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Trading the Cable swings via averages

  • #2,801
  • Apr 9, 2019 7:22am Apr 9, 2019 7:22am
Quoting Nala66
OK … When the session begins I tend to watch the 5 min intently for the signals produced there. For this I need to show the two RSI indicators. The first was a bull RSI div (D1) but the run up ran into a bear div so we either close or hedge depending on your circumstance. The run down went to another RSI div (D2) so it was now set up to pass the latest swing high average which it did convincingly with an impulse bar taking it to and above the target level. This then pulled back because it was a reg bear div. but the bulls found support (dotted green)....
Took about the same setup this morning, instead my short cover went to BE so only profit on the long side but that's ok
What HD stands for ? Hidden divergence ? I don't see it where on your wrote HD on your chart.
  • #2,802
  • Apr 9, 2019 7:54am Apr 9, 2019 7:54am
Quoting Nala66
{quote} The question was on the 5 min chart, nothing to do with the 1 hour which hasn't had time to do the moves. Well maybe it has but I wasn't referring to that. That was a good inference though.
It was Brexit news. It was told that Merkel was willing to give 5years period of time for backstop and market did that high. Later on market reversed as always on Brexit news.
That is the only reason I don't want to take pound trades this period.
  • #2,803
  • Apr 9, 2019 9:13am Apr 9, 2019 9:13am
Quoting davidmaree
For those interested I've attached my crib notes for Alan's method, which essentially is a dump of many of Alan's and some other's posts to date. TOC is as follows: {image} This pdf file is 20MB so had to be split to upload here. 7-zip or Winzip should recombine them when files are placed in the same directory, and then extracting the 001 file. Because of another FF upload quirk, before doing this you have to delete the .zip at the end so file names before extraction should be: Alan method posts.zip.001 Alan method posts.zip.002 {file} {file} For...

Thank you for share your work with us david.
"I'm gonna make you rich, Bud Fox"
  • #2,804
  • Apr 9, 2019 11:31am Apr 9, 2019 11:31am
A possible bounce on the cards if AB=CD is drawn correctly by me.
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  • #2,805
  • Apr 9, 2019 6:36pm Apr 9, 2019 6:36pm
Quoting forex_dimi
{quote} It was Brexit news. It was told that Merkel was willing to give 5years period of time for backstop and market did that high. Later on market reversed as always on Brexit news. That is the only reason I don't want to take pound trades this period.

mmm Isn't that the best time to trade. Targets get hit in super quick time.
  • #2,806
  • Apr 9, 2019 9:18pm Apr 9, 2019 9:18pm
Quoting Nala66
{quote} mmm Isn't that the best time to trade. Targets get hit in super quick time.
Hi forex_dimi,
As Alan said that, you can understand how he is confident about his speculation on market moves no matter how the news impacts.
Alan never look at the news calendar daily but I do. I totally respect his point of view on news trading.
But I do had some bad experiences while trading throughout the news releasing.
Price moved so much violently, hundred of pips within a tick, no matter how tight your stop set, I think slippage would happen and your account could be very likely wiped out if you were trading big lot size.
Just my 2 cents
  • #2,807
  • Apr 9, 2019 11:25pm Apr 9, 2019 11:25pm
Quoting quangvision
{quote} Hi forex_dimi, As Alan said that, you can understand how he is confident about his speculation on market moves no matter how the news impacts. Alan never look at the news calendar daily but I do. I totally respect his point of view on news trading. But I do had some bad experiences while trading throughout the news releasing. Price moved so much violently, hundred of pips within a tick, no matter how tight your stop set, I think slippage would happen and your account could be very likely wiped out if you were trading big lot size. Just my...
Talk about markets moving violently, I can recall when PC's were very much slower than they are today and the NFP just popped on the screen as an 80pip bar in the blink of an eye. This can still happen of course as anything can.

Combatting events like these is the reason for the three stage entry which I am sure folks haven't got a handle on yet.

1) Every trade begins as a scalp with the first entry and short stop. This in itself limits a lot of damage in my case to about AUD$41.

2) The second trade is placed with the confidence everything is going as it should. At this stage the stops are moved to limit the damage to AUD$82

3) The third trade most often placed as a pending order is placed in such a position that there is the potential to make the 40 pips with it. In other words I measure 40 pips from the target so I know I must get the order prior. Again the stops are moved and depending where the stop is the maximum damage remains at AUD$82.

Then the process of moving the stops begins. Firstly to the BE+1 point and then advancing to lock in a little profit.

Very often the 3rd trade doesn't get hit because of a div or something turning the market before it gets there. So this requires a hedge trade.

For example if I am long with 1 and 2 then I hedge with 1 and 2 and 3 and cash out the long. Now I am completely loaded short in the most safe manner I can think of and the pending order is closed.

Again if this short does not run the full distance I require (remember the longs made a profit) by running into another div then I need to hedge again so I am equal long and short. If the hedge is working I can remove the short and cash the profit. Now the hedge long usually doesn't have far to go before the whole profit is realised but now is the opportunity for bonuses. So when safe to do so I place a stop at my full profit target so if it does turn I am still ok for the day. I then look for a reason to close the whole trade.

A lot of words there in the explanation and a lot of work to do when trading live.

Now here is the rub.

Why doesn't someone write a script for this. Why don't we have a little discussion on this topic after all it is the most important aspect.
  • #2,808
  • Apr 9, 2019 11:51pm Apr 9, 2019 11:51pm
I'll begin if you like.

Let's call the three trades T1, T2 and T3.

T1 is the primary trade. It is calculated by dividing the account target ($1,000) by 120 = 0.2917 rounded to 0.3
T2 is twice the size 0.3x2 = 0.6
T3 is three times the size as T1 0.3x3 = 0.9

When all three trades are on it totals 1.8 lots. For me 1.8 lots is AUD$25 a pip. So a 40 pip target produces $1,000 + a bit.

I rinse and repeat this this all the time so these lot sizes do not change.

However depending on the base currency and the exchange rate these numbers will vary from one trader to another and also the leverages my be different. So these have to be variables where we must all calculate our own size of T1.

So that's the numbers squared away.

Next comes the trade.
  • #2,809
  • Apr 10, 2019 12:13am Apr 10, 2019 12:13am
When I see a div at a ZOO point, I see potential.

Going Long

I can measure the distance from the div point to the EMA and know I have to get at least my first two trades on ASAP before price get's to that EMA.

T3 would be a pending order at least 40 pips from the target and above the EMA.

So if I can see we are say 15 pips from the EMA at the div I can hit the script to enter T! and place pending orders at T! + 5 for T2 and T1 +20 for T3

Then I need to be able to move all stops to T1 + 1
Then T2 + 1
When T3 is triggered all stops to BE+1
Finally B3 +1
  • #2,810
  • Apr 10, 2019 1:18am Apr 10, 2019 1:18am
Quoting Nala66
When I see a div at a ZOO point, I see potential. Going Long I can measure the distance from the div point to the EMA and know I have to get at least my first two trades on ASAP before price get's to that EMA. T3 would be a pending order at least 40 pips from the target and above the EMA. So if I can see we are say 15 pips from the EMA at the div I can hit the script to enter T! and place pending orders at T! + 5 for T2 and T1 +20 for T3 Then I need to be able to move all stops to T1 + 1 Then T2 + 1 When T3 is triggered all stops to BE+1 Finally...
What is ZOO point?
  • #2,811
  • Apr 10, 2019 1:30am Apr 10, 2019 1:30am
Quoting Green-Pips1
{quote} What is ZOO point?
A ZOO is a Zone of Opportunity
https://www.forexfactory.com/showthr...9#post12090489
and the next post.
You can do a search with the forum search box.
Trading S/R with PA only. No indicators anymore!
  • #2,812
  • Apr 10, 2019 2:29am Apr 10, 2019 2:29am
Good morning all (my time ). I know Alan doesn't look the news, but this is something else. News are known to the market and more or less has valued them (except in extraordinary cases). Also in news you have the opportunity not to trade. Alan mentioned NFP. Today NFP doesn't move the market that much, but still today I prefer not to trade such days. It is scheduled and I know that.
The last 2 (and maybe more) months we get rumors about Brexit news (of course not scheduled). One comment and moves the market a lot of pips. Yesterday that rumor was 50pips (in 1min candle). Last week (maybe more), there was a rumor that DUP would not participate in a vote and price moved 100 pips.
  • #2,813
  • Apr 10, 2019 2:34am Apr 10, 2019 2:34am
Hope that was correct trade (was expecting more), closed at 10pips and reversed.
PS at EMA bull rejection took a 2nd short at 65 with target 55 and changed my 1st trade target at 55 too.
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  • #2,814
  • Apr 10, 2019 2:45am Apr 10, 2019 2:45am
Hi everyone,

Alan, I've been studying your thread and I've compiled a bunch of questions that I'm not too clear about... if you could help me with these it would be great:

1.- About the hedges and how they should be managed in terms of SL, I've understood different things during the thread; In the post 1887 you say that we don't have to use SL at all in the hedges, so this plus only hedging winning trades is all it has to it, right?

2.- A silly one because I get confused with the broker time changes and before I got there the hour was already changed so I couldn't check it myself (I know you don't take into account the time changes in your 108 bar indicator), is 108 bar always London Open?

3.- Whenever the MA didn't surpass the previous MA swing high/low and the RSI (quick or slow? both?) is overbought/oversold, you call this a "failure" for the bulls/bears. I don't understand well, do you mean that since the RSI is OB/OS the MA won't reach the previous swing average and that is what "fails"? (Meaning the average will probably try to reach the opposite average swing).

4.- With the hidden divergences, do they require a bigger timeframe confirmation? I can't recall where I read that you saw a regular divergence in M15 while having a hidden one in M5. I understood after the whole thread that they are signals by themselves and require no special confirmation, same than regular or RSI divergences, but just to clarify completely.

5.- When a single point has multiple divergences (for example 2 RSI divergences + 1 regular divergence), could we assume that signal is "stronger"? I mean, is there a concept of "confluence" with the signals? (For example in this point you could enter with 2 stages of the trade, or add sooner with more confidence)

6.- When there are contradictory signals such as the picture in the post 1295 (which in my eyes is also a "holding pattern" as you called it) the best would be to just close/protect your positions if you are in or just wait until is clear if you are not, right?

7.- Two bar test entries are used for divergences and to add a position after finding support only? Are they always used or only when you don't trust a signal that much? (Like for example a "scalp" without inferences or so), I would like to know exactly in which cases I should look for them also.

8.- I don't remember where you said something like "we scalp the setup and we trade the execution". This phrase still puzzles me, what did you mean?

9.- This maybe should be obvious to me by now but to be sure... about finding support, it is in the wick of the closed candle of the first RSI pivot after crossing the 50 level, right?

10.- Also about supports, any support can become resistance, so it wouldn't be required to paint them in different colors, right? I mean, a bull support level once price retests it either from above or below is the same than a bear support right? Only difference is that when it appears it increases our confidence in the trade in that direction.

11.- In the post 2642 you say "price will generally return to the first incidence at least", that one I've tried a few times but can't get to grasp what you mean.



Thank you so much.

PS. If you still don't want to kill me -or have a headache- I'm already preparing another (smaller ) questionnaire about the continuation divergences, ZOOs and a few other things...
  • #2,815
  • Apr 10, 2019 2:49am Apr 10, 2019 2:49am
Quoting forex_dimi
Hope that was correct trade (was expecting more), closed at 10pips and reversed. PS at EMA bull rejection took a 2nd short at 65 with target 55 and changed my 1st trade target at 55 too. {image} {image}
The idea is to turn a scalp into a trade.

So the 1st entry (short) just move the stop to BE+1 and wait to be stopped out. Closing for ten pips is never going to get the results.
  • #2,816
  • Apr 10, 2019 3:06am Apr 10, 2019 3:06am
Quoting Aerials
Hi everyone.
Oh boy, give me a break.
  • #2,817
  • Apr 10, 2019 3:14am Apr 10, 2019 3:14am
hi there, is there a post in this interesting thread which summirise clearly specific entries and exits, something like this:

Long entries:
(on the 5m TF)prices below the 26 ema, RSI (5 and 14) oversold, both showing bullish divergence, RSI (5) > RSI (14).

Long exits:
(on the 5m TF)prices crosses above 26 ema, prices hits previous high, both RSI showing bearish divergence.

Filter:
Prices on the hourly time frame above the 26 ema.

I thank you in advance.
trading is simple but is simple is not easy.
  • #2,818
  • Apr 10, 2019 3:16am Apr 10, 2019 3:16am
Quoting Nala66
{quote} The idea is to turn a scalp into a trade. So the 1st entry (short) just move the stop to BE+1 and wait to be stopped out. Closing for ten pips is never going to get the results.
Alan you are right and in gu in general, after 10-15 I am moving my sl to be+1 and let the trade. The 1st trade that closed was long. Had the long at 1.3068 and target was 85. That trade was mainly scalping since I was looking to short from that lvl and over. When price stalled and start reversing took my profit (If my triangle was correct price also hit D).
The reversal was based on D and divergence (plus a level 75 -not the best- I was willing to short).
3rd trade was based on EMA rejection (not so sure if it was right decision)
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  • #2,819
  • Apr 10, 2019 3:28am Apr 10, 2019 3:28am
Quoting ZenNy
hi there, is there a post in this interesting thread which summirise clearly specific entries and exits, something like this: Long entries: (on the 5m TF)prices below the 26 ema, RSI (5 and 14) oversold, both showing bullish divergence, RSI (5) > RSI (14). Long exits: (on the 5m TF)prices crosses above 26 ema, prices hits previous high, both RSI showing bearish divergence. Filter: Prices on the hourly time frame above the 26 ema. I thank you in advance.
In page 138, post 2,760 David had posted in a pdf file (large one-135 pages) the whole Alan's posts. This is a must (will read that on Easter)
  • #2,820
  • Apr 10, 2019 3:36am Apr 10, 2019 3:36am
Quoting forex_dimi
{quote} In page 138, post 2,760 David had posted in a pdf file (large one-135 pages) the whole Alan's posts. This is a must (will read that on Easter)
thanks mate, I saw it, but I think it is a collection of Alan's posts.....I am worried after I read it I will come up with the same questions......
trading is simple but is simple is not easy.
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