Just out of interests we have all targets hit on the weekly chart and await a new setup...
Trading the Cable swings via averages
- #10,222
- Feb 28, 2025 10:01pm Feb 28, 2025 10:01pm
- Joined Mar 2016 | Status: Trader | 6,389 Posts
Why should I have all the headaches, I ask myself. Why not pass a few onto you guys?
Reviewing the recent past activity in my humble opinion is very important to understanding just how price action works. From this we can determine certain aspects that prove to be consistent over a long period of time past. This is important because we can assume the same will continue well into the future which is by default what we are interested in. By doing this past analysis for many years now it is become natural for me to react to situations much like driving a car. Reading a chart with graphics tells a story just the same as reading a book of words.
Today the world is riddled with conspiracy theories, this applies very much to trading as it is with any other debatable aspect. Personally, I don't disagree with other traders, but I will disregard stuff that has dubious evidence or stuff I don't understand because I am dumb. The shorter version of this paragraph is the proof is in the pudding.
Below is the 1-hour chart within which there are many ZOO points for consideration at lower time levels to act upon. We can use much higher time frame charts, but these are going to take much longer to execute. This is not a bad thing since we can always reduce our lot size to allow for the larger drawdown, the wick on a daily chart can easily be 50 pips or more and then take the remainder of the day or days to come good. I will plot these higher time frames but by enlarge I use the 1 hour to look for my ZOO points and the targets levels I expect to reach.
Now for your headaches! See if you can follow the reasoning here for why price has taken this journey. I wouldn't expect all the answers to come from the one chart because things are happening in conjunction with higher time frame charts. There is however a great deal of information to be gleaned from this one chart.
Each of the blue ovals is telling a story and the magenta oval is telling a bigger story. There is nothing on this chart that I have not already covered in some depth...
Enough for today, enjoy!
Reviewing the recent past activity in my humble opinion is very important to understanding just how price action works. From this we can determine certain aspects that prove to be consistent over a long period of time past. This is important because we can assume the same will continue well into the future which is by default what we are interested in. By doing this past analysis for many years now it is become natural for me to react to situations much like driving a car. Reading a chart with graphics tells a story just the same as reading a book of words.
Today the world is riddled with conspiracy theories, this applies very much to trading as it is with any other debatable aspect. Personally, I don't disagree with other traders, but I will disregard stuff that has dubious evidence or stuff I don't understand because I am dumb. The shorter version of this paragraph is the proof is in the pudding.
Below is the 1-hour chart within which there are many ZOO points for consideration at lower time levels to act upon. We can use much higher time frame charts, but these are going to take much longer to execute. This is not a bad thing since we can always reduce our lot size to allow for the larger drawdown, the wick on a daily chart can easily be 50 pips or more and then take the remainder of the day or days to come good. I will plot these higher time frames but by enlarge I use the 1 hour to look for my ZOO points and the targets levels I expect to reach.
Now for your headaches! See if you can follow the reasoning here for why price has taken this journey. I wouldn't expect all the answers to come from the one chart because things are happening in conjunction with higher time frame charts. There is however a great deal of information to be gleaned from this one chart.
Each of the blue ovals is telling a story and the magenta oval is telling a bigger story. There is nothing on this chart that I have not already covered in some depth...
Enough for today, enjoy!
- #10,223
- Edited 4:07am Mar 1, 2025 3:55am | Edited 4:07am
Why should I have all the headaches, I ask myself. Why not pass a few onto you guys? Reviewing the recent past activity in my humble opinion is very important to understanding just how price action works. There is however a great deal of information to be gleaned from this one chart. Each of the blue ovals is telling a story and the magenta oval is telling a bigger story. There is nothing on this chart that I have not already covered in some depth... {image} Enough for today, enjoy!
+ First of all, at the A oval, Price formed an ABCD pattern, so it could have kept dropping if it had found bear support—which it did not. Instead, Price tested the opposite side (attempting to form a HH) and completed the ABCD by hitting the D target. Note how Price reacted at that D target.
+ Second, at the B oval, there was a bear HD that caused Price to return to the EMA h1 and find bear support. We had hoped for a big down move, but in the broader picture, there was resistance from EMAH4, so Price rebounded to form HH.
Then, the second Bear div led Price to form a huge ABCD pattern (magenta oval). There were a lot of developments occurring within the D to D' range.
+ At the C oval, after a bull div, Price rallied in one continuous move but then encountered a Bear div that caused Price to return and cross EMA h1. Price established bear support and formed LL, but once again, Price could not break through the EMA h4. As a result, Price became stuck at the EMA h1 and h4 levels, as shown in the D oval. Note how Price completed the sell triangle ABC by hitting D1—representing 50% of D' of the magenta ABCD—and then rebounded. After the bull div at D1, Price formed HH and we moved to the E oval.
+ At the E oval, there was a bear div at the 50%D of the huge magenta ABCD, so Price returned and attempted to cross the EMA to find bear support, but failed due to the strong 4-hour EMA. Consequently, Price formed another HH and finally hit the D target of the huge magenta ABCD.
+ At the F oval, the bear hd caused Price to retest the C level of the huge magenta ABCD, and again a bull div produced HH as Price attempted to find bull support. It did find some, but that bull support failed, and Price dropped sharply. Note that once again, Price reacted at the 50%D of the huge magenta ABCD.
+ After the bears finally found support, Price reached the D1 target of the huge magenta ABCD and pulled back to test the EMA h1, but failed to find bull support. Consequently, Price continued to fall and formed a bullish divergence at the G oval, which caused Price to retest the 1-hour EMA.
+ That's all I can point out based on my knowledge. Please correct me if I'm wrong, Sir.
- #10,224
- Mar 1, 2025 4:50am Mar 1, 2025 4:50am
- Joined Apr 2019 | Status: Trader | 1,997 Posts
{quote} OK, let me try my best, in the capacity of a long-time student. + First of all, at the A oval, Price formed an ABCD pattern, so it could have kept dropping if it had found bear support—which it did not. Instead, Price tested the opposite side (attempting to form a HH) and completed the ABCD by hitting the D target. Note how Price reacted at that D target. + Second, at the B oval, there was a bear HD that caused Price to return to the EMA h1 and find bear support. We had hoped for a big down move, but in the broader picture, there was resistance...
- #10,227
- Mar 1, 2025 11:12pm Mar 1, 2025 11:12pm
The trick is to put what we know into reading the potential future movements of price action. All the moves on the chart are made by reason of what has gone before. Our task is to interpret this into profits. When you see a div ask what is going on here. Is it at a ZOO level. Is it indicating a trade or a scalp. Scalps can easily turn into trades so where is the potential target, Can I make my profit from this. Is price just biding time awaiting some major news event before making the move. Once price makes its target can we profit from the bounce...
- #10,228
- Mar 2, 2025 8:58pm Mar 2, 2025 8:58pm
- Joined Mar 2016 | Status: Trader | 6,389 Posts
Here is a couple of 4-hour examples for those still not following this.
It begins with a signal of hidden divergence (HD). Now we hope price runs back to the EMA, crosses and finds support and then run on to test the lower average swing low. This is trading between the averages.
Price fails at the EMA, so we expect a higher high than the HD. This enacted as per expectations and in doing completed the ABCD hitting the D.
The process begins again with a second HD, it does run down to test the LL average as expected. What it didn't do was to find bear support before reaching the target.
Since the LL average was hit, we can assume the bull div formed to raise the price back to test the current EMA.
If we take all these relevant levels into consideration as ZOO points, we can trade them at the lower levels to get better positionings especially for our stops. We can thus have tight stops for large targets. This puts the mathematics greatly in our favor for low risk/high reward.
It begins with a signal of hidden divergence (HD). Now we hope price runs back to the EMA, crosses and finds support and then run on to test the lower average swing low. This is trading between the averages.
Price fails at the EMA, so we expect a higher high than the HD. This enacted as per expectations and in doing completed the ABCD hitting the D.
The process begins again with a second HD, it does run down to test the LL average as expected. What it didn't do was to find bear support before reaching the target.
Since the LL average was hit, we can assume the bull div formed to raise the price back to test the current EMA.
If we take all these relevant levels into consideration as ZOO points, we can trade them at the lower levels to get better positionings especially for our stops. We can thus have tight stops for large targets. This puts the mathematics greatly in our favor for low risk/high reward.
- #10,230
- Mar 2, 2025 11:45pm Mar 2, 2025 11:45pm
Last week stilll another BE. Well, keep talking about BE is boring. so i will only infor when i win then.
Today, let's see. As Alan show, H4 in DIV bull --> return to H4 EMA. On H1, we have HD bull here, price just finish build bull support. Currently price hide below to not form DIV bear so it have very good chance to target ABCD or H1 EMA swing 2668.
On other side, if price is not spike up, then we have good chance to go down. RSI fast is high and we still under EMA H4, so maybe H1 close in DIV bear, and better is cross H4 and we will have a decent short.
Today, let's see. As Alan show, H4 in DIV bull --> return to H4 EMA. On H1, we have HD bull here, price just finish build bull support. Currently price hide below to not form DIV bear so it have very good chance to target ABCD or H1 EMA swing 2668.
On other side, if price is not spike up, then we have good chance to go down. RSI fast is high and we still under EMA H4, so maybe H1 close in DIV bear, and better is cross H4 and we will have a decent short.
- #10,231
- Mar 3, 2025 12:30am Mar 3, 2025 12:30am
- Joined Mar 2016 | Status: Trader | 6,389 Posts
It should be obvious that if the EMA's are bunching up we have no trade and need a break away.
- #10,236
- Mar 3, 2025 4:19am Mar 3, 2025 4:19am
- Joined Mar 2016 | Status: Trader | 6,389 Posts
Nearly there but I am done for the day.
- #10,239
- Mar 3, 2025 4:57am Mar 3, 2025 4:57am
- Joined Mar 2016 | Status: Trader | 6,389 Posts
Did anyone spot that was also an AB=CD. I didn't.
- #10,240
- Mar 3, 2025 5:09am Mar 3, 2025 5:09am
- Joined Mar 2016 | Status: Trader | 6,389 Posts
On the 1-hour we have a bear div but it also looks to be testing the average swing high. Glad I am out because I cannot figure this.
