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Technical Analysis Fallacy

  • #45,681
  • Edited 10:15am Apr 12, 2014 9:43am | Edited 10:15am
Quoting CookieMonsta
{quote} hi fti, let me see if i got you correctly. Is the case of HFT where by they are performing something not as ethical on others without them having any knowledge and also that the people themselves are not able to detect nor guard against? And this is a strong case of exploitation against others. They are effectively trying to exploit the market, and gain an unfair advantage and against the general...
let me just say this.In all thing that one does, one will need pay for it.
"as ye sows, so shall ye reaps."
Is God's Law.so don't make deals with the devil.because the devil he eats his own.
so whatever one does, try ask God in prayer , guide the correct path.

everything has cause and effects.one thinks one gets good deals dealing with evil?
what goes around come back(around).the benefits may be very short term, the pain will be destructive.
you see everything is enbeded in the mindset.if mindset is not kind,
eventually the price will be pinned on one.

when price comes, maybe killed by own sword.end up at bottom of seas.
everything has purpose.


regards

about minute.
you not seems understand.
see if you can understand this.

a dealer uses could be up to few hundred million capital.
and maybe make a few hundred (to maybe 10,000 on a good day) for his endevours on a daily basis.
don't you think is minute?

then you think about those who trying make 5000 with 500 capital.
what do you think is the likely outcome?
mindset.
take whatever she willing to give.
force and the price to pay will be very high.

if you want my opinion.
those i had seen succeed.
they work very hard, ant's job.
but the key is consistency.
those make big windfalls, not seen any that lasted.
evil thrives on greed & fear.
  • #45,682
  • Apr 12, 2014 10:38am Apr 12, 2014 10:38am
Quoting fti
{quote} let me just say this.In all thing that one does, one will need pay for it. "as ye sows, so shall ye reaps." Is God's Law.so don't make deals with the devil.because the devil he eats his own. so whatever one does, try ask God in prayer , guide the correct path. everything has cause and effects.one thinks one gets good deals dealing with evil? what goes around come back(around).the benefits may be very short term, the pain will be destructive. you see everything is enbeded in the mindset.if mindset is not kind, eventually the price...
Hi, fti, I fully agree, a bad mindset brings one to court trouble, and in doing so, resigns one to a life of being engaged to loads of troubles. Better to walk on the proper path, but as always, things do happen, so I guess it's adhering to the proper mindset that brings us on the correct path. As for the minute part, I don't really view the earnings by the dealer to be minute in the sense that it is little and not worthy, I mean we don't have crystal balls, so we can't even know where the markets will on to right? So any profits is good. Just risk control has to be number one, I personally try to risk as little as possible, which led me to discover how to complement your rescue mo with options rescue mo which I created, with the hints that u have given me. Kudos to that What I liked about your AoW method is it teaches one to think and strategically plan and think of strategies to handle contingencies, and to win a battle already won. It really removes the fear and greed away from the mindset
  • #45,683
  • Apr 12, 2014 8:46pm Apr 12, 2014 8:46pm
Good Morning Sunday All! What a wonderful day !

opps .. I have forgetten some parts of the world is still in the Evening.

Enjoy .... Evening Pimrose

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  • #45,684
  • Apr 12, 2014 11:12pm Apr 12, 2014 11:12pm
Quoting fti
a dealer uses could be up to few hundred million capital. and maybe make a few hundred (to maybe 10,000 on a good day) for his endeavors on a daily basis. don't you think is minute?
At this rate, 100k capital would earn at best $10 a day, about 2.5% a year. Have I got this right? Is professional MM really so risk-adverse?

But would a bank ever risk 100million to win $100? If not, the actual capital available to Trader Joe would be far less. What sort of drawdown would be permitted before Trader Joe was politely tapped on the shoulder and told to take a very long walk?

I'd really like to know how much a given amount of capital might be expected to earn in a year by a competent trader without taking excessive risks. 10%? This would be better than putting the money into a fixed deposit, plus it would pay the trader for his time. At this rate, to make a decent living, you'd need a million dollars capital, and be able to trade well enough to make $400/day without ball-breaking draw-downs. Is this realistic, in your professional judgment, or would this be like believing in the Tooth Fairy?
  • #45,685
  • Apr 13, 2014 1:10am Apr 13, 2014 1:10am
Quoting AllanS
{quote} At this rate, 100k capital would earn at best $10 a day, about 2.5% a year. Have I got this right? Is professional MM really so risk-adverse? But would a bank ever risk 100million to win $100? If not, the actual capital available to Trader Joe would be far less. What sort of drawdown would be permitted before Trader Joe was politely tapped on the shoulder and told to take a very long walk? I'd really like to know how much a given amount of capital might be expected to earn in a year by a competent trader without taking excessive risks. 10%?...
Hi AllanS, just my 2cents from what I know,

There are 2 kinds of traders, and a trader who is trading his own money is different from a dealer.
A dealer is contrarian by nature of his position, and that I think mainly is why the dealer has to be extremely risk adverse, he may be taking the opposite positions that he may not want, also dependent on the instructions his superior tells him to adhere to, and being hit on the areas he may not want to take, but that depends on how good he is at what he is doing, and trying to unwind his positions when he can to always keep risk at an acceptable level.

As for traders who are trading their own money, like retails and hedge funds, they are initiating the positions they want, so they are more of trading with the trend only, or maybe their fundamental ideas, or whatever strategy they have. But i believe the industry standard for hedge funds is that they only try to control the risk, as for the rewards, they can't really tell, as at the end of the day, the markets will go where it wants to go, you have to be willing to take what the market gives. So as for this, it depends on how you control your risk and not go into an over leveraged position and die to over leveraging, as for how much is over leveraged, this is something you have to define by yourself as it is your book, and how much your strategy gives you leeway to manoeuvre out of bad positions, while keeping in mind that there may be a chance the market does not want to let you off the hook, then you may be forced to take a loss too. That is why the risk control is so important.

Just my 2cents, it is kind of like fishing, you never know what you are going to get, but you can define your risk and how much is justified risk.
But all these have to be considered from the position you are in, either the dealer(the counter party) or the initiating(the one who starts the trade) trader.
  • #45,686
  • Edited 7:00am Apr 13, 2014 6:27am | Edited 7:00am
Look, i say this very clearly.

I will not entertain any request for "help pls give me winning strategy" PMs.
what does these peeps think the thread is about?

anyway is dangerous try save drowning peeps.
If one is drowning, there was a cause.
and i think i already stated very clearly.
I will not be abused.

Is near impossible save peeps from hyper ambitions, fear and greed.

if one in the deep. I ask you save yourself.
CUT the dang loss, and teach self proper trading strategies.
All strategies work,
BUT not in all market situations.
Only way learn use tools is to practise.

There is no magic spell , dig one out of the deep.
and i am not a magician.
If one no time or effort learn stuff, there is really nothing i can do help YOU.

I have said countless times.
one can only build on success, is ant's job.
but if one likes break all rules of preservation of capital.
then tell me who fault is it?


regards
  • #45,687
  • Apr 13, 2014 8:11am Apr 13, 2014 8:11am
Quoting fti
Look, i say this very clearly. I will not entertain any request for "help pls give me winning strategy" PMs. what does these peeps think the thread is about? anyway is dangerous try save drowning peeps. If one is drowning, there was a cause. and i think i already stated very clearly. I will not be abused. Is near impossible save peeps from hyper ambitions, fear and greed. if one in the deep. I ask you save yourself. CUT the dang loss, and teach self proper trading strategies. All strategies work, BUT not in all market situations. Only way learn...
hey fti, not sure what happened to your last post on thinking like a businessman, i recall reading it on my dumbphone a while ago ? wish to take a shot at it. if no recall wrongly:

1. what makes business successful: consistency in revenue and operating expense = consistency in net income.

-what is revenue in trading business? could refer to the immediate p&l directly from the series of trade made
-what is the operating expenses in trading? could refer to the basic comps and bonus of trader, facilitiy bills required to maintain trading ops, management fees

2. what is p&l margin to business: gross margin = (revenue-cogs)/revenue; net margin = net income/ revenue

-Gross margin measures manufacturing efficiency and pricing capability. In trading business, there is no manufacturing, so what does cogs refer to? cogs is tricky to define for a trading business as to service business. this is because there is no product. thus, could oppportunity cost be used instead? such as using the cost of capital - the cost required to procure capital i.e. the interest rate that would have been earned if parked in T-bills.
-then how about pricing? there is no goods to price, thus i guess we could ignore it
-Then net margin measures overall performance of admin cost, sales and marketing cost and general of operating the business - is there too much headcount in sales force? is too much advertising spend? is our sales force bringing in business
-in trading context, the trader is the sales person bringing in the revenue (this revenue is his immmediate p&l from a series of trade). the turnover of "inventory" i.e. series of trade is fast thus revenue accumualation is oso fast. then his basic salary,bonus and that of his manager + the electic bills, bloomgberg bills, rent, broker comms, pantry sandwich, smokes, party expense, training and etc all adds up to the operating expense.

then, in this context, after deducting all the expense from the immediate p&l that the trader brings in, we get the net net p&l of the entire trading operation. this net net p&l is supported by large capital (economy of scale&buffer) that the bank put in. the more capital there is, the more the trader can "sell his product" and thus more revenue and thus more net net p&l at end of day.

therefore, when a trader in a bank say he makes 200% of p&l, that is not the true p&l, got to deduct all the expenses as mentioned above to dereive the net net p&l.

also, if one wants to start a business to make 5K with 500, that is like 1000% return on equity. most decent avg business makes from 0% to 20% ROE. just taking if you want make 20% ROE worth 5K then you would need 25K of equity. with only $500, you will need 49x leverage because you need borrow $24500 with $500. in this case, anykind of cash flow problem/revenue problem, business downturn or volality swing in trading will bust your kitty.

when Olam(Commodities firm listed in SG) got to about 3x leverage on balance sheet, it was already worrying and Muddy Water took ooportunity to tarnish their reputation. in my knowledge, most commdoities trading firm are about 1 to 2x leverage and commod trading firm are already consider risky investments vs the tradational brick and motar business like fmcg.

thus when one expects to make 5K with 500, one would be better advise to go apply to business school to learn business.
THE ALL is MIND; The Universe is Mental
  • #45,688
  • Edited 8:40am Apr 13, 2014 8:14am | Edited 8:40am
Quoting Jacque
{quote} hey fti, not sure what happened to your last post on thinking like a businessman, i recall reading it on my dumbphone a while ago ? wish to take a shot at it. if no recall wrongly: 1. what makes business successful: consistency in revenue and operating expense = consistency in net income. -what is revenue in trading business? could refer to the immediate p&l directly from the series of trade made -what is the operating expenses in trading? could refer to the basic comps and bonus of trader, facilitiy bills required to maintain trading ops,...

WRONG direction of thoughts. wrong channel.

regards

ok some insights for you.

1. customers. need critical mass of customers for business to be viable.

2. moving inventory. stuff that can sell. goods that moves. then can do for smaller margin of profits.
goods that not move, need big margin of p&L, is not clever business, is connish business.

ok relate these to markets.

3what is average daily range of markets? if markets high is 100 and low is 50.
4tell me how many units can a trader make?

if yo say 50 is wrong answer.
because a pro (use me as benchmark) can make from about 100 to 150.
try figure out how. That is question 4. best i had done was 200 annualised average.

if you cannot figure the answer then read thread again.
from begining.

regards
  • #45,689
  • Edited 9:02am Apr 13, 2014 8:27am | Edited 9:02am
Quoting fti
{quote} WRONG. regards ok some insights for you. 1. customers. need critical mass of customers for business to be viable. 2. moving inventory. stuff that can sell. goods that moves. then can do for smaller margin of profits. goods that not move, need big margin of p&L, is not clever business, is connish business. ok relate these to markets.
1. customers - oh yes! me think in markets, this is liquidity, need people willingly to take other side so that there is price - oh yes, here is the pricing and thus liquidity. these supply revenue and margin

2. moving inventory - liquid products such as eur/usd, moves quickly thus smaller bid/ask spread. these high turnover.

2b. good that no move - very illiquid product such as emrging market currency, big bid/ask spread. after got hit by customers, need quickly find antoerh customer to unload or find other product to hedge in.

3. avg daily range is 50 using only that day.

4. ok, me think if one is darn lucky to get in at 50 and sold at 100, one can make the max of 100% i.e. the 50 units without leverage. to make more than that, one has to capture the intermediate move between the two extreme end - this would depend on how the move looks like on that day? or use leverage - however me think leverage is not the MO.

sure, thanks for pointing out, me will read till get it
THE ALL is MIND; The Universe is Mental
  • #45,690
  • Edited 9:27am Apr 13, 2014 8:58am | Edited 9:27am
Quoting Jacque
{quote} 1. customers - oh yes! me think in markets, this is liquidity, need people willingly to take other side so that there is price - oh yes, here is the pricing and thus liquidity. these supply revenue and margin 2. moving inventory - liquid products such as eur/usd, moves quickly thus smaller bid/ask spread. these high turnover. 2b. good that no move - very illiquid product such as emrging market currency, big bid/ask spread. after got hit by customers, need quickly find antoerh customer to unload or find other product to hedge in. 3. avg...
alredy you understand.

if you whole dang day baby sitting only have 1 customer make 50 pips then you won't survive long.

so you gotta be doing business.
is babaysitting the business.
if baby sitting , when baby piss , what you do? watch?
if baby shits what you do? watch?
whole day do 1 business, watch?

so you need much customers and you need moving inventory to be viable business. no?

then think cost and P&L strategy?
if spread is 2 pips.
you buy at 50.
now is 60/62 what is your profits?
% risk , tenure risk.

some peeps 2 weeks 1 customer.
better be big sucker, otherwise how pay salaries?
they trader investors, better they be investing in land.
only need 1 customer average in 10 years .
even 1 in 30years also can.

mean while they sleep 30 years.

traders need decide they traders or they investors.

some traders when good positions they traders.
when position bad become investors.
need decide want be traders or be investor.

a trader, if inventory stuck, only thing can do is start BIG SALE.
seasons SALE. weekend SALE, clearing SALE, exibition SALE, itch backside SALE......................cutting loss SALE , thats the reality.

problem is there in FX markets there really few traders, mostly is ROBOT heads.
They are so well programmed. too educated.
I used to watch em.
wow that one is so educated, what big ego.
BIG traders.
cannot make 10 cents but can make 1000.
you know how i spot good traders?


regards
  • #45,691
  • Apr 13, 2014 9:14am Apr 13, 2014 9:14am
Quoting fti
{quote} alredy you understand. if you whole dang day baby sitting only have 1 customer make 50 pips then you won't survive long. so you gotta be doing business. is babaysitting the business. if baby sitting , when baby piss , what you do? watch? if baby shits what you do? watch? whole day do 1 business, watch? so you need much customers and you need moving inventory to be viable business. no? then think cost and P&L strategy? if spread is 2 pips. you buy at 50. now is 60/62 what is your profits? % risk , tenure risk. regards
if buy at 50, now 60/62, profit is 10pips.

%risk depends on avg daily range and of course got to keep in mind that avg daily range is not the limit

tenure risk - me have some confusion over what is the proper defination for tenure risk. me know it refers to time, thus as time passes, price changes or dont change, events happen to cause big movement movement and interest is also related to time. thus appreciate your advise here.

p&l strategy = deal in fast moving products, accpet low margin and vol is high. can hold a bit longer if potentially can get higher px in short term. try not deal in hard to move product unless able to minimize risk of loss.

basically, if higher turnover can accept lower margin, if low turnover and need use much capital, need think carefully.

me see and think this is from dealer perspective as can make spread. from trader perspective, me think need some tweaking in this MO

for trader, me think one should deal in fast moving products only as have a choice to select which product to deal unlike dealers. capitalization can be smaller as no need to hold inventory. main mode would be profiting from swing movement instead of spread
THE ALL is MIND; The Universe is Mental
  • #45,692
  • Apr 13, 2014 9:32am Apr 13, 2014 9:32am
Quoting Jacque
{quote} if buy at 50, now 60/62, profit is 10pips. %risk depends on avg daily range and of course got to keep in mind that avg daily range is not the limit tenure risk - me have some confusion over what is the proper defination for tenure risk. me know it refers to time, thus as time passes, price changes or dont change, events happen to cause big movement movement and interest is also related to time. thus appreciate your advise here. p&l strategy = deal in fast moving products, accpet low margin and vol is high. can hold a bit longer if potentially...


is very difficult .
always draw pictures must also draw intestines..
what is volatility measured against?

here the intestines.
e=mc2

regards
  • #45,693
  • Edited 9:56am Apr 13, 2014 9:34am | Edited 9:56am
Quoting fti
{quote} is very difficult . always draw pictures must also draw intestines.. what is volatility measured against? regards
volatility measured against time


sure, please rest well and good nite and thanks for your advice
i wish you good fun tomorrow

Quote
nikkei united vs usdyen.
any bookies?

for a moment, i took the football match literally..
this i would like join in the fun. either nikkei united or usdyen or niether
what's the bookies's book looking like?
THE ALL is MIND; The Universe is Mental
  • #45,694
  • Edited 10:03am Apr 13, 2014 9:41am | Edited 10:03am
Quoting Jacque
{quote} volatility measured against time

ok i need rest,
tomollo watch football match at tokyo.
nikkei united vs usdyen.
any bookies?

goodnite.


regards

FORTUNES
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  • #45,695
  • Apr 13, 2014 9:54am Apr 13, 2014 9:54am
Quoting fti
{quote} WRONG direction of thoughts. wrong channel. regards ok some insights for you. 1. customers. need critical mass of customers for business to be viable. 2. moving inventory. stuff that can sell. goods that moves. then can do for smaller margin of profits. goods that not move, need big margin of p&L, is not clever business, is connish business. ok relate these to markets. 3what is average daily range of markets? if markets high is 100 and low is 50. 4tell me how many units can a trader make? if yo say 50 is wrong answer. because a pro (use...
Hi, fti,
Let me see if I understood it correctly and correct me of ok wrong. Does question 4 relate to feeling the market and your attack mo?
  • #45,696
  • Apr 13, 2014 10:08am Apr 13, 2014 10:08am
Quoting CookieMonsta
{quote} Hi, fti, Let me see if I understood it correctly and correct me of ok wrong. Does question 4 relate to feeling the market and your attack mo?

let me try answering your qns.

if one has capital of 100 bucks. then buy 1 pcs of goods at 50bucks and wait to sell at 100 bucks, ones make 50% return of capital.

if one buy at 50 and sell at 70 and buy again at 60 and sell at 80 and buy again at 70 and sell again at 90 and buy again at 80 and sell at 100, one makes a grand total of 80 bucks on capital on 100 bucks. this is 80% return. attack mo is a strategy to manage large pool of capital. in reality, if one has 1 million bucks, one does not put entire 1 million bucks into battle. thus, one could risk 1% initially and then build on buy use some attack strategy to quickly win some foreign capital from the move so that one's capital is efficiency managed. neither too under utilized (too little at risk = opportunity cost) or overutilized (too much at risk, blow up). abiity to read market is crucial to know which strategy to use to manage capital.

best regards
THE ALL is MIND; The Universe is Mental
  • #45,697
  • Edited 12:35pm Apr 13, 2014 10:30am | Edited 12:35pm
Quoting fti
{quote} e=mc2 regards
c is a big constant and measured by unit time. one can look at this across difference scale and see what is the see., depending on scale used it could compresses the view and the it looks like a straight line the calculation would give one pot energy. in fact one could then employ the cal info across scale to see whats the value of energy. if one able to employ effective methods to round up the the little chicks, one could end up with expanded pot of many chicks which need new and bigger pot now.
this einstein formula is simple beautiful and brillant scientist

Attached Image
THE ALL is MIND; The Universe is Mental
  • #45,698
  • Apr 13, 2014 10:50am Apr 13, 2014 10:50am
Quoting Jacque
{quote} let me try answering your qns. if one has capital of 100 bucks. then buy 1 pcs of goods at 50bucks and wait to sell at 100 bucks, ones make 50% return of capital. if one buy at 50 and sell at 70 and buy again at 60 and sell at 80 and buy again at 70 and sell again at 90 and buy again at 80 and sell at 100, one makes a grand total of 80 bucks on capital on 100 bucks. this is 80% return. attack mo is a strategy to manage large pool of capital. in reality, if one has 1 million bucks, one does not put entire 1 million bucks into battle. thus,...
Hi, Jacques,
Thanks for the explanation, interesting, this bears quite a huge resemblance to the fractal nature of the markets, and bears a huge resemblance to some of the blotters fti posted in the past posts which shows the running battles that he performed.
  • #45,699
  • Apr 13, 2014 11:28am Apr 13, 2014 11:28am
Slow is steady, Fast is Fragile..........

Account size and leverage does not matter if you are consistent.............. trade with momentum only and not when the market is at rest..........use H4 charts and Daily charts and trade the same direction together............walk away and come back every 8 hours to see how you are doing ..............

Do not over think trading, it is not that hard to do...............I part time trade , maybe 40 hours a month and double my accounts every 3 months, it can be done in many ways...........

I wish everyone the best in their trading ............Alien
The More You Learn, The More You Earn.....
  • #45,700
  • Apr 13, 2014 3:25pm Apr 13, 2014 3:25pm


plan to profit where ever the market moves, be be patient, be disciplined (know yourself, know your enemy, SELF???) , the battle is only between YOU and YOU so be with the market, beware false flags, test, and move with what is moving now, do not tolerate fools (cut losses quick) AND ONLY TAKE WHAT IS GIVEN, be happy and sleep well refreshed for tomorrows challenges.



good nite. (market will still be there tomorrow)

regards

Phil.
-be careful about what you allow to be put in your mind-
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