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Trading the Cable swings via averages

  • #6,961
  • May 4, 2021 10:45am May 4, 2021 10:45am
Quoting Nala66
{quote} When you have a divergence you want to test it to see if it working for you. So the bar in divergence is tested with the bar before it (the two bars0 The entry is the cross of the test line and the stop is above the divergence bar.. Your hope now is that the price should return to the EMA. So you can determine if the distance to the EMA is worth the risk to your stop.
Should we wait to bar close below the test for example in bearish case or just enter when price cross the two bar test line?
  • #6,962
  • May 5, 2021 2:52am May 5, 2021 2:52am
Quoting yahya11
{quote} Should we wait to bar close below the test for example in bearish case or just enter when price cross the two bar test line?
Since I am expecting a turn I don't wait because I just drag the pending order to the location to be hit when the turn happens.
  • #6,963
  • May 6, 2021 1:15am May 6, 2021 1:15am
Good Morning Alan!
can we trade Gold with this method?
  • #6,964
  • May 6, 2021 3:14am May 6, 2021 3:14am
Quoting yahya11
Good Morning Alan! can we trade Gold with this method?
I don't know because I don't trade it.
  • #6,965
  • May 10, 2021 1:18pm May 10, 2021 1:18pm
The daily chart breaks the range and makes the D target
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  • #6,966
  • May 11, 2021 7:47pm May 11, 2021 7:47pm
Quoting Nala66
The daily chart breaks the range and makes the D target {image}
yes really cool
  • #6,967
  • May 12, 2021 1:10am May 12, 2021 1:10am
Although we had a bounce at the 1 hour D level I am not convinced this is the end of the bull run.

Looking at the monthly chart we see the EMA is trying for the HH where I have marked X on the chart below. This is a fair time away as yet but the bulls are heading into a zone where there is little resistance.
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  • #6,968
  • May 12, 2021 3:03am May 12, 2021 3:03am
Quoting Nala66
Although we had a bounce at the 1 hour D level I am not convinced this is the end of the bull run. Looking at the monthly chart we see the EMA is trying for the HH where I have marked X on the chart below. This is a fair time away as yet but the bulls are heading into a zone where there is little resistance.{image} {image}
wow that's great

thanks you, Master
  • #6,969
  • May 14, 2021 4:45am May 14, 2021 4:45am
hello Alan and everyone
I read Alan's money management and created the spreadsheet myself,
please comment

Thanks you
Jewel
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  • #6,970
  • Edited 10:47pm May 16, 2021 8:48pm | Edited 10:47pm
Quoting Nala66
How I trade the hidden divergence... When I see there is a possibility of a move running into hidden divergence (in this case short) I place a pending short order well below the price action in other words out of the way. Then when the price moves into the divergence I slide the order up so that I catch the spring back
Hi Alan,

Could you please help, give me an example of a pending order with HD.

Thank you very much
Jewel
  • #6,971
  • May 16, 2021 9:54pm May 16, 2021 9:54pm
Quoting jewelnguyen
{quote} Hi Alan, Hi Alan, Could you please help, give me an example of a pending order with HD. Thank you very much Jewel
You should always have your pending orders set up on your chart well away from the current price action so they are ready to be slid in place when required.

This saves you precious moments in time by not having to type in the size of your orders which change for each.

So you have all three pending orders set up and ready. You spot an opportunity and slide the first order into the correct position to be taken up. Then the second and third. Your stops should move also but they will need to be adjusted to limit risk as much as possible.

If you spot a HD or whatever you place your two bar test and slide your order to a break of the test line so it get picked up. Once it is then we adjust the stop and get the next order into position and so on.

It is good to get all three on before the price crosses the EMA and get all the stops to the position of the last entry. Then all you can do is wait and watch should a hedge be required. We cannot always assume the primary trades will win the day, many times it is my hedges that do so.

Hope this helps.
  • #6,972
  • Edited 10:44pm May 16, 2021 10:11pm | Edited 10:44pm
We don't have a current HD but this div will serve to explain.
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If the price on the 15 min gets back across the EMA then the shorts will likely be stopped out and the hedge take over the profit making and we protect the hedge with a profit stop.
  • #6,973
  • May 16, 2021 10:28pm May 16, 2021 10:28pm
Now we would be waiting to see if our three shorts get stopped out or if our one hedge does. In either case we win.
  • #6,974
  • May 16, 2021 10:39pm May 16, 2021 10:39pm
So now the chart looks something like this with the hedge stopped out for a profit and the shorts still running.
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  • #6,975
  • May 16, 2021 10:43pm May 16, 2021 10:43pm
Note how it doesn't matter which way the price now moves we still make profits.

This is the advantage we gain from placing a simple safe hedge.

If it runs down our shorts win the day if it runs long we make a small profit from the shorts and some we have banked from the hedge.
  • #6,976
  • May 16, 2021 10:52pm May 16, 2021 10:52pm
Quoting Nala66
We don't have a current HD but this div will serve to explain. {image}If the price on the 15 min gets back across the EMA then the shorts will likely be stopped out and the hedge take over the profit making and we protect the hedge with a profit stop.
Thank you very much
  • #6,977
  • May 21, 2021 6:15am May 21, 2021 6:15am
A couple of things to note here.

The red line target I had on the 1 hour chart was copied from the ABCD target on the 4 hour chart.

Mostly though I would like to draw your attention to the role the supports make either bullish or bearish and how they become the resistance levels to be overcome.

See how B (black line) was the bear support it generally requires a bullish support to take it out. So the bullish support (red line A) holds and price eventually goes on to take out the resistance at the open or our 108. It then ran exactly to the target. Upon reaching the target it was in bear divergence so a short or a hedge is required.
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  • #6,978
  • May 21, 2021 9:58am May 21, 2021 9:58am
Thanks again Alan, these concise explanations and views on how you interpret the gyrations in the market are invaluable
Cheers...Des
  • #6,979
  • May 21, 2021 10:34pm May 21, 2021 10:34pm
Quoting des_b
Thanks again Alan, these concise explanations and views on how you interpret the gyrations in the market are invaluable Cheers...Des
Thanks. The more you practice the concepts the easier it gets to see what the market is actually doing rather than some obscure theory. The whole thing is based around the market trying to make these HH or LL averages and what price has to do to attain these since price always leads the average in any given direction.

Our problem is that we are also dealing with different time lines via the respective charts. For example a monthly chart is going to experience quite an erratic chart when viewed from a 5 minute perspective. To combat this we start with a 1 hour chart because this is likely to give us the required pips for our daily rations, in most cases just a few hours work.

The key is to look for the ZOO points and then the corresponding signal to take a punt at the same time looking for where the price may have a n objective. For example a div on the 1 hour should return price to the EMA+ so we would be looking for the entries on the 5 min or even the 1 min in the desired direction all the time moving the stops for protection.

The efficiency of time is also very important to me, if I don't see a trade on offer I just walk away and await a better time. Guessing it may or may not do something is not my idea of trading it is simply gambling on an outcome. Because we are using the 1 hour as our guide it gives us plenty of time to check in for a signal to get involved and then trade it accordingly. Also because we are using the 1 hour it is likely to be somewhat choppy on the lower time frames so we may take hedges to cover ourselves and even profit from them. There is no time to just sit back and await a result charts have to have an eye on them and moving stops is a chore.

All this is going on whilst we have a fiscal target in mind but we are not limited to it, we may for example just move our stops to lock in our profit and then see what price does to improve on it. We could also take a hedge to lock in this profit so our capital is free to take additional trades.

There are many opportunities to look for trades and you may wish to specialize in any or all of them, for example the HOOK is a good call because it is preceded by a div and tells us where the stop should be placed. Two bar tests are also good because again we know where to put the stop. Supports allow us to place the stops so we do not get burned too badly with our initial entry. There are many more but I think you get the point of tight stops and compounded profits.

Amen for today.
  • #6,980
  • May 25, 2021 12:05pm May 25, 2021 12:05pm
Quoting Nala66
{quote} Thanks. The more you practice the concepts the easier it gets to see what the market is actually doing rather than some obscure theory. The whole thing is based around the market trying to make these HH or LL averages and what price has to do to attain these since price always leads the average in any given direction. Our problem is that we are also dealing with different time lines via the respective charts. For example a monthly chart is going to experience quite an erratic chart when viewed from a 5 minute perspective. To combat this...
Really good explanation by Mentor
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