FOREX PRO Weekly July 23-27, 2012

syrah

Corporal
Messages
98
Thank you for the update Sive. It is hard deciding 'if' or 'when' to pull the plug on these shorts. Patience is needed.
 

Triantus Shango

Sergeant Major
Messages
1,372
wouldyou share with us?
Triantus,you have me formidably and immensely intrigued...
ok guys, sorry for the delay, i was sick today. got hit by an acute conjunctivitis and my eyes were running like the niagara falls all day long. i couldn't stare at a screenfor the life of me. got somewhat better now since i started the drops the doc gave me.

what are the odds? why does the squeeze have to go on for 200 pips this very day (on e/j)? goddam it, really, it couldn't wait until i felt better, now could it? when it comes to FX, luck is one word that has never applied 95% of the time. :-(

anyways, i've been squinting at my charts and tried to put a cogent comment together regarding what we were discussing yesterday in regards to craig's hints. you'll find a H4 chart attached. a few words of explanation 1st:

1- the light greenline is the 100 SMA and the darker green line is the 200 SMA;
2- the indicator at the bottom of the screen is the MACD with DiNapoli inputs (8, 17, 9)--not using the decimals because the difference is too small to be noticed on screen--the colors are self-explanatory, red when it's bearish, orange when bearish or bullish momentum is weakening, and green when price finally goes from bearish to bullish;
3- the little white arrow heads is an indicator called 'Fractals' and when it's above a candle it means 'sell', and below means 'buy'.
4- the horizontaldashed lines are just the monthly pivots and the shorter solid horizontal lines at the right are the daily and weekly pivot labels as computed by the IBFX MQ4 scripts.
5- the red line is the MACD Predictor re-engineered from the explanations in DiNapoli's book.

now, one brief disclaimer: i'm pretty sure most of you already know about this, so you might be disappointed by what follows. the context yesterday made it allsound like i suddenly stumbled on the holy grail or something. i didn't mean to imply any such thing. i just got so surprised at rediscovering somethingi already knew, but especially surprised to realize i developed a habit of not even looking at those clues anymore because i would get so sidetracked with all the other stuff complicating my charts (still guilty of using charts that are way too busy, but that's about to change).

and finally, this is just my guess as to what craig might have hinted at yesterday. the stuff you'll see on the chart are the only clues i see as 'blatant' (not including harmonic patterns, and DiNapoli patterns, if any). so of course, i could be completely mistaken here--craig, that's a hint for you to confirm whether or not this is what you were hinting at.

ok, take a look at the chart. match up the yellow lines on the price charts with the ones on the MACD. get it? right, ok, pretty obvious. also, pay attention to the lengthof the candle shadows (wicks) and how often the price will move in exactly the opposite direction.

also, the relationship between all of the above and the MACD Predictor line is another clue when the market is about to turn.

and when you factor in position of price relative to the 100 and 200 SMA, although more relevant on H1or M5, you can define bearish versus bullish zones, i.e. p < 100 SMA <200 SMA ==> bearish and 200 SMA <100 SMA < p ==> bullish; sometimes 100 SMA < p < 200 SMA or 200 SMA < p < 100 SMA and that's when some people just ignore the 200 SMA.

so, all of this plus fibonacci retrace and extension levels and harmonic structures should provide a consistent money making machine. ;-) BUT 200 pips a day on average, that i am not so sure. ;-) craig, am i going in the right direction here?

i don't know if it'sjust me, but lately it seems as if there hasn't been that many DiNapoli patterns that quite worked out. so the above set up can help in finding more trigger points. please let me know what you think.

cheers.

p.s.: the MACD correlation also happens with Slow Stochastic and DPO.
 

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papao

Private, 1st Class
Messages
74
Hi Triantus and thank you for sharing. Are you describing divergences on macd? How do you trade them? (For me, talking about bullish divergence, i need a new low on price, while the macd (blue line) makes a higher low. To confirm the divergence i also need the trend turn bullish (macd crossing the signal line or, that is the same, cross of macdp). After that i use the first fibonacci retracement, provided the trend holds bullish, for the entry. I place my stop based on lower time frame patterns). What about you? And how this is connected with friday price action in general? :)

PS: i wish you a fast recovery from your conjunctivitis :)
 

Synchronicity

Sergeant
Messages
168
Hi Triantus

Thanks for taking the time to post this. I've filed it for later as I don't want to confuse myself further:confused:

You post a lot here and it is always good stuff. You are a star :)

Michael
 

Triantus Shango

Sergeant Major
Messages
1,372
thanks papao. feeling a little better thanks to the drugs.

to answer your question: yes and no. some are divergences, and some MACD patterns show the same underlyingtrend as found in the price action.


how to trade thedivergences: i would first check where price is located within theoverall context. by overall context i mean the following: how close/far is price from a significant SPPT/RSSTlevel based on the analysis of monthly, weekly, daily, H4, H1 charts using:

- previous high/lowextremes
- fibonacci analysis
- distance from 100and 200 SMA
- pivot points

then i would watchfor long shadows/wicks. if they are SG(stop grabber) in nature and we are close to some SPPT/RSST level on the otherside of which it would be natural to have stop loss orders AND MACD indicates achange in trend--and this could be something like price making lower lows orhigher highs as it crosses the MACD Predictor--AND it is clear enough thatprice doesn't seem to be able to get above or below a certain area, then iwould consider that a good signal to enter a trade in the opposite directionfrom previous price action, meaning in the same direction as the divergence onMACD. of course, i would also checkwhere the fib levels are, the pivot points, the 100 and 200 MAs, and whether ornot there are any classic harmonicpatterns to get further clues and whether price is right at the MACD Predictor,testing it with a spike, but not really crossing it, or briefly crossing it,but quickly going back where it came from and changing direction. hard to put in words, but if you look at thechart it should be clear. and sive mentioned the SG action so many times, justdo a search if you need more explanations re SG.

when MACD simplyshows the underlying trend without divergences, then i'd take the trade in thesame direction, again provided that all the other factors support the trade (asmentioned above).

some people prefer to wait for the MACD signal linecrossover, which is the same as when price cross the MACD Predictor. i'd say that's a judgement call to make basedon the context at the time since waiting for the cross-over isn't any saferintrinsically than not waiting for the cross-over. sometimes not waiting, givesyou a better entry. but if the other factors supporting a trade usually are notfully present, then i'd wait for the cross-over. but if you already have all oralmost all of the other supporting factors on the chart, and you have a goodgauge of market sentiment at that point in time, then i wouldn't wait for thecross-over.

also, there is theconsideration of thrust. if there wassignificant thrust, like yesterday, then i'd enter or reload when priceretraces to 38.2%. if it keeps retracing, then i'll keep reloading at 50% and61.8% and/or 100/200 SMA depending where the SMA is relative to the fibnodes. if it keeps retracing, my SL get****, and i will abjectly confess i was wrong. sometimes you can see you arewrong even before some significant fib node gets hit. in such case, i close thetrade.

if there is nosignificant thrust, but just some movement turtle fashion or in spurts, theni'd chance entering contra move with TP being the 38.2/50/61.8 node,reassessing every time one node has been hit, with the understanding that imight have to reverse from that node or 100/200 SMA. again, considering the big picture and allother factors as well.

as regards to usinga lower TF to place a SL, i think that's irrelevant. your SL should be determined by the mostsignificant boundaries of the overall context you trade in. in the case of this discussion, intraday. soM5 might be a little too tight, because on H1/H4 there is usually plenty ofroom to let it run.

but then again, igauge sentiment. if market feels sleepyor overly cautious, then i'd scale down and scalp 10 or 20 pips in/outquickly. otherwise, i'd use H1 and aboveto determine the right levels to position SLs.

this is a completelydiscretionary system. not mechanical at all. so it all hinges upon how good you control your mind.

to summarize, andplease anyone, correct me if you think i got it wrong, i would say that the trader's checklistshould be something like the following, in order of importance:


  1. the relative price position relative to high/low of most recent range
  2. the relative price position relative to fibonacci levels
  3. the relative price position relative to 100/200 SMA
  4. pivot points
  5. MACD patterns
  6. harmonic patterns and fib extensions
  7. 3x3 DMA for DRPO/B&B identification
  8. Bollinger Bands to estimate how far price is deviating and correlating that with OS/OB indicators and whether close to a significant SPPT/RSST level

i probably forgotsomething. the drugs (medicine) is making me sleepy. hope this helps. any feedback, ideas, all welcome. cheers.


HiTriantus and thank you for sharing. Are you describing divergences on macd? Howdo you trade them? (For me, talking about bullish divergence, i need a new lowon price, while the macd (blue line) makes a higher low. To confirm the divergencei also need the trend turn bullish (macd crossing the signal line or, that isthe same, cross of macdp). After that i use the first fibonacci retracement,provided the trend holds bullish, for the entry. I place my stop based on lowertime frame patterns). What about you? And how this is connected with fridayprice action in general? :)
PS: i wish you afast recovery from your conjunctivitis
 
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Triantus Shango

Sergeant Major
Messages
1,372
thanks michael. am afraid am just another fool trying to make it in this business though. but it helps writing things out, throwing ideas in the pit, and see what people have to say. helps refine your understanding i think. like open source. so i hope more people will jump in with comments etc... so we can progress more. again, craig--yeah, i'm looking at you ;-)--don't hesitate to share more so everyone can learn something hopefully. it certainly isn't any of us who will take your money, so nothing to lose, right?

Hi Triantus

Thanks for taking the time to post this. I've filed it for later as I don't want to confuse myself further:confused:

You post a lot here and it is always good stuff. You are a star :)

Michael
 
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