Islander and Medici trade the European open | Page 151 | Forex Factory

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Islander and Medici trade the European open

  • #3,001
  • Nov 24, 2010 12:51am Nov 24, 2010 12:51am
Once yesterday's low was broken I held on to it due to my trend following nature. Today's quota is filled and I can now start shoveling snow from the driveway. Not my favorite activity but someone's gotta do it.
Attached Image (click to enlarge)
Click to Enlarge Name: morning 24 nov 2010 fiber exit.gif Size: 14 KB
If you don't risk, you don't ever have to lose.
  • #3,002
  • Nov 24, 2010 1:35am Nov 24, 2010 1:35am
Quoting bug
Wake up - check
Look for divergence - check

This morning has started off well. I am now testing to see which divergence indi works best with my eyes. Entered the trade at the break of the candle's low.
Well done!

As for divergence indicators, our testing speaks overwhelmingly for CI. EMA AZ doesn't catch as many good trades and is IMO less informative.
  • #3,003
  • Edited 4:04am Nov 24, 2010 2:17am | Edited 4:04am
Quoting medici
As for divergence indicators, our testing speaks overwhelmingly for CI. EMA AZ doesn't catch as many good trades and is IMO less informative.
A further note on this for those who want further explanation.

The difference between CI and the MA based divergence indicators - EMA AZ, MACD, etc - is that the MA based ones are all lagging.

The difference between CI and the oscillator based divergence indicators - RSI, Stoch, etc - is that the oscillator based ones are normalised between maximum and minimum values. Therefore they are unable to accurate gauge swings once in OB/OS areas. CI on the other hand is not normalised.

Those are the two reasons for going with CI.
  • #3,004
  • Nov 24, 2010 2:41am Nov 24, 2010 2:41am
Quoting medici
A further note on this for those who want a further explanation.

The difference between CI and the MA based divergence indicators - EMA AZ, MACD, etc - is that the MA based ones are all lagging.

The difference between CI and the oscillator based divergence indicators - RSI, Stoch, etc - is that the oscillator based ones are normalised between maximum and minimum values. Therefore they are unable to accurate gauge swings once in OB/OS areas. CI on the other hand is not normalised.

Those are the two reasons for going with CI.
I read about the math behind the CI somewhere in this thread before and I can see why one would prefer to use the CI over any other divergence indicator. However, I am still very new to the indicator and I am having some trouble interpreting it. I've read about the math, I've seen the charts, but I haven't had a lot of live screen time yet. Right now, I'm keeping the EMA AZ up there with CI just to point out major divergences until I'm at home with the CI - I don't want to miss any obvious trades that show up on both indicators.
If you don't risk, you don't ever have to lose.
  • #3,005
  • Nov 24, 2010 6:26am Nov 24, 2010 6:26am
Quoting bug
Once yesterday's low was broken I held on to it due to my trend following nature. Today's quota is filled and I can now start shoveling snow from the driveway. Not my favorite activity but someone's gotta do it.

Nicely done, a 1min divergence around a level - the earlier high - and close to LO. Then you switched to a trend following mode and took some of the trend too
Trading Levels with WRBs
  • #3,006
  • Nov 24, 2010 7:37am Nov 24, 2010 7:37am
Quoting Islander
Nicely done, a 1min divergence around a level - the earlier high - and close to LO. Then you switched to a trend following mode and took some of the trend too
Thank you.

It is interesting to note that the last two days have been very similar - fiber trying to go up, hitting its head. Then some positive fundamentals from Italy, Germany etc...still trying to go up but no luck. After a while the price drops through FO/LO low's and proceeds to take out the previous day's lows.

Islander and medici,
I have a question about CI divergences. Do you take each and every one of those signals? There were quite a few positive divergences on M1 and M5 (talking about fiber) today, way before the rally back up to the morning range. Those divergences would all have produced anywhere from SL to 2 pips (SL depending on where one would place one's SL).
If you don't risk, you don't ever have to lose.
  • #3,007
  • Edited 9:17am Nov 24, 2010 8:31am | Edited 9:17am
I personally use the 1m chart during the FO / LO period and once a trend has started, move out to the 5m.

Also, I like to set the limits on my CII and then use some levels to help me quickly compare CII swings and turning levels.

Again, please remember that we also look a "levels" .....this morning, 3416 was the 24% retrace of yesterday's range and was hit in the Asian session, so at LO there was a LH at the uper 2 SD BB

The low was a spike below the 3300 level with CII very OS and with positive divergence. This was followed by an hour and a half of range trading between the 00 and 25 levels before the breakout again, divergence showed the direction for the retrace to the 75 level...
Attached Image (click to enlarge)
Click to Enlarge Name: nov 24 eu 5m morning.gif Size: 22 KB
Trading Levels with WRBs
  • #3,008
  • Nov 24, 2010 10:27am Nov 24, 2010 10:27am
Quoting bug
Islander and medici,
I have a question about CI divergences. Do you take each and every one of those signals? There were quite a few positive divergences on M1 and M5 (talking about fiber) today, way before the rally back up to the morning range. Those divergences would all have produced anywhere from SL to 2 pips (SL depending on where one would place one's SL).
Of course not! For reversals of current trend, generally divergence at the same time-frame would be required.

For example, to trade against SMA20@M15 would require CI divergence on M15.

Then you want the CI divergences to stack up on the time-frames. As an example, look at today's € low. That was M5 divergence followed by M1 divergence - a signal that nailed the low to the minute.
  • #3,009
  • Edited 10:42am Nov 24, 2010 10:30am | Edited 10:42am
Quoting Islander
I personally use the 1m chart during the FO / LO period and once a trend has started, move out to the 5m.
I prefer to follow the market on M5, and often enter based on that alone. Only closer to potential setups would I look at M1. Also, when a trend has started I follow it on M1 for potential entries with the trend, which are usually indicated well by CI.

So it's all personal
  • #3,010
  • Nov 24, 2010 10:39am Nov 24, 2010 10:39am
Islander and medici,
thank you both for your replies, they really help me a lot. To you they may seem like stupid questions (maybe), but I feel like I have to ask them because you have a lot more experience than me when it comes to trading and divergence in particular. I'm still trying to unlearn a lot of the stuff that haunts me from my earlier days of trading so stupid questions pop in every once in a while.
If you don't risk, you don't ever have to lose.
  • #3,011
  • Nov 24, 2010 7:58pm Nov 24, 2010 7:58pm
Quoting medici
Best fishing is generally between 6am and 8.15, so you need to develop new habits. I get up at 5.30 every morning to be ready at 6am, and I know that Islander does the same.
Hi Medici,

In terms of markets is this from FO to LO +75 mins or from 60 mins prior to FO thru to LO+15 mins

Also, will you guys trade today with it being a US holiday ?

Glad to see you guys still around
Money grows on the tree of persistence
  • #3,012
  • Edited 11:45pm Nov 24, 2010 10:09pm | Edited 11:45pm
Quoting ozmacca
Hi Medici,

In terms of markets is this from FO to LO +75 mins or from 60 mins prior to FO thru to LO+15 mins
The latter. Then a new phase often starts around 8.30.

Quote
Also, will you guys trade today with it being a US holiday ?
Yep.

Quote
Glad to see you guys still around
Good to see you here again too
  • #3,013
  • Nov 24, 2010 11:39pm Nov 24, 2010 11:39pm
Thanks for that info

Good trading
Money grows on the tree of persistence
  • #3,014
  • Nov 24, 2010 11:46pm Nov 24, 2010 11:46pm
Quoting ozmacca
Thanks for that info

Good trading
NP. And it should be 'new phase' not 'news phase', Now corrected.
  • #3,015
  • Edited 5:44am Nov 25, 2010 12:59am | Edited 5:44am
Today seems to be going well in terms of interpreting the CI. Will update this post later to include charts.

Thanks medici and Islander, your instructions really help.

UPDATE. 13:35 GMT
I've finished trading a shoveling snow (we have 4 inches of it here..ughh) so here's the update. As was expected, trading was light today due to US holidays, but fortunately I managed to grab a few pips.
Fiber started the morning session with a nice divergence (number 1 on chart). Took it and exited. Number 2 was a shooting star and I took it on the break of the candle. Number 3 was a nice opportunity but I missed it somehow. I took one trade on cable as well, but after price had reached the thumb area I moved the SL down a little so it took me out netting me negative 3 pips.

Just so you know, those charts are for posting, I trade off a bit messier charts with sweetspots and everything. I did however remove the AZ indicator off my trading charts.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: morning 25 nov 2010 cable.gif Size: 15 KB
Click to Enlarge Name: morning 25 nov 2010 fiber.gif Size: 15 KB
If you don't risk, you don't ever have to lose.
  • #3,016
  • Edited 2:00am Nov 25, 2010 1:32am | Edited 2:00am
Here I'm watching both 1m & 5m cii, easily changing between them.

The main question around mid FH was whether to trade Eu or Gu - a good question for further research......I traded both

Edit: blue removed, new chart saved - that's fixed it!
Attached Image (click to enlarge)
Click to Enlarge Name: nov 25 gu multi 1010 madrid.gif Size: 57 KB
Trading Levels with WRBs
  • #3,017
  • Nov 25, 2010 7:50am Nov 25, 2010 7:50am
Do you guys change your lot size during bank holidays or do you approach it as just another day in the markets?
(I updated my previous post to include charts)
If you don't risk, you don't ever have to lose.
  • #3,018
  • Nov 25, 2010 11:48pm Nov 25, 2010 11:48pm
Good morning all! Witnessing quite a bit of euro weakness/dollar strength today. Caught a divergence on fiber. There was a positive divergence on M1 and M5 (M15 too I think) right after this trade but I didn't take it in the fear of going against a strong trend.
Attached Image (click to enlarge)
Click to Enlarge Name: morning 26 nov 2010 fiber.gif Size: 12 KB
If you don't risk, you don't ever have to lose.
  • #3,019
  • Nov 26, 2010 11:31am Nov 26, 2010 11:31am
Hey guys,
I'm dropping in again to say thank you to all four of you (medici, Islander, Mr. & Mrs. V). Your posts have taught me a lot about trading in general and the European morning in particular. Reading this thread and trying to learn it all has been a great experience but running along and actually using those techniques during live trading has been even better. For me, this week has been all about divergence and learning to use the CI indicator (many thanks for pointing me in the right direction all through the week). The results so far seem to speak for themself (I've managed to reach my daily goal each day this week). I didn't want to overwhelm my brain so I didn't use fibonacci levels or pivot points but I'm going to be adding those things along the way. I hope you're doing as well as I am.
If you don't risk, you don't ever have to lose.
  • #3,020
  • Nov 26, 2010 1:24pm Nov 26, 2010 1:24pm
Quoting bug
Do you guys change your lot size during bank holidays or do you approach it as just another day in the markets?
(I updated my previous post to include charts)
No, I don't. If the setup isn't good enough to put on a trade, I'd rather stay out than reduce size.
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