Thread: How to properly use Technical Analysis

Hello that is 89866Wow CP I've read a lot of your posts and it has totally changed my way of believing.

I'm still fighting with all the price will continually close away from the open comment you made. Yes it will, but lower or higher lol. I figure if it is over the'line in the sand' then higher, below then lower - in terms of chance.

89866

Originally Posted by ;

While the 95% here are FF are just warming up (really, just stretching to get a warm up) the 1 percent are already working on Multi-dimensional Donchian Channels

Interesting modifiions to the normal Donchian Channel you have there. I will want to hear what else you have to say about it.

Guess is that the multi-donchs are just for highlighting potential areas for different periods / interval ceases to attempt to push into. Or at least to a range which has proven able to be exchanged inside.

If I am right I want a pony!

http://www.hasbro.com/mylittlepony/e...ittle_Pony.png

89866

Originally Posted by ;

preemptive guess is the multi-donchs are just for highlighting possible areas for different sessions / interval ceases to attempt to push . Or at least to specify a range that has proven able to be exchanged within.

Agreed, I do not think it's a great secret; resembles the lines are being plotted off candle highs and lows, which will be hardly more than fundamental S/R.

Reference lines that are a closely guarded secret, candlestick keys, secret methods of plotting Donchian stations that 95% of folk will never know.... I can't help grinning to myself, and wondering exactly what material might lie beneath the sales pitch that is expansive.

89866

Originally Posted by ;

Agreed, I don't think it's a great secret; resembles the lines are being plotted off candle highs and lows, that is hardly more than fundamental S/R.

Reference traces which are a closely guarded secret, candlestick secrets, secret methods of plotting Donchian stations that 95 percent of people won't ever understand.... I can't help grinning to myself, and wondering exactly what substance might lie under the expansive sales pitch.

Ideally ponies!!!

I think there's much more to it than just bog-standard s/r. There's maybe a belief arrangement tied-into using the defined channel and what it's boundaries represent and framework (particularly when they are moved outward, and even more-so if there's confluence). However, this is only me turning my own wheels.... Yeah.

89866hi,

buma just few queries, I watched your charts and your comments, sorry but you dont have proper background and understanding to teach others, such mad nonsense charts with comments like pinbar prepared sellers with stops above or institutions capturing amateurs promoting hanging man, it was just news driven movement sth using greece tranche and there were only a very small stoplosses likely....you dont have an idea how institutionals and guys trading big accounts put their stoplosses but I can tell you that at 95% cases its not above continue high on 5m chart because when you trade prop in 50-100 you cant afford scalping with wider spreads. U can observe this when there are squeezes when market is extremely long/short and stop losess are becoming filled and moving the market in oppossite direction when it runs at 200 pips off.

And on the technique and magical numbers you're presenting, is that a true egy with edge and you proven yourself with constant returns that it is profitable? If not then opened demonstration trades and backtesting that is bs anyway is insufficient.

Sorry for your offence and dont take it awful but its maybe better to understand and do some homework Before You Begin teaching others

89866

Originally Posted by ;

It is just a development of this DC with two stations instead of one. One for bulls (green) and one for bears (red). When the two channels align, market is determined, when they separate, either uptrend (green) or downtrend (red). CP has written about this before but this is the first time it has been shown by him. Thanks CP.

89866now Crucial point touched on the power of reference stage, and statistically (as coated on a thread regarding TF's here in FF, I said that price moves off from the open almost all of the period )
by ADR (typical displacement Range) price generally closes at a normal distance of 92 pips off or within open.

I said picking a directional bias to trade, reducing the probabilities piled.


But lets start with what is probability?

What occasion is very likely to happen?
How certain are you of such occurrence materializing?

So in order to calculate probabilities we need a sample space and a power collection.
By cutting back on the power set you decrease the odds of error right?

So our sample distance is the likelihood of two events happening.
1 = price will close above open
--------------
2 = price will close below open


= 50 percent of event happening.


That is the power of this open as a reference point.

So the question here is, will price close above or under open ?
Find the days that price is trading over fair market value.
do a risk assessment, not a profit expect.

If your entrance was wrong? What place will bring the least possible pain? Before you realize your mistake?

Now on to the hourly chart to find a clearer image of this, and out of here, how do I optimize profit, and decrease my risk? on to the five minute chart.

89866by the way I'm a day trader, but my personal experience so far is to not lose sight of This bigger picture and when day trading Tasked with the Likelihood of my Result in relationship with the daily candle

89866lets discuss RISK.

When initiating a situation one should always take into account the risk vulnerability.
That is why I say that the hope for profit ought to be taken away from our trading plogy.

Thinking I got to enter now or will overlook a lot of money generally gets you murdered

what's risk R(due to undesirable result )(expected loss)

so if appropriate analysis has been done, and you've got a place of interest (this can be a place that by virtue of all these tools you utilize to arrive to your decision, is the uncle point, or if price falls below or moves over this point your concept has been dis shown ) then it is simply logical to go into a position at the least possible distance from this field. As your anticipated loss will be less than foolishly entering a position at a greater distance of missing the bus.

The hope for profit will leave you holding an undesirable entry that requires confirmation, in order to shut if in reality you are wrong, so the expected loss will be much painful if the undesirable outcome materializes.

In case you figure out the opportunity cost minus risk, you may realize that it is far more expensive to expose your self from risk than to miss the bus.

And adverse equity growth by % of account grows exponentially as to recover 50 percent of your account, you would have to earn 100% profit from that point. And if a person fails to correct lot dimensions to account dimensions the risk exposure develops making the stacking the odds.

In easier words, select your entries wisely, when trading, constantly look for probabilities and risks, never wed your bias, in case there are more buyers than sellers and you are selling, no hope or rationalization in the world will save you from price turning from you.