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Trading the Cable swings via averages

  • #6,261
  • Apr 30, 2020 3:14am Apr 30, 2020 3:14am
Quoting Nala66
Following on from yesterdays chat about supports... Look at this 5 min chart and notice how it takes a bull support to take out a bear support and vice versa. {image}


Why would bear support 3 be found there and not at the pullback before it ( the first pullback after it crosses ema) ?

Thank you
  • #6,262
  • Apr 30, 2020 4:04am Apr 30, 2020 4:04am
Quoting Andy1501
{quote} Why would bear support 3 be found there and not at the pullback before it ( the first pullback after it crosses ema) ? Thank you
It's because after the first pullback price went on to close above the EMA. Price could have continued bullish but it didn't. It turned again and headed back below the EMA. It pulled back again and created bear support at 3 and held as price continued down and stayed below the EMA. You could also argue that previous bull support failed at the C point of the first small red triangle. In which case it was there that bull support failed but then re-established itself at the next pullback at the B point of the next small red triangle. There is also bull support by the C point of the green triangle at the bottom of the chart. I could go on but I hope that helps.
  • #6,263
  • Apr 30, 2020 4:35am Apr 30, 2020 4:35am
Quoting mayflower
{quote} It's because after the first pullback price went on to close above the EMA. Price could have continued bullish but it didn't. It turned again and headed back below the EMA. It pulled back again and created bear support at 3 and held as price continued down and stayed below the EMA. You could also argue that previous bull support failed at the C point of the first small red triangle. In which case it was there that bull support failed but then re-established itself at the next pullback at the B point of the next small red triangle. There...

Yes , thank you!

So essentially , a bull/bear support is validated once price passes the entry point ( as Nala labelled it here ) ?
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  • #6,264
  • Apr 30, 2020 5:10am Apr 30, 2020 5:10am
No Andy, in the above chart the bottom of the first pullback pivot created above the EMA is support as Alan has marked. The entry level in that example is shown after price passes the highest point.
  • #6,265
  • Edited 12:58pm Apr 30, 2020 8:38am | Edited 12:58pm
Quoting mayflower
No Andy, in the above chart the bottom of the first pullback pivot created above the EMA is support as Alan has marked. The entry level in that example is shown after price passes the highest point.
That's what I was saying . That photo was the only example I had.

Alan mentioned that the first bar to pull back after passing the ema is where support is found , however this doesn't usually hold. So my question was whether support is confirmed as soon as the first bar pulls back or once the price passes the highest point (the entry level )?

I hope I'm making sense.
  • #6,266
  • Apr 30, 2020 12:32pm Apr 30, 2020 12:32pm
Hi Andy, you had better get Alan to confirm your thinking. My understanding is that where support is found it is then a ZOO point providing an opportunity to go long or short. However, this support may or may not hold so an entry would require a tight stop just in case price decides to reverse back across the EMA. Just because it passes an entry point doesn't guarantee the price will continue higher or lower. If it does then you may be in the money. If not a tight stop will protect your account and leave you to watch where price next finds support.

To quote you: 'I too hope I'm making sense.' :-)
  • #6,267
  • Apr 30, 2020 12:57pm Apr 30, 2020 12:57pm
Quoting mayflower
Hi Andy, you had better get Alan to confirm your thinking. My understanding is that where support is found it is then a ZOO point providing an opportunity to go long or short. However, this support may or may not hold so an entry would require a tight stop just in case price decides to reverse back across the EMA. Just because it passes an entry point doesn't guarantee the price will continue higher or lower. If it does then you may be in the money. If not a tight stop will protect your account and leave you to watch where price next finds support....

Thank you for the input ! I think I was just over-thinking it, that's all. I hope I'm not bothering anyone with questions that might seem basic , just trying to fill some knowledge gaps so we can all be on the same page.

What I'm curious about , however, is how you guys would interpret today's situation . Bearish Divergence was present on the 1 hour but price only made it to the ema . Is this expected or do we consider this setup to be unsuccessful ? What possible entries did we have today?

Thank you,
Andy
  • #6,268
  • Apr 30, 2020 1:05pm Apr 30, 2020 1:05pm
Andy, without possibly digging myself an even deeper hole, for an explanation I will refer you to our honourable mentor, Alan.
  • #6,269
  • Apr 30, 2020 8:48pm Apr 30, 2020 8:48pm
Quoting Andy1501
{quote} Thank you for the input ! I think I was just over-thinking it, that's all. I hope I'm not bothering anyone with questions that might seem basic , just trying to fill some knowledge gaps so we can all be on the same page. What I'm curious about , however, is how you guys would interpret today's situation . Bearish Divergence was present on the 1 hour but price only made it to the ema . Is this expected or do we consider this setup to be unsuccessful ? What possible entries did we have today? Thank you, Andy
Read your stuff here Andy.

Those trades I showed are what I used to call the pivot pass trades where we take the trades in the direction the 1hour is saying at the 5 minute level.

If the 1hour is going somewhere then we will normally see this as a 5 min trend with some pull backs we can consider as entry points. We don't know how far they will pull back but we can place pending orders at their tops and once taken up we will know the bottom and place our stop there.

This is just another method of getting your entries on.

As for the support we don't know on the 5 min if is or not until it has happened. We can always drop to the 1 min chart and take a punt there. If we don't get the time correct price may zigzag across the EMA for some time before a support is FOUND.

The usual thing that happens on a very regular basis is that a div is formed taking price back to the EMA, Price crosses the EMA and finds support, price then runs to the target. We keep a sharp eye open for a counter div on the same chart.
  • #6,270
  • Apr 30, 2020 9:29pm Apr 30, 2020 9:29pm
It pays to zoom out and look at what is happening in the analysis phase of your daily trading activity.

The other day it was price trying to make the EMA target on the hour, which it did.

Then yesterday we see the EMA trying to make this HH EMA and price makes the next level.

Next we see a wide open space so we would expect a series of zigzags if it is going to close this. At the same time we watch for a change in direction altogether.

It is a matter of balancing what we see on the day and trying to determine our best option and look for the signals to execute this option.
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  • #6,271
  • May 1, 2020 6:58am May 1, 2020 6:58am
Hello Alan, Hello every body. I’m a french man living in Barcelona on a small boat and Partly disabled. I’ve begun to trade more than 20 years ago. I’ve traded stocks, futures and forex. I’ baught a lot of systems, folowed a lot of gurus and lost a lot of money. I rode and studied diferents threads of FF and lost money. I’ m a very unsuccessfull trader.
I discovered this one and it is the first time i meet a man explaining a wining strategy
I didn’t want to cominicate before reading and understanding all the thread. They are a lot of points of shadow, but I think i begin to understand.
Thanks a lot to Alan and others who help.
If i become successfull you will have saved my life.
Cheers
Chris
  • #6,272
  • May 3, 2020 2:01am May 3, 2020 2:01am
Hi Alan,
I've just read through your thread on trading with the Quartile.
It seems you used to use this on the AUD/JPY during the Asian session.

I'm curious, why did you change to the GBP/USD using your current system during the European session?
I ask this because I live in Australia and it suits me better to watch the Asian session.

David
  • #6,273
  • May 4, 2020 12:59am May 4, 2020 12:59am
Quoting Trade.Time
Hi Alan, I've just read through your thread on trading with the Quartile. It seems you used to use this on the AUD/JPY during the Asian session. I'm curious, why did you change to the GBP/USD using your current system during the European session? I ask this because I live in Australia and it suits me better to watch the Asian session. David
The AJ and the AU are so very much slower and it is difficult to make a decent pip distance in a shorter space of time.
  • #6,274
  • May 4, 2020 1:05am May 4, 2020 1:05am
On the hour chart it looks like the average is trying for the 2434 LL and price thus making the next level 2339.

It just hit the ABCD short

Since price is well ahead of the average it may well just consolidate into a holding pattern for a while.
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  • #6,275
  • May 4, 2020 3:32am May 4, 2020 3:32am
Quoting Nala66
On the hour chart it looks like the average is trying for the 2434 LL and price thus making the next level 2339. It just hit the ABCD short Since price is well ahead of the average it may well just consolidate into a holding pattern for a while. {image}

Why would you not consider the 1hr bullish divergence in this case?

Thank you
  • #6,276
  • May 4, 2020 4:48am May 4, 2020 4:48am
Quoting Nala66
On the hour chart it looks like the average is trying for the 2434 LL and price thus making the next level 2339. It just hit the ABCD short Since price is well ahead of the average it may well just consolidate into a holding pattern for a while. {image}
Nala are drawing the triangles manually or using the indicator that was post in this thread ?
  • #6,277
  • May 4, 2020 7:12am May 4, 2020 7:12am
Quoting Andy1501
{quote} Why would you not consider the 1hr bullish divergence in this case? Thank you
I would consider it but I would consider it to be a scalp because I am expecting the EMA to test for a LL.

When trading below the EMA all bullish divs are considered scalps we have to wait and see if they turn into trades.

There is an old saying "see bull div and think bear market"
  • #6,278
  • May 4, 2020 7:13am May 4, 2020 7:13am
Quoting PhillipmC
{quote} Nala are drawing the triangles manually or using the indicator that was post in this thread ?
The indicator, but some I draw myself if I think they are the correct ones.
  • #6,279
  • May 4, 2020 8:47am May 4, 2020 8:47am
Quoting Nala66
{quote} I would consider it but I would consider it to be a scalp because I am expecting the EMA to test for a LL. When trading below the EMA all bullish divs are considered scalps we have to wait and see if they turn into trades. There is an old saying "see bull div and think bear market"

At what point would they be considered trades? I'm assuming when 5 min support is found?
  • #6,280
  • May 4, 2020 10:42am May 4, 2020 10:42am
Quoting Andy1501
{quote} At what point would they be considered trades? I'm assuming when 5 min support is found?
All trades begin as scalps, we take a tentative entry limiting our risk.

Then as they progress we can begin to add more lots as a trade is being established and our confidence grows that we have made the correct analysis.

All the time adjusting our stops to limit risk.

If the price does manage to cross the EMA then a potential swing in the opposite direction is on the cards for us. If price FINDS support we can plot the target and our trade is established and monitored.

Your assumption is wrong because dropping to the lower time frame chart is only to better your initial tentative entry.

It also depends on what you consider a scalp and what you consider a trade. As far as I am concerned I consider a trade to be where I get the full lot sizes on and reach the desired target, a scalp is just where a small portion of the target is taken. We can scalp our way to our target but it takes many trades and a lot of work.
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