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Trading the Cable swings via averages

  • #5,941
  • Mar 2, 2020 4:50pm Mar 2, 2020 4:50pm
Quoting Jazz1964
{quote} Ow you are talking about this chart: {image} In the circle the RSI pierced at C1 through the straight red line indeed. Very well spotted! Does that matter for finding an adjusted D via C2? IMHO not but this is for Alan to answer. What's your opinion Alan?
Hey Jazz

Post 5928 Alan replied that it is not valid if the RSI cuts thru. He also edited an earlier post of the chart with a big X in that ABCD. Post 5900

Cheers John
  • #5,942
  • Mar 2, 2020 5:07pm Mar 2, 2020 5:07pm
Quoting Jazz1964
{quote} Ow you are talking about this chart: {image} In the circle the RSI pierced at C1 through the straight red line indeed. Very well spotted! Does that matter for finding an adjusted D via C2? IMHO not but this is for Alan to answer. What's your opinion Alan?
I agree with this, and the well spotted bit.

If we are to have rules then we cannot bend them just to make things fit. A clear line of sight is a rule.
  • #5,943
  • Mar 2, 2020 5:26pm Mar 2, 2020 5:26pm
There seems to be a lot of emphasis on the mechanicals of price action and we seem to be getting away from the basics of trading the swing averages.

Here for your diary I only have the basics on the chart.

It begins at the approx. time with a div and a high RSI indicating a short with a good downtrend on the hour chart which also has an RSI div and the fast is high. My guess would be that this is not going much higher so a shorting opportunity exists.

Now on the 5 min we have a swing low average at X so this is our first hurdle but if the EMA is to attack X then price should go to A. Which it did and we would be about 50 pips in profit. By this time the bears have found support and attempt to take out the bulls supports.

At B we have the swing low average and a bull support so this is going to be resistance for the bears and indeed they had some trouble breaking this level but we have made plenty of profit so would close there and look forwards to the next day.

The point of todays diary is to stick to the simple stuff and not try to get tangled up in the mechanicals.
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  • #5,944
  • Mar 3, 2020 6:28am Mar 3, 2020 6:28am
Quoting Nala66
There seems to be a lot of emphasis on the mechanicals of price action and we seem to be getting away from the basics of trading the swing averages. Here for your diary I only have the basics on the chart. It begins at the approx. time with a div and a high RSI indicating a short with a good downtrend on the hour chart which also has an RSI div and the fast is high. My guess would be that this is not going much higher so a shorting opportunity exists. Now on the 5 min we have a swing low average at X so this is our first hurdle but if the EMA is...
Alan

Thanks for your latest post. It's very well explained.

My query is :
You marked out a Bear DIV . My concern is that price went across EMA between the two peaks.
Is it still ok to use the two peaks to assess a reg div ?

Thanks

L
  • #5,945
  • Mar 3, 2020 1:48pm Mar 3, 2020 1:48pm
It wasn't the average day today. Still was able to make 21% with 50 pips total which is good.
3 x BE+1
2 x -4 pip
2x 27 pip, circa
Trading S/R with PA only. No indicators anymore!
  • #5,946
  • Mar 3, 2020 5:11pm Mar 3, 2020 5:11pm
Quoting Del62a
{quote} Alan Thanks for your latest post. It's very well explained. My query is : You marked out a Bear DIV . My concern is that price went across EMA between the two peaks. Is it still ok to use the two peaks to assess a reg div ? Thanks L
Oh yes very much so, The only thing I use the EMA for is to determine if it is just a Continuation Div or and ABCD.

Here below I have plotted a few examples of various types of div. You can see the last Bull div did cross the EMA and is the one we would have traded long as a ZOO point with the target being the 2800 average swing followed by the 2832 after a lot of flapping about/ It finally made the 2832 but I was in bed by that time.

Now the bulls have support on the 1 hour there is no reason they can't make the 2891 at this time.
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  • #5,947
  • Mar 3, 2020 5:25pm Mar 3, 2020 5:25pm
Yep I agree with Jaz after the first three hours the hook came for the bull div and that took another 4 hours making it a rocky start.

Looking at the chart from the five minute perspective the EMA swings were pretty close together, we need to see them much wider to get better runs on the board.
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  • #5,948
  • Mar 4, 2020 12:44am Mar 4, 2020 12:44am
Quoting Nala66
{quote} Oh yes very much so, The only thing I use the EMA for is to determine if it is just a Continuation Div or and ABCD. Here below I have plotted a few examples of various types of div. You can see the last Bull div did cross the EMA and is the one we would have traded long as a ZOO point with the target being the 2800 average swing followed by the 2832 after a lot of flapping about/ It finally made the 2832 but I was in bed by that time. Now the bulls have support on the 1 hour there is no reason they can't make the 2891 at this time. {image}...
Alan

Thanks for your reply .
Much appreciated.

Yesterday i manage to catch part of the up move in the GBPUSD thanks to your reminder about focusing on the basics of trading the swing averages.

Happy trading all.

L
  • #5,949
  • Edited 4:11am Mar 4, 2020 3:42am | Edited 4:11am
5x BE+1 today still gave +1% profit.
That's 250% a year!
Trading S/R with PA only. No indicators anymore!
  • #5,950
  • Mar 4, 2020 9:26am Mar 4, 2020 9:26am
Hey Jazz, I notice you register a lot of BE+1 trades, Alan as well actually, and was wondering how exactly you're thinking about managing stops. Is it a hard rule such as "if price goes in my favor N pips, move SL to BE +1"? Do you move it in steps with hard rules... if up 10 pips then move SL to BE+1, if up 20 pips move SL to +5 pips, etc., or is it less mechanical? Do you take price action into consideration at all? This seems to be my problem, misreading the price action... "oh it's just a hook it will turn" or if it's still in in divergence after it goes against me I tend to stay in thinking the div will work out. I get a lot of trades that go 5-10 pips in my direction that end up turning into losses, or I let them go against me and many times they turn and I get them into profit but it still feels like I'm not managing the trade/risk well. Any input appreciated, thanks.
  • #5,951
  • Mar 4, 2020 9:38am Mar 4, 2020 9:38am
Quoting asoriga
Hey Jazz, I notice you register a lot of BE+1 trades, Alan as well actually, and was wondering how exactly you're thinking about managing stops. Is it a hard rule such as "if price goes in my favor N pips, move SL to BE +1"? Do you move it in steps with hard rules... if up 10 pips then move SL to BE+1, if up 20 pips move SL to +5 pips, etc., or is it less mechanical? Do you take price action into consideration at all? This seems to be my problem, misreading the price action... "oh it's just a hook it will turn" or if it's still in in divergence...
Asoriga

You have described exactly what i have found in the past. On Monday I was stopped 3 times at BE . I took a break and then the market went in the direction of my original trades without me. It is fustrating . I did better on Tuesday . Today was fustrating as well but i manage to get 10 pips .
I would be interested to see what other memebrs have to say on stop loss placement.

I am in Uk and normally work during the day. I had the last few days off and was hoping to get to use this method for the last few days. Sadly the market did not move much in the past 3 days...

Back to work tomorrow for me.

L
  • #5,952
  • Mar 4, 2020 3:49pm Mar 4, 2020 3:49pm
Quoting asoriga
Hey Jazz, I notice you register a lot of BE+1 trades, Alan as well actually, and was wondering how exactly you're thinking about managing stops. Is it a hard rule such as "if price goes in my favor N pips, move SL to BE +1"? Do you move it in steps with hard rules... if up 10 pips then move SL to BE+1, if up 20 pips move SL to +5 pips, etc., or is it less mechanical? Do you take price action into consideration at all? This seems to be my problem, misreading the price action... "oh it's just a hook it will turn" or if it's still in in divergence...
Yes the BE+1 exits are disturbing but it should not feel like a plague. Maybe you recall my own post regarding this, a week or two ago. After a lot of thinking on this, I am happy to keep the stops as per Alan's setup.

BUT the first remark to be made is regarding the entries! If you have a lousy entry, then the BE+1 will be hit by certainty. This means the entry is of importance.

I try to get the first trade on a.s.a.p. with a 10 pip SL maximum. 10 Pips sounds heavy and I hate them but it is on small size. I don't see them happening too often. To get the trade on a.s.a.p. means price being on an extreme when I push the button (not during a retracement) . Of course such entry needs some room to breath which is the 10 pips SL. As you have seen on many of my charts, such entries are often close to perfection. They'll see a sound move in the direction to the EMA, giving me often 8 to 10 pips. If I don't take the money (for whatever reason), I expect it to go further into profit. If I am wrong on that, I sure will take the BE+1 exit if that occurs.

These stops gets hit the most. I have to be patient with them and I 'know' that a good trade will come.
Without patience, I'll have too many entries (e.g. on every div during a steady trend).
Without trust, I'll miss the best trade setup and end the day with a row of tiny losses.

In case my entry was on a two-bar-test, I'll have my Stop where the trade gets invalid. Meaning on a Buy trade, the SL is where Price itself made a lower low. With a two-bar-test, the entry is per definition not at or near the sharpest possible high/low and such trades are typically more pressurized for the BE+1 exit. Therefor I can decide to keep the trade, expecting the Hook. If the Hook fails, I am out with MAX 10 pips loss. MAX. typically 5 to 8 pips though, just where the trade became invalid.

If I get stopped out, it just implicate I need to find another setup. Or to stop trading if I feel that is better.

Then when the trade runs into nice profit, we have to secure a part of the pips.
+8 to +10 pips gives the BE+1 exit
+15 gives +5 to +7 exit.
+20 gives +10 and from there on keep 50%.

But hey, to secure profits there are the hedges. And there is the possibility to take profit at an S/R, swing, etcetera. And see if and how to get in again at a better price. Or reverse.

For 2nd and 3rd entries, I do my best to keep the plan as dictated.
After the 2nd entry, the stop is set to the entry price of the first trade.
After a 3rd entry, the stop is set to the entry price of the 2nd trade.
About and around that.

Keep the risk low.
We're able to get 25+ pip trades on the book on an M5 chart which is very good!
That is an art worthwhile to develop and exceptionally profitable at the end.


I am sure Alan will comment on this if needed.
Trading S/R with PA only. No indicators anymore!
  • #5,953
  • Mar 4, 2020 6:57pm Mar 4, 2020 6:57pm
Yep that is exactly how it works, dozens of BE +1 stops outs.

Remember we have a profit target we are aiming for which represents 100% of the days workload.

The more times we achieve this result then the easier it gets because our account grows allowing us to place larger lot sizes reducing the pip distance.

BE + 1 is infinitely better than and minus result and thinking the trade will turn in our direction is just wishful thiniking. The market is a dynamic thing and can catch you off guard very easily. That is what stops are for in the first place to protect us from these changes. Our trade is not always right, the only thing we have control over is our money management. We are always dealing with probabilities.

In the charts below we would have started with a short on the 5 min looking for price making the average swing lows which it did. Then the bears find it difficult to get past this level which we can also identify on the 1 hour chart. Look how low the fast RSI was on the hour, they are struggling here so we regard this as a ZOO level and start looking to go long on it.

However it was very choppy and BE + 1 would have been a pain we have to endure until it finally got underway. It could just as easily broke short and caught us napping. We are just speculating we are right and place a tentative trade.

Then we are looking to get the stop to BE =1 so we can get our second trade on and start to compound the profits as we head for the 2891 swing level of the hour chart.

Once our second trade is on and we get the stops to BE + 1 again we start to look for our 3rd entry and getting this to BE + 1 so we can relax and wait for the money to come rolling in. So far this has done about 100 pips of movement but our daily profit target is well and truly done and dusted.

If we don't push for this result every time we take a trade then we will get nowhere and may even give the market our money.

On the 1 hour chart we would probably close the trade at the 2832 swing average because the combination of the smaller short and this long would have been plenty of profit.

So don't sweat the small losses or the BE + 1 they are just part of the road to riches provided you keep up the energy to do so.
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  • #5,954
  • Mar 4, 2020 10:54pm Mar 4, 2020 10:54pm
Exactly the guidance I needed. Thanks Jazz and Alan.
  • #5,955
  • Mar 5, 2020 12:19am Mar 5, 2020 12:19am
Quoting asoriga
Exactly the guidance I needed. Thanks Jazz and Alan.
Just ask we'll deliver... cheers
  • #5,956
  • Mar 5, 2020 1:59am Mar 5, 2020 1:59am
Jazz and Alan, With each of your posts, I learn something everytime. Thanks for the amazing and consistent support! I'm doing better on the trading part, identifying good setups and such. However, I'm still a bit clueless on the money management part. However, these two recents posts from you guys helped a bit. I'm sure that I'll get there soon. Agan, thanks guys!
Also, Jazz, it's amazing to see you often double your account in two weeks and have days like 21%+. I would like to know what's the maximum drawdown you've ever seen in a day? And also, what's the maximum floating drawdown you've got?
  • #5,957
  • Mar 5, 2020 2:38am Mar 5, 2020 2:38am
ABCD and AB=CD on H1. Bull div took price to the D of the AB=CD and 50% level of the ABCD
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  • #5,958
  • Mar 5, 2020 2:49am Mar 5, 2020 2:49am
Quoting KevinOwens
Jazz and Alan, With each of your posts, I learn something everytime. Thanks for the amazing and consistent support! I'm doing better on the trading part, identifying good setups and such. However, I'm still a bit clueless on the money management part. However, these two recents posts from you guys helped a bit. I'm sure that I'll get there soon. Agan, thanks guys! Also, Jazz, it's amazing to see you often double your account in two weeks and have days like 21%+. I would like to know what's the maximum drawdown you've ever seen in a day? And also,...
Well I am not sure what you mean by drawdown and what is a floating drawdown?
  • #5,959
  • Edited 4:00am Mar 5, 2020 3:11am | Edited 4:00am
Quoting KevinOwens
Jazz and Alan, With each of your posts, I learn something everytime. Thanks for the amazing and consistent support! I'm doing better on the trading part, identifying good setups and such. However, I'm still a bit clueless on the money management part. However, these two recents posts from you guys helped a bit. I'm sure that I'll get there soon. Agan, thanks guys! Also, Jazz, it's amazing to see you often double your account in two weeks and have days like 21%+. I would like to know what's the maximum drawdown you've ever seen in a day? And also,...
Very good to read you focus on risk.
Let's talk about the time since I am trading well. An intraday DD that happens once in a while is 30% to 40%. That's from a complete Basket loss plus some other losses. This is typically a situation where I will step back from the chart and look if I am fit or not, and/or if I can't make chocolate from the chart.
Said that, I am ready to bust my account. It is going to happen. I will just put new funds in it and go on the next day. Reason why that is appropriate, is clear from the picture below.
Max floating (open DD) is 16%. An EA protects me at 20%DD.
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EDIT and NOTE: by purpose I extended the risk part a bit in the table above, making it a bit higher than the risk explained by Alan. This fits a bit better what happens during my trading, and still shows the extremely good risk to reward ratio.

I trade quite aggressive with 0.01 per $16. That makes that I am happy with 25 pips per day with only 1 position (=16%)
That doubles an account per week. The rest is bonus.
Trading S/R with PA only. No indicators anymore!
  • #5,960
  • Mar 5, 2020 3:53am Mar 5, 2020 3:53am
Alan/Jazz,

great stuff, brilliant as always to get the benefit of your knowledge and experience

Thanks....Des
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