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The Really Useless Thread

  • #145,601
  • Nov 24, 2016 4:02am Nov 24, 2016 4:02am
Quoting sisse
Yes we are crossing the 'red area' for the momentum play in the mid term (those expensive tickets in the never ending sketch). No break no shake environment but with imminent alerts already trigger. A good combo will unlock 1.019x by even this years end and TA the ext 0.98xx for later. A soft combo will just delayed for Q1/Q2. A major game changer, well will discuss if that happens later...
Please Sisse, let me fully understand in my words so i can mark this and go on ...

you call the week low based only on your confidence there will be no break untill FED/ECB combo is confirmed? or there is something else i'm missing?
  • #145,602
  • Nov 24, 2016 4:07am Nov 24, 2016 4:07am
Quoting sisse
Dissecting the market (The Basics) " More than a recipe book, the first collection Dissecting the market in a few bars (The Basics) defines the fundamental elements behind price analysis. These are my core trading principles, all trading analysis and decisions are derivate from them. Trading is just a probability game based on pattern recognition If every potential trade is a probability game, the job for a trader/scalper is not forecast the future but to minimize risk using every available tool to find the best available scenario. 1. The importance...

Yes. Very good information, but the explanation is bad. Thanks.
Sometimes the people cannot difference between the good thinks and bad thinks because they have not culture. I think i could recommend this to all people who wants to understand the movements of prices.
  • #145,603
  • Nov 24, 2016 4:27am Nov 24, 2016 4:27am
Quoting change
{quote}...or there is something else i'm missing?
...experience ....

Look don't overthink it, common sense always first, no US markets in a light week the odds of a clean sweep today is diminishing just out of low liquidity after Europe morning session.

What if we keep drifting down and have fresh break this week? don't sweat it [as long as you are not holding longs of course], take it as strong signal that Euro is holding on air as nobody is defending 14 year lows.

Calling a weekly high/low is less important and wont give or take a $ this time given what is in play...Maybe thinking TA wise you could track last mini break point [daily not intraday] as point of reference, if that is taken back up you may pretty much safely assume the week is over... I hope it helps.

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,604
  • Edited 5:22am Nov 24, 2016 4:55am | Edited 5:22am
Quoting sisse
{quote} --> Equally important also map the opposite side where longs could be jumping in. First because they will be the ones caught on a break down and will add momentum, second because you will 'know' where NOT to even try to enter short and finally if you are wrong and already in you will know where to close without hesitation for a loss but not to get stuck on a flop. I hope it helps ... sisse
In this case perhaps that area for longs would be around the 0580 Mark. Jumping in there would be early and more prudent to see if the 0640/660 level is where they are extended, or even higher to 730. wait for price entry if timing with news is right in those areas and if you get one, consider a short from there. Does that add up? Not looking for specific advice on a trade but more want to see if I get what you mean.
  • #145,605
  • Nov 24, 2016 4:59am Nov 24, 2016 4:59am
Quoting goosebone
{quote} In this case perhaps that area for longs would be around the 0580 Mark. Jumping in there would be early and more prudent to see if the 0640/660 level is where they are extended, or even higher to 730. wait for price entry if timing with news is right in those areas and if you get one short from there. Does that add up? Not looking for specific advice on a trade but more want to see if I get what you mean.
We dont look for long positions with short term sell outlook . In neutral we can do.
Trading in the shadow of SM
  • #145,606
  • Nov 24, 2016 5:17am Nov 24, 2016 5:17am
Quoting sisse
{quote} ...experience .... Look don't overthink it, common sense always first, no US markets in a light week the odds of a clean sweep today is diminishing just out of low liquidity after Europe morning session. What if we keep drifting down and have fresh break this week? don't sweat it [as long as you are not holding longs of course], take it as strong signal that Euro is holding on air as nobody is defending 14 year lows. Calling a weekly high/low is less important and wont give or take a $ this time given what is in play...Maybe thinking...
lol,

i stay with it, inline with my thinking but your sureness in the call made my mind numbling if you had some super-secret untold TA/FA weapon in your arsenal
  • #145,607
  • Nov 24, 2016 5:20am Nov 24, 2016 5:20am
Quoting Earleone
{quote} We dont look for long positions with short term sell outlook . In neutral we can do.
Right. Meant to be in reference to the part of sisse's comment I quoted there.
  • #145,608
  • Nov 24, 2016 5:27am Nov 24, 2016 5:27am
Quoting goosebone
{quote} Right. Meant to be in reference to the part of sisse's comment I quoted there.
Aha, Understand this one?

--> Equally important also map the opposite side where longs could be jumping in. First because they will be the ones caught on a break down and will add momentum, second because you will 'know' where NOT to even try to enter short and finally if you are wrong and already in you will know where to close without hesitation for a loss but not to get stuck on a flop.
Trading in the shadow of SM
  • #145,609
  • Edited 5:47am Nov 24, 2016 5:29am | Edited 5:47am
Quoting sisse
{quote} Of course is a mid term leg!!!!. On that break is where the money is whether you rode it from the top or from the break... Remember at this area a proper r:r entries are a lot harder to find given risk. You have to have flawless control of the timing of what markets are tracking as final outcome. All entries are rather expensive at this area because you have +/- 300 ticks gap to the natural stops making stop management vey complicate if you don't know exactly what you are doing. {image} --> Also don't forget this a mid term swing direction....
Ok, very interesting and advanced stuff. Ill make the analysis and post later (we have a few quiet days left). But before that - one fundamental Q: you suggest the final extremely quick triger of the momentum break (to second target + potentional future extension) is the fact - but how does it fit into the knowledge that we trade the expectations? how can the fact trigger the move post-fact?Or does it happen shortly prior to fact on its confirmation? Im pretty confused on this one.
  • #145,610
  • Nov 24, 2016 6:07am Nov 24, 2016 6:07am
Quoting Earleone
{quote} Aha, Understand this one? --> Equally important also map the opposite side where longs could be jumping in. First because they will be the ones caught on a break down and will add momentum, second because you will 'know' where NOT to even try to enter short and finally if you are wrong and already in you will know where to close without hesitation for a loss but not to get stuck on a flop.
Yup
  • #145,611
  • Edited 7:28am Nov 24, 2016 7:01am | Edited 7:28am
Quoting goosebone
{quote} In this case perhaps that area for ...
Yes you got it. Despite any levels, that sounds like a proper framework to build your next trades.

Quoting chester123
{...Q: you suggest the final extremely quick triger of the momentum break (to second target + potentional future extension) is the fact - but how does it fit into the knowledge that we trade the expectations? how can the fact trigger the move post-fact?Or does it happen shortly prior to fact on its confirmation? Im pretty confused on this one.
Ok stop right there!!! You are going to the dark side trying to create a one theory fits all, which defeats the whole purpose of the conversation in the last few months.

--> Who told you that buy/sell expectation necessarily means sell/buy the fact?.

The only premises are:
-> markets and smart money always trade expectations first and deal with fact later, and;
-> the sooner you realise that the better your position and less the risk.

It always have been, always will be. Does it mean all market events can be forecasted and traded like that?

- ->No absolutely no. so why we are doing this?

Because there is macro fundamentals forces in all underlying that can be traded and forecast like this. For example in currency macroeconomic factors, monetary policy etc or in stocks valuation and estimates or in commodities concrete supply and demand factors that can be measured and forecast, etc etc

Those trades/flows are possible to estimate expectations and forecast allowing you to have a tiny island of certainty in an ocean of uncertain factors and forces to make better, consistent and informed trading decision. Would they alway work and be right?

Absolutely no. Nobody can be right on this forecast. You are just taking the best technical, informed decision with the information given. If you do the homework properly the odds will stack in your favour, no more no less.

--> Now to your direct question.

Imagine we have a stock in a company XYZ lets call it 'Pineapple inc' back in 2004. You work in a large boutique investment firm. In one of your usual christmas corporate dull dinner in the City the CEO of 'Pineapple inc' with a few drinks on him made a conscious or not really 'slip of the tongue' and tell you that they are working in a new product that is going to change the Mobile phone sector forever call it the 'P-Phone'. Among the features of this new 'smartphone' is a touch screen never seen before, a digital camera, a beautiful design, etc etc etc.

Next day you go back to the office and put a couple of analyst to research the hell out of 'Pineapple inc', you put a couple of other tech consultants to research the mobile tech trends and etc, and another to tell you about the leading company in the sector 'Nokia' that control 91% of the world consumers mobile phones....etc etc

You got your reports back and you see 'Pineapple inc' stock is well undervalue, the new technologies could definitively a game changer and the competition is complete lost and behind the new technologies.

You run a few models and reach the conclusion that you want to BUY stock XYZ at $3.00 as soon as possible before everybody else jump on the wagon with the expectations to cash 50% of the portfolio at $15.xx if the actual announcement ever happen and after you evaluate the reaction in consumers before clearing all or holding and adding....

Time passes and you got your answer when the launch of the new P-Phone is a game changer success and the consumer reaction is all but frantic...

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You let the first few months pass, cash your main position at $15 making a killer to your investors and notice that Nokia market share start plummeting, etc etc etc ... would you close all because you trade expectations and sell facts blindly ? or you revaluate expectations to see what comes next?

...chart is self explanatory .... the trend unfolds on every announcement of new product and each % drop in market share by the competition...until suddenly your old friend and 'Midas King' suddenly pass in 2012 with stock in 'Pineapple inc' in literally the moon and market share of the P-Phone sharply descending given pass to the new King (android etc etc) ...what do you do? have expectations changed? let assume yes....would you sell the next fact this time ? (e.g in the launch of the 'Pineapple inc' P-Phone 7.D.V.RS T extra BOLD XAX. SE model that nobody cares any longer) ...

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #145,612
  • Nov 24, 2016 7:59am Nov 24, 2016 7:59am
Happy Thanksgiving
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  • #145,613
  • Nov 24, 2016 8:13am Nov 24, 2016 8:13am
Quoting sisse
{quote} Yes you got it. Despite any levels, that sounds like a proper framework to build your next trades. {quote} Ok stop right there!!! You are going to the dark side trying to create a one theory fits all, which defeats the whole purpose of the conversation in the last few months. --> Who told you that buy/sell expectation necessarily means sell/buy the fact?. The only premises are: -> markets and smart money always trade expectations first and deal with fact later, and; -> the sooner you realise that the better your position and less...
hmmm, cool, so if I understand it well - and your illustration of the pineapple company is perfect for explanation!!!:

the market moves are driven by a prevailing expectation forces which together create something as a continuum of expectations (= translated into continuum of price movement = trend) driving the price in a direction and with a force determined by composed power of expectations in each particular time - however, the force of expectations elements can vary = this translates into different flow of the price in time!!!!. So in FX we identify macro/risk/monetary expectations as they are the drivers.

Example: also based on your FED/ECB account of exp. from some previous posts.

I.e.

last short term E/U leg: positive macro (+ expectations of fiscal stimulus) + risk-on (in US equities) = relevant but kind of marginal in force. Main driver which adds to those 2: expectation of DEC hikes - drives price to the extreme of mid term range - if hike = 0 change to price (100% exp priced in). Expectaions (hike) = fact (hike).

BUT: hike is only part of the FED equation - the rest of the monetary expectations relate to the further monetary stance - i.e. short + mid term stance - what are market exp. = some lvl of hawkish FED - these expectations also participated on recent short term leg!!! (they are a reaction to macro + potentional fiscal stimulus = .....

So the scenarios are (of course its more complex with EUR side and ECB - but for the sake of argument - we take only USD = EUR ceteris paribus):

Non-Hike is out of question (would be extreme flop):

BUT

1) if we accept as fact that markets right now (today) expect FED slightly hawkish - and with light calendar until NFP we dont see anything to change it = we switch to neutral (as you sisse did before) - and if that expectations remain til FED and FED is slightly hawkish = 0 move in price (expectations = fact) = we stay neutral!!

2) if expectations remain for slightly hawkish FED but we get Dovish FED/no hike = triggering a short term bounce/leg from the extreme mid term range = either we stay neutral to get to the upper extreme of short term range (mid term flip???) or we even go short term buy on FED flop (depending on size of a flop)

3) if expectations remain til the fact for slightly hawkish FED - as a trigger of the momentum break will be decisively hawkish FED - violent and quick move!!! In that moment we would go for short term sell - to get the clean sweep on W and finish the main mid term target.

However, we have imminent break down alerts (TA perspective!!!) + changed to short term sell (FA perspective) = reason?? markets attacking the lows (TA) + seem to be pricing in more hawkish FED (FA; we originally thought the exp. would be stable til at least NFP - overshoot NFP could have been an intuitive trigger of the imminent break down alerts as seem on technical side) - however, as for now its more like flirting with no hard data and with most of the traders on holiday = we dont trade the alertsk!!

So right now: the floor can break with first solid opportinuty (NFP, maybe some other macro next week - ISM etc.) - what it means? The price is preempting FED = the stakes for hawkish FED could get higher easily (along with better macro) = if FED delivers hawkish more than hawkish is expected now, i.e. as hawkish as may be expected if the stakes of hawkishness get higher = 0 change to price by the time of FACT - and so FED and price can meet each other very close to the next mid term target or at least in the terminating phase of the next short term leg - and FED moment can be irrelevant for price.

P.S.: this is more like an exersice for me to better internalize what you have been saying in your post about expectations, which always help me to get out of my too linear, rational, simple model thinking Any comment welcomed. Thank you!!!!!!!
  • #145,614
  • Nov 24, 2016 9:24am Nov 24, 2016 9:24am
Quoting sisse
{quote} We are in sell mid term since few minutes after the Brexit vote was clear and unavoidable [check back post for live context and more details] ... Yes last time was back in Nov / Dec 2015 +/- same timing. Difference is US economy is a lot stronger but EZ economy is also clear of the Debt/Greek drama and forming a solid bottom. Trump unlocked inflation for sharper hikes outlooks while EZ is on the verge of starting the end of QE. Risk is still lean toward Europe via Brexit ... sisse
Sorry, catching up slowly- I know you have several conversations going currently. I'm defending a neutral outlook b/c of the following:

Fundamental:

  1. yes, midterm was sell due to brexit however; brexit vote has proven to be nothing more than an arguing point so far. The establishment although idiots are fighting the vote at every turn effectively kicking the can continually...for how long? March is current deadline...we could be talking years
  2. FED DEC rates are priced in, with hikes next year too far in the horizon to trade until at least Q1 '17, plus FED reputation to kick the can
  3. ECB tapering isn't relevant until March '17

Technical:

  1. Bottom of multi year range, last chance mofus, yadda yadda yadda
  2. shorting into multi year support after ~800 pip drop??
  3. likely short squeeze into 1.07 handle

My point is (and thus my opinion), without another catalyst (tapering, rate talk, brexit heating up, trump crazy, etc) the lows should not see a momentum break. The notion that they aren't defended?? lol...

Now- your momentum break and mine maybe different, 1.0460 wouldn't be too concerning in regards to my TA analysis / RR / leverage / yadda yadda and still within my map's extreme. I think that should be put into perspective in regards to actual trading....

  • #145,615
  • Nov 24, 2016 9:45am Nov 24, 2016 9:45am
@chester- I like your breakdown, I believe that would put us on the same page however; I'd possible be pricing it early instead of waiting for the fact- which could pay off handsomely in case #2...but unlikely

If I took your explanation then I'd be and early bird in camp #1 whereas I believe sisse is in camp #3

Anyways, time to go help the girlfriend cook...she's yelling at me already.
  • #145,616
  • Nov 24, 2016 10:24am Nov 24, 2016 10:24am
The trajectroy of Santa's magic sleigh is the same as the trendline of the S&P, at least til the end of the year. Only Grinch Hillary can spoil the fairy tale if she makes a move to deligitimize the election of the King of Debt

http://www.cnbc.com/2016/11/23/fed-i...isor-says.html

http://theakumalian.com/images/2010/...a%20sleigh.jpg
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,617
  • Nov 24, 2016 10:38am Nov 24, 2016 10:38am
sisse,

Man you spend a lot of time educating us. I'm so amazed and impressed. Hope someday our paths cross. You give so much time and info that is so invaluable! Lately all I can do is read and wait for others to respond.

Loved the illustration w Chester123!!!! If I am honest, you guys are so educated; and, I can get lost rather quickly in this forest of knowledge. Thanks for teaching us here and all the info!

I agree w this main part from Chester123 for market conditions now:

3) if expectations remain til the fact for slightly hawkish FED - as a trigger of the momentum break will be decisively hawkish FED - violent and quick move!!! In that moment we would go for short term sell - to get the clean sweep on W and finish the main mid term target.

Pharm0r, I wish you the best and love your posts along w the rest of the gang here. Getting some flack for being on here as well and neglecting my dishes for today from my gf too. She said she gave me something already this morning to be thankful for and that isn't anything to take for granted in the Short, Mid or Long Term or on any part of the Leg!

All the Best Team! Great year of learning and actually earning!!!
  • #145,618
  • Nov 24, 2016 11:07am Nov 24, 2016 11:07am
Quoting Pharm0r
{quote} Sorry, catching up slowly- I know you have several conversations going currently. I'm defending a neutral outlook b/c of the following: Fundamental: yes, midterm was sell due to brexit however; brexit vote has proven to be nothing more than an arguing point so far. The establishment although idiots are fighting the vote at every turn effectively kicking the can continually...for how long? March is current deadline...we could be talking years FED DEC rates are priced in, with hikes next year too far in the horizon to trade until at least...
You have to stop thinking in terms of pips of drop and what that means for countinuation. You know how many stocks, currencies, or other istruments on regular basis drop or rally in volatility equal to 800 pips and then double that in straight line? It is happening on daily basis on some instrument just find it. Bounce can happen or it doesnt, look for micros, if micros have nothing there is absolutely no way that there can be mid term leg having anything, the key is to have pattern search inside of micro, if you buy/sell straight support or resistance without micro you cant see it. The key problem of staying away "after 800 pips drop" is that you can miss massive trends and extended legs if you dont follow the leg structure correctly.
  • #145,619
  • Nov 24, 2016 11:08am Nov 24, 2016 11:08am
http://theweek.com/articles/663532/r...-deficit-again

Tax cuts and deficit spending....meet the new Boss, same as the old Boss.....
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"If The Fool persists in his Folly he will become wise." - William Blake
  • #145,620
  • Nov 24, 2016 11:08am Nov 24, 2016 11:08am
After just reading all the stuff repeatedly I really feel lost in the forest same as imarich .. @pharm0r I think I am with you in the camp1 and sisse I really I guess commenting in camp3 .. the whole day was continuously reading and digesting .... Headache started ... Going to bed will again read tomorrow .... 
Expectations becomes facts ... Then we trade facts .... But in between there is again somewhere some expectations is being cooked @ more then 200°C ... Which we might call it a game changer .... 
Re-Incarnated
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