The Trading Masterclass #2 gave you ideas about how to spot a pending capitulation, the capitulation in progress and #3 talked about a possible sequence of targets and the best entry.
Now, let’s look at other factors such as percentages.
The swing back up scored between 40-50% of the fractal to fractal swing.
Less than 50% sounds like a continuation down, but not so fast, Mojo Jojo. A swing high was taken out making it even.
The question mark is on the rolling pin candle calls into question the wide range: 150-pip day from an instrument that is statistically projected to make 80% of 80pips 80% of the time?! That’s more than double.
The actual move was in a 4-hour span, almost hitting the pendulum’s overdrive bands on both sides.
On 4h the pendulum’s axis is 32/4 = 8. Another not Fibonacci number.
After the range got printed, the next 4 attempts of going outside were immediately thrown back in.
Now if the first move was a failed move, then the current direction is down, and this attempt back inside the range is going to get rejected – so goes the speculation.
The leg itself did not take out any daily swing highs and barely pierced through the 40% line. I think falling into a consolidation range could save the day.
Price is currently above the 2, the 3 and the 6-doji sample ranges: a break out that is going nowhere fast. Distribution?
I know, I know, the day is not over yet and life is not over yet.
The Doji walks into a Dojo and performs a quick self health check. Ama living in a box, living in a comfort box – he ponders away -, ama farting in a comfort jar – concludes decidedly.
I know, I set the bar too high with the last few blog entries, and since Richard Heart holds the Guiness World record of Best Man In Crypto, I had to default to Best Man Outside Crypto.
As a touch of nostalgia, let’s issue this piece that I had in stock already. Kind of.
A Doji is a Doji is a Doji. Dojis are not control functions, they are checkpoints.
For a 1-H plot program at the end.
If you are still with the belief that you can trade everything that can be charted the same way, the Psychiatry is on the left.
Now, let’s talk lakhsmi lakmus first.
The stethoscope ranges for health concern as per current settings are:
95 bpm – too excited, immediate concern
90-94 bpm – upbeat, doing just fine
4.5-12.5 bpm – hypoxia, serious concern
below 2.5 – ready for revival, overall a positive sign
///reds
if (RSI2[i]<12.5 && RSI2[i]>4.5) dojir[i]=doji[i];
if (RSI2[i]>97 && RSI2[i+2]>90) dojir[i]=doji[i];
///greens
if (RSI2[i]>2.5 && RSI2[i+1]<4.5 && dojir[i+2]==EMPTY_VALUE) dojig[i]=doji[i];
if (RSI2[i]<94 && RSI2[i]>90 && RSI2[i+3]>14 && RSI2[i+4]>16) dojig[i]=doji[i];
Secondly, re-visit the ideas about low close and high close dojis. Of course we are to examine the doji and its influence with the following candle’s close. These are spelled out as vertical stripes (like breadth ticks) over the RSI2.
Thirdly, the interaction results with the E-44 are the blue halos (nojis). They are highlights for potential break-out areas / they suggest stop / stop loss placement nearby. It was just an idea.
As you can see, the last stop loss is miles away. Interaction with the E-44 would bring one closer, but nothing says that it would not be broken.
Last minute change: 8-pips of displacement. These are accurate in terms of spot location because they are not text plots.
You know, I could put the last two digits next to them to eliminate having to count / measure…
Achilles Dent:
Give Me Your Love!
Here are my veins Take my blood too Before tomorrow dries up Before something gets cancelled I’ve become sick I’ve become your sick I don’t understand you when not touching you Are you outside? Are you inside? Am I eating or thirsting? I just want the best With you I just want the best For you
DJ Culture
Song by Pet Shop Boys
Imagine a war which everyone won Permanent holiday in endless sun Peace without wisdom, one steals to achieve Relentlessly, pretending to believe Attitudes are materialistic, positive or frankly realistic Which is terribly old-fashioned, isn’t it? Or isn’t it?Dance with me (DJ Culture) Let’s pretend Living in a satellite fantasy Waiting for the night to end (DJ Culture DJ D)Let’s pretend we won a war Like a football match, ten-nil the score Anything’s possible, we’re on the same side Or otherwise on trial for our lives I’ve been around the world for a number of reasons I’ve seen it all, the change of seasons And I, my Lord, may I say nothing?Dance with me (DJ Culture) Let’s pretend Living in a satellite fantasy Waiting for the night to end (DJ Culture DJ D)Now as a matter of pride Indulge yourself, your every mood No feast-days, or fast-days, or days of abstinence intrudeConsider for a minute who you are (consider/who you are) What you’d like to change, never mind the scars (change) Bury the past, empty the shelf (bury the past) Decide it’s time to reinvent yourself (it’s time) Like Liz before Betty, she after Sean Suddenly you’re missing, then you’re reborn And I, my Lord, may I say nothing?Wondering who’s your friend (DJ (DJ Culture) And I, my Lord, (une foix) (DJ Culture) May I say nothing? (deux fois) Living in a satellite fantasy Waiting for the night to end (DJ Culture)
Doji support and resistance break confirmation lines. They are blue until they get a close over. Afterlife of a doji tick. Easy to see where market is progressing where it isn’t.
deletetxt1("Ricky");
deletetxt1("Bacardi");
for (i=lookback-1; i>0; i--){
if ((doji[i+1]!=EMPTY_VALUE && Close[i]<=Open[i]) || dojir[i]!=EMPTY_VALUE )
{
ObjectCreate("Ricky"+IntegerToString(i),OBJ_VLINE,1, Time[i], 0);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_COLOR,clrRed );
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_WIDTH,4);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_STYLE,STYLE_DOT);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_BACK,1);
if(i<40){
j=i-1;
while (j>0){
if (Close[j]<Close[i+1]-100*Point) break;
j--;
}
if (j<0) j=0;
ObjectCreate("Bacardis"+IntegerToString(i), OBJ_RECTANGLE, 0, Time[i+1], Close[i+1]-90*Point, Time[j], Close[i+1]-100*Point);
if (j!=0) ObjectSetInteger(0,"Bacardis"+IntegerToString(i),OBJPROP_COLOR,clrRed);
else ObjectSetInteger(0,"Bacardis"+IntegerToString(i),OBJPROP_COLOR,clrBlue);
ObjectSet("Bacardis"+IntegerToString(i),OBJPROP_BACK,1);
ObjectSet("Bacardis"+IntegerToString(i),OBJPROP_WIDTH,3);
}
}
if ((doji[i+1]!=EMPTY_VALUE && dojir[i+1]==EMPTY_VALUE && Close[i]>Open[i]+10*Point) || dojig[i]!=EMPTY_VALUE)
{
ObjectCreate("Ricky"+IntegerToString(i),OBJ_VLINE,1, Time[i], 0);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_COLOR,clrGreen );
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_WIDTH,4);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_STYLE,STYLE_DOT);
ObjectSet("Ricky"+IntegerToString(i),OBJPROP_BACK,1);
if(i<40){
j=i-1;
while (j>0){
if (Close[j]>Close[i+1]+100*Point) break;
j--;
}
if (j<0) j=0;
ObjectCreate("Bacardis"+IntegerToString(i), OBJ_RECTANGLE, 0, Time[i+1], Close[i+1]+90*Point, Time[j], Close[i+1]+100*Point);
if (j!=0) ObjectSetInteger(0,"Bacardis"+IntegerToString(i),OBJPROP_COLOR,clrGreen);
else ObjectSetInteger(0,"Bacardis"+IntegerToString(i),OBJPROP_COLOR,clrBlue);
ObjectSet("Bacardis"+IntegerToString(i),OBJPROP_BACK,1);
ObjectSet("Bacardis"+IntegerToString(i),OBJPROP_WIDTH,3);
}
}
}
Blog Health-check
Not sure what prevented me from posting 2 more songs here, the Owner of a Lonely Fart and the Message in a Butthole, but you’re glad I didn’t.
There’s always at least one good answer. Look at both images.
Is it true that you could have sold anywhere (with virtually any size that does not prompt a margin call within the next 30 pips) in the orange boxes after the first settled fractal’s print knowing that there was going to be a lower low printed?
– yes or
– yes
What was the reason that made a lower low necessary?
– Inertia. A boat cannot turn on a dime.
– Humphrey Bogart.
Where was the lowest risk entry for a reversal?
– Right after price came back up through the first fractal’s low and printed a positive close (green line).
– At the high that was printed right after the first fractal (blue line).
Pick a route the market may be taking from your carefully chosen entry!
– First E44 hourly, muted counter directional volatility of less than 32 pips (25 would be ideal), proceed to Daily E16, correct close to 100 pips, proceed to E44 daily.
– First E44 hourly, then counter directional move in excess of fluctuation size (32 pips), then continue trending lower.
For all the right answers you scored 3 tubs of sour cream, 2 tons of smashed potato and fake meat Blockwurst approved by carnivores, grrr.
Price is having a hard time with that 1.1175 break-down level. E44 has to come a it lower to finish the rendezvous.
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. For a divergence you want to see two separate hourly fractals to compare, so if the divergence is only present between a fractal and a neighbouring non-fractal, that is less than desired
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?
…
The deep M at the end of the rising wedge was of course still a sell for a lower low.
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).
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.
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.
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.
Slide#1
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.
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.
ForexFore - Internals, indicators, algorithmic trading 