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Technical Analysis Fallacy

  • #46,261
  • May 24, 2014 4:17pm May 24, 2014 4:17pm
Quoting priceaction1
{quote} I was pointing from the start, if durgi can't speak about possible action did you think eur down to this level or if BOJ doesn't take action than yen does come to that level, FED meting, FOMC etc. order are noting they are by product of CB actions. they don;t move the price but action of CB does that is what I thought.
Even if we consider the CHF and central bank intervention it is still done by orders. I think it was EURCHF and the CB said they wouldn't let it go below 1.2000 if I remember it correctly. The market did test this level a few times, but couldn't get anywhere through it. There were huge limit orders to buy at 1.2 and just below. Sometimes the big guys can even take on central banks if there are enough of them and conditions are right
  • #46,262
  • May 24, 2014 4:18pm May 24, 2014 4:18pm
Quoting saneblane
{quote} What trading style do you use? That would help me to understand better where you are coming from.
it is in the name because it is least lagging indicator,
don't predict direction, but dance with flow of water
  • #46,263
  • May 24, 2014 4:20pm May 24, 2014 4:20pm
Quoting priceaction1
yes we are near the point. orders, there are different types of orders and come from many areas, but what factor effect upon punting the order direction either I go long or short, that is the point.

That's the thing, and it is where skill comes in. To simplify the market for myself, I only trade the biggest orders that come into the market. And I would hope that all Retailer do this because this is how we make money. I don't know what style you use but if you use Price action, then stuff like bullish engulfing and double bottom reversals would be sign of bullish signals and that's the best your style allows. We can only do our best with what we have I guess. My way for taking a trade would be different that yours but we would hope that we would both be right and make some money.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,264
  • May 24, 2014 4:21pm May 24, 2014 4:21pm
Quoting priceaction1
{quote} it is in the name because it is least lagging indicator,

Lol I don't know about that but if you're making money then that is all that matters.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,265
  • May 24, 2014 4:24pm May 24, 2014 4:24pm
Quoting SupraSense
{quote} Even if we consider the CHF and central bank intervention it is still done by orders. I think it was EURCHF and the CB said they wouldn't let it go below 1.2000 if I remember it correctly. The market did test this level a few times, but couldn't get anywhere through it. There were huge limit orders to buy at 1.2 and just below. Sometimes the big guys can even take on central banks if there are enough of them and conditions are right
yes it is 1.200, and swiss bank pay the heavy price, as BOJ also did this. but every bank has his George Soros bank of England never forget him we are in era of CB fighting, FED VS ECB
don't predict direction, but dance with flow of water
  • #46,266
  • May 24, 2014 4:28pm May 24, 2014 4:28pm
Quoting saneblane
{quote} Lol I don't know about that but if you're making money then that is all that matters.
priceaction, just simple candlestick charts to see the historic foot print of price
don't predict direction, but dance with flow of water
  • #46,267
  • May 24, 2014 4:31pm May 24, 2014 4:31pm
Quoting priceaction1
{quote} priceaction, just simple candlestick charts to see the historic foot print of price
How is it working for you? As long as it works and continues to work, that's the main thing. Nobody can take that away from you.
  • #46,268
  • May 24, 2014 4:33pm May 24, 2014 4:33pm
Quoting priceaction1
{quote} priceaction, just simple candlestick charts to see the historic foot print of price
Good for you man, I use to do PA but it simply didn't have enough information for me. I want to know the biggest orders that come into the market Live and which currencies are in most demand, Price action didn't show these things. But As long as you're making money then that is the most important thing.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,269
  • May 24, 2014 4:37pm May 24, 2014 4:37pm
Quoting saneblane
{quote} Good for you man, I use to do PA but it simply didn't have enough information for me. I want to know the biggest orders that come into the market Live and which currencies are in most demand, Price action didn't show these things. But As long as you're making money then that is the most important thing.
Do you use the FX future as a proxy for the spot volume or tick volume or do you have access to a platform showing spot volume?
  • #46,270
  • May 24, 2014 4:37pm May 24, 2014 4:37pm
Quoting SupraSense
{quote} How is it working for you? As long as it works and continues to work, that's the main thing. Nobody can take that away from you.
100% agree the aim is profit if it work for you keep it, every trader has his own weapon to fight. but don't over load your self so when time of attack come just kill it.
don't predict direction, but dance with flow of water
  • #46,271
  • May 24, 2014 4:47pm May 24, 2014 4:47pm
If it will be centrally organised market than one can sour about volume . but at present the true volume can't known by retail traders. though this site is helpful for some extend
http://www.netdania.com/
don't predict direction, but dance with flow of water
  • #46,272
  • Edited 5:02pm May 24, 2014 4:50pm | Edited 5:02pm
Quoting SupraSense
{quote} Do you use the FX future as a proxy for the spot volume or tick volume or do you have access to a platform showing spot volume?

No nothing like that, you cannot see the volume or at least I can't I can only see in Ratios. I may not know how much EUROS were bought exactly,But I know it was bought more then USD, and so forth. A few people want to know more, but it's a custom strategy after studying the market for while. Maybe I would talk about more in dept in the future but right now I want to make money first. I would rather be rich that right on a forum, so I keep most of my research to myself.

I am getting some better tools made based on what I know to become more accurate. I might hint somethings here or there but I am not going to put my technique on forums where banks patroll, hope you understand.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,273
  • May 24, 2014 4:55pm May 24, 2014 4:55pm
Quoting priceaction1
If it will be centrally organised market than one can sour about volume . but at present the true volume can't known by retail traders. though this site is helpful for some extend http://www.netdania.com/
You don't even need to know the exact amount, that is a misconception. As long as you have a right ratio of buying and selling that's all you need, the market is so big that the different between the strongest and second strongest currency can be 10s of billions of dollars.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,274
  • May 24, 2014 5:05pm May 24, 2014 5:05pm
Anyway man, PA is good but it also has some fallacies, don't ever get to strict with any style that you have no room to grow as a trader. Always try to learn why things didn't go your way, unlike any other market I have seen the Forex market has the most answer for you're questions. How good you become is up to you, you just have to recognize the market for what it is. Buying and Selling.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,275
  • May 24, 2014 5:05pm May 24, 2014 5:05pm
Quoting saneblane
{quote} No nothing like that, you cannot see the volume or at least I can't I can only see in Ratios. I may not know how much EUROS were bought exactly,But I know it was bought more then USD, and so forth. A few people want to know more, but it's a custom strategy after studying the market for while. Maybe I would talk about more in dept in the future but right now I want to make money first. I would rather be rich that right on a forum, so I keep most of my research to myself. I am getting some better tools made based on what I know to become more...
Interesting stuff. I use a mixture of behavioural finance and some really old ideas on trading that date back many decades. But it certainly uses some price action as part of that.
  • #46,276
  • May 24, 2014 5:14pm May 24, 2014 5:14pm
Quoting SupraSense
{quote} Interesting stuff. I use a mixture of behavioural finance and some really old ideas on trading that date back many decades. But it certainly uses some price action as part of that.
When I first started out I used Price action too, but the thing with a chart is it can show you something that doesn't exist anymore. A currency can be strong and winding up and strong and winding down the difference can be hard to spot on a chart. I use to be scared when I stop looking at a chart for signals too, but you soon find out that the market doesn't care about any of that, It is what is happening at any one point that the market cares about. If you get down to the core of the market you would see that it really moves differently than people think, and very predictable. A chart can give a piece of the picture, but it's like the difference with looking outside and being outside, although you see it, one just have a feel, and the other is 1 dimension. Try to think of the market as a whole and not so isolated.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,277
  • May 24, 2014 5:22pm May 24, 2014 5:22pm
Quoting saneblane
{quote} When I first started out I used Price action too, but the thing with a chart is it can show you something that doesn't exist anymore. A currency can be strong and winding up and strong and winding down the difference can be hard to spot on a chart. I use to be scared when I stop looking at a chart for signals too, but you soon find out that the market doesn't care about any of that, It is what is happening at any one point that the market cares about. If you get down to the core of the market you would see that it really moves differently...
Yeah I don't think it's good to use a chart in a way such as pin bar at low, take the long. This is fraught with danger and is very timeframe dependent. It's about understanding what traders are trying to do. Understanding whether they're accomplishing what they want, or failing, and understanding what is necessary for them to dump their positions or what do they need to see to stay in, and acting accordingly. That's the beahavioural side of things. People can be quite predictable in many ways. Just thinking every pin bar is the same is missing the deeper truth behind what's going on in my opinion, and from your post I'd guess you see that too, although from a different angle to me. That said, what I mentioned above stands, if it works for others, good luck to them.

As you say, it is quite predictable at times. The more you learn the more you see this (took me years!) until it amazes you just how regular it is, almost running like clockwork. Other times, I wouldn't have a clue what's going on and those are times to stay out. Maybe one day I'll understand even those.
  • #46,278
  • May 24, 2014 5:29pm May 24, 2014 5:29pm
Quoting SupraSense
{quote} Yeah I don't think it's good to use a chart in a way such as pin bar at low, take the long. This is fraught with danger and is very timeframe dependent. It's about understanding what traders are trying to do. Understanding whether they're accomplishing what they want, or failing, and understanding what is necessary for them to dump their positions or what do they need to see to stay in, and acting accordingly. That's the beahavioural side of things. People can be quite predictable in many ways. Just thinking every pin bar is the same is...

It's true, It's why I simplify it for myself, I only trade buying and selling just like the market and it has simplify trading on a whole different level. Take Support/ Resistance, I really don't put much weight on it, when the big others come in there that's when the market cares and that's when I care, I use to just put my trades there and hope for the best based on my analysis,but now I only enter the market when price is moving the way I recognize. Patterns are drawn on a chart and can become any shape, but the market doesn't really care about the shape, if a bigger order comes in against your signal then you're going to lose that trade. I had to relearn a lot of what I knew about FX to be able to be very good at it. If it's not a big order I dont enter and that has saved me many times.
Being a trader is lonely, but being a great trader is lonelier still
  • #46,279
  • May 24, 2014 5:38pm May 24, 2014 5:38pm
Quoting saneblane
{quote} It's true, It's why I simplify it for myself, I only trade buying and selling just like the market and it has simplify trading on a whole different level. Take Support/ Resistance, I really don't put much weight on it, when the big others come in there that's when the market cares and that's when I care, I use to just put my trades there and hope for the best based on my analysis,but now I only enter the market when price is moving the way I recognize. Patterns are drawn on a chart and can become any shape, but the market doesn't really...
Well even though I disagree on the support resistance point, I think there's merit to what you say. People consider different kinds of things to be support and resistance. For instance it's part of human nature to huddle together in a sense. If someone wants to place a buy order, they need to pick a price to place that. It's in their nature not to pick all different prices, they'll find a few places. They may not have a very good reason for it to be fair, but they will often tend to put there order in a place they think is important, a place whether others will also be putting orders. This sort of support usually gets filled and has a quick bounce. Maybe 5 pips, maybe more, but you can see people entering around the same area. After that it may blow through that level and they'll all wished they picked a better level lol, but still if you can plot these accurately enough it presents a good place to either take profits and look to reload at a better price, or exit and reverse short term.

Then there's the other kind of support, where price just won't be allowed to go further down even though it may not necessarily be bought up higher than the level for some time. We mentioned the EURCHF 1.2--- level and this is an example of this. You're not getting through and ignore that at your own risk.
  • #46,280
  • May 24, 2014 5:43pm May 24, 2014 5:43pm
Quoting SupraSense
{quote} Well even though I disagree on the support resistance point, I think there's merit to what you say. People consider different kinds of things to be support and resistance. For instance it's part of human nature to huddle together in a sense. If someone wants to place a buy order, they need to pick a price to place that. It's in their nature not to pick all different prices, they'll find a few places. They may not have a very good reason for it to be fair, but they will often tend to put there order in a place they think is important, a place...
I am talking about S/R in the technical sense. Let me explain, when you say somewhere on the chart is support / resistance, you have already put a bias on the market, the thing is, one of them are going to have to break in order for price to move. When that happens it's not support or resistance anymore, it's just another place on the chart. The market doesn't care where it is, the only thing it care about is what happens there. S/R is also dangerous because it can only be support when it is confirmed, and just because price support resisted the move lower, doesn't mean it's going to do it again. This is also one of the things that trader get confused about. If S/R are always valid then the price wouldn't break out, they would range forever but as we know this doesn't happen.
Being a trader is lonely, but being a great trader is lonelier still
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