Trading the Cable swings via averages

And price has bounced at the 50% level of the swing high/swing low

it's holding there for now. it doesn't want to fall, so we must wait for new york for the bank to make a decision. if the low is taken, we know the down trend continues.

i only see one bull candle. where is the second bar, if i may ask?

For bear support, one bull bar is enough for the two-bar-test.

IMHO we need to see C being a pivot. That makes the blue one I drew valid.
We are currently 2 pips from that blue 50% target with HD on H1 and M5.

thanks. i hope everything is well with you in spite of... i will get back to you with my question. i wanted to give you some space.

So how did you do these days?

I closed my original trade yesterday.
Today I caught the surge at London open, but closed out too early. But that is trading.
Now, checking if the bears can come in at 2537
Did you hold your longs?

For me two trades today. The first Long from the bottom, 30 pips
Then 10 pips later on, also Long.

Nice.
Now I hope the M5 div can bring this monster back to the average.

Hi Guys and what a move while I was in bed.

On this 1 hour chart we see a different way to plot the ABCD. The thing to note is the positioning of the RSI pivot for B.

On this occasion we select the lowest point on the RSI and not the lowest point on the price.

This happens when B1 is in divergence with B.

Note how the 50% levels were a clue to this setup.

This is another addition to your targeting collection.

Thx Alan now i understand why you and Jazz were drawing 2 triangles there. For today i see this but not moving much today

You think that was interesting... Look at this! I was gobsmacked by the heroic effort but now is the worm about to turn

OK the worm has turned with the usual struggle and the bears have found the support to take this down.

However if the average at A is going to break the average at B then it is going to make another serious lower low which the monthly is indicating.

We need to be watching our trades for any indication of another turnaround to the long side. It looks fairly obvious that there is lots of money invested to stop the bears making progress much lower.

Personally I would be watching this carefully to see which side of the Quartile price makes its break. There will still be plenty of dollars in the offering at the lower time frames.

Hi Alan!
My question is about ABCD pattern.
Could you please post couple of examples to clarify the moment about the attack of one pivot to another one.
Thank you.

Hi Alan,

I'm currently only demo trading your (excellent) methodology, but finding that I'm getting stopped out a lot for BE (which isn't really a bad thing!)

I wondered if you might be able to post a chart, please, which shows how you manage stops as the trade unfolds, including when hedging.

I know you've stated previously to keep stops as tight as possible at the "trade has failed" levels. I look to get stops to BE+1 as soon as price has moved a few pips in my favour, but perhaps I'm being too aggressive?

I think you also mentioned in a previous post that you sometimes trail the EMA as price is trending.

I suppose stops are the only part of your methodology that remains a bit ambiguous for me.

Cheers

Hi fxpractice, there are some helpful posts already in the thread if you do a search for the word "attacking", which is how Alan describes the formation of the ABCD pattern.

Here's a link to the search results: https://www.forexfactory.com/search....rchid=19751316

Cheers

Hello Alan!
Can you give me your Skype contact information?
Thank you.

OK here on this 15 min chart we have two examples but they are different. This is going to be a little long winded so make a copy you can study until you get it down pat.

Consider !. C has crossed the EMA which is the same as the RSI 50%. B is lower than the attacking pivot C. So we have conflicting BC lines between the Price and the RSI. Many people refer to this as Hidden Divergence which I totally disagree with.

I would prefer it called a Continuation divergence because that is what the outcome is supposed to be. It continues the trend. It also forms the ABC triangle and this gives us a target price to aim for. Target is always C+AB = D or in a bearish situation C-AB = D.

As you can see from the example it was exactly correct.

However there is a lot more going on here than just this simple illustration.

Look at the relationship between A and a. Clearly we have a regular bearish divergence which is supposed to take price back to the average, which it does. But before it makes it we see a retest of the div in the form or the Hook H. The Hook usually produces an impulse bar and it does so here back to the EMA.

This next bit is very important to note.

This is a loading zone where we try to get our lots on in a safe manner. We are expecting the trend to continue so we load up with shorts! This may seem counter intuitive i.e. expect long and load short.

We short the bear div with trade 1
We short the Hook with trade 2
We try to get trade 3 on before we reach the EMA.

We advance our stops to limit our loss to a minimum.

At C we note the continuation div so we need to hedge all the shorts we have placed and would close all these shorts when price returned back across the EMA in the long direction.

We have safely loaded the trade with very little risk and have now made a profit and we have changed direction to the long trending side. At D we have doubled our account.

At D we note we have a Hidden Bearish Divergence so here we could have hedged our hedge (which we close) had we not made enough profit because this should return price to the EMA once again, which it does to give us the green B.

At this green B we could have hedge again because we note it is in div with the red C. I don't class this as a continuation div with a target hence not an ABCD because both pivots are on the same side of the EMA (or RSI). This time it shoots way past anything we would have regarded as a target to the green A and all the bearish divergences it made on this journey failed to do anything.

Finally we arrive at the green A where we have an RSI div returning price to the EMA.

Again C is in divergence with B but again both are on the same side of the EMA (or RSI) so we don't have an ABCD target just a bull div. In fact there is no clear line of sight to B from C on the price chart so on the RSI we see a bullish RSI div.

This is a lot of information the charts are telling us and no doubt I have skipped a bit. The point here is to learn what the charts say and get the money management on your side of the equation. Take nothing as a single context, it is only a part of the whole and for goodness sakes look where the EMA is trying to get to.

There are no theories here at all, we simply interpret what we see and trade accordingly.

Remember to load in the opposite direction you are expecting price to go and hedge it in the correct direction.

I could write a book on this stuff but I am trying to keep it as simple as I am.

I sure will but your profile doesn't have a message tag.

Message me and I will reply.

To do this click on Nala for my profile and at the top you will see the word Message.