Technical Analysis Fallacy | Page 2558 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Ultimate Fallacy in Technical Analysis 99 replies

"Technical Analysis Fallacy" thread people, I need your help 54 replies

Technical Analysis Fallacy Redux 23 replies

Statistical analysis fallacy 33 replies

Attachments: Technical Analysis Fallacy
Exit Attachments

Technical Analysis Fallacy

  • #51,141
  • Nov 23, 2014 7:45am Nov 23, 2014 7:45am
Quoting Jacque
{quote} Hey FXMaster, I will attempt to answer your questions while fti is away. How do you calculate your position sizes? depends on how much pain you can take and the historical daily volatility....
AHH so that's how FTI uses the average daily range!!! Finally it clicks.

Thank you so much Jacque!!!! You made my night, really.

Your post outlines the best money management tactics I have ever heard or read. I can literally feel the money reeling into my account.

Thanks man, I really appreciate you taking the time to answer my questions with such great explanations.

I can hear this voice in the back of my head telling me, "Don't be rigid, just go with the flow." FTI is stuck with me both on and off these forums LOL. I love the way this guy thinks and his nonrigid ways of trading. This thread blows my mind over and over, no wonder it's one of the threads on FF that never dies. I only wish I started participating sooner.

PS - I meant to post this earlier, but the factory was undergoing maintenance.

Thanks again and I wish you the best!
SK
  • #51,142
  • Nov 23, 2014 7:48am Nov 23, 2014 7:48am
Quoting priceaction1
"In reality,pattern analysis can be done in less than 10 seconds. Its not the pattern thats critical, evey body can see that, its the way it behaves while its forming that clues the trader. ie volatility, activity and time splices, range etc. and from these one is to formulate correct response,by trial and error. When in error, rescue, and when correct, to "press". chief!!! eur/usd
If one could truly master what FTI said just in the above statement, it's straight money in the bank. Patterns? S/R levels? MACD? Not for me!
  • #51,143
  • Edited 9:05am Nov 23, 2014 8:53am | Edited 9:05am
Quoting FXMasterSK
{quote} AHH so that's how FTI uses the average daily range!!! Finally it clicks. Thank you so much Jacque!!!! You made my night, really. Your post outlines the best money management tactics I have ever heard or read. I can literally feel the money reeling into my account. Thanks man, I really appreciate you taking the time to answer my questions with such great explanations. I can hear this voice in the back of my head telling me, "Don't be rigid, just go with the flow." FTI is stuck with me both on and off these forums LOL. I love the way this...
you are welcome

Quote
AHH so that's how FTI uses the average daily range!!!
would like to point out that i have lousy memories and i cannot recall if fti ever mentioned he used average daily range in this manner on thread. this is the way i have come to theoretically use it after a combination of reading this thread, readings from everywhere and practical experience. and this is the theoretical answer i would provide to your question. the truth is that, market condition is always changing, similar to fighting a war. it is unlikely one will ever see a general send in 10 brigades for a raid operation to capture a suspected number of 10 terrorist or a general sending in a section to fight an enemy suspected to be a brigade size?

put it another way, if one send in a section anticipating to fight maybe another section of enemy but it turns out to be a full brigade of soldiers, would you issue an order to retreat to the best the soldiers can with minimal casualties or order to send in rescue? if you are deep in enemy line, would a rescue operation of sending 1 platoon be effective? if sending 3 brigades is theoretically effective, can you afford the 3 rescue brigades? is it wise to rescue deep in enemy line? what is the land terrain? can we deploy tanks? under what conditions will rescue fail? how likely is that? where is the cut off point where sending further rescue soldiers would put your home country is danger of having no soldiers to defend on home soil? what is your plan if all 3 rescue brigades are wiped out?

so you see, there are many things to consider...
THE ALL is MIND; The Universe is Mental
  • #51,144
  • Nov 23, 2014 1:30pm Nov 23, 2014 1:30pm
Quoting Jacque
would like to point out that i have lousy memories and i cannot recall if fti ever mentioned he used average daily range in this manner on thread. this is the way i have come to theoretically use it after a combination of reading this thread, readings from everywhere and practical experience...
Then YOU are one of the smartest traders I know. I see such rigid rules thrown around these forums such as a set position size or set stop loss. But you are correct, the market does continually change. We as good traders must learn to adapt just as a general must adapt to the different war conditions he faces. When I read the way you use the daily range it instantly made my eyes go wide. FTI always says one reason why retail traders lose is overleverage, but how can I measure what overleverage for a certain currency pair is without making my position sizes so tiny I barely make any money? Well I never would of thought to figure it out the way you do. You instantly made me improve and adapt my money management tactics. And then you throw in the excerpts of only risking the profits you made for the day to make more money, that way you can't go negative after making something (unless some crazy shit happens of course). It's these little things that make a really good trader.

How does FTI use the daily range anyways? I never got that part lol.
  • #51,145
  • Nov 24, 2014 5:29am Nov 24, 2014 5:29am
Quoting FXMasterSK
{quote} Then YOU are one of the smartest traders I know. I see such rigid rules thrown around these forums such as a set position size or set stop loss. But you are correct, the market does continually change. We as good traders must learn to adapt just as a general must adapt to the different war conditions he faces. When I read the way you use the daily range it instantly made my eyes go wide. FTI always says one reason why retail traders lose is overleverage, but how can I measure what overleverage for a certain currency pair is without making...

you flattered me. there are many frens here who knows more than i do, only that they are silent. i dont know what i dont know and there are lots that i dont know

i came across this today, should be in public domain already. if not, kindly inform me and i will remove. i found it informative and hope fellow frens will find it useful
Attached File(s)
File Type: pdf Patman Primer on Money.pdf   2.1 MB | 860 downloads
THE ALL is MIND; The Universe is Mental
  • #51,146
  • Nov 24, 2014 5:33am Nov 24, 2014 5:33am
Quoting FXMasterSK
{quote} How does FTI use the daily range anyways? I never got that part lol.

I am not sure if/how he uses daily range - what we should look at is the leg of a move - and all the factors that show its strength/ weakness - volatility etc etc.
check out the terrain - follow never lead
  • #51,147
  • Nov 24, 2014 6:24am Nov 24, 2014 6:24am
If average daily range is say 120 pips….


Would you add or start a trade at a 115-125 pips move?

Can this info not be used to take some/safe profits?

If the market has only moved 20-30 pips, how should you think/use the skews, the same as 100 pips?

If you need to rescue would anything outside the daily range be a good place to consider to start?

Does not also the average weekly range come into play when riding profits or rescuing lasting more than a day?

just a few ideas....

Regards

Phil.
-be careful about what you allow to be put in your mind-
  • #51,148
  • Nov 24, 2014 7:30am Nov 24, 2014 7:30am
Quoting phil13
If average daily range is say 120 pips…. Would you add or start a trade at a 115-125 pips move? Can this info not be used to take some/safe profits? If the market has only moved 20-30 pips, how should you think/use the skews, the same as 100 pips? If you need to rescue would anything outside the daily range be a good place to consider to start? Does not also the average weekly range come into play when riding profits or rescuing lasting more than a day? just a few ideas.... Regards Phil.
That all makes sense - I do what you say without thinking about "average daily range" - what do you actually mean by average daily range (just to be clear)?
check out the terrain - follow never lead
  • #51,149
  • Nov 24, 2014 7:58am Nov 24, 2014 7:58am
Quoting alexandria
{quote} That all makes sense - I do what you say without thinking about "average daily range" - what do you actually mean by average daily range (just to be clear)?
Hi Alexandria

i do not actually work it out to an exact figure, i just look at the daily chart and the current move/amount of candles i want to use and size of the current candle forming to make my mind up about these things, but if you want exact figures (i guess you can already hear our friend fti) then you work out the average candle size taking into account how ever many candles you think are relevant to the current situation.

regards

Phil.
-be careful about what you allow to be put in your mind-
  • #51,150
  • Edited 8:36am Nov 24, 2014 8:25am | Edited 8:36am
Thank you guys for your replies! I just read in redlion's posts that FTI uses ATR to measure daily range so that's where I got that from. Not sure what he does, but measuring average daily range could definitely be helpful in different ways.

Alexandria I think you are referring to the momentum thrusts of the impulse waves. That shows strength of the move and the underlying trend, and something I definitely consider.

Seems like indecision in the markets right now, probably due to Flash Services PMI coming out in 20 minutes. I'm out with +0.4 and will wait and see.

Good luck guys!
  • #51,151
  • Nov 24, 2014 8:32am Nov 24, 2014 8:32am
where is chief.
don't predict direction, but dance with flow of water
  • #51,152
  • Nov 24, 2014 9:17am Nov 24, 2014 9:17am
Quoting priceaction1
where is chief.
I have no idea, but I hope he returns soon and is okay.

I just closed my scout position accidentally along with an attack position, when I meant to just close attack. Was a pretty good position too, ugh. Gotta get used to this new platform lol. Oh well I'm in green so whatever.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 19 KB
  • #51,153
  • Nov 24, 2014 9:42am Nov 24, 2014 9:42am
Quoting phil13
{quote} Hi Alexandria i do not actually work it out to an exact figure, i just look at the daily chart and the current move/amount of candles i want to use and size of the current candle forming to make my mind up about these things, but if you want exact figures (i guess you can already hear our friend fti) then you work out the average candle size taking into account how ever many candles you think are relevant to the current situation. regards Phil.
Thank you - I am not sure I would be able to do that - as I do not quite understand how I could do so - I will give it some thought and maybe I will learn something more while I trade - I guess I sort of do think about it but in a different way - not sure.
check out the terrain - follow never lead
  • #51,154
  • Nov 24, 2014 10:13am Nov 24, 2014 10:13am
The market has no idea where it wants to go this session.

Wonder if I should trade tonight. News from Japan tonight might bring more market movement than today's slow session.
  • #51,155
  • Nov 24, 2014 10:36am Nov 24, 2014 10:36am
Quoting alexandria
{quote} Thank you - I am not sure I would be able to do that - as I do not quite understand how I could do so - I will give it some thought and maybe I will learn something more while I trade - I guess I sort of do think about it but in a different way - not sure.
Hi Alexandria

maybe this chart will help a bit.

regards

Phil.

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDDaily.png Size: 61 KB
-be careful about what you allow to be put in your mind-
  • #51,156
  • Nov 25, 2014 1:59am Nov 25, 2014 1:59am
Quoting phil13
{quote} Hi Alexandria maybe this chart will help a bit. regards Phil. {image}
Thanks - I get what you mean - I guess I was thinking along those lines anyway yesterday but your chart has made it very clear - will give this some more thought.

check out the terrain - follow never lead
  • #51,157
  • Nov 25, 2014 6:40am Nov 25, 2014 6:40am
Quoting FXMasterSK
{quote} I have no idea, but I hope he returns soon and is okay. I just closed my scout position accidentally along with an attack position, when I meant to just close attack. Was a pretty good position too, ugh. Gotta get used to this new platform lol. Oh well I'm in green so whatever. {image}
hi, FXMasterSK,

may i know which platform is this? the colour scheme looks quite nice and easy on the eyes.
  • #51,158
  • Nov 25, 2014 6:42am Nov 25, 2014 6:42am
Quoting CookieMonsta
{quote} hi, FXMasterSK, may i know which platform is this? the colour scheme looks quite nice and easy on the eyes.
It's FXCM. The charting package is called Marketscope 2.0 and is an add-on to FXCM's trading platform.
  • #51,159
  • Edited 8:48am Nov 25, 2014 8:19am | Edited 8:48am
Quoting FXMasterSK
{quote} It's FXCM. The charting package is called Marketscope 2.0 and is an add-on to FXCM's trading platform.
Hi, FXMasterSK,

thanks.

i noticed your question on breakouts and fakeouts in the other thread, well, to answer your question, i need to know when exactly are you asking this question? before the breakout? during the breakout? or after the breakout? if you want it before, there is no way to know, as no one has the crystalball. as for during and after the fact, yes, we can know, real breakouts to the upside pull back, and support above the trading zone, and then proceed to create a higher high, fake outs on the other hand, breakout to the upside, then trade back into the range, and proceed to trade much lower and eventually break lower and then trend downwards.

well this seems like information which cannot be capitalized, you must be thinking, since we can't trade into the past, but the key is this, to trade fakeouts and breakouts, what u need is to use the scout, and feel the turning points and fade the turning points while you are trading blind, and when the market slowly shows us more information, we adjust our position to either long or short to be with the markets.

say for example, the market broke out to the upside, what i would do is, let it run, till a turning point, and short it, keeping in mind the move might be a small retrace, so being nimble is essential here, and we see if the retrace goes lower and does it support or does it go all the way to the down side? if it supports, i take small profit or loss and switch to long, and see if the market goes to create a higher high and then proceed to attack mo. if the market trades down all the way, i would wait for a pull back and proceed to add more shorts with the attack mo.

consider this, the market's move is made up of individual swings, with their local turning point, the only difference is that each swing can be of different strength. but do we need to know if it is a fakeout or breakout before hand to profit? well no, we can approximate the individual swings for we can observe the individual swings currently in progress and dance that, and as we become nimble while the picture is unclear, we can scalp the breakout/fakeout price action, and when we are clear on the trend, we then attack into it. and that is why the candle stick turning points are very key to approximating the market swings and its timing, as you can be wrong on the trend but be nimble and still profit a little from it.

also consider this, you know the V tops and V bottoms which are classic of bubbles and blow off moves? is there a way to know before hand that it will be a blow off top? well not really right? but what we do know and can see is the turning point of its individual swings while the turning point is being formed. so even though we do not know the V tops and V bottoms might form, but who cares? all we need to know is the individual swing is turning, decide if you want to go with it or hold on or take profit and watch on the side lines(depending on your average price position), and approximate the market's move by having good timing and seeing the individual swings and catching the individual swings very near the start.

so essentially, it is the trade management that lets us approximate the price action swings in the breakout/fakeout, while not knowing before hand if it is a breakout/fakeout, but still being able to trade it while being nimble and keeping our position sizing small, and only committing an attacking when we can see on the charts that we are with the trend.

so short answer, no, you can't differentiate the a breakout/fakeout before as even with inside information, you never know there can be more other larger traders who see the fake out, and just buy and support price and then it turns from a fake out to become a real breakout, but with good timing and dancing skills, you can still capitalize on it with nimble mo and small sizing scouts, by using the classic definition of trending, HH HL for uptrend and HL = support, therefore when we can see support= it has a strong chance to be a breakout. HH then LL can be a price action which can indicate that there is a lack of support, and may be a fakeout, the key is the specific timing and point of the HH HL LH and LL, and the form read while the market's form continually change, to conduct the trade strategy.
  • #51,160
  • Nov 25, 2014 10:04am Nov 25, 2014 10:04am
[quote=CookieMonsta;7898536]{quote} Hi, FXMasterSK, thanks. i noticed your question on breakouts and fakeouts in the other thread, well, to answer your question, i need to know when exactly are you asking this question? before the breakout? during the breakout? or after the breakout? if you want it before, there is ........../quote]

hi cookiemonsta,

like your explanation very much!
13 traders viewing now