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Trading the Cable swings via averages

  • #5,021
  • Nov 6, 2019 5:05pm Nov 6, 2019 5:05pm
If we stay with the 4 hour and examine it a little further by zooming out we can see the blue triangle has not yet completed either side D targets.

If the average is indeed trying to make the lower low then we would envisage that price will make the lower D2.

These are very long term predictions and price could simply range between the two 50% for a considerable amount of time.

We need to be watchful of the Divs cropping up in time.
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  • #5,022
  • Nov 6, 2019 5:16pm Nov 6, 2019 5:16pm
Again sticking to these longer views we see the daily has hit all the targets so may be in the process of setting up a new one as outlined by the yellow dotted lines below...
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  • #5,023
  • Nov 6, 2019 5:31pm Nov 6, 2019 5:31pm
Quoting Nala66
Again sticking to these longer views we see the daily has hit all the targets so may be in the process of setting up a new one as outlined by the yellow dotted lines below... {image}
That would coincide with a pullback to the weekly EMA and bull support bounce off of it.
  • #5,024
  • Nov 7, 2019 12:45am Nov 7, 2019 12:45am
Well that was a nice 30 pip start and whether or not to hedge at the top was a question... I closed.
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  • #5,025
  • Nov 7, 2019 12:57am Nov 7, 2019 12:57am
Quoting Nala66
Well that was a nice 30 pip start and whether or not to hedge at the top was a question... I closed. {image}
Hi Alan

There was a divergence halfway up that move. Did you ignore it because we should expect price to cross the H1 EMA (and possibly the H4)?

Thanks
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  • #5,026
  • Nov 7, 2019 2:04am Nov 7, 2019 2:04am
Quoting bridgstarr
{quote} Hi Alan There was a divergence halfway up that move. Did you ignore it because we should expect price to cross the H1 EMA (and possibly the H4)? Thanks {image}
No I didn't ignore it, I was watching for it crossing back on the EMA but it didn't so I got another long on.
  • #5,027
  • Nov 7, 2019 2:41pm Nov 7, 2019 2:41pm
Quoting Nala66
If we stay with the 4 hour and examine it a little further by zooming out we can see the blue triangle has not yet completed either side D targets. If the average is indeed trying to make the lower low then we would envisage that price will make the lower D2. These are very long term predictions and price could simply range between the two 50% for a considerable amount of time. We need to be watchful of the Divs cropping up in time. {image}
And it came to pass, the 4 hour did stop within the range but for how long? That EMA is rocketing down to attempt a LL
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  • #5,028
  • Nov 7, 2019 2:49pm Nov 7, 2019 2:49pm
We can also see this range on the 1 hour...
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  • #5,029
  • Nov 7, 2019 3:01pm Nov 7, 2019 3:01pm
So being short of ABCD's on the 1 hour we have the alternatives of AB = CD.

Here are the two of them one red, one blue. I have taken off the quartile to make it easier to see (had too many lines)

I just edited the chart to show the + or - distances so you can see how accurate this is.
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  • #5,030
  • Nov 8, 2019 4:06pm Nov 8, 2019 4:06pm
That was a long wait for the action to begin, way past my bedtime so not much use to me at all.

It kicked off with a regular div on the 1 hour and lasted just 4 hours heading for the lower D2 target set a while back now on the 4 hour. We could even see gappage down to this level over the weekend. (2746).
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  • #5,031
  • Nov 10, 2019 3:51pm Nov 10, 2019 3:51pm
Well no short gappage over the weekend so price seems to be respecting the bullish div and the EMA on the daily chart. The div should make the HH with the fast RSI having plenty of room to do that.
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  • #5,032
  • Nov 11, 2019 12:48am Nov 11, 2019 12:48am
Alan when I get a pivot like this marked in yellow directly on the EMA line, can I use this for an ABCD target? or is it just regular bearish divergence.

I think the same situation cropped up Thursday or Friday, I cant remember exactly and I wasn't sure if it could be counted legit or not. I suppose its a bit like tennis when the ball hits the line, in or out.
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  • #5,033
  • Nov 11, 2019 4:24am Nov 11, 2019 4:24am
Quoting Dubtrader
Alan when I get a pivot like this marked in yellow directly on the EMA line, can I use this for an ABCD target? or is it just regular bearish divergence. I think the same situation cropped up Thursday or Friday, I cant remember exactly and I wasn't sure if it could be counted legit or not. I suppose its a bit like tennis when the ball hits the line, in or out. {image}
Exactly is it in or out. I took it to be a regular divergence stopping the price crossing the EMA and thus making a LL than the bull div below it.

After this we got the ABCD and price shot up to a bear support (resistance). I scored very nicely on that move.

PS The next pivot after your arrow was this ABCD
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  • #5,034
  • Nov 11, 2019 4:40am Nov 11, 2019 4:40am
The bears failed to hit the 4H target so the bulls are jumping in on the fact. I posted this 12 hours ago.
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  • #5,035
  • Nov 11, 2019 7:59am Nov 11, 2019 7:59am
Now we have this on the 5 min, my guess is long but I am off to bed now.
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  • #5,036
  • Nov 11, 2019 8:16am Nov 11, 2019 8:16am
Quoting Nala66
Now we have this on the 5 min, my guess is long but I am off to bed now. {image}
I have this target as well although Im in a short position, nervous now!
  • #5,037
  • Nov 11, 2019 12:35pm Nov 11, 2019 12:35pm
Hi Alan

I'm at a bit of a loss. I seem to see signals everywhere and end up totally confused. I'm hoping you can help share your thought processes in contrast to mine!
Starting with the daily. The divergence was in place on the previous trading day also, so why no effect? Do you only consider it after a 2 bar test?

Assuming I had a long bias from the daily, then I come up against numerous bearish divergences, firstly on hourly on the 7am bar, coinciding with this 1 hour EMA. Price drops down a few pips then rises above the divergence. I got stopped out short here
Then on the M5 we have yet more bearish divergence at 09:20, followed by whipsawing around with divergences all over the place

I entered on what I thought was bull support on M5, and got stopped out again.

When my 4 hour bar between 8 and 12 closed, it was showing bearish divergence , and the M5 was overbought at 12:35 on my chart. I didn't short it thankfully.

I can't see the wood for the trees at the minute.

Thanks
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  • #5,038
  • Nov 11, 2019 12:37pm Nov 11, 2019 12:37pm
Quoting Nala66
The bears failed to hit the 4H target so the bulls are jumping in on the fact. I posted this 12 hours ago. {image}
At which point do you decide that the price will fail to hit the bearish target?
Thanks
  • #5,039
  • Nov 11, 2019 4:07pm Nov 11, 2019 4:07pm
Quoting bridgstarr
Hi Alan I'm at a bit of a loss. I seem to see signals everywhere and end up totally confused. I'm hoping you can help share your thought processes in contrast to mine! Starting with the daily. The divergence was in place on the previous trading day also, so why no effect? Do you only consider it after a 2 bar test? Assuming I had a long bias from the daily, then I come up against numerous bearish divergences, firstly on hourly on the 7am bar, coinciding with this 1 hour EMA. Price drops down a few pips then rises above the divergence. I got stopped...
I hear you and I am working on the explanation...
  • #5,040
  • Nov 11, 2019 5:08pm Nov 11, 2019 5:08pm
This is so difficult to explain in text and pictures, far easier if we chat on Shype.

Below is the 1 hour chart and I hope I have the area that troubles you in the blue inset I will expand on later.

I have tried to put as much detail here as required to get the job done. There is a lot going on so the details are important so lets recap a few rules.

1) Trades go with the trend... Scalps or hedges go against it.
2) If trading below the EMA we look for shorts
3) If trading above the EMA we look for longs.
4) We apply a 1, 2, 3 money management to restrict losses and compound profits.
5) We pay attention to our time line, mine is always 9am chart time.(Vertical dashed lines)
6) Look for those EMA swing levels, very important.

Ok on this 1 hour chart we see the last scalp made it across the EMA whereupon the bulls found support. Look at the EMA target!!!! Price will go to the next level in order to drag the EMA to the EMA target. We had an ABCD to assist us with this.

The target was reached and a bear div formed. We have the choice of closing the trade or hedging short, or both if we exit and scalp short. Remember we are now on the opposite side of the EMA so shorts become scalps or hedges.

OK next I will zoom in on the inset and so how that works within our rules.

Whoops, I forgot to mention you should look at the difference between A and B, different setups entirely.
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