Hi,
I see a lot of people chomping at the bit to go long Cable b/c of the 365 and the divergence. As I posted earlier today re: support -- I personally didn't think the 365 was going to act as support (and it hasn't) -- and if you review your chart -- looking back less than 1 month -- you will see Cable is BACK INSIDE IT'S PREVIOUS CONSOLIDATION PATTERN W/SUPPORT 200 PIPS BELOW WHERE IT IS NOW! Ok-- this is just my opinion, and I really don't know what will happen -- but here are some thoughts on what we may be seeing.
Yes, there is divergence on the MACD between the two sep. bottoms -- but have you also looked at the level of the MACD for the first peak? Do you see how much momentum this push down has had? Wait for divergence to confirm on the current bottom -- by that wait for a bar that closes above the -.0061 (i.e. -.0051) w/price divergence near support and small candles. I have absolutely no doubt that price will push up again soon, but when -- who knows?? Wait to see confirmation of a turn (will probably happen while I'm gone next week --
). I've said this 1,000,000 times, and I'll say it 1,000,000 more times if nec. -- Divergence can last a very long time (especially when the trade is moving against you!). Use it as a Flag to watch -- but WAIT TO SEE SOME TYPE OF CONFIRMATION. Sure you may miss a few pips -- but who cares? You aren't losing them either. Why not wait for a bounce to short? Remember to exert patience! Especially right now!
Why be patient? What are we seeing in the market? We are seeing FEAR! We are seeing risk aversion! Again, this scenario should be familiar -- remember trading this summer? We also have seen breakouts like last Thanksgiving (about two weeks ahead of last year's -- look back on your charts & you'll see it (this reference has been given for the last few months -- did anyone look to see how the market was playing and test this period?). & yes, we are seeing a lot of volatility (which I like, but you must play safely!). But, we have a new element introduced into Cable -- cracks showing up in the UK economy. How will this play on the longer term trend? This I can not answer -- but I bet we will see more up/down moves in this pair over time.
OK -- the point is, I like both TC & CT trades! I make money playing them both. But, the key is to wait for a specific set of criteria to manifest before taking the CT (define your criteria & use 1 hour charts to confirm moves at critical areas and move to BE ASAP). TC's are def. great in a strongly trending market, and bounces from the MA are profitable until the trend weakens -- & there are almost always signs of weakening short term trends (but you will lose a few pips at the end, guaranteed -- and again, it shouldn't really matter b/c your net gain will far exceed your small loss).
Again, only you can figure out what suits you as a trader -- and the way to do that is to practice! practice! practice! & also remember, what you KNOW is truth -- one trader can be long, one short -- and both can make money -- odd, eh?
(& by Know, I mean, what you objectively see unfolding on the charts w/out the I think the market is due for a correction playing in your head. The costliest phrase in trading is "the market is due.")
May all your pips multiply and may you trade well!
Best,
Pips
I see a lot of people chomping at the bit to go long Cable b/c of the 365 and the divergence. As I posted earlier today re: support -- I personally didn't think the 365 was going to act as support (and it hasn't) -- and if you review your chart -- looking back less than 1 month -- you will see Cable is BACK INSIDE IT'S PREVIOUS CONSOLIDATION PATTERN W/SUPPORT 200 PIPS BELOW WHERE IT IS NOW! Ok-- this is just my opinion, and I really don't know what will happen -- but here are some thoughts on what we may be seeing.
Yes, there is divergence on the MACD between the two sep. bottoms -- but have you also looked at the level of the MACD for the first peak? Do you see how much momentum this push down has had? Wait for divergence to confirm on the current bottom -- by that wait for a bar that closes above the -.0061 (i.e. -.0051) w/price divergence near support and small candles. I have absolutely no doubt that price will push up again soon, but when -- who knows?? Wait to see confirmation of a turn (will probably happen while I'm gone next week --
). I've said this 1,000,000 times, and I'll say it 1,000,000 more times if nec. -- Divergence can last a very long time (especially when the trade is moving against you!). Use it as a Flag to watch -- but WAIT TO SEE SOME TYPE OF CONFIRMATION. Sure you may miss a few pips -- but who cares? You aren't losing them either. Why not wait for a bounce to short? Remember to exert patience! Especially right now!Why be patient? What are we seeing in the market? We are seeing FEAR! We are seeing risk aversion! Again, this scenario should be familiar -- remember trading this summer? We also have seen breakouts like last Thanksgiving (about two weeks ahead of last year's -- look back on your charts & you'll see it (this reference has been given for the last few months -- did anyone look to see how the market was playing and test this period?). & yes, we are seeing a lot of volatility (which I like, but you must play safely!). But, we have a new element introduced into Cable -- cracks showing up in the UK economy. How will this play on the longer term trend? This I can not answer -- but I bet we will see more up/down moves in this pair over time.
OK -- the point is, I like both TC & CT trades! I make money playing them both. But, the key is to wait for a specific set of criteria to manifest before taking the CT (define your criteria & use 1 hour charts to confirm moves at critical areas and move to BE ASAP). TC's are def. great in a strongly trending market, and bounces from the MA are profitable until the trend weakens -- & there are almost always signs of weakening short term trends (but you will lose a few pips at the end, guaranteed -- and again, it shouldn't really matter b/c your net gain will far exceed your small loss).
Again, only you can figure out what suits you as a trader -- and the way to do that is to practice! practice! practice! & also remember, what you KNOW is truth -- one trader can be long, one short -- and both can make money -- odd, eh?
(& by Know, I mean, what you objectively see unfolding on the charts w/out the I think the market is due for a correction playing in your head. The costliest phrase in trading is "the market is due.")May all your pips multiply and may you trade well!
Best,
Pips
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