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Trading the Cable swings via averages

  • #1,341
  • Jan 25, 2019 2:16am Jan 25, 2019 2:16am
for this system or generally?
  • #1,342
  • Jan 25, 2019 2:45am Jan 25, 2019 2:45am
Quoting forex_dimi
for this system or generally?
Generally but we make use of it
  • #1,343
  • Edited 3:37am Jan 25, 2019 3:25am | Edited 3:37am
Quoting quangvision
{quote} And please remember, not all hedges turned into profit. Some will cost as lost trades and there are no way to avoid all lost hedges but just trade as market tells.
That is why I don't really like to hedge. I prefer to close the trade once the counter divergence appears on M5 or PA behaviour in the absence of a divergence.

Indeed, I was going to ask Alan the disadvantages of my position. I prefer to close the running trade as I said and enter again on the counter if the signals are right (ie, the hedge entry). Once this takes its course, I close it and enter again on the side of the main trade. This way, if GU goes back across the original entry I am in the good both ways instead of losing the first entry and then making up with the hedged entry

For instance for today's trades, I sold at 3121 and exited at 3062: the position of an old H1 average swing hi. On the strength of Alan div on both M30 and H1, I bought at 3071 and has just exited at 3095. No hedges and I will look at the charts again for divergences
  • #1,344
  • Jan 25, 2019 3:31am Jan 25, 2019 3:31am
Quoting Nala66
OK lets do a little test of all you guys to see if you understand the difference between and EMA and an SMA and how this affects what I term the impulse bar. Anyone like to take a stab at it.
EMA more reactive to PA so impulse bar pulls the average more steeply toward the target HH/LL?
  • #1,345
  • Jan 25, 2019 3:41am Jan 25, 2019 3:41am
Quoting Nala66
{quote} ...... with the HD an option for an extra trade. {image}
Alan, regarding trades from HD bars, is this just a judgement call on your part or is there something in the PA you're looking for? I have noticed that waiting for a 2-bar test after a HD bar often tends to get you in quite late.
  • #1,346
  • Jan 25, 2019 3:49am Jan 25, 2019 3:49am
Hello. I created a MT indicator to identify the divergence. Can help to test whether the indicator is detecting correctly? Thank you.
Attached File(s)
File Type: ex4 RSI_Divergence.ex4   76 KB | 490 downloads
  • #1,347
  • Jan 25, 2019 3:51am Jan 25, 2019 3:51am
At present there is bearish Alan div on M30 as well as a bullish Alan div on M5. I will wait for a bearish M5 div to emerge or confirming candle formations before I short again. If, on the other hand, the parameters remain bullish, I will also follow suit,
Attached Image(s) (click to enlarge)
Click to Enlarge Name: GU M30 0125B.png Size: 27 KB
Click to Enlarge Name: GU M5 0125B.png Size: 31 KB
  • #1,348
  • Jan 25, 2019 4:06am Jan 25, 2019 4:06am
Quoting davidmaree
{quote} Alan, regarding trades from HD bars, is this just a judgement call on your part or is there something in the PA you're looking for? I have noticed that waiting for a 2-bar test after a HD bar often tends to get you in quite late.
Oh no I don't use a two bar test I simply just take the trade as it happens because often it is only one or two pips into the div.
  • #1,349
  • Jan 25, 2019 4:16am Jan 25, 2019 4:16am
Quoting Bydyke
{quote} That is why I don't really like to hedge. I prefer to close the trade once the counter divergence appears on M5 or PA behaviour in the absence of a divergence. Indeed, I was going to ask Alan the disadvantages of my position. I prefer to close the running trade as I said and enter again on the counter if the signals are right (ie, the hedge entry). Once this takes its course, I close it and enter again on the side of the main trade. This way, if GU goes back across the original entry I am in the good both ways instead of losing the first...
These are just scalping trades and don't conform to my money management aspects at all. If the target is 1K and you score $999 you lose. The reason is you are trading on emotion and not on the terms of the trading plan.

Now your plan may be entirely different from mine so the number of pips you score is just a meaningless expression to me.

This is the whole point of a hedge trade to get to the point of having the full amount on the trade to produce the result in a safe manner.

We cannot lose by applying a hedge to a winning trade but it allows us the opportunity of pushing for the 40 pips which is the target.

We can scalp trades all day long but would have to win 6 times as many pips by doing so. This may be fine according to your trading plan but it is not mine..
  • #1,350
  • Jan 25, 2019 4:40am Jan 25, 2019 4:40am
Off to bed catch y'all tomorrow
  • #1,351
  • Jan 25, 2019 5:00am Jan 25, 2019 5:00am
By way of reviewing today’s trade so far, here is my submission. Alan, I hope you are watching.

On H4, the bullish Alan div that appeared on 24/01/19 ran its full course after garnering 130 pips with the emergence of the bearish H1’s Alan div at the early hours of today. The unchallenged bearish engulfer on the H4 candle is the confirmation that the bears are on the saddle.

On H1, the div has fetched 66 pips from 3128. Presently, PA is above H1 average ostensibly seeking for the appropriate bear support.

M30’s rally started at 3139 with Alan’s div and returned 77 pips at 3062. Like H1, it is currently above M30 average and is also seeking the relevant bear support before continuing the rally

The rally of M15 took off at 3139 just as M30, also with Alan div (flat slow RSI). It is presently above M15 average and has just posted a bearish Alan div and will most likely, obtain the bear support soonest.

Our best friend, M5, opened the day during the Asian session with a bullish run that terminated at 3139. It then commenced the bearish rally that was confirmed by the textbook bear support at 3125. Like the rest, it took a breather at 3062 and has been operating above M5 average. It has retraced up to 3113 and has posted one bullish Alan div and two bearish Alan divs all above M5 average. Between it and M15, the race as to the first to secure the bear support that will take us to 3020 hopefully (an old H1 average swing lo) is on.

So, we wait and see. The juicier pips might be ahead of us.
  • #1,352
  • Jan 25, 2019 6:01am Jan 25, 2019 6:01am
Quoting GscFX89
Hi All, i got a question. I have follow this thread since first post. But i'm too slow to catchup this strategy. 1. Can this strategy apply on mt4 android apps? 2. Is this strategy required us to monitor all timeframe? I tot we should only monitor H1 and M5. 3. Is there any tips on how to spot the divergence? Thank you in advance.
I tried to apply templates to the MT app but I couldnt work it out. I also couldnt apply the double RSI. I dont know if there's other apps that could work. Even though, It should be hard to identify divergences on the mobile because of the small screen.

I'd say that M5 and H1 are the must have. But monitoring M15 and H4 can help adding more info.
  • #1,353
  • Jan 25, 2019 9:17am Jan 25, 2019 9:17am
Quoting forex_dimi
The 1st entry was the break of the green bar? Was trying to understand the 3rd till you mentioned the peaks under. The 2nd 3rd entries are the green bar or the red ones after them (like 2 bar test mentioned in the past)? Sorry for such questions, but 1st want to create the mechanism in my head.
Hi Alan,
I have exact this above question. Please help us to clarify it. Thanks
  • #1,354
  • Edited 12:27pm Jan 25, 2019 12:12pm | Edited 12:27pm
Quoting hocius
{quote} I tried to apply templates to the MT app but I couldnt work it out. I also couldnt apply the double RSI. I dont know if there's other apps that could work. Even though, It should be hard to identify divergences on the mobile because of the small screen. I'd say that M5 and H1 are the must have. But monitoring M15 and H4 can help adding more info.
Hocius, see
Inserted Video
one as it visually shows you how to apply templates to MT4. Here's one for MT4 Android app
Inserted Video
.

In short, for the mobile app just apply a second RSI and set period to 5 and press on "Apply to" in the indicator settings then select "Previous Indicator's Date", and you're all set.
  • #1,355
  • Jan 25, 2019 1:17pm Jan 25, 2019 1:17pm
Quoting wilyno
Hello. I created a MT indicator to identify the divergence. Can help to test whether the indicator is detecting correctly? Thank you. {file}
Looks very good and the alerts are nice Wilyno, thank you. Just an early observation, as I understand Alan's version of 'regular' divergence the 1 period MA is used to determine this and so the line is drawn from bar close to bar close and not bar high/low to bar high/low. Overall excellent work, thanks.
  • #1,356
  • Jan 25, 2019 2:55pm Jan 25, 2019 2:55pm
Quoting quangvision
{quote} Hi Alan, I have exact this above question. Please help us to clarify it. Thanks
OK let's try and solve two problems at the same time here.

Clarification and Android phones

I can trade just using the 5 min charts which I have two of.
One just shows the EMA and the other is the regular one with the indicators.

Take a look at this EMA chart. I have put orange boxes all over it. These boxes represent where we should be looking for the signals even into the future.

This is our signal for entry

Now mostly we are going to see enough action to make our quota during the European session.

This is our signal for timing.

Price is not always going to make the full quota in one direction as it turns on another signal into the opposite direction.

This is our signal to hedge.

We have made a calculation of the pips requirements to reach our objective in 40 pips and we don't conclude our days work until we reach this objective.

This is our target for the day.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 43 KB
  • #1,357
  • Jan 25, 2019 3:47pm Jan 25, 2019 3:47pm
Now when looking for the signal on the 5 min chart we may see many of them throughout the day sending us long and then short but they very often don't pay much for the effort we put in watching the charts.

So we look to time our work in the most productive zones and this is where the bar 108 comes in. It is not an exact time but we can expect some major movements at this approximate time. The earlier we can get the three trades on the better but keep moving the stop to prevent too much damage. We don't need signals for the second two trades but if you feel more comfortable then wait for them, it makes no difference because the secret is going to be in the hedge anyway.

Once we get the three entries on we have no money left, we are all in. So it is vital we protect our winning position with the appropriate hedge. The profit is locked in and all our equity is released for us to add positions if we wished to. But we don't, we just wait and see if the primary trade or the hedge is going to make the target remembering that one or the other is going to be stopped out for no loss.

If the hedge looks like failing we can close it and bank the pips and this means the primary trade has less of a journey to make now 40 - Hedge. If the hedge continues after we have closed it then the primary trade gets stopped out and our only profit is the hedge we made.

Always if in doubt the safest option is to hedge a winning trade without exception. Never hedge a losing trade.

Remember at all times our task is to make our profit target not pips. Pips are only the chart increments they don't represent your account.

In this fashion you should easily turn 1k into 2k in one trading session. From then on life gets easier and easier because we have money to burn and can clock up those thousands at an alarming rate. There will come a time when you say 1K a day is fine but now I am going for 2k a day and so on. However I would remind all that the money is not yours until it is safely in your bank account so start taking money out.

In essence what we are doing is reducing some 240 pips of movement down to just 40 pips. Sure we can take the longer option and keep knocking off the pips day after day. It is going to take 240/40 = 6 times longer and this may be fine for some, I don't have a problem with that at all. For my part I am much more aggressive.
  • #1,358
  • Jan 25, 2019 4:19pm Jan 25, 2019 4:19pm
If in the past a trader has experience multiple losses then their whole persona changes and to cut a story short it becomes much more difficult to push the button and take a trade.

This is why we have a plan and the execution of it is just a mechanical one where we try to exclude emotional stuff like 'thinking' trades.

I don't know whether my trade is going to win or not, only that I will keep pushing to force it to win. For me 39.999999 is not good enough if I am chasing 40. Once we start on the road of short measures we begin a process of bad habits until the fiscal plan flies right out of the window.

I really get annoyed and bite my tongue when people tell me how many pips they closed for. Without the rest of the equation it is meaningless. If people just say chasing 240 got 55 then that makes more sense. Or chasing 40 got 55 then we know this person did better than a 100% performance. Now if the same person said chasing 40 got 22 it would tell a story of tried but failed.

I chase 40 everyday, no ifs or buts, I keep working until I get it. Sometimes I can reduce the 40 by adding to my position so I only need to make 27 or so. It depends where I see the price heading and what I need to do as far as lots go to make my objective and like I said before it gets easier when one has the profits to risk. One of my fastest trades was concluded in under 5 minutes. I don't really care what the market does after I am done for the day, that is some other persons problem.

Nuff said about that..Back to trading.
  • #1,359
  • Jan 25, 2019 4:27pm Jan 25, 2019 4:27pm
Quoting Nala66
OK lets do a little test of all you guys to see if you understand the difference between and EMA and an SMA and how this affects what I term the impulse bar. Anyone like to take a stab at it.
Morning Alan!

I am wondering if David was right? "EMA more reactive to PA so impulse bar pulls the average more steeply toward the target HH/LL?"
  • #1,360
  • Jan 25, 2019 5:06pm Jan 25, 2019 5:06pm
On the charts below (2 x 5 min)

We see on the left an orange box with an X in it. This would represent the last trade we were looking for. All the time this box is progressively moved upwards following or indeed leading the way for the EMA. However we expect this EMA to fail sooner or later so we are watching and waiting for the signals.

Now look to the right hand chart and we see there two potential trades 1 and 2. For number 1 the orange box would have been lower and we would be looking for the short.

Trade 1 gives us the go ahead with an RSI Div but look what happens. The fast RSI pushes below the waterline but the slow one doesn't. This is a buy signal but I am short.

What do I do next? a) panic b) ignore it c) close d) hedge it.

I hedge it because this locks in the profit and releases my funds to trade again. Now if the Div is not going to make the EMA we are going to see a HH so I now have time to consider my options and reverse my short and go long instead.

I have put an Aqua box on the RSI look at all those fast spikes below the waterline but the slow RSI remains above. All of these are long signals and I know we are going to make a HH than the failed Div. So it is a no brainer I should be long not short and I am long until we reach trade 2 another signal to be short. I am only scalping here because of the time so I can now close all and go short and this time we make the EMA and both RSI'S make it across the waterline, I close this short again at the RSI Div, no point hedging this the RSI is in the basement and we are running out of time for the weekend.

We play what we see and be prepared to take the appropriate action. The first trade was hedged because of doubt, the second trade was closed because of the RSI Div. No two trades are going to be the same, we have to learn to read and react.
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 73 KB
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