Trading the Cable swings via averages

Most of the time but I would refrain from using the word 'always' with anything associated with forex.

OK here we go again.

Below is the weekly chart which I have corrected. The previous weekly chart I posted is how many of you are seeing the chart incorrectly.

Let's begin with the regular bearish divergence at the top (RBeD) Price makes the HH but the RSI does not.
The opposite happens at the bottom for a regular bullish divergence (RBuD). Price makes the lower low but the RSI does not.

We hope these regular divergences will take price back across the EMA

Hope everyone is very clear about these.

Now let's tackle the ones that seem to be causing a lot of confusion. These are the exact opposites of regular divs when plotted.

A is always higher than c, B is always lower than c. The target distance is always the same as AB, a measured move we can take advantage of.

Both A and B are always pivots but C does not have to be a pivot.

Now we get to the nitty gritty of finding just where C is. C is going to be the point where we determine we have an ABCD

Look at the first example (1) C is pushing up to attack A. But look at the RSI C has already closed past A so we have divergence at this exact point. This is where we plot the structure from. So we have our AC line.

B is simply the lowest close between A and C so we now have our triangle ABC and can plot for D being the distance of AB.

Now look at the second one. It was exactly the same setup as the first but with a major difference. C was attacking A, B was the lowest close in between A and C. The RSI had made the higher high but the price had not. Exactly the same except look at B it was in a regular bullish divergence. This makes all the difference in the world.

Look at number 1 it was a continuation to the downside but number 2 changed the direction because that is what we expect from the regular divergence i.e. to cross the EMA

It is not easy to determine which way 1 and 2 will go we have to find some additional evidence. Look also at number 2 how it almost made the target and then turned around only to return 5 weeks later to take out the target.

Currently we see the EMA rolling over to the upside but the bulls have not yet found support too take out the previous average swing high. We are still below the bearish support (dotted red) so the bulls are by no means free and clear as yet.

Thanks Alan,

Finally had the light bulb moment on the ABC !!!

Cheers
Paul

Great Analysis, It is amazing how you are able to bring out the Divergence in this Chart, i will certainly be following this thread for a long time. Thank you

Thanks, Alan with ABCD done, got it, very clear explanation

Thank you Alan, again great stuff.
I like practising:

I am looking at the larger target on the daily of 3304 being hit today

Correct me please Alan (or anyone) if I am wrong but has anybody else seen the ABCD target on the 60m chart at 1.3332

Your right it's there but the entry was back at the start of London

Can you post a picture?

ABCD target on the 60m chart at 1.3332 Do we take that as a target or do we take Alan's Daily target?

Price struggling with yesterday's high and the 50% of the ABCD.
Hope it can push through.

Hat off Alan
target reached
without me though

I was aiming a tad lower, had these M5 tagets.
Next is H1 target at 3331

That's amazing, price stopped right there!

Agreed fxmars. See post 2151

Not quite yet.
A = 31974
B = 27502
A - B = 4472
C = 28600
C + 4472 = 33072

High so far is 33038

Now we have cracked it. On the daily it pays to do the math because the lines are so thick we draw in errors.

Yep close to that anyway

I just calculated it to be 33328