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Trading the Cable swings via averages

  • #741
  • Dec 20, 2018 8:21am Dec 20, 2018 8:21am
Seems to me like a lot of you are getting the hang of it without my interfering.

Well done and keep practicing.

Take a leaf out of Riaan's book and keep squeezing out those 50 pips.

Actually the market is fairly tight, when things open up a tad we will again see those much larger and quicker moves.
  • #742
  • Dec 20, 2018 9:44am Dec 20, 2018 9:44am
Quoting Nala66
{quote} Yes it is exactly the same as regular divergence except the price bar snaps back so the divergence can no longer be seen... Hence hidden. Take a look at this piece of chart. The first of these divs is the better example. See how the price climbed higher than the previous pivot but the RSI did not (at the time) so it was sold down and closed looking nothing like a divergence anymore. The second example did exactly the same but it did not snap back enough to be hidden and ended as a regular divergence. {image}
Hi Alan,
Thank so much for clarifying definition about hidden divergence.
Just only thing I don't quite understand about 'previous pivot'.
As I guess 'pivot' on your posted chart was determined by highest close price from last peak (first hidden div) and highest close price from prev upbar (second hidden div), right?
Thanks Alan
  • #743
  • Dec 20, 2018 10:05am Dec 20, 2018 10:05am
Alan’s and Regular divergences, both bullish, on H1. Regular divergence, also bullish, on M5
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: GU M5 1220.png Size: 19 KB
  • #744
  • Dec 20, 2018 6:00pm Dec 20, 2018 6:00pm
Quoting Bydyke
Alan’s and Regular divergences, both bullish, on H1. Regular divergence, also bullish, on M5 {image} {image}
There was no regular divergence on this 1 hour
Attached Image
  • #745
  • Dec 20, 2018 6:08pm Dec 20, 2018 6:08pm
Here are the last two days of 50 pips on the 1 hour chart...

So on each of these two occasions we should be looking for additional short entries at the 5 min level.
Attached Image (click to enlarge)
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  • #746
  • Dec 20, 2018 7:13pm Dec 20, 2018 7:13pm
Quoting quangvision
{quote} Hi Alan, Thank so much for clarifying definition about hidden divergence. Just only thing I don't quite understand about 'previous pivot'. As I guess 'pivot' on your posted chart was determined by highest close price from last peak (first hidden div) and highest close price from prev upbar (second hidden div), right? Thanks Alan
That's OK lots of people have trouble with divergence. Trust me I could write an entire book just on this subject alone.

See here on this 1 hour chart I have pointed out 3 divergences.

Look at number 1, this is a regular bearish divergence and should return the price to the EMA and beyond. If it fails to do this then most often price will make HH. (Which was the case in this instance)

Now number 2 and 3 were exactly the same as number 1 except they snapped back to be hidden at the close. Notice how the following bars never climb above b so this is the place for the stop (2 pips above b).

Now on both of these last two occasions price did break the EMA so we have a minimum target to aim for and would be looking at the 5 min chart to indicate where we should close. We do this because even though 2 and 3 ended with a regular bullish divergence the number 3 was different, it made a major pullback before the actual divergence which we could have avoided. Now that major pullback was also a hidden div just to through some more confusion into the mix and again it crossed the EMA and also it was an RSI div to boot.

If we must continue just under the letter c of the 2nd div was another regular div again sending price back across the EMA. This time bears found support and attacked the swing low average stopping smack on it. (X)

That should present some study and perhaps a headache, I don't see any reason that I should have all the headaches
Attached Image (click to enlarge)
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  • #747
  • Dec 20, 2018 8:08pm Dec 20, 2018 8:08pm
Quoting Nala66
Here are the last two days of 50 pips on the 1 hour chart... So on each of these two occasions we should be looking for additional short entries at the 5 min level. {image}


Alan, is that actually a divergence at the first point? The price is sloping downwards rather than upwards (with the SMA 1 at the close as the consideration)
  • #748
  • Dec 20, 2018 8:15pm Dec 20, 2018 8:15pm
Quoting Nala66
{quote} There was no regular divergence on this 1 hour {image}
I thought that is an example of hidden divergence. The under-side price movement is upwards while the corresponding under-side slow
RSI movement is flat
  • #749
  • Edited 11:20pm Dec 20, 2018 9:05pm | Edited 11:20pm
Quoting Nala66
{quote} That's OK lots of people have trouble with divergence... That should present some study and perhaps a headache, I don't see any reason that I should have all the headaches {image}

Thanks for the challenge that you threw up. My take is as follows:
(1) From experience whenever such a signal shows up, PA will certainly go below the EMA average even if it doesn’t do so immediately.
I know you don’t like discussing other EMAs apart from EMA 26 but consider EMA 10. Once PA closes below or above it while trending, PA will eventually take that direction, even if it doesn’t do so immediately.
Let’s also consider EMA 200. If you had had EMA 200 on your chart, you will notice that at Point 1, PA was close to it but not really there. So, it is expected that PA will get back to it before plummeting. PA normally retraces at EMA 200 unless there is a continuation in which case there will be a clean break of EMA 200. In effect, EMA 200 is also very good in the charts. It is the magenta coloured line on my chart
(2) As you can see from my own chart, nos 2 and 3 are not divergences. However divergences should be expected at those points. What I do personally at those points, particularly when the fast RSI has touched level 80 or 20, is to switch to M5 and watch out for divergences and other candle signals for entry
Attached Image (click to enlarge)
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  • #750
  • Dec 21, 2018 12:55am Dec 21, 2018 12:55am
Got some positions on early as it was looking at crossing the EMA, waiting to put hedge on and then see where it continues. Happy trades everyone!
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life is a reflection of what we allow ourselves to see
  • #751
  • Dec 21, 2018 1:12am Dec 21, 2018 1:12am
Hedge on w Alans divergence....
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life is a reflection of what we allow ourselves to see
  • #752
  • Dec 21, 2018 2:40am Dec 21, 2018 2:40am
Quoting Bydyke
{quote} Alan, is that actually a divergence at the first point? The price is sloping downwards rather than upwards (with the SMA 1 at the close as the consideration)
Not on my chart the slope is uphill on the price.
  • #753
  • Dec 21, 2018 2:44am Dec 21, 2018 2:44am
Quoting Bydyke
{quote} I thought that is an example of hidden divergence. The under-side price movement is upwards while the corresponding under-side slow RSI movement is flat
If that were the case then is would be just divergence but I think your gold RSI should be sloping up also.

It is difficult to tell if you squash the RSI
  • #754
  • Dec 21, 2018 2:54am Dec 21, 2018 2:54am
Quoting Bydyke
{quote} Thanks for the challenge that you threw up. My take is as follows: (1) From experience whenever such a signal shows up, PA will certainly go below the EMA average even if it doesn’t do so immediately. I know you don’t like discussing other EMAs apart from EMA 26 but consider EMA 10. Once PA closes below or above it while trending, PA will eventually take that direction, even if it doesn’t do so immediately. Let’s also consider EMA 200. If you had had EMA 200 on your chart, you will notice that at Point 1, PA was close to it but not really...
Number 2 and 3 were hidden divergences as I explained in the text above.

Yes you should always drop to the lower time frame to gain the advantage of these signal.

You can put any EMA on the chart and it will gravitate to the price no matter what numbers you use. That is what an average does. We are not comparing price to the average.
  • #755
  • Dec 21, 2018 2:57am Dec 21, 2018 2:57am
Quoting mikeeating
Hedge on w Alans divergence.... {image}
There is no need for a stop above the hedge, you need to move it below the hedge entry.
  • #756
  • Dec 21, 2018 3:11am Dec 21, 2018 3:11am
Quoting Nala66
{quote} There is no need for a stop above the hedge, you need to move it below the hedge entry.
Hi Alan,
When should we move stop to below hedge entry?
  • #757
  • Dec 21, 2018 3:28am Dec 21, 2018 3:28am
Well I made close to 90 pips so far as I turned my hedge into my main trade. I couldn't get all entries on but at least the process is becoming consistent

Thanks again Alan for a great system, cant wait for next year

Merry Xmas!
Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSDM5.png Size: 23 KB
life is a reflection of what we allow ourselves to see
  • #758
  • Dec 21, 2018 5:26am Dec 21, 2018 5:26am
Quoting quangvision
{quote} Hi Alan, When should we move stop to below hedge entry?
You don't need to apply a stop to a hedge a all.
  • #759
  • Dec 21, 2018 5:34am Dec 21, 2018 5:34am
Quoting mikeeating
Well I made close to 90 pips so far as I turned my hedge into my main trade. I couldn't get all entries on but at least the process is becoming consistent Thanks again Alan for a great system, cant wait for next year Merry Xmas! {image}
Fantastic stuff.

However I am not following your reasoning for the short on the 5 min chart. The answer was on the 15 min chart....
Attached Image (click to enlarge)
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  • #760
  • Dec 21, 2018 6:17am Dec 21, 2018 6:17am
Quoting Nala66
{quote} If that were the case then is would be just divergence but I think your gold RSI should be sloping up also. It is difficult to tell if you squash the RSI

Squashing of RSI?

This is how I enmeshed the RSI's on my MT4 platform. From the indicator list I uploaded the Relative Strength Index (Gold colour) with period 14. Then from the Indicator List under the Navigator section on the left hand side of the platform, I dragged RSI with period 5 (Dodger blue colour), from there over my trading area. With this, the two RSI are merged.

I notice, however, that your fast RSI, ie, my dodger blue-coloured RSI is usually more expansive than my own. I wonder if it has to do with our different time zone. The settings of my RSI's are the same with yours
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