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Davit's Confluence Trading

  • #421
  • Sep 5, 2013 2:10pm Sep 5, 2013 2:10pm
Quoting Davit
{quote} Its great indi.It quickly tells you the HH LL and mid points.I am an artist so I like visually appealing charts that I can look for hours. You can allow the alert to function and be alerted if new High or Low has been hit. {file}

thats beautiful thanks!
  • #422
  • Sep 5, 2013 2:27pm Sep 5, 2013 2:27pm
Quoting Davit
{quote} I am starting to grasp your idea but few more questions if you don't mind. You draw slow trend line or RSI line in What TF (1H, H4? daily?and I assume Fast 5min TF? Thanks KADC {image} {image}
I draw them in every time frame. NetDania charts (what I usually post) keep RSI lines separate for each time frame. For TWS (Interactive Brokers) and the misleadingly named ProfessionalCharts (the only charts what work on my Windows XP laptop) I colour code the lines so I can tell the difference between my daily, hourly, and 5-minute RSI trend lines (purple, orange, and white respectively in the chart on the right).

These three time frames are normally the ones I use for RSI, though depending on volatility I may need to move up or down in scale for clarity.

The yellow line you drew in your 5-min chart that shows up in your hourly chart has no value in the hourly scale. Alignments can occur, but they should be considered coincidental as they represent (from a mathematical point of view) the 12th multiple of a 14 period average.

Depending largely on the frequency of trade volume, choosing to render your RSI based on trades, midpoint, open, or close can sometimes have an extremely exaggerated effect. For example, on the left is the chart I posted previously using NetDania to chart spot gold in US$. You'll note that the descending resistance line (slow line) still holds even now. The chart on the right is TWS charting Oct '13 MGC (eMicro gold futures) where the extremely low volume (only 13 total trades took place from 11 a.m. EST until 3 p.m. -- and three of those were mine) resulted in a very different chart where the resistance line was broken. The TWS chart was rendered using midpoints. With only 13 points of data, choosing to rending using trades, open, or close gives an even less accurate chart.


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You can always make money tomorrow provided you don't lose it today.
  • #423
  • Edited 7:59pm Sep 5, 2013 5:48pm | Edited 7:59pm
The latest daily AUDUSD swing up appears to have topped.

I have drawn a supply zone on the 15 minute chart, so I will wait for a retrace to short, and take profit at the demand zone near the bottom of the daily swing up.


edit: i see it went up sooner than i thought, so i changed the entry a bit.

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  • #424
  • Sep 5, 2013 7:51pm Sep 5, 2013 7:51pm
Quoting Davit
{quote} Wow it came down to few pips to get filled but missed it.I have a feeling 84 will be tested again.Lot of demand there and does not surprise me price having resistance to touch 84. Yes do conserve your capitol.Don't overexpose yourself.This is why I did not open new positions becausemy mistake getting in on GC early.I can't wait to get this load off my shoulders.This has taught me value of patience and trend direction. Its important to note as taught in the book BWILC Dirk recommends building positions same direction as the trend. Regards...

Hey Davit...thanks for your comments, got it. Also see how you have worked the GC to gain back some of your losses....nice, real nice.


I was killed on the AU recently looking to sell the rally near the 618 fib....see my buy zone (-92 pips), red rectangle. Will now wait for entries deeper into the range...786 fib and beyond...generally speaking, with my trades.

Bryan
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  • #425
  • Sep 5, 2013 7:57pm Sep 5, 2013 7:57pm
Quoting Davit
{quote} Wow it came down to few pips to get filled but missed it.I have a feeling 84 will be tested again.Lot of demand there and does not surprise me price having resistance to touch 84. Yes do conserve your capitol.Don't overexpose yourself.This is why I did not open new positions becausemy mistake getting in on GC early.I can't wait to get this load off my shoulders.This has taught me value of patience and trend direction. Its important to note as taught in the book BWILC Dirk recommends building positions same direction as the trend. Regards...


However, Davit...despite the -92 on the AU....I hammered this sell on the GU today....+70 pips. A 786 fib sell at supply. Does not cover my losses this week but have to take some profit to cut the damage.

this one was sweet. unfortunately my upper order was not filled...close, but no cigar.

thank you,
Bryan
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  • #426
  • Sep 5, 2013 10:55pm Sep 5, 2013 10:55pm
Quoting bryn077
{quote} Hey Davit...thanks for your comments, got it. Also see how you have worked the GC to gain back some of your losses....nice, real nice. I was killed on the AU recently looking to sell the rally near the 618 fib....see my buy zone (-92 pips), red rectangle. Will now wait for entries deeper into the range...786 fib and beyond...generally speaking, with my trades. Bryan {image}

Hi Bryno
I think we had this discussion that I said I won't sell Aussie and Kiwi and only buy.
Reason is simple.Both are oversold hence its higher probable trade to go long once price deflates on both.
You must make a trading decisions on each pair and stick with it.
To me GC Short
UC Short
UJ Short
AU long
NU Long
EG Long
So far.Notice I don't flip flap.This is my style based on price and fundamentals.Once you decide your direction bias then its a question of right entry.Pretty much stress free.
My mistake lately been early entry on GC but I am still waiting for TP. I learned a valuable lesson.This is why I did not jump the gun on EG long at 8450 but insisted to wait for 84.Yes GC taught me great deal.
I am glad you recovered your weekly loss.Keep a diary and analyze why you did what you did.Its amazing how much you can learn from your mistakes. Its also important that you should measure your profitability not in a week or a month but in quarters like businesses do.This way it takes the pressure away.You may had crappy week but great next month.So keep that in mind because its important to understand profitability is based on series of trades not just few.
This is why lot of rookies go from system to system without much success.They are under the illusion that every trade should be a success or they will change their system again and never achieve the understanding of randomness factor..and probability edge in series of trades.
This is why I like BWILC.In its core its principles are based on increasing one's edge over series of trades.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #427
  • Sep 6, 2013 12:18am Sep 6, 2013 12:18am
Since my thread is about confluence then let me write briefly why I like ADR indicator I am using and why that is important.
NY Close which is New Trading day
Price 5pm open 6368 Now 6359 9pips low
So far day bias is on down side. ADR shows 10% movement already which means 90% of the move could be up or further down.Waiting for London open is smart because of greater liquidity.Asian session often creates false breakouts or basically sideway action until London open.
So looking at ADR is clear this particular pair traveled 93pips average in 20days.Once direction is established you can pretty much guess how far price will go based on ADR hence you can take your profits accordingly.

Indicator is from Alfonso's thread and I like to thank him for it.
Attached Image (click to enlarge)
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Attached File(s)
File Type: ex4 ADR_v2.ex4   11 KB | 211 downloads
In trading, you have to be defensive and aggressive at the same time
  • #428
  • Sep 6, 2013 7:54am Sep 6, 2013 7:54am
Great move on GC towards down side finally some light end of tunnel.
dropped -133pips so far.
Canadian employment news was slightly better.Great better then negative.My TP 59.5 still remaining.
In trading, you have to be defensive and aggressive at the same time
  • #429
  • Edited 9:17am Sep 6, 2013 8:41am | Edited 9:17am
Quoting Davit
Great move on GC towards down side finally some light end of tunnel. dropped -133pips so far. Canadian employment news was slightly better.Great better then negative.My TP 59.5 still remaining.
Ivey may give CAD a further nudge upwards [update: it didn't]. USD-wise, overreaction to prints almost always return to the opening price/prior close if there is no follow-through within fifteen minutes of the first push then remain range-bound for the rest of the session. With the lack of interest in any pair at US open I don't think there will be any tradeable movement until London closes which is usually when you see the last bit of profit taking for the week.

RSI is of little use following extreme volatility. At a glance, other than gold which I'm already short from near the top, shorting AUD/USD with a stoploss at the high for the day looks promising for a return to 0.91750 (essentially, opening range strategy).
You can always make money tomorrow provided you don't lose it today.
  • #430
  • Sep 6, 2013 8:48am Sep 6, 2013 8:48am
Quoting Davit
Great move on GC towards down side finally some light end of tunnel. dropped -133pips so far. Canadian employment news was slightly better.Great better then negative.My TP 59.5 still remaining.

took profit! 100 pips! shorted the audusd a minute ago
  • #431
  • Sep 6, 2013 11:44am Sep 6, 2013 11:44am
Quoting Starry
{quote} took profit! 100 pips! shorted the audusd a minute ago

Congrats! Mine is little more dramatic
I love to join you and KADC to short the Aussie but I can't. Its my trading philosophy of one directional trading on each pair only.
To me Aussie and Kiwi are long only and I will buy them if they drop down.Fundamentally since both are extremely oversold they have very good potential to break their range and go even higher so shorting them to me is risky.
Hope you and KADC profit.
In trading, you have to be defensive and aggressive at the same time
  • #432
  • Edited 1:08pm Sep 6, 2013 11:51am | Edited 1:08pm
Quoting KADC
{quote} Ivey may give CAD a further nudge upwards [update: it didn't]. USD-wise, overreaction to prints almost always return to the opening price/prior close if there is no follow-through within fifteen minutes of the first push then remain range-bound for the rest of the session. With the lack of interest in any pair at US open I don't think there will be any tradeable movement until London closes which is usually when you see the last bit of profit taking for the week. RSI is of little use following extreme volatility. At a glance, other than...

I just hope rally down on GC becomes a new direction change in my favor down and not just small corrective move.
Once UC bottoms out somewhere at 1.020 I will go long.
Good luck on Aussie short.I will cheer at sidelines
In trading, you have to be defensive and aggressive at the same time
  • #433
  • Sep 6, 2013 12:04pm Sep 6, 2013 12:04pm
Aussie shorts look good for you guys. Lots of Dogis which suggest upper push has exhausted.
Whenever you see long tails bigger then the body suggest weakness.Top tails weak UP/ bottom tails weak bottoms.
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In trading, you have to be defensive and aggressive at the same time
  • #434
  • Sep 6, 2013 1:05pm Sep 6, 2013 1:05pm
Quoting Davit
{quote} Congrats! Mine is little more dramatic I love to join you and KADC to short the Aussie but I can't. Its my trading philosophy of one directional trading on each pair only. To me Aussie and Kiwi are long only and I will buy them if they drop down.Fundamentally since both are extremely oversold they have very good potential to break their range and go even higher so shorting them to me is risky. Hope you and KADC profit.

nice

hope you do well on y our gbpcad, it looks like it might be bearish on the weekly now that it has dropped.

Thanks, hope i do well too. i need 340 pips or so to save my live practice (small though!) account, im going to feel so accomplished when i save it
  • #435
  • Sep 6, 2013 1:17pm Sep 6, 2013 1:17pm
Quoting Starry
{quote} nice hope you do well on y our gbpcad, it looks like it might be bearish on the weekly now that it has dropped. Thanks, hope i do well too. i need 340 pips or so to save my live practice (small though!) account, im going to feel so accomplished when i save it

Just take your time.I suggest to start thinking in swing way instead of daily or scalping mode.Best way to build account is being in the right trend building positions much like millipede thread.
Once in profit and once you move your SL to protect your profit then you can let it ride as far as it can go.
Best trading article I read

What Crocodiles Can Teach You About Trading
We are basically hunters of price and nature provides best solutions.Please read this article and think how beautiful crocodile is.
He does not chase every frog,fish,small pitiful prey by wasting precious energy.He waits,conserves his energy for big prey and does it consistently.
Natures best trader
In trading, you have to be defensive and aggressive at the same time
  • #436
  • Sep 6, 2013 2:04pm Sep 6, 2013 2:04pm
Watching Cable for short entry.Key area of interest to me is 78.6 56.50
Scott Carney's rule if price does not violate 78.6 then very high probability it will turn around.
Notice enormous rejecting dogi
From his writing.
"The 0.786 retracement is the square root of the 0.618. The 0.786
retracement is the next critical area to examine, after the 0.618 has been
clearly violated. The 0.786 is a vital Fibonacci number because it is often
the “last chance reversal area” before retesting the original price point. Price
action that does not reverse from the 0.786 usually will retest, and often
break past the original starting point. Therefore, 0.786 failures are
significant because the stop loss limit will be clearly defined by the original
starting point and relatively small in comparison to the potential reversal.
The 0.786 retracement is fairly unknown in the industry, although I
believe that more technicians are becoming aware of its significance. In my
opinion, it is a crucial Fibonacci number, since it is one of the last harmonic
ratios before retesting a trend’s prior high or low and it can provide a clear
indication of the future direction based upon the price action at the number."
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In trading, you have to be defensive and aggressive at the same time
  • #437
  • Sep 6, 2013 4:07pm Sep 6, 2013 4:07pm
Quoting Davit
{quote} Just take your time.I suggest to start thinking in swing way instead of daily or scalping mode.Best way to build account is being in the right trend building positions much like millipede thread. Once in profit and once you move your SL to protect your profit then you can let it ride as far as it can go. Best trading article I read What Crocodiles Can Teach You About Trading We are basically hunters of price and nature provides...

my goal is to enter long term (daily - 1hr) trades on the 1 minute or tick chart, so i can get exact entries, tiight stops, and large pips. I think i am progressing nicely toward that goal.

i like the analogy! crocodile trader
  • #438
  • Sep 6, 2013 4:13pm Sep 6, 2013 4:13pm
Quoting Davit
Watching Cable for short entry.Key area of interest to me is 78.6 56.50 Scott Carney's rule if price does not violate 78.6 then very high probability it will turn around. Notice enormous rejecting dogi From his writing. "The 0.786 retracement is the square root of the 0.618. The 0.786 retracement is the next critical area to examine, after the 0.618 has been clearly violated. The 0.786 is a vital Fibonacci number because it is often the “last chance reversal area” before retesting the original price point. Price action that does not reverse from...

I believe that the USD dollar is going to get very strong very quickly.
  • #439
  • Sep 7, 2013 10:39am Sep 7, 2013 10:39am
hey Davit and others,
I would just like to share a simple confluence strategy which uses arcs in order to determine when price will start going up or down once it has formed a bottom or top.

assumption: you know the time and price of a swing endpoint.
strategy: Use two arcs as s/r confluence in order to determine the most likely place where price will start moving up or down. In other words, we want to determine when the top or bottom is finished.

Steps:
1. Expand the second red arc to the end of the swing. The center of the arc should be at the start of the swing
2. Expand the second red arc to the end of the swing. The center of this arc should be at the start of the end-of-swing impulse.
3. Look for for price to bounce and retest the arc created in step 2. Based on the confluence of the two arcs, the retest will come in different manners. If the arcs are overlapped perfectly, than no retest will occur (it will just shoot up).

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note: for swings which lack end-of-swing impulses, you can use confluence with the previous swing.

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  • #440
  • Sep 7, 2013 11:24am Sep 7, 2013 11:24am
Quoting Starry
hey Davit and others, I would just like to share a simple confluence strategy which uses arcs in order to determine when price will start going up or down once it has formed a bottom or top. assumption: you know the time and price of a swing endpoint. strategy: Use two arcs as s/r confluence in order to determine the most likely place where price will start moving up or down. In other words, we want to determine when the top or bottom is finished. Steps: 1. Expand the second red arc to the end of the swing. The center of the arc should be at the...

Hi Starry.Love those arcs.Could you share your indi if applicable to metatrader4?
Looks to me 2 red arcs overlapping is 127 fib extension (2nd chart)
This makes sense harmonically because 127 is usually when price turns around if not then 1.618 ext. next.
In trading, you have to be defensive and aggressive at the same time
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