Trading the Cable swings via averages

post 498

Thank you very very much, MJurban!!!

Post #2760 it is.

Jazz whats the easiest way to Learn to draw the AB = CD etc?

i can trade div and etc.. but thats part of this just wondering if you could point me in the right direction

good morning everyone. hey jazz can you confirm the divergance i marked on the chart. price is above ema so theroratically we will be looking for buy, but there is bearish divergence on 1 hour. so in this scene what should we be looking for.

Sorry guys I wasn't at the PC yesterday and may not be for the rest of the week but I will try to pop in sometime during the day to keep up with queries.

OK it seems stops are a bit of a topic now.

This is a major part of the money management and should have a thread all by itself but let me spend a couple of days on this here so you should note the post number down in your diary with the heading Money Management.

Let me go right back to basics so everyone is covered from beginner to the more experienced and I will start with the traditional scenario method.

OK Polly is new to trading but wishes to get involved in this very exciting business. She has at hand a disposable sum of AUD$500 which she can easily afford to lose or to put it another way spend on her education.

The question is how can she manage this sum to her best advantage and get the biggest bang for her buck.

Let's assume the same leverage etc as me 400:1

$500 will buy approximately 1 standard lot+ returning $10+ per pip. This could also lose $10+ per pip so a ten pip loss makes a massive dent in the account of over $100 making this a most undesirable situation. It should be obvious the lot size is far too big for the account to sustain for any period of time. Any trade should be able to be repeated a good number of times and we should be letting the number of pips become a part of the equation to maximise the profit potential.

At the same time we don't want to create a situation where the profits are so tiny it is pointless to trade. Making a few cents here and there is just going to create boredom and this will probably lead to the trader taking a bigger risk and coming unstuck. A management plan is required and one that can be sustained for a long period of time and make big profits when the iron is hot to cover any losses when the iron runs cold.

This is where all sorts of management systems come into play, where people talk of risk/reward, % of risk, width of stops relative to the % and so on.

I find that a scalable entry is far superior than any other in terms of risk protection and the maximisation of profits.

This is why we take the first entry as a tentative trade just dipping our toes in the water so we don't burn our leg off. How big should this initial trade be depends on the objective. The goal of the day or even the week, we are all going to vary at this point because we all have different objectives.

Let's assume Polly wants to attempt to double her account on a monthly basis (20 trading days)

The equation then begins with $500/20 = $25 a day. This will be reviewed on a monthly basis.

If we then want to make the $25 in the time price makes 40 pips then it is simply $25/40 = 62.5 cents per pip and already our ten pip stop looks good since we are risking just $6.25. (I am assuming USD is the base currency, my base is AUD so this would equate to $6.25 x 1.4ish)

This would be a 10:40 risk/reward but can we do better than this? = Yes

By scaling into our trade we can control the loss to whatever we like, far less than $6.25 as low as just $1 which is 10c pep pip or 1 micro lot.

As the trade begins to work in our favour we add another 20c per pip ( now 30c is on) and we move the stops

Again as the trade continues we add the balance of 30c. We cannot get the decimal so perhaps we may just round it to 40c again moving the stop so we never expose ourselves to more than the original $6.25. So now we are off and running with 70c a pip looking for our daily target of $25.

What Polly has done here is made the safest possible entry. The $500 account is going to last a very long time and has the potential to reward her with the 100% per month.

If this was kept up for a year it would exceed two million dollars

Here comes the tricky bit... Don't for 1 minute imagine the trade is going to rum the full 40 pips+, it can and often does but we have to remain vigilant until we have it in the bag. This is where some of us have the option to hedge the trade locking in the profit, closing to take the profit and await another shot at the title until the $25 is achieved for the day. We may take the second or even the third trade at the full lot size since we are risking profits already made. If we have opted to hedge then this may be the trade that wins the day closing our primary trades on the way.

So where and when we place stops is always dependent on our money management plan and we have to do the math to stay in control of the situation and stick to it rigidly. If we fall a tad short of the objective for the month we don't worry about it as a new objective is created then as we continue to rinse and repeat.

Phew!

Any questions thus far.

H1 ema was reached broke and found support...
Next could be H4 ema and H1 pivot target its 1.26919 after failing making new LL


Let see what price bring us today. Wish u good day to all

On the price chart, draw your line at the white MA(1) line. We draw price divergence lines on the close of a bar.
That is a correct div you draw. It tells us we can expect price going back to the EMA and possibly further. It did.

That's in the pdf and read on from post #2760 for new examples. Alan commented on several ones e.g. drawn by me and he gave several examples himself.
It's the best and easiest way to learn them. But it takes you time and effort, sorry

Thanks a lot for that! Interesting to see that you start the topic of Stops with a disquisition of scaling in and MM.
Certainly interested a lot in how you'll go on!

Thank you very much!

Just one question about this to be sure, because it always confuses me a bit when trading.

Say for example that you have the first phase running, then you enter the second one and at once you move the SL of the first one to BE+Spread + a bit of profit. Then, if you want to keep the risk the same than the initial SL, for this second phase the SL would be roughly half the amount of pips than the first one, right? (And the third phase would have a similarly reduced SL compared to the second one).

Did you read that somewhere Aerials?

Hello, I understood that you move the SLs at once to the same point and that you must secure the previous operations and as much profit as possible, but this part confuses me quite a bit actually so don't take my word for it.

The part of "halving" the SL is because otherwise with double the lots in the second phase you cannot risk the same than with the initial phase unless you half the SL, so I figured out I might be missing something, not sure honestly!

Just got to the PC so I can answer this.

I have said that the second entry is the most dangerous as this has twice the risk of the first entry.

The third and final entry has the same risk as the second entry because the first and second have made some profit.

Thank you Alan, now I understood it.

And it worked exactly like that after testing the bull support... nice
There was the trade of the day with lovely move starting at m5 div, then bulls support and so on...

Still on my early stage so u can see i did not profit for the whole move cause i freak move to BE first entry, then did not take the second or third at bulls support... but anyway happy of improving step by step
thnks to alan and Mr Jazz for helping and supporting in this road

Great analyses Wito.
But don't mention me. I am just right on my path, had a hard job on mental issues. I am sure with hard work and experience you'll get there. Keep the risk small until you are comfortable.

i could be wrong but shouldn't it be like this

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