Technical Analysis Fallacy

Hey snowly, thanks for sharing your thoughts You're adressing this from a very different perspective than me (fundamentals, news). For me, it was mostly a question of whether price would trickle below .44 and then some. On my feed, the daily range was at its limits, so while a further strong drop may happen as it sometimes does, it didn't appear likely to me. Note where the attack ended / the scout was retracted. Does it really look like a substantial drop was expected?

and you just start trading crosses....you know one pair acting wildy can make your MO and mindset in problem....

V

imho:

news matter; there are seldom real news(I know only of two last year - Draghi's speach, Fed starting QE3), but there are various fads that can last for days. That chart doesn't occur out of thin air. I've always watched news more like... trigger signals.

2 camps, right? shorts and longs. When news is favorable for one side, they start pushing in their direction(throw orders, make noise... much like chimp males do when they fight). If the move is less than what you'd estimate it should be, that side is weaker; if it's more, that side is stronger(or it's exhaustion, obviously). But news definitely matter(obviously, as long as you understand them - sometimes I trade without reading a newsflow and usually I'm fine, but... I trade knowing I don't watch a newsflow - i.e. with less leverage).

Also, try to put yourself in the other guy's shoes. Think: "if I'd be short in this pair, from x level or y, how would I feel? Stressed, in a hurry to cover, relaxed, eager to add more, etc".

regarding the trade at you posted:

well, you exited right where you should; you pretty much nailed it.

But - sharp drop(150 pips). Can either snap back(very low probability - there are seldom snaps both directions - it really snapped at .455, probably it won't snap back on the end too) or consolidate. Now, see it from your trade:

- you trade the 2nd wave(the tricky one);
- your average is ~90;

You notice you exited right at the local top, correct? It's the urge to take money and run. Wait(unpleasant as it is). Ok, place a stop at .441 or wherever, if you don't have energy or you fear you'll revenge trade(but if you do, don't move it, take your loss and take a break - 80% of the time you'll be hit only to reverse afterwards - it's ok, you're paying for the luxury of trading while being low on energy; it's a luxury, it must be payed). And wait.

You'll probably have a consolidation. Don't be greedy. Say you're in a 20 pips range(60 - 80) - try to exit ~66-68? You'll say that between 66-68 and 75 there are only 7-9 pips. True. But your whole move was... 40 pips? 7-9 pips is... 20+% of the move(or 50% of your overall profit). Squeeze. Sometimes you'll lose all the profit and some more; on average, probably you'll be way better(when you lose, take a break, don't revenge )

yes, the market tries to scare you out of position; don't run. Be patient. If in the next 1-2h of consolidation you're not hit, ok, think about packing. But don't pack the 1st moment it barks. You're leaving stuff on the table.

p.s. - don't forget the spread. If your order is at 66, price has to reach 63 bid for you to be filled. You'll pay the spread 99% of the time. It's the law

pps - to sum up: impatient. Or greedy. Or a combo of both. Greedy due to small acct., so temptation to overleverage. Sure, if you make 10$ in a move, it's hard to find it sexy - but that's how you get bad habits. Rush to attack, rush to exit. I'd say, 70% chances you're overleveraged and with a small enough acct. not to really care(which again, will bring bad habits, which are... very hard to remove).

either reduce leverage and accept that 1-2 years you'll make... 10 bucks trades(you'll reach 20 bucks trades in 1 year if you learn), or stop and save some more money. Obviously, move 1 is vastly superior to 2.
Yes, you'll make 10 bucks trades for one month, think you're good, get a slap, lose in 2h everything you made last month only to see it reversing. After you'll get rid of that, you'll think that you're wasting 10h/day and make 10 bucks and you're doing this for a year already. Frankly... doubt there's any other way to learn. Either you accept the crap or... probably lose some money and quit.

the reason why probably I guess your feelings is simply because I've been through the same shit, not because I'm psycho

"everyone gets what they want out of the market"(or something around that - "Market Wizards #x" - crap book, good quote). You want to have fun(big wins, big moves, yadayada), you gotta pay; you want money... grind away as boring as it is.

I'm short cable for 3 weeks; I know it's early(actually, I wouldn't be surprised if it breaks up unexpectedly hard), made crap money and I've sweat alot. That's... having fun, as weird as it might sound(and I can afford it). But, at least, I have the brains to know inside what I'm really doing and keep it small.

your chart... it hurts my eyes

that blue thing is there for years. I love my blue area

otherwise, sorry for derailing the thread and chart porn.

I'm talking about the bollinger bands

I'm fine with it, you make some good points!

actually, on h1/h4/d they ain't totally bad(the 3 deviations one, the 2 is pretty useless imho). It's a pretty good graphical display for std. deviation.

sure, they're perfectly worthless on m1; but, overall, I kinda like them. Transmits information pretty clearly without needing another window.

Frankly, I look at that rsi once in a blue moon - it's there because it was always there, but... I don't know how it reached there in the 1st place At least at ATR I look from time to time, but rsi... So, usually using bb for momentum and ignoring rsi. Ok, momentum is something you already know, but, for me, it's a good reminder when I tend to get too greedy(plus, really, I can feel momentum, but I can't exactly compute it).

I can tell you are an experienced trader, I'd say it's best to go by what you are used to!
No reason to fix what isn't broken.

Snowly, I appreciate the time you take to reply, I really do. But I think you are missing the point. My objective is to explore the fti style MO of trading. As such I don't have market orders in waiting to be filled. I only trade daylight, so to be three weeks in a trade is completely out of the question. What you are adressing is not the fti MO, you seem to be talking about a different style. The number of pips isn't relevant, e.g. look at what lusan was doing. I am looking to see if I can nimbly dance wrt now. Your guessing about leverage, account size, and mindset is inaccurate.

You're probably trying to help and I appreciate that, but I'm really more interested in the MO discussed in this thread.

dkc

So, you're letting your wins turn into losses..

Attacking MO can be found in AOW Chapter 2: Waging of War.


2. When you engage in actual fighting, if victory is long in coming, then
men’s weapons will grow dull and their ardor will be damped. If you lay
siege to a town, you will exhaust your strength.

6. There is no instance of a country having benefited from prolonged warfare.


7. It is only one who is thoroughly acquainted with the evils of war that can
thoroughly understand the profitable way of carrying it on.
-"with rapidity"

18. In war, then, let your great object be victory, not lengthy campaigns.

But note that I have not tried out any attack sequences yet.. because of my timing.. I have made pips solely on rescues and it might have been just my luck so far.

Anyone have any tips on how to trade Gold, like a 3 kingdoms method for it? I know it's highly correlated with Silver, but for the third kingdom I chose AUDUSD which is only highly correlated on the weekly.

Hello FTI!

This is my first mail to you but I have been visiting/reading your thread for a long time,
So far I’ve finished 10% of the thread, I’ve TWO questions in my mind and I wish that
You could answer me in details,

For you these would be childish questions BUT for me this is very important to learn,
So here are the questions:-

1) What is DANCING WITH THE MARKET, plz explain.

2) What is SNOWBALLING?? Snowballing in a Win/Loss Position.



Waiting for your reply very anxiously.

Take care, and GOD bless you.

Ashraf

Really? If you have read 10% of the thread, you should be able to understand that. Have you ever danced? Give it some thought about the similarities.

What happens to a snowball when you rollit down a hill? it grows as it gathers new snow right? Just open your mind. you will see.

[quote=...So here are the questions:- 1) What is DANCING WITH THE MARKET, plz explain. 2) What is SNOWBALLING?? Snowballing in a Win/Loss Position. ...[/quote]

May I jive in...

Dancing with the Market is taking a pair, ex. EUR/USD, as your partner and follow what she does. In this dance, all you can do is follow. If it is going up, you buy; if going down, you sell - that is within the timeframe you are playing. In this dance, you can't lead because the partner is a huge beast and your size won't be able to budge it. You can only join with the many to be able to get noticed.

Snowballing is, just as Tub says, gathering pips as you roll. As you keep rolling, you grow because you gather pips in the way. This is a double-edged sword. Either your snowball is gaining you more or keeping you lose more. So be careful.


Tub, haven't seen you post for a while. You must have been busy gathering pips in the Rodeo...missed your humor and interaction with the Chief..

Trade well and Regards...

FTI

hope everything is fine for you , a bit worry i should say ... 2 days no news ... or may be just celebrating China national day ....

regards

Redsun

tomorrow no news for employement

http://www.bloomberg.com/news/2013-1...-tomorrow.html


V

Yah, same here.

fti, I hope you're doing well, Chief!

Seems like the US government is also celebrating China's holiday... or at least they are taking time off too

Hi Fti!
Nice to see you! How are you... took couple days of holidays?

Should we trade today?