Technical Analysis Fallacy

Hi zoomzoom

I am also from a non economic/banking background, I too thought that the market structure was beyond me at first, a while back I was banging on about buyers and sellers relationship and how they could show themselves in the market chart format, in my pursuit on this subject I believe it has helped me start to understand some of the market structure and how it shows itself within the charts, for example, I asked myself questions about why do the markets and charts move the way they do? What am I missing that the successful traders are seeing? I forget what I posted now, but fti said to me the market ‘pumps then rests’, after thinking about this and watching the charts for a long more time, I started to see this ‘pump and rest’ action, while re-reading this thread I then started to see and visualise the actions of the banks/ brokers/tiers and how if they have a run on a currency they would wait for the ‘run’ to stop/slow and try to re-balance their books during this period, I started to see what the effects were if the run continued, the market lost interest or if the other side started to trade during this ‘rest/re-balancing’ period, putting it together I could start to understand the ‘pump and rest’ (correctly I hope?), this got me thinking about how the really big trades are past through the tiers and I realised this could be connected to the big 3 pumps/rests of Elliot wave, fibs and so on, this got me thinking of trying to map this movement (not Elliot wave/fibs, the pump and rest) when I did I saw a bit more all in real time without having to worry about using the t/a that is forced upon us when we start and still I am seeing more, you can add things to the mix like watching the overall movement of a currency throughout all its pairs trading the one/s with the best/easiest to read structures (though I have not really got the full hang of this part yet).

It is not as simple as I have made it sound, it takes time/lots of screen time and re-reading this thread to start to see this and it is rarely the same, it can often be similar so that is what i look at/for, what the market price structure is telling me NOW and where we are at within the pump/rest move/s of NOW, whilst taking the bigger picture into account, personally I find it a lot easier to see this in the line charts, but that is just what suits me, again this is just my experience of what I have found, I am sure there are other ways that work well too.

Regards


Phil.

ZoomZoom and Phil
I am Also from non Financial Background
When i read and reread i see new things but they all stay there . You know its like reading the text one understand words but not the deeper meaning.
Hard to explain what i mean. Since we cant be in FTI's trading room and to be juniors there we can only understand our interpretation. Thats why every re read i think i understand more and more.
Bu still in the battle mode i cant implement everything that i read. Just in a hindsight when i look on my battle i can see the mistakes even if i write them down on the next battle i do sometimes the same mistakes.
This part i think is "YOU" when i could come to the level that i won't do same mistakes twice (stupid mistakes) then i might be advance towards the next level.
I still have a hard time to spot an impulse.
I still play with sqew of 1 1 1 sometimes 1 1 2 sometimes 1 1 1 1 1 1 1 ....
Rescue even more trickier
I never FLIP.
For me Easier to learn by Example but here very small number of examples we have to consive for ourselvs our way of Trading
Just my 2 cents
regards
Michael

Hi Phil and Michael,

Thanks for sharing. I totally miss this part of the thread about "pump and rest". Or as usual, on first read "pump and rest" seems like simple enough to understand, but try seeing it represented on the charts, may take months if not years. That's quite an in dept description of your thought process to understand the market/price structure. I imagine, I was basically reading charts as 2 dimensional on a flat screen. Reading your explaination, I will have to learn to see through the screen and visualize what goes on behind the charts. I'll have to learn to see how these people (CBs, Tier Banks etc..) could pump and rest the market to balance their books.

Do these guys do it at certain time of the trading sessions or when their books go off balance due some unexpected events or economic news and is there any glaring chart patterns that indicates these guys are pumping and resting the market? I know there are still lots of blind spots in my understanding of market/price structure. Sometimes I just don't have any clue the way market moves. Only consolation is Fti said "Don't ask why, just follow".

When the going gets tough: JFK famous speech "We chose to go to the moon not because it is easy, but because it is hard" would kick me in the butt and hopefully help me along to reach my goal.

Regards, time for bed.

zz

Hi zoomzoom


Here is a chart to explain the basic way I see the pump and rest movement, this just shows the minor movement but I use this to also to plot the bigger movements, it is interesting to say look at the daily movement then drop down to the hourly to see the movements within movements, this made me finally realise the time frames are one, one is just building the bigger picture of another.


As always please remember this is just MY interpretation of what I have found and I have not been shown or personally taught this by fti or anyone else, I have just figured this out for myself and I may be misinterpreting what I have read here, it has helped me greatly understand the market movements though that is why I am sharing this new tool I have found.


I have removed some of the trading info that I wrote on the chart as it has no relevance to what I am trying to explain I see, also this is a chart from last month.




I hope fti is doing well and recovering.


Regards


Phil.

Hi Phil,

Again thanks for the explaination and the chart definitely helps clear things up.

Here's a humorous video illustrating the quite similar suitation I'm in. I'm like the guy on the scooter asking for time and you're the other guy:

http://www.toilette-humor.com/funny_...ell_time.shtml



Regards,

zz

Just for laughs. While on the lighter side of trading, if I were one of the blind men standing behind the elephant, and if suddenly able to see just a little, and if asked what I see, I would say I see 2 balls in the sky. Now I start connecting the dots to what Fti said about having balls of steel.........and the dots lead to this video:

http://www.toilette-humor.com/funny_...ind_date.shtml



Learning may be hard, but it's fun.

MERRY CHRISTMAS EVERYONE and especially to Fti.

zz

http://qz.com/158549/put-down-the-xb...ntral-bankers/

link to the CB game lol:
http://www.ecb.europa.eu/ecb/educati.../index.en.html

merry christmas

Been a bit dead around here.

Want to wish all a Merry Christmas if I happen to not show up for a while. If Christmas ain't your thing. Then I wish you well in your holiday.

Hope your doin well Fti!

http://personalliberty.com/2011/11/2...rrid=394940233

interesting read

hi all

happy christmas to all who celebrate it. have a good one.


@zoomzoom

the balls/time thingy

here is one of the first posts from fti that helped me tie in to what i have tried to explain that i try to see in the markets/charts regarding the structure and 'pump and rest' thing.

http://www.forexfactory.com/showthre...42#post1731842

for our friend fti.

regards

Phil.

Hi Phil,

Thanks for the link , and I'll join you in prayer for FTI.,

Regards,

zz

Hi Guys and FTI
Happy Christmas to all who celebrate it , and to others just have a good full of understanding giving and self for-filing year !!!

This is My Christmas Present for the Thread
Something that we almost not talking about in this "Naked" Thread
INDICATORS in FTI words and a little bit about "Greeks" "Volatility" "Lagers"

Link 1
Link 2
Link 3
Link 4
Link 5
Link 6
Link 7
Link 8
Link 9
Link 10
Link 11
Link 12
Link 13
Link 14
Link 15
Link 16
Link 17

Have a nice weekend
And Exelent Year
Best Wishes
Michael

Hi Michael,

Again, thanks for the links.

Those Greek words like delta, sigma etc and volitility (Fti's spelling)...... With no economics background, I find it really hard to comprehend. May be they are more for the economic students or people trading options. In forex, can I even dance well without understanding those terms or how would it affect risk and money management. Can I trade consistently well by just praxising the dance and keeping everything simple. Would my foundation be strong enough to withstand the wrath of the market......Sorry for the ranting.

Merry Christmas.

Regards,
zz

Yep for me it is also "Greek" hard even to explain in my words this terms
Here maybe some clarifications on those "greeks"
Link 1
Link 2
regards
Michael

Hi Michael and zoomzoom


When I first started this market thing I was trading stocks and quickly went into trying to trade options via strangles and straddles, sounds impressive hey! Well I did not have a clue what I was doing, (lost money in stocks but not option though thinking about it?) I was mugged off to buy a set of/course of cd’s for a good few pounds, (I still keep them on show in my office to remind me never to be so bl**dy stupid ever again), all the info is out for free I have since found!, anyway they taught me about options value/time decay (at least I got that out of it), I am assuming that the ‘greeks’and there meaning you are talking about are similar to this but replacing ‘‘time remaining until expiration date’ with price (market movement) and ‘options value’ replaced with your trade sizes/skews, the furthest point being your account size (blown if you reach it), the chart shows how the nearer you get to your expiration date (higher skews/drawdown) the higher your risk curve is, accelerating dramatically towards the end as price moves against you (double edged sword), it is quite basic really but actually takes a lot for us ‘non financial’ people to understand, I think fti explained it best when he said if you lose 50% of your account you will need to make 100% just to break even, I hope I have explained it well and accurately enough, please feel free to correct me anyone who is more knowledgeable in this area as I also have trouble understanding this area of the learning curve.


Here is the chart…



Regards


Phil.

Merry Christmas to fti and all. Hope fti is recovering well.

Hi Michael and Phil,
Thanks for the links for more on Greeks.......and Fti wrote, quote: "....This has no important significance for speculative traders. It is a management tool to curb risk, whereas traders creates risk exposures. Unless you traded multiple instruments of same risk denomination." end quote.

For a "speculative trader" like me, I take it as "it is nice to know".

Quote Fti: "......deltas , sigma, vega teta... etc these are the "greek" components in management & pricing models that calculates the respective risk elements. These can be plotted and identified graphically......", leading to Phils "Options expiration/risk" chart, thanks Phil.

At the end of it all, I believe we all evolved with a modified MO that suits our visions. My goal (may be a narrow vision) is to be able to keep my book positive at the end of every month, and be ever ready to cut losses when wrong. To achieve that, I would need a simple methodology that I could be nimble and flexible to adapt to the forever changing terrain.

If I remember correctly, somebody in this thread wrote, quote: "....why would anyone want to try and dance with the market from one or four hours ago. I started making entries in the 5 minute charts based off trend alone. No fancy indicators or clothes, just me and the market. One thing that I couldn't adopt was, sending more troops when you are down, you need some serious capital to play that way and most of us here don't have the marbles.
I figure if I enter a trade on the M5, I have 20-30 pips to be correct. I set a SL mentally and let it run, Once I know I have entered correctly I move over to the 30 minute chart and start a new dance. After that I move to the one hour and so on. The best part is most trades end up break even if it reverses, or sometimes I hit the massive trend that nets 200-1000+ pips with a risk of only 20."

That seems simple and clear enough for this stage of my learning curve.....I know this guy is right, 'cause Fti and some other guys said to do likewise when sitting at the trading station. I thought I trade the same way, but then I read the charts top down, long term to short term, and buy/sell based on the hourly bias. Why/how on earth I ended up trading the hourly bias when I'm supposed to just pace the price on the 5 minutes chart and enter the scout (buy/sell depending on feel) and hoping the market does'nt backtrack on me. This way, I don't have a rigid mindset of market bias, allowing me to nimbily twist and turn with the flow. Once scout is entered, I'll have to change from 5 minutes chart to the next longer chart, like 15 minutes, and if scout is doing well, plan to attack, but if wrong, rescue or squared. (Not quite sure if this last sentance is correct).

Now if I can to do it right, I should always follow the market flow on 5 minutes chart, like Phil said, you'll never know when is the start of a new impluse wave. If the price on 5 minutes chart is showing a strong up bias, and the long term trend is down, I'll enter a buy scout with caution, and if its doing well, attack with limiting exposure and take quick profits. If scout is trapped, no rescue, cut the loss due trading against the trend. If scout continues to play well, it could be the beginning of an impulse wave or a long term trend changes and when the timing is right, I'll attack with full force........It's funny, how I usually got fooled by the market, but no problem, just impliment damage control. (This is only my thinking, and I'm usually wrong - borrowed from Donsky)

Merry Christmas

zz

This was just to funny!

Merry Christmas to all on the thread and I hope you have a wonderful New Year.

Mark

Merry Christmas all my friends.

Now back home. but very tired so i will not engage in any discussions yet.
Spent most of my time watching Star Wars series.
really enjoyed "revenge of the sith"
ai ya so sad watch good turned evil because of politics deception.
every politician should watch.
Oh and the carolling , so wonderful hear the children's voices. much nice.

I learned another lesson.
breathing in plastic cups makes me sound like darth vader.
but most important must remember desiderata.
I may THINK i am strong.
but sometime the force not with me.
next time i just make excuses to God and ask please i cannot.
not that i unwilling.

MerRy mErrY christMaS all.