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Trading the Cable swings via averages

  • #3,681
  • Jun 21, 2019 9:42am Jun 21, 2019 9:42am
Quoting MrMagnet
{quote} See above
Thanks for your explaining
  • #3,682
  • Jun 21, 2019 8:09pm Jun 21, 2019 8:09pm
Quoting luckyvictor
{quote} Why don't we treat this as bearish div signal (in attached) please? {image}
Always remember it is the movement of the averages we are interested in over and above any signals. So if trading above the average any bear div should be initially treated as a hedge or a scalp.

I wasn't here yesterday but look at this ! hour chart.

It shows a bullish continuation div in Aqua (there is also a larger one in Magenta.)

Look at the pull back at A. It is trying to turn the average when it runs into this signal. Does it look like it has a chance to make B with the RSI way down at C.

So A is your ZOO point is it not.
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  • #3,683
  • Jun 22, 2019 7:20am Jun 22, 2019 7:20am
Back to the money management.

We may well ask Polly why trading with a $500 account only about 70 cents per pip is put on the line when the account can afford a standard lot being $10 a pip.

There are two good reasons for this...

1) It is not the potential profit that is important so much as the potential loss. The account has to weather the storms waiting for the days when the sun shines and hay can be made.

2) When the good strong runs become evident having backup money to add to winning positions is highly desirable to seriously compound the profits.

This does not mean these trades can be added without supporting evidence of a strong continuation we still have to act with due care.

We may for example add several more 70cent trades making sure to move the stops. We could in fact get a dozen of these additions on before we run out of funds exploding the profits. One or two of these in a month makes a massive difference.

Suppose Polly was to make double her target of $500, then going into the following month she has an additional sum of $500 of risk capital this is worth ten trades of $50 risk or 1 lot at $10 a pip. Or to put in into perspective every +5 pips is one days work completed. There is no risk because it is only using the excess profits. So 100 positive pips gets the 1K required rather than the 800 required as per the schedule.

These excesses of profits when used like this can rapidly make a huge impact and take us into the following months with confidence.

This answers how we build confidence into our trading, we virtually trade risk free.
  • #3,684
  • Jun 22, 2019 9:07am Jun 22, 2019 9:07am
Quoting Nala66
Back to the money management. We may well ask Polly why trading with a $500 account only about 70 cents per pip is put on the line when the account can afford a standard lot being $10 a pip. There are two good reasons for this... 1) It is not the potential profit that is important so much as the potential loss. The account has to weather the storms waiting for the days when the sun shines and hay can be made. 2) When the good strong runs become evident having backup money to add to winning positions is highly desirable to seriously compound the...
Hi Alan

Really appreciated for your generous sharing, I think it can really help a lot of people to build up a second income. (I myself is trying working hard to pick up the skill)

I always believe retail trader does have disadvantage over the big player, because they have the money to virtually manipulate the market. As a small individual trader, we can and we should gather our power to help each other, simply reason, when you buy at price x, I also buy at/near price x, and more people to do the same, we are building the support zone and increasing the bullish power!

I am still studying the PDF, right now at the support resistance chapter.

I do have a question regarding divergence, can/should we trade hidden divergence? We can not see it at the point of time it happened, so what can we do about it?
  • #3,685
  • Jun 22, 2019 8:56pm Jun 22, 2019 8:56pm
Quoting luckyvictor
{quote} Hi Alan Really appreciated for your generous sharing, I think it can really help a lot of people to build up a second income. (I myself is trying working hard to pick up the skill) I always believe retail trader does have disadvantage over the big player, because they have the money to virtually manipulate the market. As a small individual trader, we can and we should gather our power to help each other, simply reason, when you buy at price x, I also buy at/near price x, and more people to do the same, we are building the support zone and...
I'm afraid I cannot agree with you on the so called power of the so called big players. Have you ever heard of an institution making 100% or even half that over an entire year, let alone a month, week or day. Retail traders tend to lose more because they risk more and trade without fiscal plans. They chase losses and try to average down losses by adding to losing trades. There are many other reasons but none are associated with what others do be they retail or institutional. We command what we do, when we do it and how much we risk, the ball is always in our court, it is always our decision.

The very common impulse bar is often blamed as a stop hunter whereas I regard it simply as an attempt to bend the average. In fact all the so called stop hunt moves can be readily explained if the traders takes the time not to play the blame game and look at the logical aspects of the moves. If we come to the trading table with this negative attitude we set ourselves up to lose through our own thought processes whereas it is not for us to think trades we simply respond to the signals we have identified as giving us an edge.

I love the often quoted number that 95% lose but isn't this true of anything. 95% of football players will lose the championship whereas 95% of drivers will survive on the roads. It all depends on how you look at stat numbers. 95% of people have religious convictions and spend a lifetime trying to convince others theirs is the correct one.

I wouldn't spend my time trying to determine what others are doing when as far as I am concerned it is what I do that counts. If we all took that attitude we would eliminate conflicting arguments. Unfortunately their is always someone out there trying to impose their will on others and many pay the price for it.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Now for your question about hidden divergence...


Of course we can see it in real time otherwise it wouldn't be a divergence! What we cannot see is if it was in divergence in the past because the RSI has no history like bars or candles have so when it snaps back it is hidden. This is why we need the past history of the RSI which you see on my charts.


Here is an example, the pink line is the RSI history.


Take the RSI history away and we have no idea if it was in divergence or not, it is hidden. It certainly didn't close in divergence.

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  • #3,686
  • Jun 23, 2019 3:15am Jun 23, 2019 3:15am
Quoting Nala66
{quote} I'm afraid I cannot agree with you on the so called power of the so called big players. Have you ever heard of an institution making 100% or even half that over an entire year, let alone a month, week or day. Retail traders tend to lose more because they risk more and trade without fiscal plans. They chase losses and try to average down losses by adding to losing trades. There are many other reasons but none are associated with what others do be they retail or institutional. We command what we do, when we do it and how much we risk, the...
Thanks for sharing your view, you are truly a wisdom man!

I think I may still struggle for the concept of hidden divergence, have to go through the PDF again and again. But looking at the example, can we simply treat it as price and rsi both moving in the same direction (downtrend in this particular scenario) and trade along this move?

Also, I myself living and working in uk, typical working hours, would it be possible to exercise your strategy in higher TF I.e. 15m and NOT watching it real time? What sort of mod has to be made to trade in this style?
  • #3,687
  • Jun 23, 2019 7:08am Jun 23, 2019 7:08am
Quoting luckyvictor
{quote} Thanks for sharing your view, you are truly a wisdom man! I think I may still struggle for the concept of hidden divergence, have to go through the PDF again and again. But looking at the example, can we simply treat it as price and rsi both moving in the same direction (downtrend in this particular scenario) and trade along this move? Also, I myself living and working in uk, typical working hours, would it be possible to exercise your strategy in higher TF I.e. 15m and NOT watching it real time? What sort of mod has to be made to trade...
I don't understand this price and the RSI always move in the same direction!

Sure you can trade this on a 15 min chart but then the stops have to be wider and as a consequence the lot size has to be smaller to compensate for the risk. In other words the efficiency decreases as the chart times increase.
  • #3,688
  • Jun 23, 2019 8:21am Jun 23, 2019 8:21am
Quoting Nala66
{quote} I don't understand this price and the RSI always move in the same direction! Sure you can trade this on a 15 min chart but then the stops have to be wider and as a consequence the lot size has to be smaller to compensate for the risk. In other words the efficiency decreases as the chart times increase.
Sorry that I may not express myself correctly, so basically, what how do we trade the hidden divergence? The direction of the divergence?
  • #3,689
  • Jun 23, 2019 8:42am Jun 23, 2019 8:42am
Quoting luckyvictor
{quote} Sorry that I may not express myself correctly, so basically, what how do we trade the hidden divergence? The direction of the divergence?
In the example I showed it is a bearish hidden div. Price has exceeded the pivot but the RSI shows there is no strength in the move so the market sees this and shorts it so it pulls back, we would be short and our stop would be just above this bar.

Note how price is also at a zoo point (15 min EMA) where we would be expecting it to be.
  • #3,690
  • Jun 23, 2019 11:54pm Jun 23, 2019 11:54pm
hello guys, fresh week for some fresh trading, nala66 it looks like the average has reached the average swing level at 1.27237. there is a lot of room for the next average swing level in the upside, so if we see bearich divergence on 1hour should we take these trades or we will just look for long trades as we are above the ema
  • #3,691
  • Jun 24, 2019 12:03am Jun 24, 2019 12:03am
As we come up to time today we see the bulls are still in control and may push for the 2785 and finally take the EMA above the 2746 after many past attempts.

The Aqua target has been hit and the magenta one is not that far off now.

However the 1H is in a bearish div so for it to gain more height it will have to break the div.
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  • #3,692
  • Jun 24, 2019 2:05am Jun 24, 2019 2:05am
anyone in short trade after the long trade, i am out of long trade at breakeven and was not able to enter in short trade as i cannot spot a bearish divergence in 5 mint, senior members please post there chart if thay have taken a trade today so i can learn from it.long trade was taken at the bullish divergence shown in chart
jazz1964 please confirm that the divergence i spoted was correct or not.
thanks
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  • #3,693
  • Jun 24, 2019 3:51am Jun 24, 2019 3:51am
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That first short was on HD but I was too early entering. Price should have come back under the green line first. Then that stop 1t -10 pips could have been tighter.
But well.
Trading S/R with PA only. No indicators anymore!
  • #3,694
  • Jun 24, 2019 3:57am Jun 24, 2019 3:57am
That H1 EMa level 1.2727 is at the test
Trading S/R with PA only. No indicators anymore!
  • #3,695
  • Jun 24, 2019 4:44am Jun 24, 2019 4:44am
Quoting Jazz1964
That H1 EMa level 1.2727 is at the test
Bull find support on M5 and H1
  • #3,696
  • Jun 24, 2019 6:38am Jun 24, 2019 6:38am
Quoting Jazz1964
{image} That first short was on HD but I was too early entering. Price should have come back under the green line first. Then that stop 1t -10 pips could have been tighter. But well.
Hi Jazz

I am still having difficulty on HD, why is it HD? if it wasn't hidden, how it might look like please?
  • #3,697
  • Jun 24, 2019 7:34am Jun 24, 2019 7:34am
Quoting luckyvictor
{quote} Hi Jazz I am still having difficulty on HD, why is it HD? if it wasn't hidden, how it might look like please?
Allow me...

I see 4 HDs so far and 1 RSI div which Jazz shows.
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  • #3,698
  • Jun 24, 2019 7:35am Jun 24, 2019 7:35am
Quoting luckyvictor
{quote} Hi Jazz I am still having difficulty on HD, why is it HD? if it wasn't hidden, how it might look like please?
Arg sorry, that was not HD but regular divergence.
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On that pic you see I drew a lime colored line on the close of the highest bar from the asian session.
Just before 108 price made a HH.
I have also a lime colored line on the RSI. If you watch closely the RSI did not make a HH.
That's why I was interested in a short (in teh direction of H1 bear div), but I was too early.
Trading S/R with PA only. No indicators anymore!
  • #3,699
  • Jun 24, 2019 7:55am Jun 24, 2019 7:55am
Quoting Jazz1964
{quote} Arg sorry, that was not HD but regular divergence. {image} On that pic you see I drew a lime colored line on the close of the highest bar from the asian session. Just before 108 price made a HH. I have also a lime colored line on the RSI. If you watch closely the RSI did not make a HH. That's why I was interested in a short (in teh direction of H1 bear div), but I was too early.
I think it is quite difficult to spot this change of direction, don't know whether Alan may share his opinion on this. I would love to learn how he reads the chart.
  • #3,700
  • Jun 24, 2019 8:00am Jun 24, 2019 8:00am
Quoting Nala66
{quote} Allow me... I see 4 HDs so far and 1 RSI div which Jazz shows. {image}
From your example, i think I can imagine the HD.

The first, second and third one, the price would have made a LL but the price has snapped back, so it didn't go the opposite direction to the RSI.

For the forth one, same reason but change the side, price didnt have the change to make HH but snapped back, otherwise it would look like a regular divergence.

So in all these cases, does it mean we can just trade with the direction of the RSI? i.e the first to third, RSI is stepping up, so we except price to go up. and vice versa for the forth one.
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