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Nicktrader and Jeff  Explaining Reverse and Regular Divers
Woodies CCI Club Discussion From January 15,16 2004
Edited by Folls


back to CCI  this webpage combines application/pdfnicktrader_on_divergences-part_1   application/pdfnicktrader_on_divergences-part_2



 The Make-A-Wish Foundationģ


INTRODUCTION


{editor} This discussion was held late one night in Woodies CCI Club. It helped me understand divers without prices and how to trade them with CCI. The text started out approximately twice the size it is now. It was edited to make it more readable and easier to understand. It is important to note that although both reverse and regular divers are discussed, Woodie advises being mainly concerned with reverse divers. They are typically used together with zlr and tlb to give a higher probability trade. Jeff and Nicktrader also make this point in the text.


This discussion was broken into the following three sections:
1) You Donít Need No Stinkin Prices
2) Trading the Regular Diver
3) Trading the Reverse Diver and Zero Line Reject


WOODIES CCI CLUB ACRONYM DEFINITIONS


For those new to Woodies CCI Club, the following acronyms are used in this discussion:
zl = the zero line on the CCI chart
zlr = zero line reject. This is a pattern that Woodie defined where the 14 CCI approaches the zero line
and then retreats back away from it.
zlx = zero line cross (the 14 CCI crosses the zero line).
tlb = trend line break (the 14 CCI going through a trend line which was drawn on the CCI chart).
hfe = hook from extreme. This is a pattern that Woodie defined where the 14 CCI hooks back toward the zero line from extreme levels. Extreme is        defined as at least +200 or -200.
diver = a pattern that Woodie defined that is explained in the discussion
shamu = a pattern that Woodie defined. This is a double rejection of the zero line. CCI appears to be doing a zlr but then reverses again and              continues through the zero line. It looks like a z or s at the zero
line. This is a counter trend trade and is explained briefly in the discussion.


SECTION ONE: YOU DONíT NEED NO STINKIN PRICES!
23:04:06 {jeff} forget price
23:04:10 {jeff} forget why
23:04:17 {jeff} woodie say it works
23:04:46 {jeff} for seeing divers quickly
23:05:01 {student} uhm, but how do you recognize diver if you forget price?
23:05:23 {jeff} woodie says it works
23:05:48 {student} so, when you enter a trade, how much 'room' do you give it
23:05:58 {student} if you're just basing on cci?
23:06:13 {jeff} first you need learn how to spot rev divers
23:06:22 {student} but how do you do that without price? :)
23:06:27 {jeff} we are only talking about divers
23:06:59 {jeff} but i can see you are struggling with all the things that books taught you. so did I.
23:07:04 {jeff} it makes it harder
23:07:20 {jeff} so forget all that
23:07:25 {student} *poof*
23:07:28 {student} k, no price
23:07:28 {jeff} great
23:08:04 {NickTrader} i dont care about price, if the CCI looks like a diver, be it regular or reverse, I will
assume that it is one and take the trade as such
23:08:08 {jeff} looking for what a diver is?
23:08:19 {jeff} just another pattern that woodie has defined as a diver
23:08:26 {jeff} thats all
23:09:03 {NickTrader} Iím looking for a pattern that looks like a diver.... if it looks like a diver, then it is a
diver... :-)
23:11:04 {student} how do I id a reverse diver? that is the question of the morning :)
23:10:55 {jeff} for reverse diver, if cci is above zero line, look for two lower bumps
23:11:25 {jeff} if cci is below zero line then look for two higher bumps
23:11:18 {student} base of the bump, or top of the bump?
23:11:42 {jeff} inside, always closest to zero line for reverse diver
{editor} outside, always furthest from zero line for regular diver
23:11:47 {student} k
23:11:55 {student} and trend lines are drawn furthest from it
23:12:09 {student} btw, INSIDE, *click* good way to phrase it!
23:12:10 {jeff} so, if you HAVE to use outside language then for reverse diver, two lower lows if above the
zero line
23:12:24 {jeff} and two higher highs if below the zero line (for reverse diver)
23:13:46 {student} so if I can detect a rev diver, chances are zlr will happen, yes?
23:14:32 {jeff} student, in general yes, so its that simple
23:13:51 {jeff} for rev diver, if cci is above zero line then look for two lower lows, or bumps inside
23:14:11 {jeff} for rev diver, if cci is below zero line then look for two higher highs, or bumps inside
{editor} for reg diver, if cci is above zero, look for two lower highs, or bumps outside
{editor} for reg diver, if cci is below zero, look for two higher lows, or bumps outside
{editor} here is a simple diagram to illustrate Jeffís point



 

SECTION TWO: TRADING THE REGULAR DIVER


23:14:54 {NickTrader} k here is a pic of a reg diver...


23:15:05 {NickTrader} but how do i know that?
23:15:13 {NickTrader} because it's a pattern
23:15:20 {jeff} if our purpose is to understand a simple pattern that Woodie has defined as rev diver, then
I only talk about what the pattern looks like to keep it simple
23:15:33 {NickTrader} simply look for this pattern
23:15:39 {student} okay
23:15:39 {jeff} exactly nick, its a pattern
23:15:45 {jeff} who cares why?
23:15:49 {jeff} learn that later
23:15:49 {student} that's a REG diver?
23:15:53 {student} looks like a trendline to me
23:15:56 {jeff} seach for pattern now
23:16:32 {jeff} and dont forget, forget about reg divers imo until you understand rev divers
23:16:54 {jeff} cuz you will twist your mind when you see both patterns at the same time and say "but i
see them both" lol
23:17:07 {student} exactly
23:17:08 {jeff} they happen at same "time" all the time
23:17:20 {student} ok, rev diver is what I'm looking for
23:17:40 {student} you could have a rev diver there in that chart too nick
23:18:01 {NickTrader} student... Iím getting there :-)
23:17:41 {NickTrader} my long entry would be on the diver and 100cross
23:18:32 {NickTrader} k, u all got that.... it's the pattern i look for... donít need no stinkin price
23:19:13 {student} thats a reg diver cause it's outside, and a rev diver is inside
23:19:32 {NickTrader} u can be aggressive on the entry and take it as soon as the diver is formed, or
take it when the the cci crosses the 100 line to confirm it.... however...
23:20:31 {NickTrader} if u wait for the 100 cross, it has a probability that it will reject it and we then have a
rev diver with zlr for a continued down move
23:20:38 {NickTrader} on the other hand ...
23:22:33 {NickTrader} on the other hand, if u take the trade early when diver is formed, u have to react
fast to get in and take the scalp and possibly get out as it approaches the 100 line for the possible reject i
mentioned before...
23:22:25 {student} nick, you lost me right there
23:22:52 {student} if you wait for 100 cross, it pass a probability that it will reject and then a rev diver with
zlr and we go down
23:23:07 {NickTrader} y student
23:22:54 {NickTrader} follow me?
23:22:58 {student} but in this case, we passed 100 and it went up to the sky
23:23:21 {NickTrader} y again
23:23:18 {student3} nick do u take immediately or on x100?
23:23:32 {NickTrader} student3, it depends
23:24:11 {NickTrader} if the trend is strong i take it when diver forms... to scalp the pullback cause the
probability is high it will reject at 100 line
23:24:54 {student3} like this was strong
23:25:06 {NickTrader} u have to weight the probailities of success... thatís what it's all about, probabilities
23:26:08 {NickTrader} k on the same chart u can c another diver earlier...
23:26:13 {NickTrader} from extreme
23:27:13 {NickTrader} there is always a possibility of a zlr, thatís why i normally exit at the approach of
the zl
23:27:45 {NickTrader} the 100 line and the zl act as support/resistance levels
23:28:55 {NickTrader} so... on that diver, if the cci breaks through the 100 line ( a resistance level) there
is a higher probability that the counter trend trade will be successful to the next resistance level which will
be the zl
23:28:28 {student} nick, you said, ď if u wait for the 100 cross, it pas a probability that it will reject it and
we then have a rev diver with zlr for a continued down moveĒ
23:28:39 {student} lemme try to rephrase that and see if I got it, please?
23:29:21 {student} if we wait for the 100 cross, there is less chance to reject the 100 line. if we reject the
100 line, then we have rev diver with probablity for zlr
23:29:47 {NickTrader} y because that zl is the next resistance level
23:30:01 {student} so you buy long at that second bump
23:30:13 {student} when it crosses the 100 line
23:30:17 {NickTrader} y the formation of the diver
23:33:04 {student} agrressive entry would have been at the diver, @ cci -200
23:33:29 {student} and this is countertrend trade
23:33:57 {NickTrader} y counter trend
23:33:29 {NickTrader} there are a lot of examples of these trades here.... study them ...
http://www.talkstox.com/forum/showthread.php?s=&threadid=268&perpage=10&pagenumber=1
23:34:22 {student} so that's why we go long with cci 6+ bars under
23:34:25 {NickTrader} all such reg divers are counter trend trades, lower probability because they are
against the trend
23:34:48 {NickTrader} the best trades are with the trend,
23:35:04 {student} so better to hunt down the rev diver
23:36:00 {STUDENT2} so can I sum this trade setup as: condition 1) cci at an extreme. condition 2)
regular diver condition 3) buy when cci crosses the -100. now watch what happens at the zero line. .. if
it make it past that then watch what happens at the cci +100 line
23:37:34 {NickTrader} STUDENT2, yes
23:37:49 {NickTrader} however...
23:38:43 {NickTrader} condition 1 may or may not have to exist, it is usually a higher probability if itís from
extreme, but a reg diver does not always have to be from extreme
23:38:54 {STUDENT2} in this setup rev diver plays no role in this trade.
23:39:02 {NickTrader} correct
23:39:33 {NickTrader} rev diver is with the trend trade while reg diver is counter trend
23:39:55 {NickTrader} and this is a counter trend trade we talking about
23:40:31 {NickTrader} so now u have the pattern, u donít need price anymore
23:40:41 {NickTrader} price just scares you

SECTION THREE: TRADING THE REVERSE DIVER AND ZERO LINE REJECT


23:35:06 {NickTrader} now we get to rev divers
23:35:09 {student} the one that will get us a zlr
23:35:12 {student} and we stay up/down
23:35:45 {NickTrader} rev divers are with the trend trades, high probability trades
23:36:26 {NickTrader} reverse diver then a zlr with a TLB is a high probability trade... with the trend
{editor} Nick then posts a chart with two reverse divers. The chart also includes the regular diver from
previous chart. The two rev divers with tlbís are marked on the chart.


23:48:03 {NickTrader} 2 rev divers... 1st is a triple rev diver
23:48:37 {NickTrader} and both are followed by zlr
23:48:48 {NickTrader} and then a tlb
23:49:14 {student} tlb is like a break of reg diver isn't it?
23:50:03 {NickTrader} y
23:50:40 {NickTrader} these are the highest probability trades..... u can just trade these all day and do
very well
23:50:51 {student} so you can be aggressive and sell at the 2nd rev diver point, or, wait for the tlb to
confirm
23:51:42 {NickTrader} i would wait for the zlr at the least for an aggressive trade... the tlb will be the
confirmation
23:52:17 {NickTrader} however...
23:52:27 {NickTrader} there is always a but lol
23:52:28 {student} so you enter on the bar that bounces downwards from the 0 line, just after 10:39 for
example
23:52:39 {NickTrader} y student
23:52:33 {STUDENT2} nick, is this one trade or multiple short sells
23:54:20 {NickTrader} STUDENT2, u can either add at each zlr for the continued trend or u can exit at
the hfe and re-enter at the next pattern
23:54:11 {student} nick, is this where the but comes in?
23:55:24 {NickTrader} k the but part ...
23:55:57 {NickTrader} after the TLB in this rev diver zlr pattern there is a possibility for a shamu ...
23:56:41 {NickTrader} it can reverse after the tlb and possibly cross the zl for a reversal of the trend
{editor} here is a simple diagram of a shamu


23:57:35 {NickTrader} what to do what to do ...
23:57:36 {student} but that's "normal", not uncommon for a zlr to become a shamu
23:57:48 {student} so you play the zlr, and if it reverses, you reverse
23:57:52 {student} or just get out
23:57:55 {student} and catch the next one
23:58:13 {student} so here you short, if it reverses, you cover and go long, or just take your tiny lumps
and wait till later
23:58:14 {student3} like on 2nd one it broke tl then looked like shamu
23:58:32 {student} student3, yah, but didn't confirm, came back down down down
23:58:51 {student} hey nick, have another question :)
23:59:07 {NickTrader} well, on that last chart the 2nd zlr worked, however, u can c that the 3rd one
crossed the zl and if u look very very close, u can c a little jiggle on that crossing.... just a little insy winsy
shamu ...
23:59:29 {student} first zlr more than likely will work rather than not nick?
23:59:44 {NickTrader} y higher probability
00:00:58 {NickTrader} as woodie said earlier today, the first is higher probability it will work, the 3rd has a
much lower probability that it will do zlr and a much higher probability that it will do a zlx
00:00:26 {student} sometimes I see people play a zlr that actually crosses and comes back within a bar
or two
00:00:46 {student} is that a lower percentage play? or not really a zlr to begin with?
00:02:14 {NickTrader} student, y the zlr can actually be within +/-50 cci
00:02:31 {student} nick, cool, just has to happen within 2-3 bars, right?
00:03:11 {NickTrader} so, therefore, on that cross there is still a probability that is will reject on the other
side of that zl within the +50 zone
00:04:11 {NickTrader} student, 2- 3 bars is good, longer i would exit because there is no direction as cci
moves along zl
00:02:47 {student} why is the first zlr higher probably than the third? just cause trend was trending so
long?
00:05:32 {NickTrader} the 1st is usually the start of the trend.... the 3rd is usually the end of trend and
perhaps due for a major pullback or reversal
00:06:01 {NickTrader} pullbacks usually happen in 3s
00:06:27 {student} so by the time that third one comes around, odds are in your favor it'll zlx
00:08:28 {NickTrader} student, y but it it really depends on the strength of the trend.... sometimes u get a
very controlled gradual trend with no major pullbacks.... sometimes u get more violent moves and these
produce larger pullbacks on the 3rd.... there are nuances of the cci that u must learn by watching chart....
lots and lots of chart time is only way
00:10:53 {NickTrader} student, donít worry... took me 6 months to learn this... then another 6 months of
honing the skills on trades, now after 1.5+ yrs it's starting to talk to me ...
00:11:19 {NickTrader} it takes lots and lots of chart time...
00:11:59 {NickTrader} donít expect to learn this in a few days or weeks
00:13:03 {NickTrader} it will come, just take the time to learn it.... the trick is to be able to do this in any
kind of market on any symbol... on demand.... then u have earned your stripes ...
00:15:18 {NickTrader} student, study my charts on that site, there are 19 pages of them.... an evolution of
how I started using CCI with other indicators, then finally realizing that it was better to remove everything
but CCI.... I often look back at charts just to c and remind me how i did it ...
00:16:58 {NickTrader} http://www.talkstox.com/forum/showthread.php?s=&threadid=268&perpage=10&pagenumber=1 (unfortunately this thread was destroyed)
00:20:29 {student} forget countertrend trades, and just look for trend trades, they'll be plenty
00:20:35 {NickTrader} y
00:20:57 {student} then, when you do the trend trades in your sleep, expand your pattern filter for
countertrend, etc
00:21:04 {NickTrader} counter trend stuff is more for experienced folks, and they still bite
00:22:00 {NickTrader} just take rev diver ZLR TLB trades and u will do well

NickTrader on Diver Part II 2-19-2004
Page 1 of 18


14:36:18 {NickTrader} k jason, lets do the dver thing
14:38:02 {NickTrader} jason, 1 sec i find some patterns to post
14:38:43 {JASON K} Ready whenever you are!!!
14:39:32 {angela} are you going over divers? and if so, may i eavesdrop?
14:39:40 {NickTrader} sure
14:39:44 {angela} gracias
14:39:51 {jeff} AutoMsg: IB closes down for its daily maintenance in a few minutes. It closes anytime from
11:45pm on and will stay closed until around 1:00am est. Please check for all open orders and close out any
trades you dont want to be in during the shutdown period.
14:42:17 {NickTrader} <<file:C:\PROGRAM FILES\1STWORKS\HOTCOMMLITE\UPLOADS\NickTrader_02-
19-04_T234328.HCC>>


14:42:46 {NickTrader} k that pic.. what does the TL show?
14:43:20 {angela} up
14:43:31 {angela} higher low
14:43:35 {NickTrader} y
14:43:49 {NickTrader} but what does it LOOk like
14:44:10 {angela} hfe followed by...
 


14:44:22 {angela} ah
14:44:30 {NickTrader} now what does it look like?
14:44:30 {angela} ok thanks
14:44:33 {JASON K} Inverted ghost, not sure
14:44:37 {angela} rev div
14:44:44 {NickTrader} reg diver
14:44:49 {angela} dammit
14:45:05 {NickTrader} k np Iíll show the diff.... just wait
14:45:35 {NickTrader} but here is the good part if i remove price can u c the pattern
 


NickTrader on Diver Part II 2-19-2004
Page 3 of 18
14:46:06 {JASON K} I was wondering since there was no prices
14:46:10 {NickTrader} same pic but no price.... reg diver
14:46:27 {angela} sooo, it's easier to see the price action...without the prices
14:46:30 {NickTrader} dont care about price, just confuses things
14:46:49 {NickTrader} dont care about price action just CCI
14:46:51 {JASON K} I thought the div was a function of diverging w/ price...no?
14:47:28 {NickTrader} jason, y but in 99% of cases when u c PATTERN for a reg diver as u c in pic.... it will be
a reg diver.... simple
14:47:36 {JASON K} Diverging with?
14:48:02 {NickTrader} cci diverging with respect to price but lets not talk about price
14:48:20 {NickTrader} just look for pattern
14:48:24 {JASON K} ok
14:49:01 {NickTrader} k another reg diver on opposite side ...


14:49:15 {fei} Nick Trader, could you show the difference on the chart b/t reg div and reverse div. I saw the
charts a couple of days ago, but not clear to me.
14:49:17 {NickTrader} this time lower highs...
14:49:18 {JASON K} ahhh I see
14:49:35 {NickTrader} fei, getting there.... sit back relax ;-)
14:50:11 {NickTrader} but i dont c price, again im assuming that the price is making higher highs and 99% of
time it will be



14:50:47 {NickTrader} k there it is if u must c
14:50:55 {NickTrader} got it ?
14:51:17 {NickTrader} i show price just in case ur a nn-believer lol
14:51:18 {JASON K} Is the cci hl, hh. lh ect, ect a function on lines between valleys & peaks?
14:52:09 {NickTrader} the 2 peaks connected by the line is the pattern
14:52:32 {NickTrader} k rule 1... the diver should not be more than 10 - 12 bars
14:53:07 {NickTrader} rule 2Ö the 1st point on diver should be in area of greater than + or - 100 (extreme is
best)
14:54:07 {NickTrader} rule 3Ö 2nd point of diver must be on same side of the zero line as first point of diver
14:54:14 {fei} if it is more than 10-12bars, the divergence is failed?
14:54:40 {NickTrader} y


14:55:52 {NickTrader} so that line is not valid because ....?
14:56:07 {alexmontoya} you said so?
14:56:12 {NickTrader} lol
14:56:12 {fei} it is down below zero
14:56:37 {angela} crosses zl
14:56:40 {NickTrader} yes, wrong side of zl where 1st point is located..... i notice many folks making this
mistake
14:56:44 {angela} says fly on the wall
14:57:23 {alexmontoya} rev diver though, can be on either side can it not?



14:57:44 {Nicker} w any trendline NickTr, or just divr/rev diver trendliens? re crossing zero
14:57:54 {angela} nicktrader, as the fly on the wall, i have always wanted to know how to read divers when
they span the zl
14:57:55 {NickTrader} nicker: weíre talking about divers now, not TLB
14:58:09 {Nicker} k
14:58:16 {NickTrader} 1 thing at a time
14:59:11 {NickTrader} k .... is this valid ?



14:59:37 {Jimi 53} nick no to many bars
14:59:41 {JASON K} I think so if I got your rule down right
14:59:44 {choo-choo} too many bars?
14:59:45 {Nicker} too many bars
14:59:50 {NickTrader} right, to many bars
14:59:57 {JASON K} Ahhh y
14:59:57 {angela} way too many bars...>12
15:00:19 {NickTrader} this valid ?


15:00:45 {angela} y
15:00:45 {fei} y
15:00:49 {NickTrader} right
15:00:52 {Nicker} y
15:00:59 {JASON K} I think so if I counted right
15:01:12 {angela} jason, i was squinting
15:01:22 {JASON K} Laughing out loud !
15:01:31 {NickTrader} y about 10 bars, just eye ball it, no time to be counting bars
15:01:57 {angela} in real time, you know the rhythm of the bars
15:02:01 {angela} of your chart
15:02:09 {NickTrader} k so u got the reg diver pattern.... right.... they all the same.... dont need price
15:02:12 {angela} not so much squinting
15:02:21 {JASON K} yes
15:02:29 {NickTrader} k let do rev diver
15:02:42 {JASON K} Reday
15:02:48 {JASON K} ready
15:02:58 {angela} fly on the wall is ready too
15:03:00 {NickTrader} k i find a few,,,, 1 sec
15:03:04 {choo-choo} Nick, what is the entry point on these div'rs?
15:03:27 {alexmontoya} rev diver my favoritsimo
15:03:52 {alexmontoya} i learned them from nick a few years ago
15:04:22 {NickTrader} hold the entry point question lets get the patterns first

15:04:30 {choo-choo} k sorry
15:04:31 {jeff} i thought you were new to the room alex
15:04:55 {alexmontoya} lol
15:04:59 {Jimi 53} jeff a month learning this stuff seems liek years
15:05:03 {alexmontoya} I meant to say weeks
15:05:05 {angela} seems i am lucky Nick is still teaching
15:05:06 {alexmontoya} holy crap
15:05:09 {alexmontoya} my brain is in the toilet
15:05:29 {NickTrader} k here are rev divers ...
15:05:33 {angela} what's a few years among friends



15:06:41 {NickTrader} k so what's different about these divers
15:06:57 {Jimi 53} nick inside line
15:07:03 {NickTrader} y
15:07:12 {JASON K} Ones above zl & ones not for starters
15:07:30 {NickTrader} the rev diver is drawn on INSIDE of cci, that is, between the CCI line and the zl
15:07:41 {NickTrader} simple
15:07:44 {Nicker} didn't have to start at >100
15:07:48 {fei} Nick, when you draw the lines, they are not connecting trough points...?
15:08:28 {Nicker} That was a question. still requires >100 on one end of rev diver?

15:08:29 {JASON K} Does the above or below zl make a difference?
15:08:48 {angela} all below zl, no?
15:08:55 {angela} in this case
15:08:56 {NickTrader} for rev diver the rule can be relaxed for 100 line 1st point
15:09:31 {NickTrader} however, the 2nd point must be on zl
15:09:36 {NickTrader} or near zl
15:09:59 {Jimi 53} nick with in 50?
15:10:06 {NickTrader} rule is +/-50 to be considered a zl
15:10:13 {Jimi 53} txs
15:10:17 {Nicker} ty
15:10:27 {NickTrader} but this is dynamic depending on trend
15:10:46 {JASON K} Boy that explains a lot of the missing parts!!
15:10:47 {angela} nicktrader, you've no idea how clarifying this impromtu lesson has been for me
15:11:03 {NickTrader} the same rule applies for the 100 line for 1st point.... however...
15:11:13 {Dsquared} Isn't that a VT at 15:30?
15:11:53 {NickTrader} it does not mean that if the 1st point of diver is below 100 line it will not work.... just then
has lower probability
15:12:05 {angela} so the 1st pt must be >100?
15:12:15 {angela} oh i see
15:12:15 {NickTrader} it's all about probabilities
15:12:19 {angela} understood
15:12:23 {NickTrader} y
15:12:29 {JASON K} yes
15:12:31 {alexmontoya} you almost have reg diver there too
15:12:37 {alexmontoya} just a few bars too far apart
15:13:02 {NickTrader} so to have best signal with highest probability of successs, than u must fit the rules
15:13:14 {John 2} if you would have taken regular divergence today on 250V er you would have lost several
times. How can you increase success rate. Any nuances?
15:13:18 {fei} Nicktrader, I still can't see how and why you draw white lines like that, is it on TCCI or CCI?
15:13:57 {angela} nicktrader, i have been struggling to see the difference between one divers and the other.
now i feel i have a foothold
15:14:01 {JASON K} NickTrader this has been a great help, thak you for sharing your knowledge
15:14:10 {angela} thank you so much
15:14:19 {NickTrader} john, reg diver is a counter trend trade, low probability of success.... trade with the
trend.... and use with the trend signals... that would be a rev diver with zlr and tlb
15:14:28 {angela} and JasonK, thanks for provoking this imprompu session
15:15:10 {JASON K} Angela we both learned something ...that's a good thing
15:15:10 {angela} hope i did not add too much noise...it was enthusiasm and enlightenment
15:15:17 {angela} on my part
15:15:23 {angela} jason, thanks
15:15:26 {John 2} I know its countertrend thought maybe there was a way to weed out poorer ones
15:15:36 {r7} y
15:15:42 {NickTrader} y dont trade them
15:15:58 {fitzy40} yep
15:16:02 {alexmontoya} lol
15:16:06 {r7} hey fitzy
15:16:08 {John 2} that was my conclusion too
15:16:10 {alexmontoya} the trend is your friend to the end !
15:16:18 {alexmontoya} heya fitzy
15:16:24 {NickTrader} unless u can scalp very fast, u will not have high success rate on counter trend trades
like reg divers
15:16:25 {fitzy40} hi all
15:16:47 {NickTrader} k so another point ...
15:17:06 {Nicker} hi fitzy
15:17:10 {John 2} I hate scalping
15:17:21 {NickTrader} if u have a rev diver and a reg diver show on same slope of cci, which u take?
15:17:33 {angela} rev
15:17:40 {r7} good ?...I c that all the time
15:17:57 {Nicker} mostlikey the rev diver shows up first? & u might have to be fast if it goes wrong
15:17:58 {NickTrader} angela, why?
15:18:02 {Jimi 53} rev with the trend
15:18:03 {angela} rev divers with the trend
15:18:04 {John 2} picture of it
15:18:09 {JASON K} I will guess rev
15:18:27 {NickTrader} y wit the trend trade is hgher probability
15:18:51 {angela} i don't do much counter trend, yet.
15:19:00 {NickTrader} gb007 takes only rev diver zlr tlb trades with the trend
15:19:01 {angela} maybe never will much
15:19:30 {angela} i'm a new trader and have no business with counter trend, as i see it
15:19:36 {NickTrader} so now ...
15:19:43 {NickTrader} how do u tell the trend?
15:19:49 {angela} ema
15:20:04 {fei} above or below zero line?
15:20:08 {Jimi 53} how many bards
15:20:11 {Nicker} # bars on same side of zero
15:20:12 {JASON K} 5 bars + or - ZL?
15:20:20 {Nicker} >6
15:20:28 {John 2} ema
15:20:29 {NickTrader} ema? u mean on price? whats a price bar?
15:20:37 {angela} oooops
15:20:57 {angela} as others have stated above, bars above zl]
15:21:02 {Nicker} 14 CCI bars -6 is trend
15:21:07 {NickTrader} scci on either side of zl 5+ consecutive bars will show trend
15:21:30 {NickTrader} dont need no stinkin price
15:21:43 {angela} where have i heard that?
15:21:46 {JASON K} Laughing out loud !
15:21:47 {NickTrader} just scares the pant off ya ;-)
15:22:20 {NickTrader} k now TLB ...
15:22:48 {JASON K} Wow! I wanted to ask but you have already done so much!!
15:22:56 {angela} Nicktrader, it is a special gift and talent to be able to explain these concepts...and you have it
15:23:03 {angela} ok here we go
15:23:31 {angela} again JasonK, are we butting in?
15:23:48 {r7} NickTrader will be taking donations to his fund at the end of this commercial....hehe...just kiddin
15:23:52 {angela} i was going to quiety eavesdrop, don't knwo what happened
15:24:05 {JASON K} Absolutly not please join in, thank you for being here
15:24:21 {angela} jasonk, thank you
15:24:40 {angela} spans zl


15:25:04 {NickTrader} k here we have reg diver, tlb and ?
15:25:12 {fei} Nicktrader, would you agree it has a higher probability of success trading zlr or tb than
divergence?
15:26:10 {NickTrader} anyone get the 3rd signal?
15:26:16 {cizera} nope
15:26:20 {Jimi 53} x 100
15:26:22 {JASON K} Did I read that the combo is very powerful?
15:26:33 {NickTrader} y 100cross for confirm of entry
15:26:38 {r7} +100 line cross
15:26:42 {b6268w} hfe
15:27:06 {NickTrader} so if u must do a counter trend trade u need 3 things
15:27:12 {NickTrader} 1 reg diverÖ.2 tlbÖ.3 cross 100
15:27:38 {alexmontoya} crossing back to the downside, correct?
15:27:43 {angela} oh nice
15:27:44 {Jimi 53} nick is the diver from TCCI more or less powrerful than from 2 pts on 14 CCI
15:28:02 {NickTrader} if u dont wait for 100cross, u might have a 100 reject for a with the trend trade
15:28:24 {JASON K} I c!!
15:28:55 {angela} aha!
15:28:55 {NickTrader} the 100 lines and zl are resistance/support areas, so therefore, there is always a high
probability of a rejcet
15:29:19 {JASON K} Got it
15:29:22 {Nicker} NickTr, but if you have a HFE at high levels, you don't wait for 100 x do you?
15:29:33 {angela} nicktrader, i've heard that countless times, now i've a way to measure it
15:29:46 {NickTrader} jimi, not sure on numbers for that rtade
15:29:48 {angela} wowweee, great lesson
15:30:05 {Jimi 53} txs Nick Great stuff
15:30:18 {angela} Nicktrader, thank you so much! this has been a special problem for me
15:30:25 {NickTrader} hfe is not a diver, we doing divers
15:30:43 {Nicker} OH... got it
15:31:09 {angela} nicker, some of us have trouble with diveers


15:31:20 {NickTrader} tripple diver....
15:31:36 {NickTrader} very strong


15:32:20 {alexmontoya} nick, though wouldn't you take it after the 2nd probably?
15:32:24 {NickTrader} a vt which all are rev divers
15:33:06 {John 2} any nuances for VT
15:33:10 {alexmontoya} vt looks like reg diver, no?
15:33:29 {NickTrader} y but vt has a defined shape
15:33:42 {NickTrader} that chart i post is ideal
15:33:44 {alexmontoya} yup, little hooker
15:33:52 {Jimi 53} Nick on the triple -you short on the x100 If you come back above the 100 do you exit?
15:35:37 {NickTrader} y if the next point goes higher than previous point its invalid
15:35:52 {Jimi 53} thanks
15:36:18 {NickTrader} must make lower highs for short, higher highs for long
15:36:29 {NickTrader} otherwise its invalid
15:36:43 {alexmontoya} nick, as usual, great lessons :)
15:36:48 {JASON K} NICK TRADERÖÖThanks A Million My Friend !!!!!
15:36:51 {angela} agreed
15:36:52 {alexmontoya} I'll try some on the eur in a few hours
15:37:07 {NickTrader} all u need is pattern, no price
15:37:11 {angela} Nicktrader, again, thank you so much
15:37:15 {John 2} thanks
15:37:18 {NickTrader} yw
15:37:24 {Jimi 53} Nick thanks
NickTrader on Diver Part II 2-19-2004
Page 16 of 18
15:37:25 {angela} this has cleared up much of my confusion
15:37:31 {fei} thanks a lot,
15:37:34 {b6268w} thanks nicktrader
15:37:39 {marko} as always Nick learned alot
15:37:57 {Nicker} Nick, you're really appreciated. Thanks a million
15:38:05 {John 2} NickT, do you take all TLB's
15:38:05 {NickTrader} np
15:38:11 {marko} thanks again
15:38:19 {John 2} just what you showed
15:38:32 {choo-choo} Nick, higher highs for long?
15:38:58 {angela} unbelievalbe what happens if one pops into this room...at any hour
15:39:03 {Jimi 53} gn all Thanks Nick
15:39:14 {NickTrader} choo, y as in this pic ...



15:39:45 {NickTrader} oppps thats higher lows ,,,
15:39:52 {choo-choo} the higher high's in reverse divergence.
15:40:31 {choo-choo} ok, now I'm back on the same page with you... lol
15:40:33 {NickTrader} opposite of lower highs ;-) for short
15:40:52 {angela} nick, great example nonetheless
15:41:26 {choo-choo} Thanks so much Nick.. I really appreciate your help.
15:41:31 {NickTrader} i dont think in terms of higher highs numerically i just c pattern.... thats why u need lots
of chart time
15:41:39 {angela} and thank you so much for explaining the divers rules
15:41:50 {angela} but for some of us, we have to start somewhere
15:42:09 {angela} point well-taken about chart time
15:42:26 {angela} thank you so very much
15:42:34 {NickTrader} u should draw the divers preferably untill u c it in ur sleep
15:42:43 {choo-choo} Nick, in that last chart isn't that reverse divergence also?


15:44:05 {choo-choo} Yes, thank you Nick.
15:44:08 {NickTrader} y rev diver that failed
15:44:25 {choo-choo} HOw do you know it failed?
15:45:03 {NickTrader} cause it didnt follow through with a zlr and turned into a reg diver
15:45:11 {choo-choo} Oh, i c. thx
15:45:35 {NickTrader} k lets c price c what happened ...
15:46:27 {choo-choo} k


15:47:27 {choo-choo} yep, it went up instead of down..
15:47:39 {alexmontoya} wow, that's tuff, you have rev diver and tlb and it still failed
15:47:44 {NickTrader} aha, from open hfe so i dont take trades from open i wait 5 bars to c direction
15:48:19 {choo-choo} oh i c.
15:48:20 {NickTrader} remember woodie rule.... after first 5 brs we get direction...
15:48:30 {alexmontoya} oh, didn't realize this was @ open
15:48:35 {NickTrader} the 5+ bar rule for trend
15:48:50 {Nicker} still that rev div was ok for 5 pts
15:48:51 {choo-choo} To be 'so' simple, it sure is complicated for this old man.
15:49:29 {choo-choo} I have a severe case of that CRS syndrome.
15:50:17 {choo-choo} Thanks again for your help NickTrader.
15:50:18 {NickTrader} nicker, perhaps, but not worth risk imo, the diver was much better signal, after 5 bars
for trend and it worked well, so if i was in rev diver trade i may have missed a better trade.... all about
rirk/reward, probabilities
15:51:01 {Nicker} I see that, even understand. Thanks Nick

 

 

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