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  • #121
  • Nov 29, 2012 8:57pm Nov 29, 2012 8:57pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Dee - thank you, nice document. If your following this thread - you definitely want to add this to your knowledge arsenal

Quoting dee50
This will help explain Divergence. Well written short and to the point.
  • #122
  • Nov 29, 2012 9:05pm Nov 29, 2012 9:05pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Good morning - or evening where ever you are in the world. Looked the EU briefly to see that all the emotion from yesterday's housing release has subsided. Thank you Asia for putting us to sleep! haven't looked in depth yet, but from a brief glimpse it appears that the Bulls recovered their losses. I scanned the 1H nothing else, looks like the bulls are getting tired and losing steam though. Classic divergent setup on the 1H.

I'll finish my coffee, take care of some personal business and be back soon.

I am hoping to dive into a bit of scalping today, hopefully the music allows a scalping polka today, but generally following a big news day and coupled with the fact that today is Friday I am not anticipating much.

Wanted to let everyone know as well - if you've started reading any of Bill Williams books and have any questions, let me know - post it in the forum with which book and page number.

Slow days can prove to be the best days to absorb knowledge! Read it, learn it, absorb it - learn to dance with price not for it!
  • #123
  • Nov 29, 2012 9:20pm Nov 29, 2012 9:20pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Since the opportunity presented itself again, thought I would mark up a chart and show you classic divergence.

One very important thing to keep in mind if you choose to trade these setup's is volume is key to success. A slow market has a razor sharp sense to ignore this setup! This setup can also fail in strong trending markets - this is why it is critical that you NEVER enter a market order for instant execution.

The formula that works best for me is stop orders using the spread plus 1 pip for a buy, or spread minus 1 pip for sell. This will keep you out of trouble so much! For me, I use IBFX, the spread is 2 pips on the EU (although it goes as low as 1.5). General rule of thumb for me is +3 pips for buy, -3 pips for sell.

Onto the chart. I marked it to show why it is called divergence (download Dee50's PDF on divergence!). Price has formed a new high but the AO does not. Like I said in the previous post this is the one time that the AO does not lag and gives you a pretty accurate picture!
Attached Image (click to enlarge)
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  • #124
  • Nov 29, 2012 9:35pm Nov 29, 2012 9:35pm
Some random on the internet posts a massive 48 trade sample that has a trade with a loss 5 times larger than the average winner and the next few pages are "show me your magic system"....

This is the reason so many people fail
  • #125
  • Nov 29, 2012 9:45pm Nov 29, 2012 9:45pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Let's have a look at the daily: Yesterday's move up for 3/4 of the day was a pretty strong indication that the Bulls are taking over, however the news release sent them packing right back down the hill and coincided with a strong US economic news release.

Including yesterday's candle the last 4 candles have all taken shots at the 1.30 level and failed. yesterday's candle closed (after forming a new high) bullish divergent, but with bearish characteristic's (closed in the bottom half of the candle). So in my opinion, yesterday's high forms what I believe to be the completion of the X to A leg.

What we saw yesterday also was a triple top formation, while there may be some Bulls still around, believe the Bears might be coming out of their slumber today at least in the short term, remember the RSI is still above 50, so the market will have a tendency to fight the bears!

I believe we are already seeing the bulls push their final bit of steam out

I would like to draw your attention to the double top that occurred on 9/17 what ensued? Eleven days of Bears bliss.

Again - yesterday's candle while bullish, closed with bearish characteristics. Hammers can be ignored but rarely on the daily time frame.

What's our bias? For me today to start I am going with "Da Bears"
Attached Image (click to enlarge)
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  • #126
  • Nov 29, 2012 9:50pm Nov 29, 2012 9:50pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Too right. All we need to figure out is that there is no such thing as the fast track to success. We have all been given the keys to success, yet due to the sheer power of the forex, everyone wants that turn key system that removes the thinking process for them.

Open your eyes, the success is there. It's like those pictures that used to be so famous, the ones that at first glance looked like clutter, but the longer you looked at it, then the picture showed through.

Forex is NO DIFFERENT. It's there, you just need to look at it from the proper angle, and mindset - and maintain a real time, realistic perspective

Quoting havaiana
Some random on the internet posts a massive 48 trade sample that has a trade with a loss 5 times larger than the average winner and the next few pages are "show me your magic system"....

This is the reason so many people fail
  • #127
  • Nov 29, 2012 9:52pm Nov 29, 2012 9:52pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
My 4H is next, but I need to take a moment of pause. Will be back in about an hour
  • #128
  • Nov 29, 2012 10:15pm Nov 29, 2012 10:15pm
In the past, I have managed to catch bits & pieces of the many examples you have charted, but truly didn't understand until you put it all together, in one thread. I must admit with my two jobs, it will take time to devour all you have been kind enough to put forth. Thanks for the incredibly informative thread.
  • #129
  • Nov 29, 2012 10:50pm Nov 29, 2012 10:50pm
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Robert glad to help. My intention is to help while also building a foundation of learning condusive of creating open dialogue with all traders. Appreciate the feedback

Quoting Robert DeCuir
In the past, I have managed to catch bits & pieces of the many examples you have charted, but truly didn't understand until you put it all together, in one thread. I must admit with my two jobs, it will take time to devour all you have been kind enough to put forth. Thanks for the incredibly informative thread.
  • #130
  • Nov 29, 2012 10:58pm Nov 29, 2012 10:58pm
Quoting havaiana
Some random on the internet posts a massive 48 trade sample that has a trade with a loss 5 times larger than the average winner and the next few pages are "show me your magic system"....

This is the reason so many people fail
To be fair, you need to compare apples to apples, the average losing trade is 385.07 and the average winning trade is 145.24 giving a ratio of 2.65 - not as bad as the 5 times you highlighted.

The single, large loss maybe attributed to a news event perhaps; eliminating that, the other 3 losses would average 272.59, bringing the ratio down to 1.88.

With the win / loss ratio of over 90%, there may still be some hope, don't you think?

Perhaps, as you mention, the sample size may be too small to gain a significant understand of this "style" of trading, however he is doing his best to show the "magic"

It takes a lot for me to IGNORE you, but you can try.
  • #131
  • Nov 29, 2012 11:20pm Nov 29, 2012 11:20pm
Damn. I find interesting threads when there is not much time to read them. Anyway, I bookmarked and will return to this later. Weekend is coming with plenty of time to read.

I have been interested in Gartleys and their variations recently but I kind of dismissed them as I can't understand their logic and they seemed a bit esoteric to me. Pretty much like following the moon cycles. Maybe this is because it is difficult to spot these patterns in the past with a naked eye to evaluate their performance. I hope this thread clear things up.

BTW your results are very impressive.
  • #132
  • Nov 30, 2012 12:02am Nov 30, 2012 12:02am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
I may have mis-read havaiana initial post. If the loss that was referred to was the loss of $722 on my posted results, I can easily explain that. It will ring in my memory for a LONG time and I am not too pleased to have to recall it now - karma keeps calling

That loss was a result of pure stupidty on my part. I analysed the premise and I analysed the premise correctly. I was locked and loaded for a beautiful buy set up. I mean PICTURE perrfect

I set all the parameters of a buy stop and went about my morning. Took a shower and returned to a result that sent me into a tail spin.

My stop was taken out. The confusing part at first was the pair went exactly as I submized it would, yet my account balance did not reflect what the chart showed, it reflected a loss that I was not prepared to see.

In my haste to place the order, even though I KNEW I needed to be long, I set a sell stop. I mean all the way down to counting the pips of the low and high of that candle. I was long in my premise, short in my execution - pun intended.

I spent the next 30 minutes expertly spewing profanaties that would make any Marine proud. I beat myself up over that (still am actually).

While those were the results on my demo account, they were mirrored exactly from my live account. So not only did I make the mistake once, I made it twice~!

Was a moment of clarity that "B!tch slapped" me out of the complancency that I had fallen victim too!

Either way - past results are not reflective of future performance! Won't be making that mistake again!

Oh an incidentally hopefully I don't see anymore negative posts in this thread. We need to keep it positive and pave the way for creativity, not negativity. If you can't do this - please stay out of this forum.

Quoting Erebus
To be fair, you need to compare apples to apples, the average losing trade is 385.07 and the average winning trade is 145.24 giving a ratio of 2.65 - not as bad as the 5 times you highlighted.

The single, large loss maybe attributed to a news event perhaps; eliminating that, the other 3 losses would average 272.59, bringing the ratio down to 1.88.

With the win / loss ratio of over 90%, there may still be some hope, don't you think?

Perhaps, as you mention, the sample size may be too small to gain a significant understand of this "style"...
  • #133
  • Nov 30, 2012 12:11am Nov 30, 2012 12:11am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Yes it is very difficult to spot ABCD patterns without help, while it is not impossible, it is difficult and without help the room for error is quite large.

I to used to believe the same about gartley patterns. I ignored them, until I learned that Bill Williams (my favorite all time forex author) bases his dimensions almost directly from Gartley patterns.

This was when I googled Gartley and read anything and everything I could. I found the zup indicator and haven't looked back since

Quoting KMidas
Damn. I find interesting threads when there is not much time to read them. Anyway, I bookmarked and will return to this later. Weekend is coming with plenty of time to read.

I have been interested in Gartleys and their variations recently but I kind of dismissed them as I can't understand their logic and they seemed a bit esoteric to me. Pretty much like following the moon cycles. Maybe this is because it is difficult to spot these patterns in the past with a naked eye to evaluate their performance. I hope this thread clear things up.

BTW...
  • #134
  • Nov 30, 2012 12:20am Nov 30, 2012 12:20am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
let's return to reality for a moment and the 4H chart - TRICKY but let's talk it through:

At its highest point the inverted candle, while rejected from the 1.30, did in fact make a new high, negating what I presumed to be an ABCD pattern.

Look at the bounce from the 200, the candle that rejected from the 200 is now X and the high that was rejected at 1.30 is now A. Make sense?

So draw your fibo from X to A to determine approximately the retrace level. I can't speculate here but my guess is that "B" will form around 38.2 to 50.0 (maybe even a push to 61.8 and a subsequent hammer)

4H bias: bearish (although the Bulls are still hanging around), but the AO is STILL showing divergence on 4H
Attached Image (click to enlarge)
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  • #135
  • Nov 30, 2012 12:34am Nov 30, 2012 12:34am
Thanks for the great thread 9er

I find your trading "style" very interesting. It is a bit difficult to get my head around it, but the more I study your charts and so forth, the more clear it becomes. Keep up the good work.
  • #136
  • Nov 30, 2012 12:36am Nov 30, 2012 12:36am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Before I move to 1H and while I am thinking about it. I want to direct your attention to an area that you may not think about too much, if at all.

Geometry. Yep I said geometry. What you look for and the ZUP indicator can help here are pyramids or triangle's. A perfectly shaped pyramid when it concludes SCREAMS partial valid ABCD pattern. Depending on it's postion, Pointy end to the right, generally this signals the completion of "D" and your signal that price is about to turn around

Flat side to the right usually signals the completion of the "B to C" leg.

Do your ABCD's when you see this, I mean that literally. Pointy side to the right - count backwards from the pointy side "D is here, that makes this "C", oh here is "B" and by god there is "A""

Pointy side to the left, flat side to the right do your ABCD's forward "A is here, B is there" you get the premise.

Now the more symmetrical the shape the stronger the signal. While the ZUP indicator can help you, it will not always "paint" pyramids. Use your eyes!
Attached Image (click to enlarge)
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  • #137
  • Nov 30, 2012 12:45am Nov 30, 2012 12:45am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Download, read and absorb the attached material. It's a bit more complex than my "Pointy end" analogy, but provides you the rules for the ABCD and butterfly patterns.

I highly recommend printing these documents and reading them in the morning over coffee. Your mind is at its most hightened state the first few hours after waking up, take advantage of this time - dump some knowledge in there in the morning instead of garbage.

Learn these materials - absorb them. Read them until you understand them. And trust me on this one: EVEN IF IT DOESN'T MAKE SENSE, DO NOT QUIT ON IT - KEEP READING IT, COMPARE IT TO CHARTS, LEARN TO DRAW FIBONACCI, I PROMISE IT WILL COME TO YOU. Use your down time wisely!

Study until your eyes get tired. Give them a rest and then hit the materials again until you can intelligently speak to them!
Attached File(s)
File Type: docx Gartley ABCD.docx   298 KB | 688 downloads
File Type: docx Gartley ABCD 2.docx   235 KB | 652 downloads
  • #138
  • Nov 30, 2012 12:58am Nov 30, 2012 12:58am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
ok - off my soapbox - onto the 1H. The current candle (0600 GMT) pushed through 1.30 and as has been the trend was rejected. take a look at the AO and see again the divergence between the oscillator and price. Depending on the shape of the candle, I may be so inclined to place a sell stop at it's low.

RSI is 63.09, not terribly over bought, but over bought nonetheless.

1H bias: Given the fact that the current bar was rejected at 1.30 is one sign, the divergence of the AO is confirmation number 2, and the RSI agrees with both: Bearish

Quandry: London does not open for another hour yet. No volume currently, no strength. Divergence is VERY dependant on volume or strength. As I said before low volume can negate ANY SIGNAL! Trade wisely, go big when the opportunity presents itself and go SMALL when it does not. If there is any conflict between our indicators or these criteria, weigh your decision to execute a trade wisely.
Attached Image (click to enlarge)
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  • #139
  • Nov 30, 2012 1:02am Nov 30, 2012 1:02am
  •  9er
  • | Joined Oct 2012 | Status: Please tell me it's impossible | 732 Posts
Sell stop set: 1.29918 while I was typing I had not set the stop and almost got triggered in. Let's test this premise!
Attached Image (click to enlarge)
Click to Enlarge Name: eu1h.gif Size: 40 KB
  • #140
  • Nov 30, 2012 1:09am Nov 30, 2012 1:09am
Quoting 9er
ok - off my soapbox - onto the 1H. The current candle (0600 GMT) pushed through 1.30 and as has been the trend was rejected. take a look at the AO and see again the divergence between the oscillator and price. Depending on the shape of the candle, I may be so inclined to place a sell stop at it's low.

RSI is 63.09, not terribly over bought, but over bought nonetheless.

1H bias: Given the fact that the current bar was rejected at 1.30 is one sign, the divergence of the AO is confirmation number 2, and the RSI agrees with both: Bearish...
Can you please show the divergence on the char? I don't see it.
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