Trading the Cable swings via averages

Yes sure..

The first div you pointed out I should have hedged as you correctly pointed out and I can't for the life of me understand why I didn't.

The next one I took but we don't need a two bar test just to lock up the trade.

Then the word long was used because this is the start of a new trade (the other is locked up)

When this long passed the entry of the previous hedge I close the hedge and this widens the distance of the trade profits and the long becomes the new hedge. So once again the profits are all locked in.

I then closed this last hedge(the old long) at the EMA for the profit and was getting ready to close the short also but it bounced so all was good.

The last one why not hedge, I did but this time the price started running short. Too late to take off the hedge as profit so I just closed all instead and made a coffee.

Got back just in time to take the long (somewhat late) off that last bullish div looking for about ten pips so to get that it had to get across the EMA or come back and stop me out. It got across so I just kept moving my stop up and finally just closed with a very nice profit.

Allan this is my understanding how to draw the adcd i dont get it the same as yours

Always look for the pivot being attacked by the price. We can't just pick and choose any pivot, they are all very specific points.

Not all divergence's are going to be friendly ones.

You have to stretch your imagination a little to apply the drawings below to actual chart examples.

As traders the one we are looking for is the Hook. In this example we spot a divergence hoping it will take us across the EMA to find bearish support and form the Hook. From here we are looking to test the lower EMA swing and get our daily pips. We don't know if the entry is going to be good or bad as yet so we test the waters with our smaller entry. The result is a potentially smaller loss, often nothing if we move our stop to BE. We then add to our winning position as confidence builds that the trade is good.

The second example is the 'J' and this will stop us out. The divergence fails to make it across the EMA and as a result fails and then makes the HH. If we don't move our stop to BE then we are just going to donate some funds to the market. It is always better to take these signals from a 1 hour time frame because the distance from the Div to the EMA is mostly of a good size to make a profit from. However we can still use the same on the 5 min chart if we are expecting price to roll the EMA over.

The is always danger when taking any trade we just have to keep an eye on the money management to risk a little and win a lot. Our hope is to have all our three trades on before we see the impulse bar that bends the EMA in our favour. We continue to address the risk by moving our stop to protect ourselves. Most often it is not a question of how much we can take from the market but of how little we give back to it that puts us ahead of the game.

We can't wait to see if a signal works or not because we can't take any advantage from hindsight. We have to take the risk and manage the trade accordingly. The market maker will manipulate the prices to create business, we can't do anything about that. All we can do is observe the strengths and weaknesses where business is stalling and losing interest for the market maker to take action and create business in the opposite direction until that too tails off and we get a rinse and repeat situation. As long as there are buyers the market maker will increase the price to attract sellers and conversely as long are there are sellers the market maker will decrease the price to attract buyers. The market has no interest in who is winning and who is losing.

Commercial trading houses take money from one another just the same as retail traders do but they are bound by strict limitations whereas retails traders like you are me are our own masters and set our own risk rules.

Ok we start the week with a good target on the 4 hour.

On the 1 hour we price is in between the 50% level and the EMA

The 5 min has just given us a HD

Regular div now on the 5 lets see if the bears can find support here!

Going well stop at BE +1

4 more pips and I will lock in 20 with a hedge

Maybe not this could be the 5 min bears support else I will be stopped out.

Bears have support target is 2902 on the 5 min

Target on the 1 hour is 2853

Well done, saw a slight divergence on 5min (unfortunately again missed the hidden one-have to train my eyes on that), saw the short consensus on higher tf's, but not divergence on 1h.

Swing average on the 5 min is 2891

The touch of the 1 hour EMA was a good place to look

I just hedged on the 5 min because of RSI div I have 4 trades on.

I've got in long on the 5min alans divergence. Is that valid?

Hedge stop is at BE +1

Whoops hedge stopped out