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Trading the Cable swings via averages

  • #1,041
  • Edited 6:43am Jan 11, 2019 6:30am | Edited 6:43am
Quoting Nala66
{quote} And they sure did firing on all cylinders while I was busy watching the cricket.

My joy is that the spike picked my order at 2772 right to 2848 where I exited

Meanwhile, there is a variant of hidden Alan's divergence on M15 and Alan's divergence on M30 both bearish
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: GU M30 0109B.png Size: 24 KB
  • #1,042
  • Jan 11, 2019 7:06am Jan 11, 2019 7:06am
Quoting Bydyke
{quote} My joy is that the spike picked my order at 2772 right to 2848 where I exited Meanwhile, there is a variant of hidden Alan's divergence on M15 and Alan's divergence on M30 both bearish {image} {image}
I can only see the following divergence, as the ones presented by the OP (Alan) - it is also now forming a Bullish divergence, so we have to be on the lookout for upmove:

Attached Image (click to enlarge)
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Personally, I don't think the Bearish divergences you drew on both charts are correct. I might be wrong ofc, still learning.
  • #1,043
  • Jan 11, 2019 7:39am Jan 11, 2019 7:39am
Quoting Zelias
{quote} I can only see the following divergence, as the ones presented by the OP (Alan) - it is also now forming a Bullish divergence, so we have to be on the lookout for upmove: {image} Personally, I don't think the Bearish divergences you drew on both charts are correct. I might be wrong ofc, still learning.
Yer not wrong, yer right..
  • #1,044
  • Jan 11, 2019 7:47am Jan 11, 2019 7:47am
Quoting Riaanvw
+50 pips Not sure if you guys are into the whole supply/demand thing but here goes... We dont want the reliability of the setups to be skewed just because our stops are in the wrong place so sometimes we might need to have bigger stops because we dont want it to stop us out and then go on to target either so look at how this divergence was formed. I have marked it on the chart as a demand level so if the divergence is formed like this we just need to be aware of it and accept that bigger stop on this type of divergence formation might be necessary...
Riaan this is totally out of context of what we are doing here. This was a logical trade with a logical entry, stop and target
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  • #1,045
  • Jan 11, 2019 7:59am Jan 11, 2019 7:59am
Quoting Nala66
{quote} Riaan this is totally out of context of what we are doing here. This was a logical trade with a logical entry, stop and target {image}
Hi Alan,
On this chart, second entry on bull support would be stopped out before it hit swing high, right?
  • #1,046
  • Jan 11, 2019 8:31am Jan 11, 2019 8:31am
Quoting Nala66
While we are waiting let's take a look at some aspects of divergence. This is the 1 hour chart displaying 3 bearish divergencies. Look at number 1. It is supposed to cross the EMA but it didn't, it bounced off it... This is a heads up that price is going for a HH which it did. Number 2 was straight forward and made the crossing as did number 3. What this tells us is that we can measure from the point of divergence to the EMA and guesstimate the number of pips we could make as a scalp and then if they find support we could turn the scalp into a trade...
Sorry for bringing up an old post but I'm studying all the posts one by one.

Alan, in that chart, isn't the orange rectangle the bearish support? If it is, you enter right on the next red candle or you place a two bar test?

Thank you for your patience.
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  • #1,047
  • Jan 11, 2019 11:55am Jan 11, 2019 11:55am
Just wanted to thank Alan for opening his heart and taking the time to share his knowledge, methodology and experience. Also everybody else for contributing.

Wishing you all a great weekend and lets make some more pips on Monday!
  • #1,048
  • Jan 11, 2019 2:28pm Jan 11, 2019 2:28pm
Quoting Nala66
{quote} Riaan this is totally out of context of what we are doing here. This was a logical trade with a logical entry, stop and target {image}
Thanks for your extra mark ups on the charts Alan, it is starting to sink in slowly.
  • #1,049
  • Jan 11, 2019 5:07pm Jan 11, 2019 5:07pm
Quoting quangvision
{quote} Hi Alan, On this chart, second entry on bull support would be stopped out before it hit swing high, right?
Not really, price has already moved about 50 pips by the time the bull support was found, in fact more like 75 pips so we should be well out of the trade by this time. The grey and black bands are 50 pips wide on that chart.

The fact that the total move is well over 100pips just means that we have every chance of making our 50 pips which our money management requires. Remember I try to get the three trades on within the first 10 pips. The support would just present confidence this trade is going great.
  • #1,050
  • Jan 11, 2019 5:44pm Jan 11, 2019 5:44pm
Quoting hocius
{quote} Sorry for bringing up an old post but I'm studying all the posts one by one. Alan, in that chart, isn't the orange rectangle the bearish support? If it is, you enter right on the next red candle or you place a two bar test? Thank you for your patience. {image}
Now this is a good question

See how you have identified the bar with the box, well it wasn't followed by a red bar so it is still looking for support and this continued for two more bars until finally it made a red one making the last green bar the support. So our stop would be above this latter green bar. Generally I view these supports as being weak and look for the price to retest and fail this level.

Yes a two bar test is a good option but if the price just moves generally sideways then even the 2BT would be of little value.
  • #1,051
  • Jan 11, 2019 5:49pm Jan 11, 2019 5:49pm
Quoting Riaanvw
{quote} Thanks for your extra mark ups on the charts Alan, it is starting to sink in slowly.
No worries Riaan, as you are probably well aware there are many ways to trade but very few that are contained within a total package. That is not to say you cannot add to the method via your own Knowledge of price action.

Anyway keep winning....
  • #1,052
  • Edited Jan 12, 2019 4:40am Jan 11, 2019 6:39pm | Edited Jan 12, 2019 4:40am
OK a little for you to study over the weekend.

Here we have the 5 min and the 1hr side by side showing 4 trades, good bad or indifferent it matters not.

1) Was an RSIDiv on the 1 hr and a regular div cropped up o the 5 min a nice scalp of 20 pips or so down to the EMA

2) Was a hidden div on the 1hr and both a regdiv and an RSIDiv on the 5 min down to the 1 hr EMA

3) Was both a regdiv and an RSIDiv on the 5 min at the 1hr EMA level, plenty of pips there.

4) Was a regdiv on the 5 and on the 1 hr

Bucket loads of pips to be had by simply paying attention to what is going on and not trying to outsmart the reality of the market by 'thinking trades'

This now leads on to what is happening to the money management side of the equation and I will explain that later today...
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  • #1,053
  • Jan 11, 2019 6:50pm Jan 11, 2019 6:50pm
Quoting Nala66
OK a little for you to study over the weekend. Here we have the 5 min and the 1hr side by side showing 4 trades, good bad or indifferent it matters not. 1) Was an RSIDiv on the 1 hr and a regular div cropped up o the 5 min a nice scalp of 20 pips or so down to the EMA 2) Was a hidden div on the 1hr and both a regdiv and an RSIDiv on the 5 min down to the 1 hr EMA 3) Was both a regdiv and an RSIDiv on the 5 min at the 1hr EMA level, plenty of pips there. 4) Was a regdiv on the 5 and on the 1 hr Bucket loads of pips to be had by simply paying attention...
Alan, I think you forgot to attach the chart
  • #1,054
  • Jan 12, 2019 4:41am Jan 12, 2019 4:41am
Quoting hocius
{quote} Alan, I think you forgot to attach the chart
I don't know how that happened... Put it down to old age.

Corrected now.
  • #1,055
  • Jan 12, 2019 5:42am Jan 12, 2019 5:42am
OK let's consider this so called money management.

I use to be of the opinion that if one traded small enough one could trade out of most situations by simply adding to the losing situation so the recovery of funds was usually a done deal. This meant I had to be at the PC sometimes for days either hedging the loss or adding at appropriate times reducing the loss gradually until at last the trade was out of debt. Not always in profit but not a loss either but I was losing and that loss was valuable time. I can recall saying why didn't I get out early and trade the opposite way I would be quids in.

The problem so I believe was in the fact the lot sizes were so small that even a win from the onset would return only a small profit also. One then falls in the trap of placing too big a lot size to be able to trade out and the inevitable happens as it does with most traders I have come across.

So I spent a lot of time considering this, after all this is probably the most important aspect of trading. The questions I was asking was 'How can I keep my losses small?' How can I make better profits?' ' How much profit do I want?' and so on.

To cut the story short this lead to the method I have outlined. This will continue to make 1K profits in itself but once we do make that first 1K we have options.

The first 1K is made by placing the three trades at the rate of 0.3 lots, 0.6 lots and 0.9 lots totalling 1.8. (1.8 x 1.4 x 40 = $1008)

Now the account is at 2k so I should now be able to double up but look what happens 0.6 lots, 1.2 lots = 1.8 so there is no need to apply the third entry.

Now the account is at 3k and again the increase to 0.9 lots, 0.9 lots = 1.8. So my second entry is getting smaller and so is my total risk as a percentage of the account.

This continues until finally my first entry is 1.8 lots and I need not apply anymore at all unless I care to. I will still make the 1K with 40 pips of profit but look at what has happened on the losing side of things, I am risking about $250 to make $1000 that is a 1:4 risk/reward, I don't know about your thoughts but to me they are pretty bad odds even though the win rate may be much better than the trade loss rate. I would like to see my potential win rate about ten times my initial loss rate i.e. $2,500 so I am still requiring that second trade on to achieve this.

So by following the money management process the account naturally grows exponentially and at an awesome rate where we need not fear stop outs nor spend hours if not days making small profits.

OK stop dreaming for a moment and let's get back to that initial target of making our first 1K. Let's say I managed to get the three trades on but fail to make the full 40 pips, let's say I only make 20 pips because a signal told me to bail. In this situation I don't begin over trying to get the three trades on I just continue as if it were the same trade, that is I place the whole 1.8 lots on from the start looking to make the balance of the 40 pips i.e. 20 pips more. I still keep the stop as tight as I can and get it to B/E ASAP.

We all find a way to manage our money but I am convinced that we have to push the market as much or more than it pushes us. We have to control from the onset just what we are prepared to risk. I don't think risking 1% to make 2% is going to get us anywhere nor is risking 10% to make 20% these are both 1:2 risk/rewards we need to get those figures up to 1:10 to give ourselves the mathematical edge.
  • #1,056
  • Jan 12, 2019 6:58am Jan 12, 2019 6:58am
Quoting Riaanvw
+20 pips on the sell {image}
Rian, could you tell me how can I have my orders marked in the chart like yours. Is that a pluggin or something?

Thank you
  • #1,057
  • Jan 12, 2019 1:59pm Jan 12, 2019 1:59pm
Quoting Nala66
OK a little for you to study over the weekend. Here we have the 5 min and the 1hr side by side showing 4 trades, good bad or indifferent it matters not. 1) Was an RSIDiv on the 1 hr and a regular div cropped up o the 5 min a nice scalp of 20 pips or so down to the EMA 2) Was a hidden div on the 1hr and both a regdiv and an RSIDiv on the 5 min down to the 1 hr EMA 3) Was both a regdiv and an RSIDiv on the 5 min at the 1hr EMA level, plenty of pips there. 4) Was a regdiv on the 5 and on the 1 hr Bucket loads of pips to be had by simply paying attention...
Allan, I am struggling to see the Hidden Divergence on the H1 at 2. On my chart it is actually a regular divergence - higher close price by less than 1 pip and lower RSI value.
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  • #1,058
  • Jan 12, 2019 6:15pm Jan 12, 2019 6:15pm
Quoting pakeha
{quote} Allan, I am struggling to see the Hidden Divergence on the H1 at 2. On my chart it is actually a regular divergence - higher close price by less than 1 pip and lower RSI value. {image}
That is fine if it closes in the reg div position but at the time you would not have known it was going to do this.

The point is that the price pushed past that previous pivot but the RSI did not so an earlier entry can be taken on the wick of the bar. We never know how far the bar will snap back. The difference is in the timing of the two types of divs. What you could have done is taken the hidden div and then also taken the regular div as another opportunity.

Sometimes these hidden divs snap back quite a lot so we would miss out on quite a few pips and as you see in this case sometimes they only snap back a little to end in regular divergence. Then there are other times when they are in a hidden divergence state and continue to push out of it so it is important to drop to the lower time frame and pick up on the signal there.

It is the wick of the bar we are looking at for hidden divs not the actual close because then it would be too late.

Hope this helps
  • #1,059
  • Jan 12, 2019 9:56pm Jan 12, 2019 9:56pm
Quoting hocius
{quote} Rian, could you tell me how can I have my orders marked in the chart like yours. Is that a pluggin or something? Thank you
Hi Hocius, It's not a plug in, it's just the standard MT4 orders that show automatically when you have trades open
  • #1,060
  • Jan 12, 2019 10:06pm Jan 12, 2019 10:06pm
Quoting Nala66
OK a little for you to study over the weekend. Here we have the 5 min and the 1hr side by side showing 4 trades, good bad or indifferent it matters not. 1) Was an RSIDiv on the 1 hr and a regular div cropped up o the 5 min a nice scalp of 20 pips or so down to the EMA 2) Was a hidden div on the 1hr and both a regdiv and an RSIDiv on the 5 min down to the 1 hr EMA 3) Was both a regdiv and an RSIDiv on the 5 min at the 1hr EMA level, plenty of pips there. 4) Was a regdiv on the 5 and on the 1 hr Bucket loads of pips to be had by simply paying attention...
Hi Alan,
From your chart, I noticed there were several bearish divs along the way up from 3 to 4. How can you avoid those possible hedges or accept all stopped out? Thanks
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