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Lilmoe's Trading System and Analysis

  • #561
  • Edited 9:01am Dec 11, 2008 8:51am | Edited 9:01am
Quoting lilmoe
hi there.

that chart was an ideal world setup for my system. i used it for a clear picture of what i mean. now, if u take a good look at the lines again, u'll see that i market the classic bullish divergence with "green" lines. however, the hidden divergence was marked by a "blue" line.

i'm sure u have a good idea what classic divergence is. hidden div on the other hand is the complete opposite. we had a higher high in price at 241 (weekly chart), and then a LOWER high at 215. MACD had made a HIGHER high when price was at 215. and how did...
Hi,

I guess I am getting it now after few month If I am not wrong again

In a downtrend when price start rising and we get a Higher High in MACD we say :"Ok, this is a Bearish HD so it mean trend continuation which is down. SO the best place for price to bounce would be 50 ema.

So we put a sell order on 50 ema.

Is that right?

I changed your chart a little bit.If it's wrong let me know to change it please.

Thanks
Mike
Attached Image (click to enlarge)
Click to Enlarge Name: lilmo.jpg Size: 119 KB
Failure, is a wonderful teacher!
  • #562
  • Dec 11, 2008 9:23am Dec 11, 2008 9:23am
yup certainly clear now.

for the classic bullish divergence, although the price was going lower, the CCI and MACD actually was bullish for the same time period. coupled with the cross over above -100. this served as confirmation.

my question is: do you need both indicators to show divergence before your system allows you to make the trade?

Quoting lilmoe
hi there.

that chart was an ideal world setup for my system. i used it for a clear picture of what i mean. now, if u take a good look at the lines again, u'll see that i market the classic bullish divergence with "green" lines. however, the hidden divergence was marked by a "blue" line.

i'm sure u have a good idea what classic divergence is. hidden div on the other hand is the complete opposite. we had a higher high in price at 241 (weekly chart), and then a LOWER high at 215. MACD had made a HIGHER high when price was at 215. and how did...
  • #563
  • Dec 11, 2008 9:45am Dec 11, 2008 9:45am
I think we have such a senario here:

1) Price is in downtrend

2)Price is rising

3) Higher high in MACD( Bearish HD)

4) Best place to bounce back ----->50 ema
Attached Image(s) (click to enlarge)
Click to Enlarge Name: lilmo2.gif Size: 30 KB
Click to Enlarge Name: lilmo3.gif Size: 30 KB
Failure, is a wonderful teacher!
  • #564
  • Dec 11, 2008 9:53am Dec 11, 2008 9:53am
allow me to say, please correct if i'm wrong.

i see this that chart as having 2 peaks. so the first peak is much higher than the second. from the indicators, the MACD shows a divergence when you draw on the histogram at the position of the 2 peaks. the CCI30 shows this as well. this is the hidden bearish divergence, since it's not shown on the indicator.

for the retracement, the indicator tells us that this is gonna happen as it is clearly (classically) bullish on the CCI30 and the MACD.

Quoting mike1349
Hi,

I guess I am getting it now after few month If I am not wrong again

In a downtrend when price start rising and we get a Higher High in MACD we say :"Ok, this is a Bearish HD so it mean trend continuation which is down. SO the best place for price to bounce would be 50 ema.

So we put a sell order on 50 ema.

Is that right?

I changed your chart a little bit.If it's wrong let me know to change it please.

Thanks
Mike
  • #565
  • Dec 11, 2008 12:55pm Dec 11, 2008 12:55pm
Quoting belekas
Im also practising the scalping techniq something similar to lilmoes when the market is slow. My original sell would have been on the red descending upper TL that comes from the dayly, but i was asleep when price touched it. I drilled to 5m and spotted a potential bearish HD divergence on the double top and 138 sweetspot. Price came down as it was declined by CCI 100 level and was finding resistance below the 138 sweetspot. That was the early sell signal if i understand correctly, but also we could have entered when 5m cable closed below its 50ema...
  • #566
  • Dec 11, 2008 1:14pm Dec 11, 2008 1:14pm
Quoting mike1349
Hi,

I guess I am getting it now after few month If I am not wrong again

In a downtrend when price start rising and we get a Higher High in MACD we say :"Ok, this is a Bearish HD so it mean trend continuation which is down. SO the best place for price to bounce would be 50 ema.

So we put a sell order on 50 ema.

Is that right?

I changed your chart a little bit.If it's wrong let me know to change it please.

Thanks
Mike
u got it right this time!!

the TL we draw on price is only to make it clear that price has made a lower low, it's necessarily one that should hold btw.
  • #567
  • Dec 11, 2008 3:20pm Dec 11, 2008 3:20pm
Hi, Lil,
It is my first post in the thread, however, I have been following such an interesting method for quite a while.
I have a couple of questions about setups for GY today...If you find some spare time could you be so kind to clarify a couple of moments for me?

At about 12 50 there formed bearish HD on 5 minutes but CCI was already above 100 and price above EMA50, so I decided to look at 15 bounce from EMA50 and 0 CCI line, a bit later on 15 min tf formed bearish HD, so I was sure it would bounce. It did for a candle, so I was lucky to get some small gain, but then it soared quickly as u can see from the screenshots below. I was analyzing that trade and could not get why. Could it be because of bullish HD on 1H which was not broken at that time?? Need your help in that. Was my thinking correct? So do u usually look at higher timeframe as well?

Thanx in advance.

Peter

Screenshots:

Attached Image (click to enlarge)
Click to Enlarge Name: GY 5 min.JPG Size: 195 KB


Attached Image (click to enlarge)
Click to Enlarge Name: GY 15 min.JPG Size: 198 KB


Attached Image (click to enlarge)
Click to Enlarge Name: GY 1H.JPG Size: 214 KB
  • #568
  • Dec 11, 2008 9:22pm Dec 11, 2008 9:22pm
i made this trade.

the CCI cross 100.
there was a classic bearish divergence on the M15.

can lilmoe comment on this? hope i'm seeing this correctly
Attached Image (click to enlarge)
Click to Enlarge Name: m15gj.gif Size: 40 KB
  • #569
  • Dec 12, 2008 2:56am Dec 12, 2008 2:56am
Hi Lilmoe,
sorry but I am not an english native speaker and I am having problems in understanding rule #2:

rule #2: when CCI and/or MACD detect a classic divergence while price is touching a strong SR level when CCI is below/above the -100/0/100 line (in that established trend), price tends to "seek" 50ema of that timeframe IF CCI makes it back above/below the -100/0/100 lines. classic divergence is confirmed when a trendline is broken (example in chart). a classic divergence is not necessary for this to happen, but in most cases it does.

could you please rewrite this in a different manner?
Thanks!
  • #570
  • Dec 12, 2008 3:11am Dec 12, 2008 3:11am
Hahaha, this is NOT english, this is traderish. Hope he can translate it for you.


Quoting marcb
Hi Lilmoe,
sorry but I am not an english native speaker and I am having problems in understanding rule #2:[indent]rule #2: when CCI and/or MACD detect a classic divergence while price is touching a strong SR level when CCI is below/above the -100/0/100 line (in that established trend), price tends to "seek" 50ema of that timeframe IF CCI makes it back above/below the -100/0/100 lines. classic...
  • #571
  • Dec 12, 2008 3:13am Dec 12, 2008 3:13am
Quoting hwsv07
i made this trade.

the CCI cross 100.
there was a classic bearish divergence on the M15.

can lilmoe comment on this? hope i'm seeing this correctly
Classic double top with bearish HD - lovely
  • #572
  • Dec 12, 2008 3:27am Dec 12, 2008 3:27am
it means when for a trend reversal to take place, there must be, for e.g. a downward to upward trend

1. crossing from bearish to not bearish (from below -100 to above 100).
2. there must be a classic divergence in CCI and/or MACD.

if 1) and 2) is fulfilled, the retracement will try to seek 50EMA in the same TF.

this retracemnt is confirmed by breaking of TL.

please comment. hope i made it clearer.

Quoting marcb
Hi Lilmoe,

sorry but I am not an english native speaker and I am having problems in understanding rule #2:[indent]rule #2: when CCI and/or MACD detect a classic divergence while price is touching a strong SR level when CCI is below/above the -100/0/100 line (in that established trend), price tends to "seek" 50ema of that timeframe IF CCI makes it back above/below the -100/0/100 lines. classic...
  • #573
  • Dec 12, 2008 4:05am Dec 12, 2008 4:05am
Another bearish HD on the 15m and the 61.8 retrace with dayly S1 in confluence. 50ema gave a little early signal though. What you think lilmoe?
Attached Image (click to enlarge)
Click to Enlarge Name: gbp_yen_d15m_bearishhd_121208.jpg Size: 175 KB
  • #574
  • Dec 12, 2008 8:38am Dec 12, 2008 8:38am
Quoting hwsv07
yup certainly clear now.

for the classic bullish divergence, although the price was going lower, the CCI and MACD actually was bullish for the same time period. coupled with the cross over above -100. this served as confirmation.

my question is: do you need both indicators to show divergence before your system allows you to make the trade?
not necessarily, but if both give the same signal the better. i usually am satisfied with a signal from MACD, that's why it' there, otherwise i'd use CCI alone.

but always make sure that CCI doesn't cross a level when it's close to 50ema or a strong S/R level on the TF that a divergence is present. NOW, in the case where 2 timeframes show the same divergence, CCI30 of the HIGHER timeframe should be the one u look at for not breaking a cci level
  • #575
  • Dec 12, 2008 8:49am Dec 12, 2008 8:49am
Quoting hwsv07
allow me to say, please correct if i'm wrong.

i see this that chart as having 2 peaks. so the first peak is much higher than the second. from the indicators, the MACD shows a divergence when you draw on the histogram at the position of the 2 peaks. the CCI30 shows this as well. this is the hidden bearish divergence, since it's not shown on the indicator.

for the retracement, the indicator tells us that this is gonna happen as it is clearly (classically) bullish on the CCI30 and the MACD.
i don't use the indicator he does to automatically detect a div, but u're correct. there was a bullish div on cci that caused price to spike up to touch 50ema then rebound from there after it was held by a counter hidden div. kindof what i have on the second rule of my system
  • #576
  • Dec 12, 2008 8:53am Dec 12, 2008 8:53am
Hello lilmoe. How you doing big brother? We have classic bearish divergence on the 15m GBP/USD. Do you trade classic divergences like hidden ones, or no? Also 15 bearish classic on the GBP/YEN.
  • #577
  • Dec 12, 2008 9:29am Dec 12, 2008 9:29am
hi lilmoe, do you have an example for this?

thanks.

Quoting lilmoe
not necessarily, but if both give the same signal the better. i usually am satisfied with a signal from MACD, that's why it' there, otherwise i'd use CCI alone.

but always make sure that CCI doesn't cross a level when it's close to 50ema or a strong S/R level on the TF that a divergence is present. NOW, in the case where 2 timeframes show the same divergence, CCI30 of the HIGHER timeframe should be the one u look at for not breaking a cci level
  • #578
  • Dec 12, 2008 9:31am Dec 12, 2008 9:31am
Quote
rule #2
Quote
: when CCI and/or MACD detect a classic divergence while price is touching a strong SR level when CCI is below/above the -100/0/100 line (in that established trend), price tends to "seek" 50ema of that timeframe IF CCI makes it back above/below the -100/0/100 lines. classic divergence is confirmed when a trendline is broken (example in chart). a classic divergence is not necessary for this to happen, but in most cases it does.
so for example, in this chart, price was below the -100 line, but while it was retracing, it made it back above the -100 line signalling a breakout and a retracement to 50ema on the weekly chart.
hi lilmoe,

what if the price does not retrace back to 50EMA/Gann in the particular TF, how do you know when to get out of that trade?
  • #579
  • Dec 12, 2008 11:16am Dec 12, 2008 11:16am
short at retracement to 5sma.

Bearish HD.
But CCI30 is questionable.

would you go for it?
Attached Image (click to enlarge)
Click to Enlarge Name: enhanced gu.gif Size: 39 KB
  • #580
  • Dec 12, 2008 12:45pm Dec 12, 2008 12:45pm
Quoting hwsv07
short at retracement to 5sma.

Bearish HD.
But CCI30 is questionable.

would you go for it?
That is classic bullish div on your chart hwsv07
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