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Trading the Cable swings via averages

  • #4,241
  • Jul 21, 2019 10:41pm Jul 21, 2019 10:41pm
Quoting k1w1
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...
I think the post I just made also answers your question Kiwi. If it doesn't let me know.
  • #4,242
  • Jul 22, 2019 3:11am Jul 22, 2019 3:11am
Quoting Nala66
{quote} 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....
Alan!
Thank you very very much for your time and for this huge piece of work and for very interesting and useful information as well. That I will undoubtedly study many more times.
But my initial question has not changed. How do you define the attack of one pivot on another? Do you mean the price move direction between two pivots or something other? I just see that understanding of your definition of “attack” is necessary for building ABCD pattern.Therefore, I try to understand exactly what you mean in this definition. Sorry if my question is too primitive.
Thanks a lot once more.
  • #4,243
  • Jul 22, 2019 4:21am Jul 22, 2019 4:21am
Quoting fxpractice
{quote} Alan! Thank you very very much for your time and for this huge piece of work and for very interesting and useful information as well. That I will undoubtedly study many more times. But my initial question has not changed. How do you define the attack of one pivot on another? Do you mean the price move direction between two pivots or something other? I just see that understanding of your definition of “attack” is necessary for building ABCD pattern.Therefore, I try to understand exactly what you mean in this definition. Sorry if my question...
Sorry but I just can't understand what the problem is here.

What do you mean by price moving between two pivots, that is impossible because price forms the pivots.

Post a drawing or a chart to illustrate what you mean so I can correct it if need be.
  • #4,244
  • Jul 22, 2019 5:15am Jul 22, 2019 5:15am
Quoting fxpractice
{quote} Alan! Thank you very very much for your time and for this huge piece of work and for very interesting and useful information as well. That I will undoubtedly study many more times. But my initial question has not changed. How do you define the attack of one pivot on another? Do you mean the price move direction between two pivots or something other? I just see that understanding of your definition of “attack” is necessary for building ABCD pattern.Therefore, I try to understand exactly what you mean in this definition. Sorry if my question...
After considering this for some time now I think I know what you are saying.

When the price gets across the EMA and closes we see it is conflict forming an ABCD however it then pushes on a tad before it actually makes a pull back to form the pivot. I think that is what you are saying.

If this is the case then price has formed a range for the target to reach being from that first close to the pivot. I always look for price making the least target, that way I won't be disappointed if it reaches the largest one.
  • #4,245
  • Jul 22, 2019 5:16am Jul 22, 2019 5:16am
Quoting Nala66
{quote} Sorry but I just can't understand what the problem is here. What do you mean by price moving between two pivots, that is impossible because price forms the pivots. Post a drawing or a chart to illustrate what you mean so I can correct it if need be.
Alan, I can not post the chart explaining your definition which I myself do not understand...)
Here is your post number 1604:https://www.forexfactory.com/showthr...8#post11969838
Quote: "Lets consider AC first... This is a line drawn from the attacking pivot to the pivot being attacked on the price chart"...
My question: what do you mean? There is your chart in that post and I can not understand the moment of "attack".
Your other post #1462: https://www.forexfactory.com/showthr...8#post11941798
You answer there to the previous post #1461. We have the charts in both posts.
Quote: "...you have to look which price pivot is under attack "...
How do you define the "attacking pivot" and "attacked pivot"?
Thank you.
  • #4,246
  • Jul 22, 2019 5:52am Jul 22, 2019 5:52am
OK putting the ABCD aside as I don't regard this as one, both pivots are on the same side of the EMA.

Price is trying to climb and the next highest high to pass which is A. Price is currently at C when it runs into divergence with the RSI.

Therefore A is being attacked by C when it runs into divergence.

I cannot think of a simpler explanation.

At no other point does it do this so it is not debateable.
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  • #4,247
  • Jul 22, 2019 6:06am Jul 22, 2019 6:06am
Now in the example post of mine which you listed I was simply trying to show the point where price runs into divergence with the RSI. I don't actually regard that as being an ABCD because they are both on the same side of the EMA. However it does introduce the concept of a div having a target price albeit many of these types exceed the target.


In fact the one posted just above is quite likely to do just that i.e. exceed the target of AB
  • #4,248
  • Jul 22, 2019 6:46am Jul 22, 2019 6:46am
Well at this point it does appear to be struggling at the AB target but the 1H indicates it is going lower.

The 1H may run into Div though.
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  • #4,249
  • Jul 22, 2019 9:23am Jul 22, 2019 9:23am
Quoting Nala66
OK putting the ABCD aside as I don't regard this as one, both pivots are on the same side of the EMA. Price is trying to climb and the next highest high to pass which is A. Price is currently at C when it runs into divergence with the RSI. Therefore A is being attacked by C when it runs into divergence. I cannot think of a simpler explanation. At no other point does it do this so it is not debateable. {image}
Great!
Thank you for your patience.
Thanks a lot, Alan.
  • #4,250
  • Jul 22, 2019 9:34am Jul 22, 2019 9:34am
Quoting fxpractice
{quote} Great! Thank you for your patience. Thanks a lot, Alan.
No worries, glad you understand now
  • #4,251
  • Edited 8:50pm Jul 22, 2019 8:29pm | Edited 8:50pm
Quoting Nala66
{quote} 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....
Alan, you're a bloody champ for taking so much time to explain these things - many thanks.

One thing I couldn't get my head around, at first, was why we would load up on shorts when the trend was up (seemed risky!)

But then I realised that if we progressively scale into the shorts as our confidence grows that price is returning to the EMA, then we are fully loaded when the trend resumes and ready to capitalise on the biggest move!

Am I right, or am I making stuff up!?
  • #4,252
  • Jul 22, 2019 9:47pm Jul 22, 2019 9:47pm
Quoting k1w1
{quote} Alan, you're a bloody champ for taking so much time to explain these things - many thanks. One thing I couldn't get my head around, at first, was why we would load up on shorts when the trend was up (seemed risky!) But then I realised that if we progressively scale into the shorts as our confidence grows that price is returning to the EMA, then we are fully loaded when the trend resumes and ready to capitalise on the biggest move! Am I right, or am I making stuff up!?
You are correct. It seems counter intuitive to load up in the opposite direction to what the trend is doing but it is the safest way because you are always expecting the signal to come that resumes the trend and that is where you hedge with all the lots you have thus far placed. Once the hedge begins to work you can remove all your loading trades for whatever profit and move the stop for the hedge to break even.

Now you are all in and in the correct direction to make the big profit you expect.
  • #4,253
  • Jul 22, 2019 9:53pm Jul 22, 2019 9:53pm
Here we have the 1H and the Daily charts.

Only an idiot would say they are not trending down, hope you all agree with that including the idiots

So how do we make the safest possible entries in this situation. Well we do it exactly as I have described but I will go through it anew in a following post.

C'mon all the idiots who think this is an uptrend, raise your hand, don't be modest.
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  • #4,254
  • Jul 22, 2019 10:00pm Jul 22, 2019 10:00pm
OK on this 30min chart there are two loading zones. See if any of you can pick them and comment while I write the text for the explanations.

Don't let me do all the work for you or you will never get the hang of trading for profits. This is your opportunity to learn something so don't let it get away from you. Get involved!
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  • #4,255
  • Jul 22, 2019 10:18pm Jul 22, 2019 10:18pm
First let's consider the objects on this chart.

We have the approximate timeline. Dashed vertical magenta.

We have the grey grid set at 25 pips in this case.

We have the 26 period EMA. I have removed the 1H to keep things clear.

Then we have multiple hand drawn lines to measure and compare levels both on the RSI and the price. Together with letting to help me explain the various points involved.

There are a couple of red boxes which help me with the measuring of stops I have these set at 8 pips to allow for a 2 pip spread making the stop 10 pips in total.

That is it, nothing fancy or theoretical here.

I'll go away now and let you all make some deliberations and come back later either today or tomorrow.
  • #4,256
  • Edited 11:59pm Jul 22, 2019 11:29pm | Edited 11:59pm
Quoting Nala66
First let's consider the objects on this chart. We have the approximate timeline. Dashed vertical magenta. We have the grey grid set at 25 pips in this case. We have the 26 period EMA. I have removed the 1H to keep things clear. Then we have multiple hand drawn lines to measure and compare levels both on the RSI and the price. Together with letting to help me explain the various points involved. There are a couple of red boxes which help me with the measuring of stops I have these set at 8 pips to allow for a 2 pip spread making the stop 10 pips...
Okay, I'll give it a crack...

Z - you start loading up on longs from here because price has created a LL but the fast RSI is way oversold compared to Y (is this also HD? Not quite sure...)

a - RSI div forms in alignment with the higher-timeframe trend (bearish). Time to hedge short the full position and close longs.

Midway between A and B - RSI div forms (after impulse bear move). Time to hedge long. Price moves up briefly and then continues down, closing long hedge for BE (or perhaps a small loss).

B - RSI div forms again. Time to hedge long again.

Now this is where I get a bit confused...

Between B and b - Price moves up briefly to close our shorts and then U-turns to make a LL, meaning the long hedge was probably stopped out for BE, too.

b - Bullish reg div forms. Time to start loading long.

X - RSI div forms. Time to hedge short.

C - Price climbs to close short hedge and forms an ABC based on con div, as well as forming an RSI div. Time to hedge short again, targeting D, but being mindful of 50% level.

Whew!
  • #4,257
  • Jul 23, 2019 12:47am Jul 23, 2019 12:47am
Nice effort Kiwi
  • #4,258
  • Jul 23, 2019 1:05am Jul 23, 2019 1:05am
And by the by it has just hit the D target
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  • #4,259
  • Jul 23, 2019 1:26am Jul 23, 2019 1:26am
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Here is my loadings Allan
  • #4,260
  • Jul 23, 2019 1:57am Jul 23, 2019 1:57am
Quoting k1w1
{quote} Okay, I'll give it a crack... Z - you start loading up on longs from here because price has created a LL but the fast RSI is way oversold compared to Y (is this also HD? Not quite sure...) a - RSI div forms in alignment with the higher-timeframe trend (bearish). Time to hedge short the full position and close longs. Midway between A and B - RSI div forms (after impulse bear move). Time to hedge long. Price moves up briefly and then continues down, closing long hedge for BE (or perhaps a small loss). B - RSI div forms again. Time to hedge...
For the benefit of others, Alan helpfully pointed out that there is in fact an RSI div between B and b, so the long hedge would've been closed and then resumed at b. But it was 48 pips by b anyway, so you'd probably be done and enjoying a well-deserved beverage
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