Technical Analysis Fallacy

Courtesy of capt sumc....

although her sortee table is full. thank you.

Attachment

thanks too

Rgds

regards

ain't we all.its only means to an end. a device. its only paper.
please renew your library memebership.


regards

Hi fti,
its always good to see you posting
good health to you always
amazes me that this thread just keeps going and its wonderful to see you correct newbies whenever they arrive
can i please ask your opinion.
when does one know that he is not cut out for trading?
many thanks...

there is no such thing.
If one no have burning desire and open mind learn and adjust.
Then there are other stuff to enjoy in life.
One decides, no one else can say.

天生天養,天不截路

anyway, there is really no escape from trading.
everyone's trading.
not everyone's trading same things only.

人 is another matter.
no benefits, dumps.

regards

by the way cookie is no noob, not retail i suspect.
But what he gets see here, he can bring it to the board, if he uses it.

well, i am retail. have never even seen how professionals operate before except from this thread here. the rest of the info i had to dig out from interviews from various professionals and reverse engineer what they say from the interview, usually is just afew sentences which is from their experience, usually they say it offhand and quite casually, but it really indicates their years of experience and provided quite abit of information to be used to understand how professionals like that trade, and can also subsequently decipher what their mo is like, since their mo is evolved by their experience, and what they say usually indicates some portion of their mo.

one idea from gann, when he say how price hold when break new high, but price can hold many ways. so consequentially, thinking deeper, although price break higher, price can snap back with equal strength. but if price break higher, with slow shallow retrace, usually means although price break higher, strong sellers dare not sell it back down, which is even more powerful as an information. so in order to use this in our trading, the better way to identify good trades is to look for strong impulse, followed by much weaker pullbacks, then when market accumulate/distribute to go back into impulse wave then send small scout on weak retrace after it shows some impulse. usually that is my favourite since such moves usually more profitable than range moves, and usually moves fast also since market is already in a state ready to move up or down. but if shallow retrace develop into quite strong counter impulse, usually means something else at work.

as for which part of gann's ideas which work. there was this article here which richard wyckoff interviewed gann. so wyckoff would have also understood how gann traded and wyckoff had a trading manual, and wyckoff was using point and figure charts, while gann was using swing charts, these 2 are basically the same calibrated to different volatility setting to weed out small moves and is meant to check for accumulation and distribution. apart from this, the rest of gann's indicators are not inside. as for gann's other ideas they are basically macro factors and inter-market correlations, but usually these will already be in the price itself, just that divergence from this means something else is in play. the rest is pyramiding math, and gann was indicating sublinear, which indicates how to lag price to the market. thats how i figured gann's mo.

also when u said u were wondering where investors will park cash, that itself led to thinking that, when crisis occur, investors will flow out of the currency, and go else where safer, and then where will they park it? maybe equities, bonds, commodities and properties or maybe all of the above. thats one sentence which helped me figure out how to use the 3 kingdom to trade the yuan crash, because then some other pairs will sync up temporarily till the yuan crash is over, usually volatility will be smaller than the yuan pair but still sizable, since its from yuan to usd, then to the 3rd currency. More managable for me

the rest i had to figure it out how to adapt for my own usage, and i taper my attack and first level attack, and provide for a nice ride while being robust to market retrace, and the resulting mm can be 1 2 1 2, to lag the market, or can be 1 3 2 3, if the initiate push is stronger and i have enough foreign caps to handle slight retraces. the relation is that, 1 2 1 2 grows sublinearly with the overall position size and keeps lagging market after first attack, so most risk is at first attack, and from then on the risk tapers as the base keeps getting stronger and stronger as more pyramids are added, but our size still increases quite abit, which becomes a nice tie between opportunity cost and entering too much position and when a strong blow back comes u be might overextend. its a mm which i like because i trade slower and suited to my style for riding trend leg.

https://www.google.com.sg/url?sa=t&r...lRaTJHzyFVRJHw

A brick building stacked up one way the bricks make a cathedral, another way they become a gas station.

regards

many ways to trade, the key is to find a suitable style for oneself

Thanks for sharing up there.
Cookie, might sharing what you did when the yuan crashed?

I used to do the same... and google everything, and after i googled, would browse through almost everything at least on the 1st and 2nd page of google.. ha..

I always try to put thing into perspective, and simplified the thinking.. so one day, i put the equation down, and made it into a "3" for ease of categorizing my thoughts.

Story/simplified eqn.
There is 3 object on the table, a knife, an apple/s, and a container/s. The amount is limitless or limited, big or small, whatever we like. Objective is simply to cut the apple whatever way we deem fit, and place it into the container for consumption later.

So.. what would define the ideal/perfect outcome? Good apples? Sharp knife? Big/small container?

Truth is, good apples are like the terrain we choose to be in, we cant get good apples, if we choose a rotten one to begin.
A sharp knife is needed for a swift and precise cut, instead of a blunt knife that causes more work - our skill set, much like our mental management and agility to move through thoughts to execute them.
And the container, simply is our capital, we can only generate % relative to size of the cap.. likewise, we can only get x number of apples into x size container.

Hence,
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
from our favorite book.


Just sharing guys.

Rgds

Hi, ray, what I did back then was that I did not have a position in the market, then news came out that yuan crash. So yuan is bad for trading since the move at the start will be disorderly and hard to manage, so not my cup of tea, but because its a crash, the money must go somewhere, it could be any of the g7 currency or maybe all of it. So it would be time to look for impulse in the g7 pairs. So we can enter on retrace of hourly impulse. The impulse on the g7 indicates that market is proving my theory is correct and supporting with an impulse wave. So I would be waiting to buy hourly retrace. But such conditions the volatility is quite huge, so timing needs to be slightly more accurate, but usually when impulse after retrace come in its not going to back off, so in a sense u have majority of market helping u push ur direction. So there's fundamental to highlight direction, and technicals to highlight validation of the fundamental idea and the timing to get in.

Cool, thanks. Well played.

Rgds

neither was man born to fly nor was crocodiles born to climb tree. but man manage to take to the sky, what say the crocodile? may not be productive as it is in current state, but i have the interest & energy to dive in, so is not stopping me. who knows what the future bring? i will let the dots connect itself.

oh noted.
i was talking about me not accompanying anyone climbing the tree.
YOU are at liberty do as you deem fit.

I wanted leave something behind for any one who wanted climb the hill.
I not knows if they end up become lion king or gets eaten by the lions on the climb up the hill
That is beyond my scope to foresee. YOU decide, and you no have to report to me.I not give anyone remunerations for sometime already. In fact during the time toward my retardation, even those boys no tell me anything anymore, I not bothered if they follow their training anymore. Every one makes wierd elephant of my picture. i just watched their bottom line only. The bottom line stinks i send them packing.
regards



http://www.lyricsmode.com/lyrics/p/p..._the_wind.html

i learned in my journey.
people are not steadfast because they are steadfast.

This is truth..

http://news.discovery.com/human/evol...ife-160412.htm

regards

.....keep calm and wear your raincoats.
and don't fall asleep in you poncho.

Today every one in thailand wet wet
Happy Songran New year.




regards

cookie, i had light bulbs moment few days ago and i found time today to consolidate my thoughts. it started from our discussion on options as per below and also on my reading of black and scholes paper and the vol 3 market risk book by alexandra.

"Hi. Jacques, what u mentioned I believe is arbitrage and hft to a certain extent. There is another mo which I have been thinking of these past few days. Its meant to work with what we have learnt in the taf thread. Let me give u an example. Let's say market is in a pullback wave, major trend is up. We establish a put ATM, 4 units, 1unit long spot. Then as market retrace, we dance it using rescue mo. If market turn and major trend ensues, we turn to attack mode with 4,4,4 as attack if we have 4 units deployed with put. Otherwise we got 1,3,4,4 if we bought scout and it goes our way in spot right off the bat. If we dance rescue, but market change from impulse to major trend reversal, we can either sell 4units call to flatten out if we still near the money but spot positions sunk. If market trends strong against us before our spot gets 4x, it means our puts are profitable minus premium. So it becomes a lock in on puts profits to become a long call. That's the mo in using demo with now."

i have made the decision to post here to share with all.

when we trade 1 contract intraday spot, we are trading delta = directional price risk. there is no gamma, no vega, no rho risk factor. however, if start to think of positional risk factor than in fact, fti has all along been teaching us a very power MO centered on managing positional delta risk in which delta changes because of us actively managing the spot position. our active managing introduced the gamma risk, recall gamma is change in delta as underlying price change. as underlying price change, so do our number of contract as we actively managed so in fact, we are the source of gamma risk.

if we then introduced derivatives which can inculude futures, spread, bonds or wathever, we introduced additional risk factors i.e. vega and rho. then instead of having gamma exposure via actively managing spot, we get gamma exposure via inactive managing using options because options have inherent built in gamma risk.
the strategy i saw in your example does something like this: ur put options remove risk of price drop without active manage because u have gamma exposure which automatically change your delta in line with market. if you didnt have put, you would have active manage to be in line. if mkt trends up after finish downwards retrace, your gamma again changes your delta to be in line with market. but because u paid premium for a short maturity option, u lose the entire value quickly which puts ur spot avg at a loss. i think the trick is to use long dated options, so at least u can recover portion of the premium. however, long dated delta is not sensitive, this can be compensated buy buying more long dated option to have a higher positional gamma which makes positional delta more sensitive. so maybe instead of 1D or 1W which u mentioned, maybe u can try 3mth or 6 mths which are purely my conjectures.

and there is still vega risk which is significant and which i have not thought in depth. and the problem of fair pricing and market access. i dont think it will work out in fx for retail, but it could in the futures mkt because it is regulated and there is high liquidity.

and abt the b/s model, the Partial differential equation that was derived via continuous delta hedge which remove gamma risk and constant vol which remove vega risk thru out the life of the derivate leaves you with constant risk free rate which assumed from risk netural world would cause you to only earn risk free. so now i understand, it can price any derivatives. but because the boundary conditions for an option was introduced. it collapsed to an easy to use b/s equation.

so if you can delta hedge frequently, u minimize gamma risk and what you are trading on is really just vega which is the big problem. the normal dist in the assume fails to take into account fat tail events which happens more frequent in real life than in normal dist, which means the b/s model would normally underprice. so we adjust for the fat tail by increasing the vol used, this is really useful for mkt maker for their delta hedges to earn them money. for us, i think it is useful to give ballpark ref like if a can of coke during peacetime charged at US$3/can is really expensive but it may be a fair price during wartime.

bottom line is that, the auto changing delta due to gamma risk can be useful for inactive manage but there is a premium to pay, vega risk to consider and there are problems of mkt access.

this is all i am gona say of options in fti thread. i try not to say anymore going forward so as not to distract others. to run, one has to learn to survive being a baby. i have survived baby and i am ready to go learn walking.

http://www.mb.com.ph/some-sleep-in-c...l-41-in-japan/

regards