NZDUSD Weekly.
- #2,808
- Dec 20, 2019 5:58am Dec 20, 2019 5:58am
- Joined Oct 2009 | Status: Trader | 1,023 Posts
{quote} AUDCAD broke out on H1 but unfortunately, I was asleep when it happened. I did not place a buy stop order as I wanted to see the breakout out first. {image}
Actually, for chamane strategy EA is a good way to trade: if bearish HD spoted on W1, wait for entering Trading Zone on D1 and put some trend catcher EA on H4 to "short only". That EA is going to work for you till we are in the Trading Zone. Once we are out- shut it down.
- #2,809
- Dec 20, 2019 6:06am Dec 20, 2019 6:06am
- Joined Jan 2009 | Status: Trader | 1,987 Posts
{quote} I think that you should use a robot to open orders in night time
Do you know any one of those EA?
- #2,810
- Dec 20, 2019 6:41am Dec 20, 2019 6:41am
- Joined Oct 2009 | Status: Trader | 1,023 Posts
{quote} Vitall, Do you know any one of those EA?
- #2,813
- Dec 20, 2019 4:46pm Dec 20, 2019 4:46pm
- Joined Jan 2009 | Status: Trader | 1,987 Posts
{quote} I have been trading by EAs for about 5 years. There are some good trend catcher for this strategy. I had one, based on RSI crossing 50% line, but can not find it in my files. It is easy to order a simple EA: MACD crossing "0". For good programmer it's 2 hours work
- #2,814
- Dec 20, 2019 5:39pm Dec 20, 2019 5:39pm
- | Joined Jan 2018 | Status: Trader | 1,108 Posts
Hi, Spot a HD. {image} What do you think?
This trade failed because of the opposite divergence on D1 which is stronger
and
because E/G was on round number 0.83000
which is also a strong weekly/daily supply zone:
If you trade divergence alone, blindly and without contextualization and understanding where price is located, on the long term you will lose money
- #2,815
- Dec 20, 2019 7:35pm Dec 20, 2019 7:35pm
- Joined Jan 2009 | Status: Trader | 1,987 Posts
{quote} This trade failed because of the opposite divergence on D1 which is stronger and because E/G was on round number 0.83000 {image} which is also a strong weekly/daily supply zone: {image} If you trade divergence alone, blindly and without contextualization and understanding where price is located, on the long term you will lose money
I personally like to use a cost averaging approach in my trading. After I spot a HD pattern (vertical line on the 4HR chart), I swich to the next lower timeframe (1 HR chart). I wait for the start of a Trading Zone when MACD crosses the zero line (blue rectangle). It did, but crossed back the line shortly upward, which gave no entry on the 5 min chart. So again, no entry.
Like you said, a HD pattern is not enough by itself. We need other confirmation signals to minimize our losses and maximize our profits so we don't lose money in the long run.
- #2,816
- Dec 20, 2019 8:09pm Dec 20, 2019 8:09pm
- Joined Jan 2009 | Status: Trader | 1,987 Posts
Here is another example of a HD pattern situation and the way I like to trade it.
We spot a HD pattern on the Daily chart as soon as the indicator diverges from price movement (red vertical line). We also observe that price is at a major Fib level at that time, increasing the probability of going up. Then we switch to the next lower timeframe (4 hr chart) and wait for entry signals. Price crossed a trendline up, but I usually wait for MACD to cross the zero line. It tells me that we are entering a Trading Zone (blue rectangle). Then I switch to a timeframe 8 to 12 times lower and wait for entry signals which is the MACD cross of the zero line (circles on the 30 min TF). With a RR=1:1, it gave 2 winning trades so far. I did not took those trades, the problem I have is to be in front of the screen when it happens.
We spot a HD pattern on the Daily chart as soon as the indicator diverges from price movement (red vertical line). We also observe that price is at a major Fib level at that time, increasing the probability of going up. Then we switch to the next lower timeframe (4 hr chart) and wait for entry signals. Price crossed a trendline up, but I usually wait for MACD to cross the zero line. It tells me that we are entering a Trading Zone (blue rectangle). Then I switch to a timeframe 8 to 12 times lower and wait for entry signals which is the MACD cross of the zero line (circles on the 30 min TF). With a RR=1:1, it gave 2 winning trades so far. I did not took those trades, the problem I have is to be in front of the screen when it happens.
- #2,820
- Edited 7:31am Dec 22, 2019 7:17am | Edited 7:31am
- Joined Jan 2009 | Status: Trader | 1,987 Posts
We will see how EURGBP act in 2020. The pair is bouncing off Weekly support. It just broke a relatively minor weekly resistance. There is a classic bullish divergence on Daily and a strong bullish triple candlestick formation (not shown). {image} {image}
- We can enter long right after price touches the down trendline on the Weekly chart. This would have resulted in a loss with a stop loss on the last swing low.
- We can enter long after price closes above the down trendline on the Daily chart. With a stop loss below the last swing low, we would have been stopped out unless we bring the stop loss at breakeven after price reaches half the risk which it did, so no loss. This is an advantage of switching to a lower timeframe to manage the trade.
- We can enter after MACD crosses the zero line upward on the Daily chart. We would have been stopped out at the last swing low. For me, the MACD signal is often a confirmation after the break of a trendline, but there is no guaranty of success.
- We can consider the MACD cross as the start of a Trading Zone (blue rectangle) in a Cost Averaging approach so we would enter at every MACD signal on the 1 HR (or 2 HR) chart. We can see on the 1HR chart that there were no entry signal upward from the indicator, so no trade. After that the HD pattern disappeared on the Weekly chart as price reversed to the downside.
There might be other entry options, but those are the ones I consider the most. Option number 4 is the one I prefer, because when you sum up all trades in a Trading Zone, it is likely to give a positive result. But it requires that we sit in front of the screen more often than not unless the HD pattern is spotted on the very higher timeframes. As we can see, the HD pattern was not easy to detect on the Weekly chart when backtesting, but we are facing those situations in real time trading sessions. Cost Averaging approach with Trading Zones are tools I adopted after searching for ways to eliminate losing situations. I will share any other tricks that I can come up with.
I will follow ken911's suggestion and am wishing you all a Merry Christmas. Happy Trading in 2020!