Do you find it worthy keeping upto date on these sort of fundamental things going on? Or do people (using the MO in this thread) mostly stick with what they are seeing directly on the charts? I find a lot of the fundamentals confusing - interesting - but over my head a lot of the times.
Well, I'm sure that interbank dealers know about this sort of thing way before we do so I'm not sure what the value of such information is as far as what you are trading today is concerned. However, if you try to follow fundamentals you may begin to spot news items that point the way to possible changes in market conditions in the future.

I won't pretend I understand it all but I try to stay informed. Some fundamentals only seem to have a short term affect - well, the news of the fundamentals that is. For example, figures for foreign purchases of US treasuries. I assume that because they have already been bought, the foreign exchange transactions that were needed to buy them have already had their effect on the market price before we are told about them. However, I am not an economist or even a particularly good trader so it is best to make your own mind up about such things.
Quoting ukmanthailan
Well, I'm sure that interbank dealers know about this sort of thing way before we do so I'm not sure what the value of such information is as far as what you are trading today is concerned. However, if you try to follow fundamentals you may begin to spot news items that point the way to possible changes in market conditions in the future. I won't pretend I understand it all but I try to stay informed. Some fundamentals only seem to have a short term affect - well, the news of the fundamentals that is. For example, figures for foreign purchases of...
As a forex dealer for a large bank told me once: we make the news!

let it think in..
I'm just going to express a few things here that I feel might be limiting my trading with this MO. Maybe you have similar experiences. Its mostly to help me put it into words and analyze my own trading mind.

1) I find myself missing out on some BIG moves (and A LOT of $$) because I get spooked and exit my attacks too early.

The problem is when I have many troops in play I become hyper aware of the fact that if price was to turn on me I would be absolutly screwed. Therefore I take profits quick, real quick. I time my entries well enough and price goes my way but I usually leave a lot of potential profit on the table.

I know the main problem is my undercapitalization. I would not be so worried about market potentially turning on me if I was properly funded. But at this time I am just a mere mortal and have no way around that shortcoming. FYI my skew is currently 1,1,1 (micro lots) since I'm very new and learning - and my account is only $1200 total so I cannot afford to put much more on the line.

For example: I go long. Then I see 3 or 4 big candles that go in my direction. By now I'm 3 troops deep and all in profit. Great! But the last candle had a fairly long wick at the top - this could be the end of the push up. Next candle looks like indecision. Uh oh its going to turn on me! Exit all troops with profit. Then BAM price continues to go up 2 or 3 times as much as before. Lots of money left on the table I had profit yes, but would have been much more if I stayed in trade...

So basically I have lots of envy about potential monies I could have achieved. I guess its greed getting the better of me (or maybe its not because I am exiting early enough to avoid a future disaster). Maybe I need to trust in my analysis more, but if things reverse on me in full attack I would be in a lot of trouble.


2) How to manage dynamic exits.

I love the charts you show fti that illustrate where you enter and exit and how many troops for each. But I find it very confusing and difficult to know which trades you are exiting at which time.

So you go in something like 1,1,2,3,8 then start to exit afterwards with something like 1,2,5,7 (not specific numbers, i'm making them up). I understand that you are taking off amounts that you feel should be taken off at each point in time (no set amount to deload each time, just a feel of what is right) but I don't understand how to do that effectively with MT4 (you are probably not using MT4?).

With such fast moving markets trying to decide which trades to close first, which to leave open, how many troops each time. Seems very confusing. I usually just close all open at once when I decide the trade is over. Do you think this is a bad approach? Should I try harder to learn your dynamic exit style? Other people, do you find the dynamic exits helpful or hinderance?


Thanks for listening I am improving a lot - but I'm far from perfect and hope to improve with your help. I feel like I'm going to be full of novice questions as the weeks progress, please bear with me.
Thanks to those providing information on the thread.

news is just an excuse, give them their due importance. nothing more nothing less.
i have been taught to follow rythm only. its the bias that gets into sometimes and creates problems.
that the mindset problems but those sudden intuitions, whose accuracy i have statistically tested, i love
them the most. and such is the feeling i would love to hear from tubguy and from you all.

is nice to hear chief meeting old friends.
i have had a nice day. May you have the same.

regards
Quoting indianguyinny24
My company wants to provide bloomberg terminal to me...i hope i can remote access into it as well... worth it for guys like us??? V
If you have WM/Reuters rates on it, I'm sure it will come in handy.
Quoting piccolo
{quote} As a forex dealer for a large bank told me once: we make the news! let it think in..
I think his ego might have been getting the better of him.
Quoting nomadic123
I'm just going to express a few things here that I feel might be limiting my trading with this MO. Maybe you have similar experiences. Its mostly to help me put it into words and analyze my own trading mind. 1) I find myself missing out on some BIG moves (and A LOT of $$) because I get spooked and exit my attacks too early. The problem is when I have many troops in play I become hyper aware of the fact that if price was to turn on me I would be absolutly screwed. Therefore I take profits quick, real quick. I time my entries well enough and price...

Hey Nomadic,

will try to give my opinion of an answer to your questions.

Regarding your first point, i think it is good as you put it that you become hyper-aware when you have many troops in play, it is at this point that your exposure is high and so also your risk. You want to be nimble when this is the situation.

When you see signs of the market stalling and slowing, I think it is right to be cautious, things can turn in the blink of an eye, so the only way to protect ourselves is to be very nimble. As you say you do not want things to reverse on you when you have your full attack in, and you want to take profits quickly as they are given to you.

Firstly I would say it is much better to pull too early and make some profit then to have stayed too long and lose the profit and potentially get into a loss.

One way to deal with this would be to reduce the exposure when you see signs of stalling, bank some foreign capital and leave some positions in to see if the move is in fact really over. Again this all come down to feel and what you see unfolding in the markets. They may be times when it is best to take everything out, other times maybe just reduce your exposure down, you can always add more if the move starts to continue.

It is a constant process of adjusting your exposure and risk depending on how you see things unfolding. No fixed way. I think it just comes down to practice and experience. The more you practice the more experiences you have the better you will become, you will build more confidence and improve.

Regarding your capital I think it is a problem. I would not feel comfortable trading your size without a balance of at least $10,000. You have less room to put positions in because you are under capitalized, I think this could be also part of the issue. I would recommend looking at Oanda as a broker as they allow you to trade sizes much smaller then you are currently restricted too. This would give you far more freedom to enter positions. You could start you progression 10x smaller then you are currently using. This would allow you to make more adjustments.
Micro lot scouts on a 10k account? The game has to be worth playing and at that size I would lose interest.
Quoting ukmanthailan
Micro lot scouts on a 10k account? The game has to be worth playing and at that size I would lose interest.

This is only my personal preference and what I feel comfortable with. I want to make my money from my attacks, I can quickly get my exposure up if I need to but like to have the flexibility of multiple positions etc.

Just as an example as I know it may seem small, of how I feel comfortable doing it.

I would quickly build my position up to 0.10. Perhaps something like 0.03,0.03,0.06.

From there If I felt things were going my way I would quickly want to get up to 0.20 then to 0.40 up to a maximum exposure of 1.00.

I want to be able to start very small so that if I am on the wrong path I can cut things away quickly and look to reposition my self. If I am correct and things start going in favour I can quickly get the exposure up.

All of this based on an account size of £10,000
Quoting Acs_112
{quote} This is only my personal preference and what I feel comfortable with. I want to make my money from my attacks, I can quickly get my exposure up if I need to but like to have the flexibility of multiple positions etc. Just as an example as I know it may seem small, of how I feel comfortable doing it. I would quickly build my position up to 0.10. Perhaps something like 0.03,0.03,0.06. From there If I felt things were going my way I would quickly want to get up to 0.20 then to 0.40 up to a maximum exposure of 1.00. I want to be able to start...
Ah, OK. I thought you meant 3 micro lots was your full exposure lol. 0.3 leverage would make it very hard work.

Cheers!
Quoting ukmanthailan
{quote} Ah, OK. I thought you meant 3 micro lots was your full exposure lol. 0.3 leverage would make it very hard work. Cheers!
Lol yeah, I think to even make 1% in a month like this would mean you performed exceptionally haha. Maybe if I had 100 million or more may be more interesting and safe like this
41K posts. Yikes! Are there cliffs?
Quoting nomadic123
I'm just going to express a few things here that I feel might be limiting my trading with this MO. Maybe you have similar experiences. Its mostly to help me put it into words and analyze my own trading mind. 1) I find myself missing out on some BIG moves (and A LOT of $$) because I get spooked and exit my attacks too early. The problem is when I have many troops in play I become hyper aware of the fact that if price was to turn on me I would be absolutly screwed. Therefore I take profits quick, real quick. I time my entries well enough and price...
Taking profits is always a good thing. It's a good habit to develop. You might consider taking just part of your position off when the bankers pause or pull back (they are probably taking profits then so why not take some off, too), but when you believe the pullback is over/behind you, re-establish your full position and start adding on. I separate trading from the trades I am in. Maximize trading, not necessarily an individual trade. As for capitalization, you might be OK as long as you are both trading for dimes/pip and not letting a trade run against you for more that 20-30 pips. Again, you are here to become a great trader, so never let one trade define who you are.
Quoting Smokeymar
41K posts. Yikes! Are there cliffs?

wtf is this?>

V
Quoting indianguyinny24
{quote} wtf is this?> V
Cliff notes on the thread.
Quoting Smokeymar
{quote} Cliff notes on the thread.

ignored...

V
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