Trading the Cable swings via averages

To trade HD's we set up the trade like this...

Regular divs or HD's they should return price to the EMA. If it doesn't look out it will probably make a HH/LL

Look at these last two on the 1 hour, both made the EMA...

The longer term hope for these divs is that the bears cross the EMA and find support but they have not been able to for several days.

A long term trader would hold the longs from the bottom and hedge these signals for additional profits or protection.

Too long winded for my tastes but.

This is a 40 pip grid on the 1 hour chart so lately the movement is limited.

Hard to get more than the market is prepared to give.

Hi Alan,

Why did you know it would become HD bar? because it could snap back a while but finally had closed price above previous bar as situation below

So that the current bar is HD, it MUST CLOSE below the previous one.
If this does not happen and it closes above the previous one, we get the usual regular divergence. (as now on H4)

That is correct. However most often it is going to be pretty clear a hidden div will form while in the div state. A risky trader, like myself, will take a punt and jump in at this early stage (only risking 10 pips of a first entry). Then my second entry will be picked up on the snap back. Then it all depends on the distance back to the EMA as to whether I can get the third trade on and hope to make the 40 pip profit. Often only two entries are made and sometimes just the first.

It is for this reason the better signal comes from the 1 hour chart where 40 pips or more often present themselves as potential better options.

Due to broker bar closing times I don't rely much on the 4 hour and besides it takes too long to execute. If you were an institution you would probably be trading this in shifts over the 24 hour period. I have never heard of a bunch of retail traders ever getting together and trading in such fashion as to cover these long periods. Everyone would have to be on the same page and comply with strict rules of conduct. However I am rambling here.

Reading the chart in the context of what it is telling us is the skill we should be developing, so, with that in mind let's take a look at the 1 hour chart and read what is happening there.

Beginning at the top which is close to the start of the day we see a bear div to short. (This should return price to the EMA, which it does)

However it reaches the EMA in bull divergence so our option is to either close or hedge. (Hedge is always the best option to lock up the profits)

Price does bounce so we expect this bull div to make a HH than the top. But look carefully it is stopped at the 50% pull back level giving us an AB = CD so our best option here is to close the hedge and let the top trade continue to this target.

It hits the D target but it is in a bull div sending it back to the EMA.

While this has been going on an ABCD div triangle has formed. The bulls cannot get back across the EMA so this is failure and the bears then take it the D target of the ABCD again in bull div taking it back again to the EMA.

All this took more than an eight hour day and I defy anyone to hold their concentration for such long periods. A few days of this and their health would be at risk.

This is why it is so difficult for retail traders to get on top of the market. If we try for more than we should we are overtrading as individuals. Just look at all the work and knowledge involved, no mean feat to do on a daily basis and this is just the 1 hour chart. Throw in all the moves on the 5 min chart and the process is daunting indeed.

Our task is to get our individual profits and not care less what institutions are doing, Let them win some money, they also have mouths to feed.

Plenty to chew over there for the weekend.

What amazing words! Thank you for your patience, sir. Have a nice weekend.

I have not decided to write it for a long time. I believed that it could be misunderstood. But after this post, I can no longer hold back and should speak.
Exactly the same technique of working with HD, my mentor showed me more than 10 years ago. When I asked him, if he had familiar traders in Australia, he replied that no. After that, I realized that we live in a virtual world where everything is absolutely connected with each other. )))
Two unfamiliar people came to the same discoveries completely independently of each other. The only difference is that the RSI is not used for these purposes. But it does not matter because they behave absolutely all oscillators.
Just amazing!
And yes, I am also a risky trader.))

Sorry but I don't understand what you are getting at here. Where are the hidden divs you speak of?

The RSI you have there is used for finding RSI divs, not hidden divs.

I don't use the 4 hour chart for finding regular divs because brokers close the bars at different times, there could be up to two hours difference.

However all should have the same highs and lows although these may be on different bars.

With that in mind when plotting the 4 hour chart I only use the highs and lows, not the closes.

So using the 4 hour chart below I have plotted the hidden divs.

A) is the high the bulls are attacking. Plotted at the extreme with the blue horizontal line both on the price and on the historical RSI.

B) is where price broke above this high but looking at the historical RSI it didn't, so there at B we have a hidden bear div. which should return price to the EMA. (It did)

c) again crossed the blue line and again the historical RSI failed to do so making another hidden bear div. Which should return price to the EMA. It didn't so the rule is that it will probably make a HH than C. (It Did)

D) Was another hidden bear div and made it to the EMA.

The blue/black grid on this chart is 50 pips.

Did you all get your AB = CD today.

Yes, Sir

Hi Mr. Alan,

I've been confused for a while that why did you use rsi_divergence indicator to find HD instead of just Rsi14? I also have that indi in my chart but actually I don't use it.

The normal RSI repaints all the time until the bar closes. The rsi divergence indictor shows the range of this repainting so we can see from it that when price made a HH the max range of the rsi did not so we have a hidden HD occurring when the price snaps back.

Take a look at this snippet of the 5 min chart...

This was the latest, returning the price to the EMA

Updating the 1 hour chart...

We see price bounced at the 50% and then continued down to the D1 level. The bull div at the bottom was formed as per usual.

However there is something not quite right about this, the next ABCD can only be very tiny if indeed one actually forms.

The average is attempting a LL which means the price will have to push down another 150 pips or so.

If the bulls can stop the EMA then they may attempt to head to the D level of the last ABCD. The div should take price back to the EMA but can the bulls break above once more?

Time to be very careful me thinks...

Hi Alan,

I saw so many Hook after divs, the problem is some Hook have div or rsi extreme, so I can easy deal with it, but some Hook have no signal.

How can you deal with those cases?

Can you show an example of what you mean on a chart?

how to deal with this bull rsi/rsi? same on M30

if the ema breaks that ema swing level around 1,3533 price is targetting around 1,3412?