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Trading the Cable swings via averages

  • #121
  • Nov 22, 2018 6:01pm Nov 22, 2018 6:01pm
Quoting diamonddbw
Must say I'm getting a bit thrown by divergence, as used here. I'm certain that your methods are sound, it's just that chart in #108 has me befuddled. Below is a simple chart of regular and hidden divergence. Identifying the difference used to be confusing until I noticed lines drawn on the tops of price and oscillator forebode of a price fall. Whereas price drawn on bottoms indicate chances improved for a move up. Or, simply put, "Top Down, Bottoms Up". No need to name the beast. {image}
I have no idea why you brought this up. I was showing you the relationship of the divergences contained only on the RSI and how we get many more than the regular ones you have shown.
  • #122
  • Nov 22, 2018 6:07pm Nov 22, 2018 6:07pm
Quoting Nala66
{quote} I have no idea why you brought this up. I was showing you the relationship of the divergences contained only on the RSI and how we get many more than the regular ones you have shown.
++++++++++++++++++++++++++

Just trying to get a grasp on how and why. I'll hold further comments whilst this unfolds.
  • #123
  • Nov 22, 2018 6:11pm Nov 22, 2018 6:11pm
Quoting Jazz1964
how to read divergence, on bar close or on price extreme can give different results as shown here Can you pls shine your light on this? {image}
Not everything is a divergence, if it was that simple we would all be rich very quickly.

For example one of the most common moves is the good old AB=CD of the swings. Again on the higher time frame (1Hour) these give us an idea of direction.

Here on the 1 hour chart you can see the latest two..
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  • #124
  • Nov 22, 2018 6:12pm Nov 22, 2018 6:12pm
Quoting diamonddbw
{quote} ++++++++++++++++++++++++++ Just trying to get a grasp on how and why. I'll hold further comments whilst this unfolds.
Thanks... I don't mind comments at all as long as they are relevant to what I am try to say. This is very difficult to do I just a few words.
  • #125
  • Nov 22, 2018 6:35pm Nov 22, 2018 6:35pm
Recap..

So now I have shown you a couple of ways you can you can get a handle on the direction from the higher times frames.

You have seen how mostly the market begins to move from bar 108.

You have seen how price pulls the 26EMA to make a HH or LL or indeed fails the attempt.

You have seen how I make compounding entries and how I aim for 40 pips above my last entry to make my money.

You have seen how I setup the charts so I can see all these things very clearly.

Now moving onto what I look for as support...
  • #126
  • Nov 22, 2018 6:55pm Nov 22, 2018 6:55pm
Just as there are many forms of divergence there are equally many forms of Support and Resistance.

I am not really interested in resistance what I am looking for is the fact that one side or the other (bulls or bears) have FOUND support for the current move they are about to make.

Look at this 5 min chart below to see how these things all come together and then I will explain what I mean by support.
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  • #127
  • Nov 22, 2018 7:47pm Nov 22, 2018 7:47pm
Firstly we should be aware of flattish markets, these are a warning of big things to come and the unwary trying to grab scalps can easily get caught on the wrong side and receive a severe finger burning.

The trouble is we do not know how long these flat spots are going to persist so we have to be very careful and busy plotting the charts for the story that may unfold quicker than we can say SH*T what happened?

We look hard for the signals that something is up and about to happen. You simply do not have time to slip out for a coffee when working, this will have to wait until you get your stops to break even. I am not joking, this is a very busy time where you need a clear head and no distractions.

Using the same section of chart as above and in this case looking at the bulls finding support. We see this...
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  • #128
  • Nov 22, 2018 8:12pm Nov 22, 2018 8:12pm
Both price and the RSI have formed a distinct pivot, price above the EMA and RSI above the waterline (50%). Not confirmation as yet but worthy of our my first entry with the stop just below the wick (very tight, low risk).

This happens most of the time on the 5 min chart.

Then we see the bears are failing to recross, the fast RSI gets below the blue but we see failure to cross the EMA. A good reason for my second entry and moving the stop. A two bar test at this point gives me the third and final entry and again moving the stops ASAP until all are at the minimum of break even above the last entry.

Only now can we take a break but as you see from this example the whole thing took less than an hour to make an incredible $3,000 bucks for a very tiny risk.

These moves do not happen every day because of the setup and execution processes.

Generally we would scalp the setup and trade the execution.
………………..………………….

Look what happens next having hit the AB=CD target. The price came all the way back to test the support but look at the RSI. It is a sure bet it is not going to take out the support. Another trade we could have taken long. The fast RSI has bottomed out and the whole thing ends up back above the 26EMA.

Note how the bears never FOUND support for their move down and the whole thing just flattens out again to give us time to count the cash.
  • #129
  • Nov 22, 2018 8:32pm Nov 22, 2018 8:32pm
Now when we get support we have a valley for the bulls and a peak for the bears but I always draw the line on the appropriate wicks and if these are broken then my stop is hit because that is where I would put it.

Remember I want to risk as little as possible and a warning here is due to NEVER ADD TO A LOSING TRADE. People only do that with good skills, small entries, large accounts. My rationale is completely different, I do the pushing as hard as I can, I don't let the market push me.

See how it works:.

Smallish test entry, second more encouraged entry, even more confident entry.

The potential for making far more money than I risk is foremost in my opinion.

I spend very little time at the PC and relatively not long in a trade, tiny losses versus huge wins.

Sometimes I see nothing so I simply don't trade at all, it is not compulsory it is an option.

(Must keep saving in case of power outages)
  • #130
  • Nov 22, 2018 8:51pm Nov 22, 2018 8:51pm
How do we find these AB=CD's.

Well for a long time I was using my Quartile tool and my good friend Gentleman Jock (He probably fell off his chair calling him that) uses the Fib very effectively.

However there is a much simpler way in the from of a line drawn from the swing low to the swing high (or vice versa) and the dot in the middle of the line gives me the 50% retrace level where I can start to look for the trade.

These things happen on all time frames so even at the 5 min time we can look for the smaller trades we can take as potential scalps.

A scalp to me is where I only ever get the first trade on. However one can build up a nice pot of money in readiness for the bigger trades.

No doubt I have missed something out but my head is spinning as I attempt to put all this into words so I am going to take a break and await questions.
  • #131
  • Nov 22, 2018 10:31pm Nov 22, 2018 10:31pm
Quoting Nala66
How do we find these AB=CD's. Well for a long time I was using my Quartile tool and my good friend Gentleman Jock (He probably fell off his chair calling him that) uses the Fib very effectively. However there is a much simpler way in the from of a line drawn from the swing low to the swing high (or vice versa) and the dot in the middle of the line gives me the 50% retrace level where I can start to look for the trade. These things happen on all time frames so even at the 5 min time we can look for the smaller trades we can take as potential scalps....
great work Nala. You read the charts like a map
i have tried to start trades with a trend, now i prefer to follow the trend
  • #132
  • Nov 22, 2018 10:58pm Nov 22, 2018 10:58pm
Quoting jereajali
{quote} great work Nala. You read the charts like a map
Thanks...

This is what I am seeing on the 5 min chart at this time.

Now if I was a market maker I would drop in a hurry to somewhere around C to take out all the stops from folks going long. Then I would switch and head for D.

But I don't know what trick they have in mind.
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  • #133
  • Nov 22, 2018 11:37pm Nov 22, 2018 11:37pm
Quoting Nala66
{quote} ~~But I don't know what trick they have in mind.
In this example given that price did not bounce off C and "time wise" has extended well pass D, at what point would you cancel the trade?

Edit: Just acknowledging we have not got to bar 108 yet.
Good Trading
  • #134
  • Nov 23, 2018 12:48am Nov 23, 2018 12:48am
Quoting aud
{quote} In this example given that price did not bounce off C and "time wise" has extended well pass D, at what point would you cancel the trade? Edit: Just acknowledging we have not got to bar 108 yet.
You are correct but I am looking at the bounce where it flattened out after the volatility of the previous move. I could well be wrong but the point is to be plotting the potential possibilities of measured moves.

As far as time wise goes it can take as long as it likes until it thinks you have forgotten about it. Who knows the tricks and traps being made.

The market hasn't quite been as flat as this in a long time and that is a worry. Looking at the chart below (5min) we see there are no more swings to pass until it gets to 3014 so we may see some fiendish moves today. But That is speculation, I need to see some form of evidence to support the move upwards or downwards.
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  • #135
  • Nov 23, 2018 12:52am Nov 23, 2018 12:52am
Quoting Nala66
Generally we would scalp the setup and trade the execution. ………………..………………….
Are you using the same 1st lot size for both scenarios?
  • #136
  • Nov 23, 2018 6:05am Nov 23, 2018 6:05am
Trying to get a feel for it
Arrows drawn 'live'.
I'm not sure if I would have reached the target due to divergence which I would not have ignored.

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Trading S/R with PA only. No indicators anymore!
  • #137
  • Nov 23, 2018 6:24am Nov 23, 2018 6:24am
Quoting MrMagnet
{quote} Are you using the same 1st lot size for both scenarios?
Yes because I would not be sure if the scalp could turn into a trade.
  • #138
  • Nov 23, 2018 6:33am Nov 23, 2018 6:33am
Why are you limiting yourself to a single instrument?
Necessity knows no law except to conquer
  • #139
  • Nov 23, 2018 6:54am Nov 23, 2018 6:54am
Quoting Jazz1964
Trying to get a feel for it Arrows drawn 'live'. I'm not sure if I would have reached the target due to divergence which I would not have ignored. {image}
Very good work Jazz, The divergence came at the target anyway so a nice winning result,,, Here's my chart
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  • #140
  • Nov 23, 2018 5:03pm Nov 23, 2018 5:03pm
On the 1h chart there was a failed retest before London open so there was a clue it was going down and on the 1m chart I can see the 2 divergences at support where there would be entries. If I would have taken the 1st entry I would have been stopped out by moving my stop to break even. What is your process for stops for the 3 entries if using the 1m or the 5m charts as well.
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