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Technical Analysis Fallacy

  • #54,581
  • May 24, 2016 4:40am May 24, 2016 4:40am
hahaaa, thanks Alex...
  • #54,582
  • Edited 7:11am May 24, 2016 5:48am | Edited 7:11am
Quoting appleboy
by assessing the terrain, eg, by looking at the RO3K, we would already be forming an opinion, and thus creating a bias on the USD. how then does a trader stay unbiased ? ( quoting : "unbiased is supreme" ) would eliminating the USD from a chosen trading instrument/pair be considered elimination of the USD bias ? i have found that i perform best when i ignore my USD bias , and for that matter ignore the USD entirely, and just flow with the market, but it goes against the grain of assessing the terrain through the RO3K to assess USD strength/weakness...
Hi, appleboy,

eliminating USD is not needed, just need to focus on, the fact that, for that particular pair, price must still act right, because when trading currencies, you are infact trading relative currency strength. for a pair to move in an extremely impulsive and explosive fashion(e.g. eurusd, down trend), eur must be weak, and usd must be strong, and usd weak and eur strong, implies strong up trending move. whilst if eur is ranging or eur is strong and usd is strong, we usually get ranging and messy moves, or slight drifts. the same idea can be applied to cross trading, where you are in fact crossing 2 major pairs, to get a good strong move, say eurjpy, you want eurusd to be strong and eurjpy to be strong too. thats why the moves from crosses tear so strong when they trend.

it is in fact very useful to speculate if there are other fundamentals which are not on the news but are currently being priced in right here right now when you observe a pair diverging from the markets in general, like unnaturally strong or weak gbp given the brexit situation. for example, eurgbp, given that brexit keeps being harped on, many people are probably unwinding trades, and we can see eurgbp is strongly trending, and also hedge funds like soros will be inside, that is a given, eurgbp has be moving south since april, it alerts to us perhaps the big boys are already moving and pricing in something, like way before. we are reversing off of the significant high of 0.8120-ish. since gbp was in the eurozone too, their correlation should be the same, but now its not, meaning change in fundamentals. usd helps us deduce it is these 2 pairs acting weird and not usd acting weird as of now since it is the brexit overshadowing all other events, maybe even rate hike. it helps us highlight which countries fundamentals are affecting price most, because the strongest and weakest out of ordinary against the general market direction usually tells us something is odd about a move yet to be told, someone else big is already pricing in an event perhaps.

think about this, the s&p itself has many stocks in the entire market, and then they further divide the markets into industries or sectors, then similar group of stocks or competitors in the same business. those that receive better support in a decline usually means professionals are bullish while those that fall more than their peers in a down trend means they are weaker, and stock selection can be done using this relative strength between sectors as well as markets as well as stocks. this is primarily top down analysis/investing. the same idea for RO3K can be applied, when you are selecting currency pairs, maybe if you don't see potential in the majors, the crosses might be trending, and you can use their major pairs to help time the crosses on top of pa dance. the relative volatility between the pairs show us how if there is a lack of liquidity to whichever side the market is moving, which in itself indicates the strength/weakness over currency pairs and impulse is more likely to come into which pair.

it can be used in actual trading too, say if instead of just using RO3K, you can select the best pair for the best moving volatility by selecting the ones which DXY, dollar index lines up well with the actual chart itself too, if they don't line up, then checking the other pairs to see the landscape of what might be happening and using it to time the move is good too. for example other correlations like eurchf, which is usually preserved would usually be in sync, and sometimes can cause eurusd which if trying to move up, really churn and whipsaw, if dxy is up and eurusd is down, it usually means the quite alot of people are vested in dxy and eurusd.

a more accurate way is that we are seeing divergence from the general market's direction, pardon my usage of the word weird as it doesn't fully convey the meaning i mean use but i can't think of another word beside divergence.

just my 2 cents.
  • #54,583
  • May 24, 2016 6:11am May 24, 2016 6:11am
Quoting CookieMonsta
{quote} ..... eurjpy, you want eurusd to be strong and eurjpy to be strong too. thats why the moves from crosses tear so strong when they trend. it is in fact very useful to speculate if there are other fundamentals which are not on the news but are currently being priced in right here right now when you observe a pair diverging from the markets in general, like unnaturally strong or weak gbp given the brexit situation. for example, eurgbp, given that brexit keeps being harped on, many people are probably unwinding trades, and we can see eurgbp...

......for eurjpy to be strong - we could have eurusd strong + usdjpy strong in same direction - so jpy is weak against usd and eur is even stronger than usd so eurjpy will be the top banana -
.
... when there is a Brexit poll out pro euro then gbp may go long like today so as eur is weak today and gbp strong then eurgbp is really weak

I am trying to get to grips with the correlations RoK - need to work out where momentum is ...... think also which pair moves first in the RoK group may mean sth but not sure - as after all at some point this must come back into alignment eg cable will line up with eur.

Alex
check out the terrain - follow never lead
  • #54,584
  • May 24, 2016 6:12am May 24, 2016 6:12am
Quoting fti
{quote} Ahhh seems i lost a day and gained a life. all is fine, the numbness is gone. feel like going for a swim BUT i know better, i think. Thanks to God. Thanks to mom running around get this get that like headless chicken. Thanks to my friends and prayers, and to little bit of this and little bits of that. A Ok now. feels great. but i think i will meditate s little. but first need take care of the hunger. regards {image}


Rgds
Fall in love with the process, and the outcome takes care of itself.
  • #54,585
  • May 24, 2016 6:14am May 24, 2016 6:14am
Quoting fti
{quote} Ahhh seems i lost a day and gained a life. all is fine, the numbness is gone. feel like going for a swim BUT i know better, i think. Thanks to God. Thanks to mom running around get this get that like headless chicken. Thanks to my friends and prayers, and to little bit of this and little bits of that. A Ok now. feels great. but i think i will meditate s little. but first need take care of the hunger. regards {image}

Sorry if I moaned at you............glad you are feelin better.
check out the terrain - follow never lead
  • #54,586
  • May 24, 2016 6:23am May 24, 2016 6:23am
Quoting alexandria
{quote} ......for eurjpy to be strong - we could have eurusd strong + usdjpy strong in same direction - so jpy is weak against usd and eur is even stronger than usd so eurjpy will be the top banana - . ... when there is a Brexit poll out pro euro then gbp may go long like today so as eur is weak today and gbp strong then eurgbp is really weak I am trying to get to grips with the correlations RoK Alex
hmm, yep, but not necessarily that just the brexit poll could cause weak eurgbp, because our information is limited to what we can observe from various sources.

if you are interested, you could look at the price action before the swiss intervention, it showed RO3K at its best power. the entire markets were churning the entire day since the opening in frankfurt. then markets all lined up all together formed reversal formations. that churning move was probably someone moving alot of usd, then the eurchf news hit the markets and eurchf gapped like crazy, the rest of the market were affected drastically too.

also when china crashed, chinese yuan didn't use to really cause moves in the majors like eurusd, gbpusd usdjpy and usdchf, mainly in audusd, nzdusd and the likes who are trade partners with china for their import exports. but with the recent crash, money from china is flowing to these currencies and also more usd treasuries too. because of this, chinese news release which used to not affect eurusd as much should now be kept on a watchlist too and if eurusd is usually not active in tokyo, it might become very active in tokyo and that offers more opportunities too.
  • #54,587
  • Edited 7:02am May 24, 2016 6:29am | Edited 7:02am
Quoting alexandria
{quote} ......for eurjpy to be strong - we could have eurusd strong + usdjpy strong in same direction - so jpy is weak against usd and eur is even stronger than usd so eurjpy will be the top banana - . ... when there is a Brexit poll out pro euro then gbp may go long like today so as eur is weak today and gbp strong then eurgbp is really weak I am trying to get to grips with the correlations RoK - need to work out where momentum is ...... think also which pair moves first in the RoK group may mean sth but not sure - as after all at some point this...

well, the part about cable line up with eur may not hold anymore if britain leaves eurozone, because originally eurgbp was price according to eurozone and britain agreement, but if britain leaves, gbp needs to be priced according to other things, unrelated to eur, like maybe gold+oil+ other export import factors, eur and gbp may only be correlated if they are each other's number one trade partners. if britain remains, we might see reversion first because many people unwinded or hedged, so first they need to reaccumulate/unhedge then they move back inline.

anyway just 1 more interesting idea you might like to explore, check up usdcad, and dxy and see that tomorrow is the BOC rate statement and overnight rates. usdcad is showing its slowing down and some weakness is developing, but dxy is showing strength. right now usdcad is churning. it might be 2 cases, usdcad is either unwinding trades for tomorrow or professionals are shorting it. but 1 thing im rather concerned about, recently gbpusd and commodities have been rather correlated, and i haven seen how 1 side's new release drags the other around, so the temporary dip might itself be caused by the gbpusd massive push up, and professionals might still be net long and still holding well. might need to see how usdcad end today first.
  • #54,588
  • May 24, 2016 6:40am May 24, 2016 6:40am
Quoting CookieMonsta
{quote} well, the part about cable line up with eur may not hold anymore if britain leaves eurozone, because originally eurgbp was price according to eurozone and britain agreement, but if britain leaves, gbp needs to be priced according to other things, unrelated to eur, like maybe gold+oil+ other export import factors, eur and gbp may only be correlated if they are each other's number one trade partners. if britain remains, we might see reversion first because many people unwinded or hedged, so first they need to reaccumulate/unhedge then they...
... thanks for info.....I live in UK so know the news/vibe re Brexit

Alex
check out the terrain - follow never lead
  • #54,589
  • Edited 7:27am May 24, 2016 6:48am | Edited 7:27am
Quoting alexandria
{quote} ... thanks for info..... Alex
sry, my mistake on the eurgbp reversion, it should first be very messy, killing many people, then they slowly revert to being in sync.

but usually, in these kinds of cases, where politicians and all keep talking about it for so long, the volatility will be rather low, because many people have enough time to prepare, hence people won't be forced into desperation and cause crash-like volatility. its the very quiet and sudden ones which are the killers, during the time leading into the chf intervention, its volatility was so low and practically unrealistic, and probably huge stop clusters gathered there, when the announcements come out, price gapped so much it caused brokerages to fail. such moves when recognized can be traded in 2 ways, either through butterflies or longer term long straddles paid for by shorter term butterflies, by exploiting the decay differentials between longer term decay and short term decay, its practically a trade that can never go wrong, even if its wrong, u lose only a little.
  • #54,590
  • May 24, 2016 6:50am May 24, 2016 6:50am
Quoting CookieMonsta
{quote} sry, my mistake on the eurgbp reversion, it should first be very messy, killing many people, then they slowly revert to being in sync. but usually, in these kinds of cases, where politicians and all keep talking about it for so long, the volatility will be rather low, because many people have enough time to prepare, hence people won't be forced into desperation and cause crash-like volatility. its the very quiet and sudden ones which are the killers, during the time leading into the intervention, its volatility was so low and practically...
sorry... lost me... need to think about what you are saying.
check out the terrain - follow never lead
  • #54,591
  • Edited 7:22am May 24, 2016 7:03am | Edited 7:22am
Quoting alexandria
{quote} sorry... lost me... need to think about what you are saying.
oh, just saying we may see massive whipsaw in the correlation before a reversion to being in sync instead of seeing a reversion to correlation immediately if britain remains in eurozone.
  • #54,592
  • May 25, 2016 6:20am May 25, 2016 6:20am
Quoting CookieMonsta
{quote} Hi, appleboy, eliminating USD is not needed, just need to focus on, the fact that, for that particular pair, price must still act right, because when trading currencies, you are infact trading relative currency strength. for a pair to move in an extremely impulsive and explosive fashion(e.g. eurusd, down trend), eur must be weak, and usd must be strong, and usd weak and eur strong, implies strong up trending move. whilst if eur is ranging or eur is strong and usd is strong, we usually get ranging and messy moves, or slight drifts. the same...

Thanks for the explanation Cookie
  • #54,593
  • May 25, 2016 6:54am May 25, 2016 6:54am
Quoting appleboy
{quote} Thanks for the explanation Cookie
  • #54,594
  • Edited 4:18pm May 25, 2016 7:17am | Edited 4:18pm
Quoting CookieMonsta
anyway just 1 more interesting idea you might like to explore, check up usdcad, and dxy and see that tomorrow is the BOC rate statement and overnight rates. usdcad is showing its slowing down and some weakness is developing, but dxy is showing strength. right now usdcad is churning. it might be 2 cases, usdcad is either unwinding trades for tomorrow or professionals are shorting it. but 1 thing im rather concerned about, recently gbpusd and commodities have been rather correlated, and i haven seen how 1 side's new release drags the other around,...
leading to the BOC bank rate statement and all, we see that audusd and nzdusd is trading in a churning fashion, they are going counter to their daily trends too, meaning the most current overshadowing fundamental is the BOC bank rate, notice that usdcad did not break 1.3083 which was significant support before new york today, with alot of stops below, they purposely not touch it off and held it back. and we rallied above to 1.3120-ish zone, and price action there felt like it someone was establishing a limit there. and when that happened, there is a strong possiblity which the usdcad might transform into a downwards wedge formation from yesterday's 1.3176-ish region. this might clue to us that professionals are pricing this in and when 1.3120 formed as a resistance area/sell zone, the odds are really high that the news should be downwards. the fact that 1.3120 is being supported pre-news implies dealers want to do something with it, because when dealers obviously had a chance to hunt stops, but don't hunt stops, it means those people's positions are probably wrong, and dealers can let the stops accumulate and let the news naturally carry it downwards and then take profits into it. this along with the fact that a sell zone at 1.3120 zone is established from london to new york, forming 2 lower highs from each sessions clues us to the fact that there is quite some selling carrying out afew sessions, and when such volume is taking place, in time and lack of price movement, rather range bound movement, it might means someone big is in the markets, and the catalyst is the boc news, in this instance, we could use price action patterns(down wards wedge formation, however, it has to be in formation and slightly not so obvious as compared to the textbook wedge shaped formations, we ideally try to get in on 1 of the turning points as opposed to the break outs, because if u can see on the charts, the move is probably over) and RO3K and ff calendar events to deduce the direction and timing in which some big boy is entering the market, and that is the distribution formation, and we got in understanding the direction, while it is in its formation.

i had taken a small trade at 1.3119 when the market formed the sell zone there, my stop loss was at 1.3167, since i figured with that much stoploss built up at 1.3119's high point, 1.3131, stop hunts are likely to go that far afew minutes before the news is released and then drop below if my analysis is right, hence my stop at 1.3167 is safer.

just some disclaimers.

however, i am in no way endorsing this method of reading pa and RO3K and ff calendar to be used with the mo provided in this thread, since the logistics will be much different, and also since the thread advocated that putting positions on in before news can lead to disastrous outcome if mm is not robust, which i do agree, since my mo for trading this is a 1 entry method and i do not snowball the move since its into fundamentals which can spark off new trends.

this mo came about from my understanding of how to use fundamentals and technicals together to decipher events which might happen next, given that it is on the ff calendar and is bound to happen, it is my own creation.
  • #54,595
  • May 25, 2016 7:47am May 25, 2016 7:47am
Quoting CookieMonsta
{quote} leading to the BOC bank rate statement and all........
Thanks so very much for great explanation.... been watching the plays all day... learned a lot.

Cheers

Alex
check out the terrain - follow never lead
  • #54,596
  • May 25, 2016 7:49am May 25, 2016 7:49am
Quoting alexandria
{quote} Thanks so very much for great explanation.... been watching the plays all day... learned a lot. Cheers Alex
  • #54,597
  • Edited 6:56pm May 26, 2016 6:16pm | Edited 6:56pm
Quoting CookieMonsta
{quote} leading to the BOC bank rate statement and all, we see that audusd and nzdusd is trading in a churning fashion, they are going counter to their daily trends too, meaning the most current overshadowing fundamental is the BOC bank rate, notice that usdcad did not break 1.3083 which was significant support before new york today, with alot of stops below, they purposely not touch it off and held it back. and we rallied above to 1.3120-ish zone, and price action there felt like it someone was establishing a limit there. and when that happened,...

There are some people who live on earth, that cannot be saved no matter what one trys to do to try save them.
There are also some people who cannot change.
They learn only new terms and adulterate the stuff with their old ways and calls it development.
In my life time, i had met many these kinda people.
These kinda people have certain charateristics.
1.They insist and impose on others what they want.
When people say some kinda long swords will not be duiscussed because there no benefits to retail traders. Then these kinda people insist to fish.
They think they very polite shit in others houses.

2.There are peeps who are very bias. No matter if there any strong influence. Some people's ego can be so dorminante that, if they see a wet person, they insist that it raining. Never considers that,maybe mua been in the pool. They cannot discern between fundamentals and bias. These kinds normally pretends they know stuff , but are actually taking about their ego. I have listened lots polititians speeches, although i know evry word i hear, i can never understand wtf they speaking.
Some people go to concerts to listen, some goes to cheer. When they start cheering , probably escalate to riots.

3. Some kinda peeps can write all kinds untruths and twist whats actual given as best practises. They can twist anything in their mind to "own it". Like the stupidity of stops and duck ponds. Talk about mo , when they seem knows swat about the mo. Do the stuff, that tells not to do. "rebels without brains". Then makes disclaimers because they know its all a lode of their mind fart.
These kinda are normally "student" type personas that will never rise up to mastership. At the end of the day, they is no knowledge, only ego.
Its all about them and abusing what others gives them.
If every one start posting their elephant mutated monsters on my thread.
This thread can be 1,000,000 pages long. Esp those that are 100% the opposite of what i practise.
eeer, did forexfactory disallow people from making their own threads post their mo and stuff.

I was thinking.
maybe i should stop socialsing with my friends on my thread here. I am not trading actively now and will have little to contribute.
Maybe if my friends post links to their journal i may go visit em and guide em on their development if possible.
would be more productive. maybe.
but what if links also becomes 1,000,000 pages long?
maybe retired peeps should stay retarded, instead disturb the peaceful mind.

some people cannot be saved.

i am still alive.

regards

PS: Stop order?
that is for peeps whos eating their gf's hamberger while driving.
or for peeps who cannot afford the time to manage risk but like to punt. make like casino . red they win black you lose.
or for peeps who no have gut slaughter the PIG. So they leave it to their broker.

"eeeer i am not gambling, i got stopped out."
Your rigidity is showing.
Attached Image
  • #54,598
  • May 26, 2016 7:13pm May 26, 2016 7:13pm
Quoting fti
{quote} There are some people who live on earth, that cannot be saved no matter what one trys to do to try save them. There are also some people who cannot change. They learn only new terms and adulterate the stuff with their old ways and calls it development. In my life time, i had met many these kinda people. These kinda people have certain charateristics. 1.They insist and impose on others what they want. When people say some kinda long swords will not be duiscussed because there no benefits to retail traders. Then these kinda people insist to...
Hi Fti,
I was pondering about this for awhile, about creating a journal here. I have my own private daily journal in excel, but I am not sure how will I feel to post it openly in a public domain. Perhaps, this is the push I need.
I will create a journal next week, which I hope will have the honour of you(and others ..) gracing the electronic inks.
Will have to plan and take this into account for my daily schedule/routine.

Rgds
Fall in love with the process, and the outcome takes care of itself.
  • #54,599
  • Edited 10:51pm May 26, 2016 7:30pm | Edited 10:51pm
some days i just wish my analytics are wrong.
So that i no need eat up everyones stop loss.

regards

Ps some peeps not understand.
risk reward ratio.
Me, take highest risk always when trade. In fact no one knows his risk factor until after the trade.
Gets the rewards and hide ambush the next victims.

They not understand trading is like sex.
There is no such thing as safe sex.
You fu k, is lightly sometimes you gets pragnant.
Question is how you deal with it when theinevitable arises.
How you deal it, how you survives it.

me no like stay in the water too long, will definately attract many buayas.
so i only stay in water when i need to.
otherwise they can have my toes.
Is better than let em get everything.
  • #54,600
  • May 26, 2016 7:35pm May 26, 2016 7:35pm
Quoting RelaxRay
{quote} Hi Fti, I was pondering about this for awhile, about creating a journal here. I have my own private daily journal in excel, but I am not sure how will I feel to post it openly in a public domain. Perhaps, this is the push I need. I will create a journal next week, which I hope will have the honour of you(and others ..) gracing the electronic inks. Will have to plan and take this into account for my daily schedule/routine. Rgds
noted.
to have it worthwhile. you must at least have 1 good friend who sits with you on your thread chit chat.
When ready give a link here.
also on your profile for easy find.
You must remember we have many gfs to visit so we cannot remember everybodys addresses.
Thats for the taxi driverto know. sometimes name also gets wrong.
Why do you think i have so many dogs?
I cannot remember if i linked it here alreasdy.
anyway some of my dogs loves me.
some only when i feeding em.

Inserted Video

anyway the answer i get is DOG.
regards.
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