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Technical Analysis Fallacy

  • #41,901
  • Aug 10, 2013 10:53am Aug 10, 2013 10:53am
Quoting -Michael-
{quote} Tashkent i Agree with you But Byte the bulet or commit in rescue is very tricky subject Wrong Entrance surrender or not "If you can afford the lost , bite the bullet" Regards Michael
definitely. it is extremely delicate issue, no question. to get more insight, fti's comments on this subject must be repeatedly read, contemplated and digested. rescues are performed ONLY if you are sure to great extend that you will get out with something. it is like a sword supposed to be used to cut the loss, but not to be used to get profit from a losing position. if you do not know how and when to use the sword, you will only cut yourself. it is not a toy for inexperienced.
As Above, So Below
  • #41,902
  • Aug 10, 2013 11:24am Aug 10, 2013 11:24am
Quoting tashkent
{quote} definitely. it is extremely delicate issue, no question. to get more insight, fti's comments on this subject must be repeatedly read, contemplated and digested. rescues are performed ONLY if you are sure to great extend that you will get out with something. it is like a sword supposed to be used to cut the loss, but not to be used to get profit from a losing position. if you do not know how and when to use the sword, you will only cut yourself. it is not a toy for inexperienced.
Yep but one cant never be sure to great extent about the "when" thats why you have a sqew
Never know that first rescue will bring you to the safety .
Thats why you have to know your tools i mean maybe take back and continue bleeding
maybe go to the next level if you can afford maybe kill the scout in some cases maybe even flip.
Like FTI said "different stroke to different people"
Many things to learn and much more things to experience while you learning.
regards
Michael
Do not be victim to conflict of the General and Commander in you - by FTI
  • #41,903
  • Aug 10, 2013 1:57pm Aug 10, 2013 1:57pm
Quoting sirji
{quote} Please discuss about next trades. what will happen next week any idea
price will fluctuate!!
Allah has permitted trade and has forbidden interest [koran]
  • #41,904
  • Aug 10, 2013 2:32pm Aug 10, 2013 2:32pm
Quoting -Michael-
{quote} Yep but one cant never be sure to great extent about the "when" thats why you have a sqew Never know that first rescue will bring you to the safety . Thats why you have to know your tools i mean maybe take back and continue bleeding maybe go to the next level if you can afford maybe kill the scout in some cases maybe even flip. Like FTI said "different stroke to different people" Many things to learn and much more things to experience while you learning. regards Michael
my point was regarding rare high probability trades which happen when we see more directional money flow in a specific time at a specific point, usually to kill the sitting ducks or vice verse - sitting ducks trigger such moves.
As Above, So Below
  • #41,905
  • Aug 10, 2013 2:34pm Aug 10, 2013 2:34pm
Quoting sirji
{quote} Please discuss about next trades. what will happen next week any idea

i will open you the secret: next week it will close above or below weekly open. but please do not tell that anyone.
As Above, So Below
  • #41,906
  • Aug 10, 2013 2:59pm Aug 10, 2013 2:59pm
@tashkent bro you miss one vital point " next week it will close above , below or open at weekly open"
don't predict direction, but dance with flow of water
  • #41,907
  • Edited 3:23pm Aug 10, 2013 3:08pm | Edited 3:23pm
@sirji start reading from 1st page and go till 200 pages than go back re read and than go back re read and than come to that last page with reading. after that you don't need any discus and idea, market will tell you what she want to do next.

actually no one knows what is her next move.
don't predict direction, but dance with flow of water
  • #41,908
  • Aug 10, 2013 3:28pm Aug 10, 2013 3:28pm
Quoting priceaction1
@tashkent bro you miss one vital point " next week it will close above , below or open at weekly open"
i deliberately dropped it out, otherwise you have to get into deeper fractals and debate forever. lets say EU is at 1.3300. what is the probability it will close exactly at 1.3300 after a week?
what color candle would it be if weekly open and close are equal? (let's say you use red for down, green for up)
do you see any such phenomena in your weekly chart? they are either red or green, are not they?
of course there is still a tiny chance but this was not my point at all.
As Above, So Below
  • #41,909
  • Aug 10, 2013 3:41pm Aug 10, 2013 3:41pm
Quoting mario83
Hi Friends, I would like to ask you for an advice and lesson how to deal such situation in future. I've been trading some time ago as amateur starting from 2010 and finished in the end of 2011 as my primary job was exhausting and couldnt spent more time on FX. Now i'm back with target of 10% each month which seems very easy. I learnt a lot of from FTI's thread (FTI - i will be always thankful for your effort put into this thread - you made my eyes wide open into FX market and personal life). So, i was almost 10% up in just one week trading with...
let me be frank with u,the way u r playing this game ur only one trade away from decapitating urself.
1.ur leverage was 1:5 to start with which is very high.
2.by the end of ur manoeuvre u increased ur leverage to 1:20,marked my words mister ur just one trade away from blowing ur account.
3.10% per months,i wonder which fantasy land u r coming from.ur naďve and insulting to all the professionals in this business.for god sake smell roses and come to reality.
4.ur problem is fear and hope,the question is how u going to take this out of the equation or atleast minimise it. the way forward is take the leverage out of the equation and u will be alright.
5.for the immediate future ur aim in trading should be to prolong ur life as trader and not making 10%per month.
Allah has permitted trade and has forbidden interest [koran]
  • #41,910
  • Aug 10, 2013 3:45pm Aug 10, 2013 3:45pm
I live doji
don't predict direction, but dance with flow of water
  • #41,911
  • Edited Aug 11, 2013 12:05am Aug 10, 2013 11:50pm | Edited Aug 11, 2013 12:05am
Quoting drzakir123
{quote} let me be frank with u,the way u r playing this game ur only one trade away from decapitating urself. 1.ur leverage was 1:5 to start with which is very high. 2.by the end of ur manoeuvre u increased ur leverage to 1:20,marked my words mister ur just one trade away from blowing ur account. 3.10% per months,i wonder which fantasy land u r coming from.ur naďve and insulting to all the professionals in this business.for god sake smell roses and come to reality. 4.ur problem is fear and hope,the question is how u going to take this out of the...

hi drzakir123.

i got different view about leverage, but i stand to be corrected if i wrong,

An undercapitalized trader may leverage its equity by borrowing money.
if you well capitalized, then you don't need leverage.
for me, leverage is just dividing troops into smaller fraction unit in % equity.

leverage - The more it borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result. (wikipedia)

so, if trader undercapitalized and use little leverage, he would use big portion of his equity as margin.
if trader undercapitalized and use high leverage option, he could use smaller fraction of his equity.

imo, leverage has no impact on your profit/loss book, but the principal risk does.
what you risking is what you losing/gaining.

example: if i opened an micro account (0.01 lot base = 1000 unit) with $2000
if i pick 1:10 leverage, i have smallest unit 0.01 lot = 5% of equity
if i pick 1:100 leverage, i have smallest unit 0.01 lot = 0.5% of equity

what i'm more concerning is his value at risk.
if he undercapitalized and use little leverage,
he use big portion of his equity as margin (risking >10% of equity per trade),
then small possibility he would survive in long term.

regards
steady as she goes
  • #41,912
  • Aug 10, 2013 11:51pm Aug 10, 2013 11:51pm
Quoting mario83
Hi Friends, I would like to ask you for an advice and lesson how to deal such situation in future. I've been trading some time ago as amateur starting from 2010 and finished in the end of 2011 as my primary job was exhausting and couldnt spent more time on FX. Now i'm back with target of 10% each month which seems very easy. I learnt a lot of from FTI's thread (FTI - i will be always thankful for your effort put into this thread - you made my eyes wide open into FX market and personal life). So, i was almost 10% up in just one week trading with...

hello Mario,

i have experience like you have it there several times.
that's the problem, we don't know the future and we must deal with our own greed and fear.

but rescuing against trend is very dangerous for your book,
what if the price never comeback in several days?

although there is no guarantee of right,
but imo, the safer place to put the sell order is on the lower high, likewise the rescue order, unless there is no trend.

sometimes i don't have patience as well.
take what market gives is the answer.

regards
steady as she goes
  • #41,913
  • Edited 3:11am Aug 11, 2013 2:38am | Edited 3:11am
Quoting mario83
Hi Friends, I would like to ask you for an advice and lesson how to deal such situation in future. I've been trading some time ago as amateur starting from 2010 and finished in the end of 2011 as my primary job was exhausting and couldnt spent more time on FX. Now i'm back with target of 10% each month which seems very easy. I learnt a lot of from FTI's thread (FTI - i will be always thankful for your effort put into this thread - you made my eyes wide open into FX market
Hi mario,

i think 1) initial analysis of the trend might be off.. unless it is showing a down trend on the longer chart (in that case, your mm should allow you to stay longer in the battle)

2) rescue too early.. the first sign of rescue seems to be when the reversal pattern showed up (double top)..

you may have wanted to go for a small quick profit in the green circle.. quite risky considering its counter trend..

oh.. and no need to regret not catching the whole chunk of the down move. you should give yourself a pat for scaling it out nice and steadily (unless you are over stretching your mm, in that case you will desparately want out asap). it will encourage you psychologically for many more trades to come.

lastly, i have no prob with leverage. blowing up a 100 dollar account is the same as blowing 1% of 10k account. just have to make sure there is enough pips range to manoeuvre on a small highly leveraged account.

cheers

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  • #41,914
  • Aug 11, 2013 3:45am Aug 11, 2013 3:45am
hi drzakir123. i got different view about leverage, but i stand to be corrected if i wrong, An undercapitalized trader may leverage its equity by borrowing money. if you well capitalized, then you don't need leverage.
leverage is not a matter of undercapitalise or well capitalise but of greedfor me, leverage is just dividing troops into smaller fraction unit in % equity. leverage - The more it borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result. (wikipedia) so, if trader undercapitalized and use little leverage, he would use big portion of his equity as margin. it is same thinking and this is what happen at banks, in order to go around basel rule of keeping 8%equity,they created shadow banks and use leverage to the hilt and in lehaman case about 1:50 via credit derivatives[they consider to be well capatalise] and time proves that they don't have any equity when time comes to face reality,they don't have any equity to take losess and tax payer had to pay and they went bust in my view leverage was created for well to do people and it was not created for retail traders and to make them rich quickly, it is a fallacy. if trader undercapitalized and use high leverage option, he could use smaller fraction of his equity. ur thinking more like bankers before 2007 bust,thier logic and thinking exactly the same word for word.imo, leverage has no impact on your profit/loss book, but the principal risk does. what you risking is what you losing/gaining. example: if i opened an micro account (0.01 lot base = 1000 unit) with $2000 if i pick 1:10 leverage, i have smallest unit 0.01 lot = 5% of equity if i pick 1:100 leverage, i have smallest unit 0.01 lot = 0.5% of equity what i'm more concerning is his value at risk. if he undercapitalized and use little leverage, he use big portion of his equity as margin (risking >10% of equity per trade), then small possibility he would survive in long term.it is very easy for loses to happen in this business and difficult for profit to comes by,the reason is spread,which makes all the difference.to begin with,u start with hope and ur trade start with a loss, becos of spread, and one's mindset change from hope to fear very quickly and in the process u lose ur abilty to think rationally and if u take a position against trend and with leverage this process will exacerabate.my feeling is robustness should be the cornerstone of one's trading and the way to go about it is by shunning leverage and infact I will go negative on leverage and my experience is,i have comes out positive on my balance sheet.listen to fti properly u will see this message that small profit better than small loss,grow ur equity slowly otherwise trading will take u to some very dark corners regars.
wa salaam.
Allah has permitted trade and has forbidden interest [koran]
  • #41,915
  • Aug 11, 2013 4:28am Aug 11, 2013 4:28am
i don't think leverage is a matter of greed. i can lose a highly leveraged $100 account vs a 1% of a 10k account. my loss is the same. the difference is i borrowed 9.9k to divest into other safer assets say dividend stocks or bonds.
  • #41,916
  • Aug 11, 2013 4:38am Aug 11, 2013 4:38am
Lee Kuan Yew ON...Life after Cabinet... and death

"My daily routine is set. I wake up, clear my e-mail, read the newspapers, do my exercises and have lunch. After that, I go to my office at the Istana, clear more papers and write articles or speeches.

In the afternoons and evenings, I sometimes have interviews scheduled with journalists, after which I may spend an hour or two with my Chinese teachers.

I have made it a habit to exercise daily. At the age of 89, I can sit up and I do not need a walking stick.

When I was in my 30s, I was fond of smoking and drinking beer. I quit smoking because it was causing me to lose my voice at election campaigns. That was before medical research linked smoking to lung and throat cancer, among other things. Oddly enough, I later became hyper-allergic to smoke.

The drinking gave me a beer belly and it was showing up in pictures appearing in the press. I began to play more golf to keep fit, but later on turned to running and swimming, which took me less time to achieve the same amount of aerobic exercise.

Now, I walk on the treadmill three times a day - 12 minutes in the morning, 15 minutes after lunch and 15 minutes after dinner. Before dinner, I used to swim for 20 to 25 minutes.

Without that, I would not be in my present condition physically. It is a discipline.

I continue to make appointments to meet people. You must meet people, because you must have human contact if you want to broaden your perspective.

Besides people in Singapore, I meet those from Malaysia, Indonesia, and, from time to time, China, Europe and the United States.

I try not to meet only old friends or political leaders, but people from a variety of fields, such as academics, businessmen, journalists and ordinary people.

I have cut down on my overseas trips significantly, because of the jetlag, especially when travelling to the US.

Until 2012, I was still travelling to Japan once a year to speak at the Future of Asia Conference - now into its 19th year, organised by the Japanese media corporation, Nihon Keizai Shimbun (Nikkei).

For a time, I was going to China nearly once a year, although I am reluctant to go to Beijing now because of the pollution. But the leaders are there, so you have to go there to meet them.

The JP Morgan International Council, which I am on, did me the honour of holding its 2012 annual meeting in Singapore, so did the Total Advisory Board.

Going to France is all right. It is a 12-hour direct flight on an Airbus 380, there and back. But to go to New York is much more tiring - especially because of the time change, from night into day and day into night.

Travelling overseas helps me widen my horizons. I see how other countries are developing. No country or city stays static. I have seen London and Paris change, over and over again.

Being out of Government means I am less well-informed of what is going on and the pressures for change. I therefore go by the decisions of the ministers, by and large. I seldom express a contrary opinion - at least, much less than when I was in Government and attended Cabinet meetings, which allowed me to participate fully in the debates.

Occasionally, when I disagree strongly with something, I make my views known to the Prime Minister. There was an instance of this when the Government was looking to reintroduce Chinese dialect programmes on free-to-air channels.

A suggestion was made: "Mandarin is well-established among the population now. Let us go back to dialects so the old can enjoy dramas."

I objected, pointing out that I had, as prime minister, paid a heavy price getting the dialect programmes suppressed and encouraging people to speak Mandarin. So why backtrack?

I had antagonised an entire generation of Chinese, who found their favourite dialect programmes cut off. There was one very good narrator of stories called Lee Dai Sor on Rediffusion, and we just switched off his show.

Why should I allow Cantonese or Hokkien to infect the next generation? If you bring it back, you will find portions of the older generation beginning to speak in dialects to their children and grandchildren. It will creep back, slowly but surely...

Life is better than death. But death comes eventually to everyone. It is something which many in their prime may prefer not to think about. But at 89, I see no point in avoiding the question.

What concerns me is: How do I go? Will the end come swiftly, with a stroke in one of the coronary arteries? Or will it be a stroke in the mind that lays me out in bed for months, semicomatose?

Of the two, I prefer the quick one.

Some time back, I had an Advance Medical Directive (AMD) done which says that if I have to be fed by a tube, and it is unlikely that I would ever be able to recover and walk about, my doctors are to remove the tube and allow me to make a quick exit. I had it signed by a lawyer friend and a doctor...

If you do not sign one, they do everything possible to prevent the inevitable.

I have seen this in so many cases... Quite often, the doctors and relatives of the patient believe they should keep life going. I do not agree. There is an end to everything and I want mine to come as quickly and painlessly as possible, not with me incapacitated, half in coma in bed and with a tube going into my nostrils and down to my stomach.

In such cases, one is little more than a body.

I am not given to making sense out of life - or coming up with some grand narrative on it - other than to measure it by what you think you want to do in life. As for me, I have done what I had wanted to, to the best of my ability. I am satisfied...

Different societies have different philosophical explanations for life and the hereafter.

If you go to America, you will find fervent Christians, especially in the conservative Bible Belt covering much of the country's south.

In China, despite decades of Maoist and Marxist indoctrination, ancestral worship and other traditional Buddhist or Taoist-based religious practices are commonplace.

In India, belief in reincarnation is widespread.

I wouldn't call myself an atheist. I neither deny nor accept that there is a God. The universe, they say, came out of the Big Bang.

But human beings on this earth have developed over the last 20,000 years into thinking beings, and are able to see beyond themselves and think about themselves. Is that a result of Darwinian evolution? Or is it God? I do not know.

So I do not laugh at people who believe in God. But I do not necessarily believe in God - nor deny that there could be one."
  • #41,917
  • Aug 11, 2013 5:19am Aug 11, 2013 5:19am
From: mario83
I would like to ask you for an advice and lesson how to deal such situation in future……………..
Could you please advise me how to stick to original plan and don’t move anything? How to switch off emotions how to switch off fear? How to switch on PATIENCE?



Hi mario83,

I took similar trades as you with $1 for the scout etc. but my live working capital is over $100,000 not $1000.

I do not have the skills to have the scout at $1 for a $1000 account and I have been trading since 2006.

If you made your scout 10 cents, it may help you with your patience and mindset.

I do not aim for 10% per month or any amount. I just aim for consistency in making a small amount and having non losing days. Last month I had two losing days, -0.82% and -0.32% and this month no losing days so far.

For my improvement in consistency I have to thank Fti and others here who have help me over the years.

For a benchmark, I could put my capital into fix deposit or time deposit with banks in Australia for 4% per year, couple of years ago is was 7%, it is safe and I do not have to do anything but as long as I made more than that with my trading I am happy.


Anyway you seem to be on the right track with your trading, it is just the size of your trades that might need some adjusting.

All the best, Ray.
  • #41,918
  • Aug 11, 2013 5:25am Aug 11, 2013 5:25am
Quoting kinky
i don't think leverage is a matter of greed. i can lose a highly leveraged $100 account vs a 1% of a 10k account. my loss is the same. the difference is i borrowed 9.9k to divest into other safer assets say dividend stocks or bonds.
the difference is in first instance u blow ur $100 account and have no right to sit on the table to play and bet vs loss of $100 of 10k account and play another round and hope for the best.and it is a big difference.
Allah has permitted trade and has forbidden interest [koran]
  • #41,919
  • Aug 11, 2013 5:29am Aug 11, 2013 5:29am
Quoting 1234
From: mario83 I would like to ask you for an advice and lesson how to deal such situation in future…………….. Could you please advise me how to stick to original plan and don’t move anything? How to switch off emotions how to switch off fear? How to switch on PATIENCE? Hi mario83, I took similar trades as you with $1 for the scout etc. but my live working capital is over $100,000 not $1000. I do not have the skills to have the scout at $1 for a $1000 account and I have been trading since 2006. If you made your scout 10 cents, it may help you with your...
I totally agree with u ,ur very sound.and may God bless u.
Allah has permitted trade and has forbidden interest [koran]
  • #41,920
  • Edited 6:31am Aug 11, 2013 6:12am | Edited 6:31am
Quoting drzakir123
{quote} the difference is in first instance u blow ur $100 account and have no right to sit on the table to play and bet vs loss of $100 of 10k account and play another round and hope for the best.and it is a big difference.
i could reinstate my right to sit and play again by transfering another $100 into my account vs someone continuing to play with a 9.9k account. i still have 9.8k to divest elsewhere.

take Ray's example. if he seldom lose say 1% of 100k (=1k) on any day. he could play with a 10k account with high leverage and invest 90k on fixed d. Not saying what you are doing is wrong, Ray. just trying to maximise the potential of our hard earned money here.

The issue we should focus on 1) is how many pips does the market require to move against you before you get a margin call then adjust our leverage accordingly so that we can manoeuvre within this pip range.. 2) how much we can emotionlessly afford to lose. easier to be emotionless if the loss was foreign cap
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