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Trading the Cable swings via averages

  • #7,141
  • Jul 16, 2021 10:06pm Jul 16, 2021 10:06pm
Hi Alan, the great thread I have just known. I have quizzes:
1. Why do we need divergence between RSI5 and 14?
2. What is the main meaning of this divergence?
I'm sorry if you think my quizzes are silly, I'm a newbie. Thanks !
  • #7,142
  • Jul 16, 2021 10:13pm Jul 16, 2021 10:13pm
Quoting cylon
{quote} Hi Allan, as for the entries shown above, what makes the place where they are taken to be zoo points? Or we should not ignore any Divergence regardless off whether it is on a zoo or not? The first 2 entries by Yahya I can say the zoo is the 5 min ema but the rest I can't tel. Also is the telegram group still active?
Here I have drawn in a few for you on the RSI. The problem with my RSI is when I shut down I lose these lines I have but I only needthem in real time so it is not a problem. It just makes them hard to record for you.

Here is my 1 hour chart where you should be able to see clearly where the signals tie in with the respective levels.

You should ask Des about Telegraph
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  • #7,143
  • Jul 16, 2021 10:34pm Jul 16, 2021 10:34pm
Quoting covid
Hi Alan, the great thread I have just known. I have quizzes: 1. Why do we need divergence between RSI5 and 14? 2. What is the main meaning of this divergence? I'm sorry if you think my quizzes are silly, I'm a newbie. Thanks !
The chart I just posted should answer that question.

I suppose the short answer is that it provides another explanation why the price turns at these points.

During my long time ago apprenticeship I traded nothing but divergences and learned a lot more about them than the text books would have you believe. In fact my divs are radically different from the text book types and I managed to make 1% profit everyday for 270 days. This to me is evidence that my understanding is adequate to get the job done.

However divs are not the be all and end all as the comparison between the fast and slow also gives us an idea of the real time strength and if the currency is is over bought. It is a matter of reading the language of the indicator and the story it is telling.

Hope this provides at least some explanation for you.
  • #7,144
  • Jul 17, 2021 2:57am Jul 17, 2021 2:57am
Quoting Nala66
{quote} The chart I just posted should answer that question. I suppose the short answer is that it provides another explanation why the price turns at these points. During my long time ago apprenticeship I traded nothing but divergences and learned a lot more about them than the text books would have you believe. In fact my divs are radically different from the text book types and I managed to make 1% profit everyday for 270 days. This to me is evidence that my understanding is adequate to get the job done. However divs are not the be all and end...
Thanks Alan,
I am answering myself that in principle when a divergence occurs, a reversal is possible (possibly a failure), and divergence in RSI indicates that the RSI has reversed, then It is directly related to the price reversal. Is this correct?
  • #7,145
  • Jul 17, 2021 1:29pm Jul 17, 2021 1:29pm
Quoting Nala66
{quote} Here I have drawn in a few for you on the RSI. The problem with my RSI is when I shut down I lose these lines I have but I only needthem in real time so it is not a problem. It just makes them hard to record for you. Here is my 1 hour chart where you should be able to see clearly where the signals tie in with the respective levels. You should ask Des about Telegraph {image}
Thank you Alan learn. This helps a lot.
  • #7,146
  • Jul 17, 2021 2:45pm Jul 17, 2021 2:45pm
Quoting cylon
{quote} Hi Allan, as for the entries shown above, what makes the place where they are taken to be zoo points? Or we should not ignore any Divergence regardless off whether it is on a zoo or not? The first 2 entries by Yahya I can say the zoo is the 5 min ema but the rest I can't tel. Also is the telegram group still active?
the first short was a m5 bear support retest in divergence, the second was the m15 bear support retest in divergence; both gave a 2bartest entry and both were in line with the h1 bear divergence
  • #7,147
  • Jul 17, 2021 9:18pm Jul 17, 2021 9:18pm
Quoting Nala66
{quote} The chart I just posted should answer that question. I suppose the short answer is that it provides another explanation why the price turns at these points. During my long time ago apprenticeship I traded nothing but divergences and learned a lot more about them than the text books would have you believe. In fact my divs are radically different from the text book types and I managed to make 1% profit everyday for 270 days. This to me is evidence that my understanding is adequate to get the job done. However divs are not the be all and end...
Alan as you said you traded divergences during your apprenticeship and learned lot of about them , what you would suggest if one want to trade only divergences if not get handle on all stuff yet , any extra tips on divergence and which type of divergences or where divergences becomes more reliable , one type i guess and trade and get result when price touches ema and bounce back and divergence appear it is very trustable setup ,
Pleas guide me on this subject little more
Thank you
  • #7,148
  • Jul 18, 2021 1:18am Jul 18, 2021 1:18am
Quoting covid
{quote} Thanks Alan, I am answering myself that in principle when a divergence occurs, a reversal is possible (possibly a failure), and divergence in RSI indicates that the RSI has reversed, then It is directly related to the price reversal. Is this correct?
Remember the RSI is a measure of relative strength.

So if the fast RSI fails to cross the slow RSI we can say the current relative strength has potentially weakened.

Like wise if the fast RSI crosses the 50% level and the slow doesn't we can say the current is overbought.

There are two things I do a lot and they are...

1) Compare the current average to the past average
2) Compare the fast RSI to the slow RSI

Average example. If the average has failed to make a HH than a previous swing it will tend to test the opposite swing to make a LL
RSI example. If the fast RSI remains above the slow RSI then we have an uptrend.
  • #7,149
  • Jul 18, 2021 1:42am Jul 18, 2021 1:42am
Quoting yahya11
{quote} Alan as you said you traded divergences during your apprenticeship and learned lot of about them , what you would suggest if one want to trade only divergences if not get handle on all stuff yet , any extra tips on divergence and which type of divergences or where divergences becomes more reliable , one type i guess and trade and get result when price touches ema and bounce back and divergence appear it is very trustable setup , Pleas guide me on this subject little more Thank you
I think I have covered the subject of divergence quite extensively. You can trade them profitably if you take the inference from a higher time frame and then trade accordingly.

A divergence on the 1 minute chart may only pay a couple of pips, whereas a div on the 1 hour may run to a hundred or so depending on the other factors I have covered.
  • #7,150
  • Jul 18, 2021 4:53am Jul 18, 2021 4:53am
Quoting Nala66
{quote} Remember the RSI is a measure of relative strength. So if the fast RSI fails to cross the slow RSI we can say the current relative strength has potentially weakened. Like wise if the fast RSI crosses the 50% level and the slow doesn't we can say the current is overbought. There are two things I do a lot and they are... 1) Compare the current average to the past average 2) Compare the fast RSI to the slow RSI Average example. If the average has failed to make a HH than a previous swing it will tend to test the opposite swing to make a LL...
Great answer. Thanks Alan.
I know that there are many types of RSI div such as crossing, divorce, or kiss . Could please explain more about each case?
  • #7,151
  • Jul 18, 2021 5:13am Jul 18, 2021 5:13am
I found in first posts, and I added more view (green), is it correct ?
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  • #7,152
  • Jul 18, 2021 6:48am Jul 18, 2021 6:48am
Hi , this is the intro to Alan`s method from the beginning of the thread to 04.2019. In previous pdf`s i started from April 2019 ,as there was davidmaree`s excellent pdf.
I decided to make a new, because i wanted to be chronological . There is everything for new starters and a lot for experience traders .This is part one.
To be continued.
Read digest study prosper!
Attached File(s)
File Type: pdf Nala66 Intro 1 .pdf   9.5 MB | 417 downloads
  • #7,153
  • Jul 18, 2021 12:30pm Jul 18, 2021 12:30pm
Quoting covid
I found in first posts, and I added more view (green), is it correct ? {image}
As for myself this is the one time I do not use the two bar test. As the price runs into div it is mostly obvious it is going to be a HD so I just take a punt and enter try to catch the top of the wick. The thing with HD is we know very quickly if it is working or not because of the snap back created to make it a HD.
  • #7,154
  • Jul 18, 2021 10:29pm Jul 18, 2021 10:29pm
@Alan: in #post 393, I can see an HD on H1 tf, right?
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  • #7,155
  • Jul 19, 2021 2:30am Jul 19, 2021 2:30am
Hi Alan,

so we saw an example of a bull failing on the 1hour. There was an rsi div as you can see from the graph below.

Now the way we tested this was we noticed that the bulls could not get passed a bear support level.

So our thinking changed.

Now I noticed this and my bias went back to bears, however as i was too busy looking for entries i couldn't shout out to the others in the chat.

What can others do to themselves t o notice if a bull is failing in this type of situation.

Mind you ema had reached the next level to. So we do ask ourselves, will it turn, keep going or go sideways.
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  • #7,156
  • Jul 19, 2021 8:37am Jul 19, 2021 8:37am
Quoting covid
@Alan: in #post 393, I can see an HD on H1 tf, right? {image}
Yes that is correct
  • #7,157
  • Jul 19, 2021 9:22pm Jul 19, 2021 9:22pm
Quoting covid
@Alan: in #post 393, I can see an HD on H1 tf, right? {image}
I'm sorry the answer I gave was entirely wrong and inappropriate.

The correct response should have been 'I don't know'

The reason is that I have no historical record of the RSI going back that far, in fact I didn't have the historical RSI at that time and this is needed to determine if the RSI made the HH or not albeit briefly. Once the situation is past we cannot see if it was a HD or not, that is, it is hidden.

Without this historical RSI we have to be present at the time to witness it in real time.

Here below is the historical RSI showing just how high or low it actually travelled (black) The red is the closes.
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  • #7,158
  • Jul 19, 2021 9:55pm Jul 19, 2021 9:55pm
Quoting Nala66
{quote} I'm sorry the answer I gave was entirely wrong and inappropriate. The correct response should have been 'I don't know' The reason is that I have no historical record of the RSI going back that far, in fact I didn't have the historical RSI at that time and this is needed to determine if the RSI made the HH or not albeit briefly. Once the situation is past we cannot see if it was a HD or not, that is, it is hidden. Without this historical RSI we have to be present at the time to witness it in real time. Here below is the historical RSI showing...
Thanks.
Let's see, there is no fast RSI on this chart, isn't it?
  • #7,159
  • Jul 20, 2021 3:54am Jul 20, 2021 3:54am
Quoting covid
{quote} Thanks. Let's see, there is no fast RSI on this chart, isn't it?
That is correct.

I have two sets of RSI's. One showing the relationship between fast and slow and the other showing the history of how much the RSI moved in both directions remembering that the RSI is always repainting until the bar closes.
  • #7,160
  • Jul 20, 2021 8:52am Jul 20, 2021 8:52am
My view this morning. is it correct ?
Thanks
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