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Trading the Cable swings via averages

  • #2,381
  • Mar 13, 2019 4:49pm Mar 13, 2019 4:49pm
Quoting davidmaree
Haven't seen anyone mention this yet but Daily bearish regular div ran into bullish continuation div at the start of today. MA not made HH yet.{image}
Alan's Best Calculated Destination indeed. Daily done after failing at -50%.

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  • #2,382
  • Mar 13, 2019 5:23pm Mar 13, 2019 5:23pm
Quoting Nala66
And let's not forget the 1 minute when these bigger moves are underway. {image}
Yes all of them will do it is very helpful.
  • #2,383
  • Mar 13, 2019 5:27pm Mar 13, 2019 5:27pm
Allan I struggle to get the main direction at times like yesterday there were bearish divergence on the 1hr and the trend went bullish.
  • #2,384
  • Mar 13, 2019 8:41pm Mar 13, 2019 8:41pm
Quoting jgoedhals
Allan I struggle to get the main direction at times like yesterday there were bearish divergence on the 1hr and the trend went bullish.
You should be saying to yourself "price is ignoring the divergence so it is trying to get somewhere'

Consider on the 1 hour which side of the EMA is price trading...Topside
So have the bulls found support... Yes
So the market is bullish. BUT it will not remain bullish forever once it takes out the targets it becomes too risky to keep going long.

Any bear signals should be considered as scalps or hedges. So if you spotted a bearish div consider it as such. If it doesn't make it back to the EMA then price is going to climb higher.

Always consider the trending side in conjunction with the EMA and look to see where the EMA is trying to get to and has it failed in the opposite direction.
  • #2,385
  • Mar 14, 2019 2:40am Mar 14, 2019 2:40am
Quoting davidmaree
{quote} Alan's Best Calculated Destination indeed. Daily done after failing at -50%. {image}
Hey David or Alan, can you clarify for me the basis of constructing these target points ? They are not drawn to specific highs or lows and the logic of the construct presently escapes me. My inability no doubt but . . . . . . HELP !!!!!
Thanks.
  • #2,386
  • Mar 14, 2019 2:44am Mar 14, 2019 2:44am
Quoting AltosTrader
{quote} Hey David or Alan, can you clarify for me the basis of constructing these target points ? They are not drawn to specific highs or lows and the logic of the construct presently escapes me. My inability no doubt but . . . . . . HELP !!!!! Thanks.
Yes they are?
  • #2,387
  • Mar 14, 2019 2:57am Mar 14, 2019 2:57am
Consider this...

The XA line is a regular divergence but it has failed to cross the EMA so it should make a HH.

Where is that HH?

On price, C is attacking the pivot B. Now look at the RSI and C has already passed B. So this forms the ABC triangle and the target D is the same distance as AB taken from C.

Price also moved to C2 so this may be a correction we have to consider, C@ was also a retrace to the 61.8.
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  • #2,388
  • Mar 14, 2019 3:51am Mar 14, 2019 3:51am
Alan,

This is brilliant stuff, just need to make sure I apply it correctly

Cheers...Des
  • #2,389
  • Mar 14, 2019 3:52am Mar 14, 2019 3:52am
OK - thanks for your response. I will have to grapple with this one. David has taken a 23 or so daily div. and worked from that. I concede a chart is a chart, is a chart but I struggle a little with a 23 day divergence. I will retire to my cave and try draw this out to see it clearly.
Thanks Alan.
  • #2,390
  • Mar 14, 2019 4:42am Mar 14, 2019 4:42am
Quoting AltosTrader
OK - thanks for your response. I will have to grapple with this one. David has taken a 23 or so daily div. and worked from that. I concede a chart is a chart, is a chart but I struggle a little with a 23 day divergence. I will retire to my cave and try draw this out to see it clearly. Thanks Alan.
Don't forget also that the half way point (50%) is a danger point to consider.

Here you see the half way point was a Div on the 1 minute chart sending price back below the 1 min EMA
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  • #2,391
  • Mar 14, 2019 4:43am Mar 14, 2019 4:43am
This shouldn't make any difference to us though because we have easily achieved our profit target by now.
  • #2,392
  • Mar 14, 2019 8:09am Mar 14, 2019 8:09am
I wanted to comment that failed 50%, but was short that time and I m rather superstitious when trading (was short at 1.3310 (target was 1.32-1.3180), but unfortunately stopped out at 1.3235.
Used both C-C2 (but since market did C2 preferred that one.
(your morning analysis helped me a lot)
  • #2,393
  • Mar 14, 2019 8:13am Mar 14, 2019 8:13am
Alan for instructional purposes only, would that considered as an ABCD?
(must learn to draw them correctly sometime...)
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  • #2,394
  • Mar 14, 2019 8:51am Mar 14, 2019 8:51am
I see that many of the people new to this method are struggling with direction.
What I focused on when I started trading this method was:

1. EMA success or failures. Which way did the EMA break last? In other words, which EMA pivot was broken and which was challenged, but was not broken?
Do this exercise for all the time frames, and also note (for each time frame) which side of the EMA price is trading.

2. Support. After the price crosses the EMA it needs to find support before we trust that it will continue in that direction. Just look at the M5 chart below and see how price found support before the major drives. Also see how price reacts to old support.

With these basic and easy concepts you will get a good grasp of where price is likely to go.
So before you start focusing on divergence and targets you need to master the basics... you need to get in a trade in the right direction before you start thinking about hedges and targets
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  • #2,395
  • Mar 14, 2019 9:01am Mar 14, 2019 9:01am
Quoting fxmars
I see that many of the people new to this method are struggling with direction. What I focused on when I started trading this method was: 1. EMA success or failures. Which way did the EMA break last? In other words, which EMA pivot was broken and which was challenged, but was not broken? Do this exercise for all the time frames, and also note (for each time frame) which side of the EMA price is trading. 2. Support. After the price crosses the EMA it needs to find support before we trust that it will continue in that direction. Just look at the M5...
This is exactly correct and what I set out in the first place when trading between the averages.

When the average fails one side it then tends to test the opposite direction.

Concentrate on what the averages are doing before considering the other stuff which are the mechanics of getting from one pce to the other.
  • #2,396
  • Mar 14, 2019 1:23pm Mar 14, 2019 1:23pm
Quoting Nala66
Consider this... The XA line is a regular divergence but it has failed to cross the EMA so it should make a HH. Where is that HH? On price, C is attacking the pivot B. Now look at the RSI and C has already passed B. So this forms the ABC triangle and the target D is the same distance as AB taken from C. Price also moved to C2 so this may be a correction we have to consider, C@ was also a retrace to the 61.8. {image}
Alan in this example you took point C attacking B (and drawn D accordingly). When price passed C to C2, should we redraw our ABCD?
Why did you take C and not C2? C2 isn't closer to point B as for attacking point?
  • #2,397
  • Mar 14, 2019 6:28pm Mar 14, 2019 6:28pm
Quoting forex_dimi
{quote} Alan in this example you took point C attacking B (and drawn D accordingly). When price passed C to C2, should we redraw our ABCD? Why did you take C and not C2? C2 isn't closer to point B as for attacking point?
Hi forex dimi

Of course C2 is closer to B by a factor of 15 pips or so and the C point has still continued to adjust C3 but it still remains above B.

Now if we extend the BC line (dotted) we can see the bears have created some wriggle room whereby they can effectively get past the B point on the price by remaining above the dotted line on the RSI until they are good to go. This is a battle zone for positioning.

At the same time we see the average has made the HH and must wonder if the bulls are going to be strong enough to take of the next level (3295) or will we see the bulls collapse and the bears attempt the test of 3100. No point making speculations we must wait and look for evidence of direction.
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  • #2,398
  • Mar 15, 2019 8:38am Mar 15, 2019 8:38am
Sitting on sidelines till I can see some direction on 1H
  • #2,399
  • Mar 16, 2019 2:36am Mar 16, 2019 2:36am
Quoting fxmars
I see that many of the people new to this method are struggling with direction. What I focused on when I started trading this method was: 1. EMA success or failures. Which way did the EMA break last? In other words, which EMA pivot was broken and which was challenged, but was not broken? Do this exercise for all the time frames, and also note (for each time frame) which side of the EMA price is trading. 2. Support. After the price crosses the EMA it needs to find support before we trust that it will continue in that direction. Just look at the M5...
Fxmars what direction did you take on Friday
  • #2,400
  • Mar 17, 2019 4:25am Mar 17, 2019 4:25am
Quoting jgoedhals
{quote} Fxmars what direction did you take on Friday
The short version is that I was long.
At Frankfurt Open there was no support on H1, price kept closing on both sides of the EMA. However, from earlier in the week, and also inference from H4, we were clearly in an bullish market. So my plan was, on H1, to wait for either a pullback or H1 bullish support, whichever would happen first.
As price was trading above it, the H4 EMA seemed like a logical place to look for longs. And as per the attached chart, that is also what happened. My entries were on M5 and M1.

But it is important to note that, even though this was my plan, I would have started taking shorts as soon as my charts indicated bearish sentiment. In particular, if we had gotten bearish support on H1. We should trade what we see on the chart and not get attached to a preconceived notion about were we think/feel/hope price will go.
So yes, former price and EMA activity does have merit. But it will never trump what is happening right now on the chart.

And to confuse people further, I am myself more of a scalper than a swing trader, so personally, I do trade both directions, mostly on M1 charts. Normally, in a bullish market, there will be plenty of room to take shorts on the pullbacks. So bullish or bearish overall direction is relative to the time frames you are looking at. The most important entry criteria for me is whether or not I can get on a tight SL, and whether or not there is enough room for me to easily get the SL to BE.
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