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Multiple Divergencences in a row

  • #41
  • May 9, 2018 9:03am May 9, 2018 9:03am
With no volume in forex, that would be the reason to study and understand wide range bars. Wide range bars are expressions of energy spent. That is the essence of a market. The market maker pursues liquidity to fill the large orders. It's all we get for info.

Try an ATR (average true range) of 1 with bars on a 15 minute chart and see how the 2 or 3 largest bars of each day dictate. After that just tracking higher highs and higher lows or lower lows and lower highs, followed by each pullback. Your ability to judge the condition of a market will improve significantly.

An example of what I'm talking about on the U/J with a 20 minute chart.
Attached Image (click to enlarge)
Click to Enlarge Name: Yen pic 3.png Size: 52 KB
  • #42
  • May 9, 2018 12:23pm May 9, 2018 12:23pm
Quoting Sossos
With no volume in forex, that would be the reason to study and understand wide range bars. Wide range bars are expressions of energy spent. That is the essence of a market. The market maker pursues liquidity to fill the large orders. It's all we get for info. Try an ATR (average true range) of 1 with bars on a 15 minute chart and see how the 2 or 3 largest bars of each day dictate. After that just tracking higher highs and higher lows or lower lows and lower highs, followed by each pullback. Your ability to judge the condition of a market will improve...
Thanks. I need to study Wide Range Bars in relation to the current strategy we talk about. I will get back. If you have some material/book on this WRB please do share
  • #43
  • May 9, 2018 1:06pm May 9, 2018 1:06pm
My suggestion is to take a set amount of time each day or week and go back on your charts and study what happens after WRB's. The ATR helps to identify the singles, but you have look a little harder for the sets of 2 or 3. Also choose just a couple of pairs. Then watch and study those 2 charts. See and study every WRB that happens. After some time you will see how the WRB's fit into each swing. How some of them go nowhere, some hardly get retraced and some get retraced back to the ignition point. It will take time but YOU will own it. YOU will know what you know about it. Don't look at 4 or 40 of them and expect to know all you need to know. Try 4,000 of them, then YOU will own it. I'll make this guarantee. If you study 4,000 WRB's diligently, it will change how you look at a chart and you will automatically be a better trader than most.

I have studies the Andrews median line course for a few years now and there are concepts of Newtonian physics that apply very well in markets. The catch is that a really firm understanding of basic structure and price action go a long way in making the median lines sing. Studying Andrews transformed my trading and my view of charts. I had to start by gaining an understanding of structure as a base.

You will be building your base!!!!
  • #44
  • May 9, 2018 2:32pm May 9, 2018 2:32pm
Quoting Sossos
My suggestion is to take a set amount of time each day or week and go back on your charts and study what happens after WRB's. The ATR helps to identify the singles, but you have look a little harder for the sets of 2 or 3. Also choose just a couple of pairs. Then watch and study those 2 charts. See and study every WRB that happens. After some time you will see how the WRB's fit into each swing. How some of them go nowhere, some hardly get retraced and some get retraced back to the ignition point. It will take time but YOU will own it. YOU will know...
what would you recommend on learning about structure?
  • #45
  • May 9, 2018 8:20pm May 9, 2018 8:20pm
Self teaching is best. But I don't know what you know or don't know! If you self teach you can call things whatever you want to call them.

A list by common name.
Swings
Pivots/wash and rinse
Wide range bars
Major retracements
Minor retracements
Micro retracements
Higher highs and higher lows - upward flow
Lower lows and lower highs - downward flow
Expanding pivot
Inverted expanded pivot
Equal sized pivot
Bar by bar price action.
Multiple pivot lines
Entry bars
Pivot counting
Gaps
Stop placement
Impulsive waves
Condition of a market
Time

That is a fairly comprehensive list. Pick one or two and start. My suggestion is swings and what happens after wide range bars. Don't look for where the trade would be, but compare. Look for differences. Ask why? why there? Become a two year old that constantly asks, why?

Sorry you asked? But if you want to trade well...........
  • #46
  • May 9, 2018 9:03pm May 9, 2018 9:03pm
Quoting Sossos
My suggestion is to take a set amount of time each day or week and go back on your charts and study what happens after WRB's. The ATR helps to identify the singles, but you have look a little harder for the sets of 2 or 3. Also choose just a couple of pairs. Then watch and study those 2 charts. See and study every WRB that happens. After some time you will see how the WRB's fit into each swing. How some of them go nowhere, some hardly get retraced and some get retraced back to the ignition point. It will take time but YOU will own it. YOU will know...
I've been doing trend structure marking (i.e. Swing analysis) in the charts to ascertain what price is doing. Sometimes, the pullback is straight forward but they get complex as well. In such cases, marking where the pullback ends is subjective. Out of my limited reading and myself marking them, I realise that trend structure drawings can't be fully objective. Does Median line course provide some guidance to strengthen the fundamentals?
  • #47
  • May 10, 2018 5:00am May 10, 2018 5:00am
Quoting Sossos
Self teaching is best. But I don't know what you know or don't know! If you self teach you can call things whatever you want to call them. A list by common name. Swings Pivots/wash and rinse Wide range bars Major retracements Minor retracements Micro retracements Higher highs and higher lows - upward flow Lower lows and lower highs - downward flow Expanding pivot Inverted expanded pivot Equal sized pivot Bar by bar price action. Multiple pivot lines Entry bars Pivot counting Gaps Stop placement Impulsive waves Condition of a market Time That is...
.
haha kind of ...i was expecting the study of HH and HL but i want to learn more where can i read about all the others?
  • #48
  • May 10, 2018 7:06am May 10, 2018 7:06am
Quoting rmchokku
{quote} I've been doing trend structure marking (i.e. Swing analysis) in the charts to ascertain what price is doing. Sometimes, the pullback is straight forward but they get complex as well. In such cases, marking where the pullback ends is subjective. Out of my limited reading and myself marking them, I realise that trend structure drawings can't be fully objective. Does Median line course provide some guidance to strengthen the fundamentals?

Median lines are projections. Understanding price action when price gets to each line is a must. On the other hand well drawn lines reveal price action.



To answer vladutz112, I've never found a comprehensive book that covers what I listed. Most authors use indicators. The closest thing I've found is Market Geometry. They have a M/W/F class that costs $179.00 a month. Other more in depth classes are more expensive but dive into things that I haven't mentioned. The teacher of those classes is Tim Morge (only 3 masters degrees).

Just to give you an idea. I've studied Elliott Wave, Moon cycles (Gann), Robert Miner's Dynamic Trading, Fibs, Ichimocu, Harmonic patterns, Hurst, Bressert and cycles and I'm sure I've missed some. Plus I've put on my chart virtually every indicator that a platform offers and I've ended up looking at naked charts. 12 years I've studied this stuff and I draw a few lines now and then but mostly watch what my markets are doing and when I recognize something, I join in the fun.
  • #49
  • May 10, 2018 7:15am May 10, 2018 7:15am
Quoting Sossos
{quote} Median lines are projections. Understanding price action when price gets to each line is a must. On the other hand well drawn lines reveal price action. To answer vladutz112, I've never found a comprehensive book that covers what I listed. Most authors use indicators. The closest thing I've found is Market Geometry. They have a M/W/F class that costs $179.00 a month. Other more in depth classes are more expensive but dive into things that I haven't mentioned. The teacher of those classes is Tim Morge (only 3 masters degrees). Just to give...
do u think it is possible to know all the time what the market will do?
  • #50
  • May 10, 2018 9:40am May 10, 2018 9:40am
No. But you can see and understand it enough by looking for specific things to take a chunk out every now and then.

An example would be if you studied the wide range bar and what happens after each one. You then could build a trade plan around that knowledge. The same would apply to any structure you would choose to study. The beautiful thing is along the way you also learn about some of the other structures by osmosis. The more you study about a specific structure the more you see the other structures. Please don't study by looking where a trade would be. Think about it, if you understand a structure the trade will fall into your lap automatically. You'll just know.

My mentor would tell me to trade easy when it's easy.

The trick is to gather enough knowledge that YOU understand for YOU to take trades that YOU understand why your doing it. What somebody else is doing is not relevant. Sorry to say it will take more than a week. But a worthwhile journey starts with the first step. Be your own best teacher
  • #51
  • May 10, 2018 10:36am May 10, 2018 10:36am
Quoting Sossos
No. But you can see and understand it enough by looking for specific things to take a chunk out every now and then. An example would be if you studied the wide range bar and what happens after each one. You then could build a trade plan around that knowledge. The same would apply to any structure you would choose to study. The beautiful thing is along the way you also learn about some of the other structures by osmosis. The more you study about a specific structure the more you see the other structures. Please don't study by looking where a trade...
ok thank you for answering i have one more question since you have so much experience my trading style goes very well untill the market starts to make HH-LL-LH-HH basically a choppy market is there any way on how to avoid this?
  • #52
  • May 10, 2018 12:09pm May 10, 2018 12:09pm
Losing trades are our cost of doing business.

What is the market doing before it goes into this condition? That's the first question I would ask. What leads to what? If the market has had a good long flow, it's going to take a breath. It's very common for a market to run hard in one direction making traders chase it, then after that long run it will chop all those chasers to pieces as they hope for the flow to resume.

Try taking your winners and loser and compare them. Is there a bar or two that leaves a hint. A lot of times a market will take out a minor low and go back into it's flow, it just needed the stop hunt for liquidity. Find the commonality of your losers and learn to identify them before you get into them. But sometimes you are just wrong. My losers are usually over and done with in just a couple of bars. I was wrong and I move on. If your platform takes screen shots use that tool so you can study your weeks trading at the end of the week. Studying the losers with bear fruit in time

Track your winner and losers by way of percentage of wins and loses but also by the ratio of reward to risk. If you have a 3 to 1 reward to risk ratio and a 50% win rate, you will still make money. The key in capital management is to be consistent with your risk. That way you eliminate trade bias. So set a percentage of your capital, like 1% or 2% and stick with it. As your capital rises, so will the size of you trades. If your capital falls then the size of your trades will fall, protecting you from losing it all.
  • #53
  • May 12, 2018 11:54am May 12, 2018 11:54am
Guys thank you for your discussions here. I have read them all and I am definitely going to try some of the suggestions here.

To get back on the thread title, I have tried several technical tools and techniques (T&T) in order to define an almost precise system to use multi divergence in a row.
I will try to explain it in different posts, and afterwards I will definitely post numerous examples in which I believe this system might just work like a charm.

Now I know there is nothing called "the golden system" or "flawless strategy" or stuff like that, but I believe using different T&T, along side with this strategy, might help us mitigate the risk and significantly improve our success probability.

Money management is of grave importance since you will be entering multiple trades. The further the trend goes and makes a new divergence, the harder it will get to observe risk management rules. This will be talked about.
The T&T will be explained.
The SL and TP will be shown on examples.
  • #54
  • May 12, 2018 12:04pm May 12, 2018 12:04pm
Update will be here in 12-14 hours.
I need to rest for now.
  • #55
  • May 12, 2018 12:41pm May 12, 2018 12:41pm
Quoting saoshyant
Update will be here in 12-14 hours. I need to rest for now.
great...will be waiting
  • #56
  • May 12, 2018 11:41pm May 12, 2018 11:41pm
Strategy Rules:
Guys, the first rule in this strategy is to choose the right currency pairs. I have realized that some pairs, specially those which CHF is a part of, CANNOT be traded using this strategy. I recommend GBPJPY or USDJPY for this strategy. I will yet have to check other pairs to see which other pairs can be used in this. (WILL UPDATE IN THE FUTURE)

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The tools and techniques I'm using in this strategy are:
1. Relative Strength Index
2. RSIOMA Light
3. Advanced ADX
4. Some chart patterns (Wolfe, AB=CD, Three drive, ...)
5. Different types of fibo
6. Support/Resistant lines
7. Candlestick Patterns
8. Trend direction analysis
Remember you can always combine this strategy with other T&T you might know in order to maximize your success rate.

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The TF for this strategy is usually M15, M30, H1. So it will be useful to those daily traders.

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Money management should be done very carefully, since you will probably be entering several Sell or several Buy trades. I recommend for every 1000$ of equity, between 0.04 to 0.1 lot for the total amount of trades

1000$ Equity Money Management Plan:
Risk Lover:
Start with 0.01 and add to the next trades' lot size, meaning 0.01, 0.02, 0.03, ... . The number of trades should be limited to a maximum of 4-5, resulting in 0.1 lot size in total. (EXAMPLE 0.01+0.02+0.03+0.04=0.1)

Risk Neutral:
Start with 0.01 and keep the lot size at 0.01 for the next trades, until the last trades of which you are certain a reversal is imminent. They should be 0.02 or 0.03 lot size. (EXAMPLE 0.01+0.01+0.01+0.03= 0.06)

Risk Averse:
All trades should be 0.01. Try not to enter a trade on a weak divergence. The number of trades are generally restricted to 3-4
(EXAMPLE 0.01+0.01+0.01+0.01= 0.04)

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  • #57
  • Edited May 13, 2018 1:12am May 12, 2018 11:42pm | Edited May 13, 2018 1:12am
Strategy steps are:
1. Get RSI in a separate window.

2. Get RSIOMA Light in the same window as RSI

3. Get Advanced ADX in a separate window.

4. Analyze the chart using the TFs mentioned and focus on M15 and M30.

5. Find a divergence, look for a reversal candlestick pattern and enter the first trade.

6. Wait for the divergence to reverse the trend and exit the trade with 1 divergence OR in case it went on, wait for the next divergence to form. Enter the next trade when you see the next reversal candlestick pattern and and continue this approach until you have 3 to 5 trades. You can use resistant lines starting from the first HH to the next HH in order to anticipate the probably reversal zone for the next divergences. Remember to only enter a trade when you see enough confirmation through other T&T. Also use Fibo T&T. (In case you don't know how to exactly use this, let me know and I will explain)

7. The trend reversal will start and move down until the RSIOMA is below 30-20%. Also the exact confirmation point to exit the trades is in Advanced ADX (AA). When you see the bars of AA in red and they are building up it is time to get ready to exit the trades. The red trend in AA is rising until the first bar is closed with lower value than the previous bar AND usually it is near the level in which you first started trading; it is your exit point.

8. Put SL of all trades behind 127% of the last correction trend.

9. The TP (exit point) is usually around at 50% fibo ret of the whole movement. (remember to use other T&T in different cases to predict the most probable exit zone. T&T are trend lines, support lines, channels, fibo ret levels, fibo expansion levels, ...)
  • #58
  • Edited May 13, 2018 1:10am May 12, 2018 11:50pm | Edited May 13, 2018 1:10am
I will now demonstrate a number of examples in order to clarify this strategy.
Remember our first example on GBPJPY.
Now look at the first photo below.
The light green vertical lines are the trade entry points. As you can see multiple divergences are forming using RSI or even RSIOMA versus the trend itself.
The exit point is at 50% fibo ret. , in which RSIOMA is around 20-30% .
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY 01.png Size: 54 KB


In this photo you will see the AA reflection in which two important signals are shown. First the level around the first trade in AA (red horizontal line) , and second the first change in red AA trend ( the grey square in AA)
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY 02.png Size: 50 KB
  • #59
  • May 12, 2018 11:58pm May 12, 2018 11:58pm
The next example:
The gray circles are entry points.
The yellow line is the exit. (which is 50% ret, 20-30% RSIOMA and First trend reverse in AA)
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY 03.png Size: 65 KB
  • #60
  • May 13, 2018 12:01am May 13, 2018 12:01am
Next example.
Same rules.
Attached Image (click to enlarge)
Click to Enlarge Name: GBPJPY 04.png Size: 50 KB
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