Trading Masterclass #2

Capitulation VS break-out

First thing to say is that capitulations don’t just come out of the blue. Your warning(s) are the previous days. Like we have already discussed here, the Cover lows/ highs are 4-sample daily highs / lows with 27+ retracement on the last candle. The Cover days come with a moratorium zone (white numbers) and moves up to these numbers are no break extensions. These displacements are also based on the fore-mentioned 27 pips. Give it another 6 pips tolerance to avoid some fake outs.

Based on this, the capitulation was narrowly avoided (prepped) by the previous day when the low that was set was at 1.12345, but when today the 1.1230 level was hit, the capitulation was on.

To compare this with the previous capitulation, you will find that that too had Cover lows setting up the stage & at 1.1216 (with the 6-pip add on) there was no question about what was happening. The cover low was first followed by a low, that did not retrace 27-pips on the daily candle. Dead giveaway.

The 1.1175 level was calculated with the last Money Flow divergence low and 46 pips additional distance (wanted to sick to the 8 multiplier table).

One interesting nuance is that if you measure the distance from the capitulation low to the previous large black candle’s closing level, on the second image you get 96 pips, whilst on the current example this is 111.

Another nuance to insert here is that I set up my 0-M hourly chart in a way that the first indicator row displays primary signals (vertical lines) and the second row has secondary signals. Obviously, secondary signals do not matter during a capitulation.

The capitulation went way beyond what can statistically be expected from a Wave 3 or a C without further consolidation.

Now let’s talk about how important it is that the ink dries on the hourly fractal when looking for the low.

The current fractal would be solidified in 20 minutes, when the current hourly candle settles.

Now, let’s look at what happened with the previous capitulation. After the 67-sample momentum made a reversal divergence along with the RSI2, price went back to the E-44 within 24 hours.

Here is the latest example where the market made a major move that ended up being a sustained break-out for comparison.

As you can see, the descent wasn’t as vertical, there was a prolonged consolidation at/below the 8-EMA and when both the RSI2 and the momentum showed a reversal, the market ended up tagging the E-44 with a 27-pip lift, as by then the moving average managed to catch up with the price.

So, I presented you all the evidence; from the current swing low, the E-44 is almost a 100 pips away, and they are certain to meet again, the question is: which route shall the price take from here?

Trading Masterclass #1

Parabolic reversal

Ingredients: 8EMA on opens, 44 EMA on medians


Price separation from the 😯 for 6 consecutive hours. A hourly fractal solidified at the outskirts.

Since a lower low / higher high on the bow back is likely to be marginal at best or going to fall shy, you should place your buy / sell stop at the inner fractal especially if it also falls shy of the 8-0 and target the Moray eel (E44M) with good size, for the kick back from the fractal on the second visit is likely to be muted.

You are wrong 10 pips beyond the first swing leg of the parabolic move.

Exit anywhere beyond the Moray eel, preferably with RSI2 in its last 10% print.

Better than break even stop loss can be applied when in 10+ pips of gains.

You may not see a fractal on the hourly, but on 30 or below you would.

Automatic target adjustment with Code 44 (0.44 stop loss on longs, 4.4 stop loss for shorts).

/////Long Target - Code E44 

if( OrderType()==OP_BUY && (OrderStopLoss()==0.44 || OrderTakeProfit()==4.4) && OrderTakeProfit()!=NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0)+10*Point,4) && OrderOpenPrice()<NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0),4)-10*Point
       { OrderModify(OrderTicket(), OrderOpenPrice(), OrderStopLoss(), NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0)+10*Point,4), OrderExpiration());
          Print("LONG Target Set to E-44 @ "+DoubleToStr(NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0)+10*Point,4),4));}

/////Short Target  - Code E44

if( OrderType()==OP_SELL && (OrderStopLoss()==4.4 || OrderTakeProfit()==0.44) && OrderTakeProfit()!=NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0)-10*Point,4) && OrderOpenPrice()>NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0),4)+10*Point
     {  OrderModify(OrderTicket(), OrderOpenPrice(), OrderStopLoss(), NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0)-10*Point,4), OrderExpiration());
           Print("SHORT Target Set to E-44 @ "+DoubleToStr(NormalizeDouble(iMA(symbol,30,88,0,MODE_EMA, PRICE_CLOSE,0),4)-10*Point,4));  }    

As a trader the biggest advantage you can have is knowing where / when the market isn’t likely to move more than a handful of pips against your position, because you can take advantage of the high leverage, i.e. on a 5k account you could open 10 lots with a 500:1 and make 2.5k on a single trade.

Could you define a parabolic move as a separation from the 😯 for longer than 5 hours? I think you could.

Moray eel
Morello cherry (magyarul meggy)

Could you have known what was the limit the market would likely not undercut the previous “Cover” day’s low?

I believe you could have.

The displacement is 26 pips. Only a capitulation move would be able to fly past this value, but then you would see the price come back almost as quickly.

Match Ball Walking

Thanks to me you already know that Mr. Morten Market is a wrecking ball, that swings as a Pendulum and now you are about to find out that it also plays fetch tennis with Murena Williams.

The green print is after the previous 3 closes were above the E-44, so only appears on the 4th candle.

E44 is the net, it is not a goal line, so don’t think of it as a limit, it is more of a half-court. 3 consecutive closes are a match ball with serving rights transferred.

for (i=100; i>=0; i--){
   E44[i]=iMA(symbol,0,44,0,MODE_EMA, PRICE_MEDIAN,i);

for (i=100; i>=0; i--){   
   if (E44N[i+1]==EMPTY_VALUE) E44N[i]=EMPTY_VALUE;
   if (E44P[i+1]==EMPTY_VALUE) E44P[i]=EMPTY_VALUE;
   if (E44N[i+1]!=EMPTY_VALUE) E44N[i]=E44[i];
   if (i<97 && Close[i+2]>E44[i+2] && Close[i+1]>E44[i+1] && Close[i]>E44[i]) {E44N[i]=EMPTY_VALUE;  E44P[i]=E44[i];}
   else if (i<97 && Close[i+2]<E44[i+2] && Close[i+1]<E44[i+1] && Close[i]<E44[i]) {E44N[i]=E44[i]; E44P[i]=EMPTY_VALUE;}

Murena Williams has the serving rights and is occupying the side where the ball cannot seem to be able to land more than twice before she hits it back.

Of course, whilst in the middle of the court, this affair with Rafael can turn into something more.

The sole role of E-16 is to blow hot air. A new close to either so of it is enough to make the fan flip direction, making the balls progression easier / harder accordingly.

D32Pro is aiming to cherry pick ripe conditions where the amateur player has an edge and would be able to walk the ball back to the net at the very minimum. The name of the player is fittingly BallBack ’cause his only aim is to get the balls back.

As you can imagine, on the hourly chart this is a much more involving play than on the daily where the two Retrievers can be spotted at work with a single condense divergence line.

Other. Chapter 27. Let’s talk about some daily candle conditions.

Cover: 4-sample higher high/lower low closing in the new direction and portraying at least 27 pips between its open and the far-end tail. A Modesto counter-directional entry, but it certainly isn’t a Stockton by itself. Roll out / hedge if the wick gets exceeded.

   ///////3-candle low closing back up 27-pips cover
   if ( iLow(symbol,0,iLowest(symbol,0,MODE_LOW,1,i))==iLow(symbol,0,iLowest(symbol,0,MODE_LOW,4,i)) && Close[i]>iLow(symbol,0,iLowest(symbol,0,MODE_LOW,2,i))+270*Point
         && !gr[i]){
      ObjectCreate("Bingb"+IntegerToString(i), OBJ_TEXT, 0, Time[i], Low[i]+20*Point); 
       ObjectSetText("Bingb"+IntegerToString(i), "C", 26, "Impact", DimGray);    
   ///////3-candle high closing back down 27-pips cover
     if (iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,1,i))==iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,4,i)) && Close[i]<iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,2,i))-270*Point
         && !gr[i]
      ObjectCreate("Binga"+IntegerToString(i), OBJ_TEXT, 0, Time[i], High[i]+230*Point); 
       ObjectSetText("Binga"+IntegerToString(i), "C", 26, "Impact", DimGray);    

Gr is short for Green. Logical array for the high volume / cyan candles.

Blue arrows (& nightingales): a high volume day usually would get put into context by the following day: a lower close would point to selling at hand activating the opposite end as a future position-protection repeat action etc “Dead Giveaway”. Of course there are no guarantees for free sailing from the get-go, but you would at least have an idea about what to do with a relapse.

Gray arrows: another spin on the 27-pip kick start combined with sample size uncertainty of 2. Exclusion of high volume days.

I know what you are thinking. I said no break and go below the channel – and there wasn’t. But there was volume and a lower close, so we have a new resistance to contend with. Yes, this could get sold off quite hard – things change. The market is due for a correction, thus the Doji Supports should be at least hit (1.1321-1.1318) even if the bullish setup gets prolonged. There should be either a Retriever divergence for a proper bottom or at least a Cover print for a leg to be terminated properly. We have neither.

Apologies for the higher level entry, but I think overall it was a sound lesson.

Now let’s talk about climate change.

When tomorrow ends, we shall no longer be friends.

Before Going On Mute

A few things to show you, in no particular order.

Some people drew in the equidistant channel, others may have plotted the 100 EMA – potent selling, yes, but the market only made it back down to the up swing’s oversold level, so far this is a retracement, possibly a Wave 2.

Although there is no clear direction (there have not been 3 constructive candles on either side), going through God back and forth is a sideways market, but on the balance price has gotten further on the upside than on the down so far. Supertrend 2 period, 3.0 multiplier is positive and the channel bottom is very close – would be even closer tomorrow.

Whilst others are expecting the re-visit and beat of the low, I am not at all convinced at all.

I believe that the structure of the down move was ABC corrective. Elliott Wave has something banning from Wave 2 taking up a shape of a triangle. The E-16 and E-44 on this time frame was framing the compression / particle accelerator perfectly. Who needs trendlines anyways? There is a selling zone above as you can see, a reaction from that professional volume’s wick is to be expected.

There were 2 more things saying that the last leg down was a C, the RSI2 ending on a strong note (continuation divergence up) and the fact that price tagged the third standard deviation of the 62-linear regression line (hourly).

Not only the downside move had a corrective structure, but the upside, low volatility move seems to be made of 5 waves.

Therefore I’m expecting an ABC move down for a next wave.

The magenta block was the bulk of the body of an extra high volume candle that gave support.

There is a doji support at 1.1314 – just about the recent low and the cyan pro volume has a small wick that could reject the A leg down – quite possible with this muted volatility. E-44 is the last hope for the turn down, so it better be on it already.

We are going to postpone the lessons about why every break out is a money flow divergence break out and why you should find a signature, bread and butter trade for yourself.

I have to show you how D32Pro V1.5 handled this limbo period. Although the sell signal was a smidge early (30 pips), the green turn got picked up perfectly without me having to rewrite any of the existing filters.

1.1524-1.1528 comes up as Daily Window Envelope, Daily Money Flow divergence break out zone (46 pips displacement), current 4H consolidation’s sound barrier to overbought zone and a number of other things I’m sure. 1.1501 is the 4H projected distance from the last leg up.


The guest commentator of today’s lecture is Sir David MacdulioBorough.

The lesson would be on RSI2 correction – evaluation. It will start soon. Bring in the projector!

Khem. Welcome.


RSI2 was invented for traders who can’t trade that well. It’s like a tandem unicycle with extra flywheels.

Peaks are easy, you just have to be able to count to two and a half. Peaks precede a correction & correction precedes the count.

What about the pedal to metal hump? You cannot see the structure from Mount Trumpmore. You need to adjust the time metric to spot the Whoop-Bam-Boogie.

As it turns out, there was a W-B-B structure.

An ABC collection’s B leg is one of the few entries where you can bet the farm on your house for a lower low/higher high.

B is going to show up as a cross back up/below the 50 and would be occurring with highly subdued volatility. In EUR/USD terms this means a limit order 16-24 pips away from the most recent low / high made by wave A.

So wouldn’t it be beneficial to keep track of the counter move limit of a counter move? I think it would be.

The “B” entries at 16-pips displacement are guaranteed winners for a lower low – if you get the peak count right.

A legitimate correction would arrive after the 3 count, it would include an M print (RSI2<12.5 || RSI2>87.5) and the counter directional push would print an RSI2 on the other side of the 50.

A wrong footed correction is the kind that does not include a higher high / lower low (14 sample) between the A and the C ending points. The next leg coming out of it could still make a new HH or LL, but the rights for a 3-count would be forfeited.

What do you call that spike down printing a new, lower fractal? That is a liquidity break with the purpose if prolonging the move a bit longer sacrificing some fresh blood: trail stops placed a fluctuation size away from the highest note.

My trail stop would be triggered at 33 pips.

The below example is a no-volatility correction that happens during a channeling move, it has 3+ S= Shy of oversold lows and 3 B moves back above 50. Akin to a 3M low print, this is a valid terminal utilizable for a long entry. Take note of the price avoiding to touch the E-16.

People tend to forget that this is a zero sum sucker’s game. Anyone who went short the Euro sitting up to the Dollar strength narrative below 1.14 can be milked indefinitely. Taking price far enough would turn them into buyers they can unload to. Instead of constantly trying to guess where sellers and buyers would be, think about where the bag holders are. If you don’t know who the sucker is…

There is nothing fundamental about trading other than fundamentally everyone’s hoping to make money.

Professor out.

40% got tripped.

Treating God

DJ Dooku is famous for throwing all nighter parties.

So how to play an encounter with God?

Do not interfere on the first day of creation.

On the close of the second day, you draw a percentage scissor onto the swing you have. If the 3rd day makes further progress, adjust the end point.

If God falls beyond a 40% retracement, you are not likely to see him back.

Currently 1.14007 would be too far – and this is if no higher high would be made from here on today.

Close or hedge off your positions upon an approach of this line.

Your hopes for the next turn back to have a shot at seeing God again are going to hinge on the Momentum/Stochastic divergences discussed in the Ports of Call blog entry.

I should also mention about crossing over the weekly E-21. If this was to occur, E-34 can start acting as a deflector further capping the possibility of counter-directional moves.

Knocking on E-21’s door (white). A Push means thay you will see a higher high come next week.

As a reminder, I got screwed with the last God-flip by defying the move on the first day in the low 1.20s. Those prices were never seen again (they were outside the 40% tetracement), and Eur/Usd went all the way to 1.1185 afterwards.

Installer Ilona

Today for the first time ever we are not going to talk about Veronica Ciccione or people who have migrated from Italy, but people whom migrated there.

CIC-CIO-LINA = Staller ~ stall

Ilona ~ Italia

Frankie goes to Hollywood & Istaller Ilona goes to Italia.

The image shows increased professional activity on the bottoms.

Little Italy is a growth next to a hairy pincushion.

One of my English lessons I received from a car dealer in California – he taught me the differences among slit, slot and slut.

Her second single, Papa Can’t Reach wasn’t a serious hit, since a Sugar Daddy would be Sugarhill crazy to pay for this kind of promotion.

From Tuscany, with love.

There is only one unanswered question left: just how dumb do you need to be to be able to forget your own mother’s tongue?

Ports Of Call

Well, aren’t you lucky, today’s the day that we are going to re-invent your entire vocabulary.

See you on the other side

Things to plot: Daily E44 HL2

20-period BB based on that data with 1x standard deviation.

Can be done on the cell by adjusting the Apply to to the Previous Indicator’s Data.

East-16 HL2 (aka The House Of Love)

All of the above in different shades of Blue, because this is monochrome.

Now we can almost invent two different types of markets. How about King and Kong? Hull and Skull? Let’s pick two animals. One with hooves and one with claws. Donkey and Cassowary? Bull and Bear? Maybe,but they both start with a B, and that’s a bit confusing. Everything pertaining to percentages is utter rubbish.

For the switch between the markets let’s introduce the term, constructive closes. These are candles oriented in the direction of the switch with visible bodies. Open & Close both above / below E-16.

I’ll take 3 of those.


Stretch condition.

657 pips is certainly an extreme for the Maker-Makee distance. 400+ is already pretty intense.

This is where you start looking for Reversal Divergences.

Use 67-sample momentum to spot a reversal divergence on the upside and 9-sample Stochastic D for a reversal divergence on the downside.

Bill Williams may be too slow for furnishing some of the fractals.

Now that you are in reverse mode, you can either meet your maker or your circuit breaker. God is not a DJ, it is the 20SMA of the 44EMA, sometimes nicked as Zilla.

The circuit breaker lays between the E44 and the closest BB band. It can refuse entrance to Sandman by re-polarizing the light.

The rejection comes in a form of an injection. Vaccination against inevitable death if you will. After a while the market may become comfortably numb to further vaccination.

With another image, the stepping stool to reach the breaker may become loose.

The vaccination of the circus breaker wasn’t effective if the patient does not let go of the handrail. This grabbing on to for dear life period is also known as Omni-comedy.

The tension was almost as exciting as in Sly Stallone’s Racoon Hanger.

All Hail

I decided today to change my maiden name (was given to me by my co-worker) from

The Proper Dark Horse


Reactive Volume Plays

How to utilize professional volume prints?

1 lot put on for a fluctuation-size spin -> $320 less commission ($6)

Is this all? That’d be $49.90 Refer to: Reactive Volume Plays

..and next time try to remember who you are talking to: I was a night kitchen porter at the Pullman Hotel on St. Pancras.

First sore thumb signals
A to pro volume, B bounce, C to pro volume #2. What a coincidence!
Print Eastwood says Hi.

Aced that homework, by the way.

Stay On These Roads…

To become an investor for a day, how Wyckoffy do you need to be?

It is a good idea to start utilizing Volume, even if you only have Tick Volume as your proxy in Forex.

It is possible to know what is going to happen next on occasions. I do not suggest to try to learn about every effort & effect divergence, but I did figure something that was easy to include with the trade calls.

My combination is using the MFI reversal signals for emotional foundation, then obeying settled climax volume in the given direction by opening a position at market. Yes, I had to invent a silent alarm for myself for being there at every top of the hour.

Think inside the box.

Look for a Better Volume for MT4 on the net.

Insert the following into the code:

  ///first Climax down        
        if ( white[i+3]==0 && white[i+2]==0 && white[i+1]==0 && white[i]!=0 && red[i+1]==0 && High[i]-Close[i]<180*Point){
                      ObjectCreate("DuhhW"+DoubleToStr(i), OBJ_RECTANGLE, 0, Time[i+3], High[i], Time[i], iClose(symbol,0,i));
        ///first Climax up        
        if ( red[i+3]==0 && red[i+2]==0 && red[i+1]==0 && red[i]!=0 && white[i+1]==0 && Close[i]-Low[i]<180*Point){
                      ObjectCreate("Duhh"+DoubleToStr(i), OBJ_RECTANGLE, 0, Time[i+3], Low[i], Time[i], iClose(symbol,0,i));

Alternatively, get an MFI Pro w/ a Better Volume Pro from me. See what you could do with an almost guaranteed 60+ pips with very little kick back allowing for extra large size entries.

I also added horizontal reminders for extra large volumes on top of changing the color scheme to something more comfortable (Magenta @ magenta).

The Purple block is the plot of the D32. It measures out the buy / sell limit listed in the 3rd row: “within 28 pips up to 1.1322” – that’s where this move fizzled out to the pip (also the last swing’s fair price). The U-Turns (red after green and vice versa) are also canes I plot above based on the last call.

The problem with this last green candle was its length. Previous instances that worked out had candles leaving room for acceleration: they were below 25 pips, and the recoil part would had fit in 16. This monster candle was a halted start due to a jump out at 40 pips or so. Back to the starting line.

If you noticed that the CFG (Configuration) went red (BEAR), that is because of the E67 dipped below the E207. May be a quick episode. This however flips the Keltinger Chaos routine, so it is now looking for heads on the upside and plotting the confirmation line on the bottom.

The Waterfall got choked, but so was Walter with his erection. The current squeeze would favor the upside, but this could change in the next hours. I would salvage my longs upon hitting the upper green trend line then lay back and watch for a bit. The last momentum divergences (& MFI) were positive, but this hasn’t gotten us much so far.

In any event, there should be a discharge on the upside, and the 2.8 Safety line is now coasting below 1.1330 – the weekly pivot.

///negative - arrow down
  if (i>0 && i<lookback-10 && D32[i]<D32AVG[i] && D32[i+1]>D32AVG[i+1] && D32[i+1]>20 && D32[i+1]<68 && D32[i+2]<68  && D32[i+2]>D32AVG[i+2] && D32[i+3]>D32AVG[i+3] && (D32[i+1]>20 || D32[i+2]>20  || D32[i+3]>20  || D32[i+4]>20 || D32[i+5]>20) && (D32[i+10]>-30 && D32[i+11]>-30  && D32[i+12]>-30 && D32[i+13]>-30  && D32[i+14]>-30  && D32[i+15]>-30 )) {ADOWN[i]=D32AVG[i]+5; D32AVGR[i]=D32AVG[i]; D32AVGY[i]=EMPTY_VALUE;
  if (i<30 && sizing_and_levels_on){
          ObjectCreate("ObjecST"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i+6], 2);
          ObjectSetText("ObjecST"+DoubleToStr(i), DoubleToString(NormalizeDouble(fullsize/4,2),2)+" LOT @ ATM: ("+DoubleToStr(NormalizeDouble(iOpen(symbol,0,i),4),4)+")", 11, "Impact",  Blue); 
          ObjectCreate("ObjecSZ"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i+6], 10);   
          ObjectSetText("ObjecSZ"+DoubleToStr(i), DoubleToString(NormalizeDouble(fullsize/2,2),2)+" LOT @ HIGH: "+DoubleToStr(NormalizeDouble(iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,6,i+1)),4),4)+"...or after 6 hours", 11, "Impact",  Blue); 
          ObjectCreate("ObjecSY"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i+6], 18);   
          ObjectSetText("ObjecSY"+DoubleToStr(i), " within 28 pips down to"+DoubleToStr(NormalizeDouble(iOpen(symbol,0,i)-280*Point,4),4) , 11, "Impact",  Blue); 
              ObjectCreate("DickW"+DoubleToStr(i), OBJ_RECTANGLE, 0, Time[i+2], Low[i], Time[i], iOpen(symbol,0,i)-280*Point);
          ObjectCreate("ObjecSS"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i+6], 25); 
          ObjectSetText("ObjecSS"+DoubleToStr(i), DoubleToStr(NormalizeDouble(fullsize/4,2),2)+" LOT EXTRA@: "+DoubleToStr(NormalizeDouble(iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,6,i+1))+150*Point,4),4) , 11, "Impact",  Navy); 
          ObjectCreate("ObjecSX"+DoubleToStr(i), OBJ_TEXT, indicator_window, Time[i+6], 33); 
          ObjectSetText("ObjecSX"+DoubleToStr(i), DoubleToStr(NormalizeDouble(fullsize/4,2),2)+" LOT EXTRA@: "+DoubleToStr(NormalizeDouble(iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,6,i+1))+300*Point,4),4) , 11, "Impact",  Navy); 

Cyan is what I use for Pro volume, not Green as you may find it elsewhere.