Trading the Cable swings via averages

Did anyone go long at ZOO = EMA26 8H?

Gee whiz I was done and dusted a lot earlier...



That was my yesterday's trade. I haven't traded today.

I don’t think I could’ve taken that trade like you did, since the candle’s wick was so short — I just couldn’t catch it in time.

No No No that is not how I trade it.

Place a pending order below and move it into a closer position when you spot it happening. Price pulls back to get you into the trade, you put the stop just above the HD. It is then left to run to the target moving the stop to BE and then leave it all alone. That was something like an 80-pip trade so my 40 was an easy do.

The wicks are nearly always very short and quick. No time at all to be fooling around filling out the sell tickets.

Hi Alan,

Could you please explain in more detail what you mean by "when you spot HD happening"?
My understanding is as follows:
When the price approaches an H1 price pivot on the left, and the current H1 RSI level is lower than the RSI level of the pivot above, you place a pending sell order well below the current price.
When would you adjust that pending order so the price drop can trigger it?
Do you need confirmation from other timeframes?
Is any left pivot acceptable, or is it specific to a certain Zoo?

Sorry for my questions; I appreciate your help!

We appreciate your insights—please keep sharing! They’re greatly enhancing our learning journey.

In most cases they are blatantly obvious, price simply streaks away but there is no underlying strength in the move shown on the RSI. So, when this happens, we take a punt and our pending order is taken up. Our stop is moved to the top of the offending wick so even if we are wrong, we lose little. Remember we should also have the target worked out approximately to give us a very good return for risk. We can amend our entries to meet our profit target as the trade progresses.

We can calculate the profit because we already have a pre-existing pivot height to work from.

Not all of these work out as planned, sometimes price just pushes on through which in itself tells us the market is strong, and we are trying to trade against it in which case we close and review our analysis. It really doesn't matter if a few fail to bear fruit the wins should be far and above these losses.

If you want you could wait for some sort of confirmation, but this means you have to have a wider stop and therefor risk more unless you lower your entry size.

This is a very common signal in the London morning trading session and is one of my favorite trades to take.

Hope that helps with HD's

It has finally reached the swing high target on the D1 chart at level 1.32xxx.

I’m looking forward to discussing what we should be doing.

Whoops I forgot to post this, it was sitting in notepad awaiting copy and paste. Thanks for the reminder.

Here we go with the should do.
1) The absolute number one is patience. So, are you virtuous?
Most people are not and tend to enter trades because they THINK the market is going to whatever, but the market is very good at tricking people into thinking trades.
In the main most movement in the GBP/USD is going to happen during their respective sessions. Yes, we can get movement during the Asian session also, but this tends to be slow and somewhat erratic. We cannot be there 24/5 so we pick the best time to make our profit. Then we have to wait for our trading signal and not just assume what the market is doing.
Mostly we are looking for failures that indicate weakness in one particular direction. A failure is when the EMA fails to make either the HH or LL turning the market to test the opposite side. This is critical to my trading, weakness being overcome by strength, it happens all the time no matter where we look on the chart and irrespective of the chart time duration.
Our patience is rewarded for waiting for these indications to happen and then trading the signal to get us in. A wrong reading must be stopped out early enough as to not cause undue damage. All this requires is the drawing of horizontal lines at these swing average levels. We see where the failure is and where the target is located and can calculate for our profit.
2) Do the math.
I recommend to people when starting to get a handle on this method to only risk an initial 1% for a profit of 2%. This means you can still last a long time despite getting multiple losses. Note the word 'initial risk' because this should never happen. If the target is 40 pips for 2% then the initial risk is half being 20 pips for 1%. However, we move our stop accordingly, so the risk becomes far less than 1%.
My target is always set at 40 pips and stop at 20 pips both of which are initial numbers. The target can be extended, and the stop can be shortened once the trade is taken up. I say taken up because I have pending orders ready to be dragged into position, this is quick and efficient. Then I adjust the stop and target. I know from this I am aiming to win twice as much as I risk at a minimum. When finally set I may be looking at risking 10 to win 50 or 60 pips if using the 1%/2% method so the risk reward is good.
My personal risk/reward is much higher than this, I like to use 4% risk and 8% reward as the initial targets. It is very difficult to get these numbers so precise due to the cost of lots. I just take 8% of my account and divide this by 40 pips and this gives me my lot size to trade with the stop be half of this initially.
3) Risk Reward.
We can manipulate the math to make the risk even less by placing multiple winning direction trades. In other words, if we trade at 3 bucks we can split this into two and trade 2 x 1.50. Providing we don't add to losing positions our risk is reduced to produce a much better risk/reward. We can always add even more to winning trades by moving the stop accordingly to prevent a larger loss.
4) Know when to quit.
Trades are going to come every day so if we get one done then quit to rest up for the next day. Sitting for long hours trying to squeeze blood out of the market is not healthy and both you and your account are likely to suffer.
Watch out for the counter signals that may mean your trade is over. This is a good time to move the stop to lock in some profits, so your time has not been completely wasted. There is always the next day...
5) I always keep pen and paper handy.
Things I note are: The current cost I paid for the lots because I need to know how many lots I can afford with my account. I often use the entire accounts worth.
I also scribble stuff like the higher time frame levels during the analysis then put the lines of reference on the lower time frames with a note in the description for what they are.
I also like to tot up the small losses to get my money back when I can.
6) I think I may have mentioned this already...
Patience, patience and patience. Better to be out of the market than being in a losing trade taken irrationally.

Please explain the remark I highlighted above in more detail.

When we observe the EMA snaking along and we see it fails to make a HH than the previous average this is weakness.

This is when we see a test of the opposite side to make a LL with strength.

Thus, we have witnessed weakness being overcome by strength which is very important to my trading method.

I often look for the EMA failures during my analysis and determine if there is enough left in the trade to make enough profit. Then I would look for an opportunity to take a trade in this preferred direction.

Even a divergence can be seen as a weakness from which we can expect a turn and test of the EMA.

Clear enuff I hope...

Armed with the notion of strength and weakness let's do a bit of analysis my style...

Below is the 1-hour chart with a circle on it being my start time 0900 according to the chart time at the bottom. The grid on the chart is 40 pips so I can see quickly if my target is achievable.

So, what can we see?



Well for starters the grid is showing me I can get 40 pips if the price tests the average swing high (red horizontal line). At this stage it is an IF what I need is a signal.

I do have a signal in the form of an RSI bull div, so I next need to do the math. I do this quickly by dragging in my 40-pip box and my 20 pips stop box.


In this case I make my profit in a couple of hours. The point here was the bears were far too weak to take price down to the swing low, so we expect the strength to test the opposite swing high. Simple enough hey!

But there is more (no not steak knives). We have a previous ABCD to add into the mix and this never ceases to amaze me as it should you.

Just look at this! I have simply copied the triangle for the D and D1 targets and also to make it look pretty.


This one took forever to get to the D, but it did so and smack on the close of the week. Don't let anyone tell you they can plot the future; this proves you cannot duh!

Anyway, I hope this clears up the analysis for Timing, Entry, Target, Stop and money management.

Looks to me like the weekly is making a fast start to make the 35707-swing high level this week.

The bulls are very strong. Waiting for a pullback to go long.

I would think the morning rush is just about over for now.

It looks like the bulls could reach the monthly swing high around 1.341xx

Ha, I walked away to come back at my nominated time only to find it shot up again after I left.

I just noticed that it ran to the hourly swing high level 3397, 5 hours later.

I had no intention of trading today, just goes to show how unpredictable the market can be.

My monthly swing high is 3389, next is 3617.

Dear Alan,

I'm new and want to know Do you trade using Wyckoff method? and what pairs do you trade ? Thanks

No, I don't trade the Wyckoff method though I have read the reasoning. Many methods are used in trading and vary in effectiveness in the real live situations, and many are subject to interpretation. I am not here to tell you one way or another how to trade I simply explain (That's a joke) my method of trading. As the tittle of the thread suggests I trade between the averages, shown below...

I stick to the one pair because I can't be bothered duplicating so much work over so many time frames when I can make all I need from the GBP/USD.

The chart above shows one major trade and several small ones all in plain view with no theory applied. What we see is what we get.

Hope you have a great career in this exciting industry.