I’ve been out of the game for almost 3 weeks now, forced myself to take a break so as to not get overconfident. I’m already ahead a month in terms of growth goals.
I usually only trade the fiber but for some reason I felt more comfortable with the patterns on the cable, so I went with that instead. Until the 1.2600 is broken on the EUR/USD I didn’t want to make any assumptions on the direction. Anyway, here is a simple cable short at 1.5733. The price shot down and rebounded right before NYO. I entered close to the OTE level. Now I’ve moved the stop to BE plus a bit and going to let it ride a bit.
I made the trade right before I left for uni, and a couple hours later now I’m looking back at the fiber… there was a clear opportunity to short into the rally near NYO. Oh well.
Just closed out the trade at +50 pips. I only risked 0.5%, I wanted to start up slow. But hey, +50 pips on anything is solid in my books. Thanks everyone!
I’ve been trying to learn the concept of divergence. I noticed this on the charts this morning - I didn’t trade it… I made some very noobish money management errors last week so I’m going back to the drawing board for a while so to speak.
So what I saw this morning was this:
Now is this considered divergence? I know I’m not comparing a pair to the dollar index, but I’ve seen others look for divergence between correlated pairs. My question is, if this is divergence - or if this is indicative of the two pairs’ correlation being out of whack, how does one come to the conclusion that it is bearish?
Basically if GU is making lower lows and EU is not, is that enough to say EU will come down to correlate with GU again? One could say GU may stop making lower lows and bounce up to get correlated with EU’s up moves. You get what I’m saying?
Sorry if my phrasing is confusing, any feedback on divergence would be greatly appreciated. Thanks!
When looking at two highly correlated pairs - in this case the cable and fiber, they should move together… A single pair posting a lower low or a higher high when the other pair fails to follow suit is what we call a SMT Divergence - smart money tool divergence…
A bearish divergence is when one pair will make a higher high, and the other pair will fail to…
Inversly, a bullish divergence is where a pair makes a lower low while the correlated pair fails to…
The way its taught is that the pair which fails to make the higher high or the lower low, is the weaker of the pairs and entries are better looked in that.
My understanding of that is that if say in your example, the Fiber has made higher highs but the cable fails to, i take this as any buying into the cable is being absorbed by smart money, and thus they are accumulating or distributing positions…
I’m on vacation from next Thursday for 3 weeks, but until then I’ll see if there’s any more juice to be squeezed out of further bullish advances on the Euro v/s the Australian and/or New Zealand Dollars, providing this easing from recent highs doesn’t completely wash out.
In order for that to happen I’ll be looking for some ship steadying & any positive/negative noises from the respective camps to be reflected in a decent higher low in the technical chart to spur me into taking action.
Anyone trading this morning? Nice SMT divergence, lower lows on the Fiber, lower highs on the USDX, higher lows on the Cable. Also an OTE from yesterdays low -> AR high.
Long from 1.3385 (yes yes, bearish MS, but SMT divergence @ the key support level of 1.3380 [still marked on the chart from weeks/months ago])
I wont be aiming for a massive move up with this one, but its paid for already, so we’ll see how it moves… (We have a lot of inefficiency to fill in ;))
Yesterdays AR low [give or take] (I’m looking at closing my final 30% @ 1.3480 (another HTF S&R level)). Took most off @ 30 pips as its a Friday and we’re quite bearish at the minute…
NFP? Was that not last Friday? Or are you talking about the Trade Balance data thats coming out @ 13:30GMT?
back where we started almost a year ago when Michael suddenly disappeared. Quite a hectic time then, not as hectic this go round, but much more drama. My suggestion would be to add a link to Clint’s thread. I’m not sure if adding links to the other threads would be of much help since all the vid’s have been removed
I am Forex newbie and just joined Babypips a couple of days ago. Searching for somewhere to start my Forex learning (besides the Babypips school) I did a search for a Forex mentor and looks like I have walked right into a politcal storm… I am not sure what the whole thing was about but the way you guys have rallied around Michael, I kind of already respect the man.
Being a newbie my contribution will be at the minimal but I aim on lurking around in the hope that ICT resurface, and that in the mean time some of what he has taught you all will rub of on me.
In the mean time is there anyway that I can get to learn what he taught? I’d appreciate any pointers.
Hi, I’ll try to give you a shortcut, but when you get a hold of the movies you need to watch them
BTW; This is MY take on ICT’s Concepts…
Mark up Key Support/Resistance lines on your chart(keyword: KSR) on the daily, weekly and monthly
Market Structure on daily(maybe 4H)
A STL(Short Term Low) is a Low with 2 higher lows on both sides(This is a 3 candle pattern)…
A ITL(Intermediate Term Low) is a Low with 2 higher STL on both sides…
A LTL(Long Term Low) is a Low with 2 higher ITL on both Sides…
And STH,ITH and LTH(Long Term High) is the excact opposite… Hope you get that.
When you mark up your chart with this you should see how the market moves from STL to STH, ITL to ITH and LTL to LTH
The thing is, when we have moved past(higher) than the last ITH then I look for buy signals every day. If the last broken HIgh/Low is a ITL, I would be looking for a Short the following day.
You need to know there is many ways to get a ‘bias’ for the day, you can look at correlated bonds/yields/stocks/cot repport/seasonal tendencies etc to get a clue about what to look for the next day.
Entry Signals
This is the fun part.
when you have your Bias(and hopefully marked a point where your bias would prove incorrect(like at a ITL)
We only take entry signals in KILL ZONES(London Open, New York Open, London Close, New York Close, Tokyo Open).
In a BUY day you looks for long entries BELOW Asian Range High, and in a SELL day, you look for entries ABOVE Asian Range Low.
Look at KSR levels you have marked, or improvised levels(Pivots, Fibs, Last Weeks Low, Current Week Low etc) and at those levels look for OTE’s, Price Divergence(beetween the pair your watching) and correlated pairs(also known as SMT(Smart Money Tool)), Indicators(RSI,Stochastics, MACD, Williams %R), and probebly a lot more that I dont rembember right know…
Money Managment
This is a big chapter, but the basics are to open 2 orders(each half of the original position), 1 with 25pip SL and 25pip TP, the second with 25pip SL. The second the first trade reach TP, you need to move the SL on the second trade to Break Even(BE), dvs set SL to entry price + 2 pips…
On the last trade, remember to set TP at KSR levels, Average Daily Range etc
And NEVER risk more than 2%
I dont know if this is a good idea, but its basically my strategy… Still work in progress…
Remember, always start your week by plotting the KSR-levels.
Then I would suggest to print a some daily charts out and start drawing in Market Structure…
[give or take] (I’m looking at closing my final 30% @ 1.3480 (another HTF S&R level)). Took most off @ 30 pips as its a Friday and we’re quite bearish at the minute…
