Looking for my next Forex trade
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The TDI is the best indicator I've ever seen Kirby, bar none...and believe me, I have used a LOT of them...LOL!
No indicator is the holy grail by any means. But if you spend time studying how price action relates to a particular indicator, you can make money.
The TDI is my favorite simply because it responds better to price action than anything I've ever seen and it packs a ton of information in one window. Each component of the TDI has value, not just the green fast TDI line we use most often.
Yep, the percentage is all that matters...not the pips or the dollars.
True...but if you wait you won't be underwater on the trade and you'll be able to lock in more pips of profit later.
Keep in mind that things can change. What if our wave count is wrong and it spikes for some crazy reason? Then you'd regret adding at the lows when you could have taken a position at a much more advantageous point later.
One of the things that is a killer (as much for me as anyone) is fear of "missing out" on a big run. We tend to add positions at illogical points "just in case" or "when it gets going". Instead, we need to approach things from a purely logical point of view without any emotional expectation.
Trading with ice water in your veins is tough to achieve but if you train yourself, it can be done. If you miss the trade, you just miss the trade. It's not a big deal because there's always another trade setting up somewhere.
I've often said I don't mind getting egg on my face. I'm still not wearing a Superman cape last time I looked...ROFL!
AU is probably going to bounce from here Qui. That minor Wave 2 retrace is going to give way to a move back up for a while as it works on eeking out 5 total waves in an hourly Wave 4 movement.
It's a bad idea to enter shorts when the price is hitting an actual short side target. Always wait for topside bounces when shorting to either add to a position or take a new trade.
Ok gang, I tell you about my wins so I don't mind telling you about my losses either.
Yesterday, I made a bone-headed decision to "load the boat" on an EA long position that I had no business doing. I just closed it for a 7.07% loss. The position was too large and I was trying to use only 1 method for determining a bottom, which is never a good idea.
So, there you have it...I do mess up...LOL! The good news though is that I'll get it back quickly. You have to be willing to admit when you're wrong...taking losses is part of doing business and that's what trading is.
Still up very nicely for the month so I don't mind...the only thing that bugs me is I was stupid. Had I taken the trade for logical reasons and lost, it wouldn't bother me at all.
https://www.myfxbook.com/members/nettechs/renko/1282587
Yep, that's basic Dean Malone instruction. Above 50 is bullish and below 50 is bearish. Of course, using that alone isn't a good idea. I only use it in conjunction with other methods to help confirm what I see on the chart.
AU Secondary Short Target Achieved
Nailed the FE 161.8 here.
I'm looking at the 5 minute chart count again and wondering if this last move wasn't just a complete Wave 2 down. It likely is. If so, then the count I have listed is the correct one so we still haven't wrapped up the hourly Wave 4 retrace at all.
Lots more downside coming later...
Using TDI Peaks to Confirm Entries
This is something else I watch very regularly.
If I'm expecting a pair to drop or to go higher, I will watch the peaks and troughs created by the TDI when it first moves away from a high or low.
Along with the count, the break away from the previous peak or trough signals the coming trend move.
Just an FYI...
I notice it put 4 minute on that post instead of 5 minute...old age creeping up on me...LOL!
AU 4 Hour Chart with TDI Count
As part of keeping perspective on multiple time frames, I'm watching the 4 hour AU chart as well. We've basically started a nice, bearish 4 hour reversal candle here after Wave 4 peaked inside the TDI channel.
Wave 5 down here is just beginning so there's lots more downside to come. Definitely only looking for shorts on this pair from here on out for a while.
AU 5 Minute Chart Update
Got a minor Wave 4 move back down here in the larger hourly Wave 4. So far, price is still dropping as the TDI count is basically consolidating sideways. That means they're not likely to take it up far before moving in for a larger sudden drop after the 5th wave completes on the hourly Wave 4.
Also note...the hourly Wave 4 is going to be literally unseen if you're looking at the hourly chart...it will appear to be hidden because it's so slight. So all we'll see from the hourly perspective is more or less a straight line down.
Almost at the FE 161.8 now which is our secondary short target.
TDI Market Base Line Relevance
Hey Qui, I think it was you that asked whether the yellow Market Base Line was relevant at all when using TDI counts.
I don't use it often but I do use it as a reference during trend runs. In this case on the AU 4 minute chart, the MBL dropped below 50 and is still tanking. That confirms for me the bearish trend at play on the hourly TDI count.
It's another type of confirmation.
No problem...as time goes on, you'll be able to identify those as well using even lower time frames. When I can't determine the count easily on one time frame, I just switch to another one.
In the case of the UJ hourly, all those squiggles may be more easily read on the 4 hour time frame for instance. Or maybe the 15 or 30 minute gives better clues. If there are a lot of squiggles, typically I'll switch to a higher time frame to smooth things out. What looks like a lot of swings on an hourly may be a single swing on the 4 hour or daily that's easily counted. So if it's one smooth swing on the 4 hour, for example, then I just go back to the hourly and label that swing as a single wave and move on from there.
Or, if the count is too complex, as I find sometimes, then I just move on to another pair.
You can trade any pair with this method so don't limit yourself to a chart that seems confusing. GU is a chart I don't like, for example. The TDI count is a mess so I don't trade it.
Ok Qui, here's a simple example. Forget about the price action completely. Just concentrate on counting TDI swings.
There's nothing to it. Just count 1 through 5. Once 5 is completed, we expect to see a 5 count swing the other way.
Wave 4 is always our point of interest.
This is a UJ hourly chart I just grabbed at random...
Good morning Kirby. Glad to help. I figured a play by play count during live trading would be one of the easiest ways to see how the TDI plays into trading overall. It's easy to look at history but it's much more beneficial to actually apply it during real time action.
You're making it too hard, Qui. Just count each swing....1 up, 2 down, 3 up, 4 down and so forth. It doesn't matter which one is higher or low...just count the swings and compare it to the larger time frames to see if it lines up.
No, no, Qui. You're confusing price action wave 5 with the TDI wave 5. They are NOT the same.
Wave 5 price action bottoms actually come in most times AFTER 5 waves have completed on the TDI AND you see an alternate 1-2 in another count. That next Wave 2 back down, in this case, is where the bottom normally shows up. That creates the divergence we normally see.
In a downtrend, the bottom would most likely come after 1-2-3-4-5 and then 1-2 or 1-2-3-4 in another channel.
Just focus on the simplest count....1 down, 2 up and then 3 down. Don't try to get too complex. Just count the simple swings on the larger time frame and then use the lower time frames to hone in on the moves.
Just like counting waves at the ocean...1 wave, 2 waves, and so on.
AU 5 Minute Updated Wave Count
The count was so small I missed the whole 5 wave move up. But, this could be just the first small minor Wave 1 up (indicated with a yellow (1), and this would be minor (2) back down. So I'm still looking for more of a recovery bounce with a total 5 wave completion before the larger hourly Wave 4 is complete.
The 15 minute chart barely registered the move so I won't bother posting it yet.
AU 5 Minute TDI Live Count Continued
After finishing a potential Wave 3 down on the hourly, we now need to look for a total of 5 Waves back up to wrap up a Wave 4 on the hourly to get ready for a larger short position.
So far, the 5 minute chart is showing a minor Wave 1, 2 and 3 of that hourly Wave 4 complete. We still need to see a Wave 5 up to wrap up the count. Based on the meager counter trend rally so far, I don't expect AU to get back above 0.7240 or so before dropping again but it depends on how the wave count progresses.
News and the TDI Counts
8 minutes to US news...
With the larger count still bearish on news, please keep in mind that the smaller minor count waves could occur all at once during news releases. So if minor Wave 5 down is complete in the larger Wave 3 progression, we could see some price action swings higher very quickly and then a move down afterward. News messes things up a bit usually.
That's why we have to back off periodically and go back to the higher time frame to clean up our counts, Qui...perspective has to be maintained.
Sometimes we start counting so many squiggles on the lower time frame that we lose count on the higher time frame, like the 15 minute chart.
Once I went to the 15 minute chart to see where we were, I cleaned up the 5 minute chart to reflect what I saw.
Here's what we have now on the 5 minute chart...
AU TDI Counting...Keep Perspective
When counting waves on a small time frame like the 5 minute, it's still always best to back off a bit and go back to a slightly higher time frame like the 15 minute to help keep your perspective in focus. You can get so many notes on a smaller time frame chart that it can make it difficult to keep trace of the larger waves as they progress.
In this case, I've updated the 15 minute chart to show our current progress. And we still haven't made the larger Wave 4 pattern yet that will really lead to more downside. This is just the beginning.
Notice the larger trend line breakdown we got. That's longer term bearish as well so we're still only interested in shorting this thing.
So far Qui, price is still stalling around the FE 100 so it may yet get back to the FE 61.8 at 72.35 to allow for another short entry. But the peak that it hit was 72.30 so it wasn't that far off. A short entry at the support turned resistance trendline is still a good idea even if it moves a few pips beyond that to actually hit the FE 61.8.
Keep in mind that US news is about to hit in 20 minutes so the advised strategy is to sit it out from here until after the news.
Using Candles to Determine Wave 4 Entries
If you remember from our HOT checklist, candle patterns were one of the requirements. This is an example of that.
At the peak of Wave 4, the market made a tiny little candle with almost no swing to it. That was the key candle indicating that the market had moved price back up about as far as they were going to. That would be the signal to go short for the 5th wave move down.
I had the wrong chart on the Retrace post but I've corrected it now.
Ahead of you again...just posted a chart showing AU potential price retrace point to short again...LOL!
US news is going to be hitting the wires in about 40 minutes here gang...9 AM Central to be exact. I've often found that during these setups, news is used to carry price action to projected targets, sometimes quickly.
Just an FYI...
Already beat ya to it, Qui...just answered your question on the last post...LOL!
One major key in identifying the TDI wave count Qui is to look for the biggest moves in price action. If you see a large swing in price, it's either going to be Wave 3 or Wave 5. Wave 4 to 5 is typically the longest. Once you identify those waves on a historical chart, you can count backwards to get the rest and then move forwards with the projected count.
Morning Qui. The TDI waves don't always follow what you would expect on 5th wave endings. Sometimes they are higher than Wave 3 and sometimes they're not. Just depends on what the market wants to do with it.
You know how we often look for negative divergence on TDI peaks to find a top? That's how they wind up looking sometimes...the 5th wave will actually make a lower peak instead of a higher one.
When counting waves, I always try to start with the higher time frames first...get a clear picture of what's happening there. Then we can drop to the lower time frames to time trade entries.
In this case, the AU hourly is our primary chart. So we can drop to the 15 minute and even the 5 minute chart to count the wave details as it progresses.
AU 5 Minute FE Target Projections
Since we know Wave 3 down on the hourly is about to get started, we can use the FE tool to get some idea of price projections now.
The first target is the FE 100, measuring from the absolute high to the previous lows.
The next potential comes in at the FE 161.8...then, the channel projected target...and finally, the 261.8 FE extension.
We can look well beyond the normal FE 100 levels at this point because we are using the hourly chart, knowing that moves there are substantially larger.
AU TDI Live Wave Count Continued
Wave 4 apparently was just a minor bounce on the TDI. It's now setting up for the 5th wave down on the 5 minute chart. Even though this is only a 5 minute chart, keep in mind we're setting up for Wave 3 down on the hourly so the drop could be severe.
And Wave 3 down on the hourly chart isn't even what we're really after. We really want to see a Wave 3 drop on the hourly followed by a Wave 4 move back up to hop in for the larger short.