Delta Phenomenon

This is a discussion on Delta Phenomenon within the Trading Delta Cycles forums, part of the Specialists' Corner category; Originally Posted by cmellon My current bias is that 1.35 is SLTD 2 low. Looking at my Delta chart in ...

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Old May 21, 2009, 11:28am   #16
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Originally Posted by cmellon View Post
My current bias is that 1.35 is SLTD 2 low. Looking at my Delta chart in Dynamic Trader, I see that LTD 16 time zone is between mid June - mid August.

We have had quite a ride from 1.35 - 1.58 (currently) from Jan 22 to May 21, a period of 4 months and more than 2000 pips increase. Suppose today is LTD 15 (and we probably could make an argument that LTD 15 will be due slightly later), we have only 3 months period or less to mid August before LTD 16 should be due.

Again the 2000+ pips gain is within a period of 4 months. I am not sure that within three months or less, we could completely retrace all these 2000 + pips gain and some more. Timing wise, it's not proportionate.

If we are going to retrace and take out 1.35 by mid August, fundamentally we get to see some big shocking news again, similar to the credit crisis last year.

If SLTD 2 low is IN at 1.35, then SLTD 3 high will not be due until later this year. Once LTD 16 low is due on mid August, we should rally again to LTD 17 (and LTD 17 should be higher than LTD 15). LTD 17 would most likely be also SLTD 3 high, due at the end of this year.

Just my 2 cents.
The widow is very tight indeed for the LOW SLTD2 to go lower then the last 1.34 prievious low @ LTD14, agree with you that for cable to do so will demand another financial Tsunami, which indeed might happen, with some big moves of the equities, or a new wave of drought, causing the "green shoots" of economy to wither. However this is only a possibility, a remote one, but with Mr Obama wanders who knows what might be around the corner.
I shall update my count later on, ITD12 might have arrived in style.
I am shorting from now.
Good trades to all,
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Old May 22, 2009, 2:20pm   #17
 
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Nice thread you folks have here.
I don't know much about Delta but this thread does make for VERY interesting reading.
Also, if it's any help one of my mid-term timing models shows a pivot in the gbp-usd should happen right about now.
Please keep it up!!
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Old May 22, 2009, 10:52pm   #18
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Originally Posted by hwsteele View Post
Nice thread you folks have here.
I don't know much about Delta but this thread does make for VERY interesting reading.
Also, if it's any help one of my mid-term timing models shows a pivot in the gbp-usd should happen right about now.
Please keep it up!!
It is great that you are interested in the concept of Delta.
I would like to bring to our attention one very important principle in applying Delta, or indeed other swing methods. I have learned it, experienced it and paid my tuition when I forgot about it.
I call this principle, Trading AWAY FROM confirmed points (H & L) as opposed to Trading TOWARDS TO the yet to be confirmed points.
This is especially important in this very volatile markets, when cable (the pair I trade) seems to be at times "out of sync" with other markets, meaning other fx pairs, commodities, equities and bonds. Eighteen months ago the markets were different, and one could travell towards the next ITD points with a SL not much more then 150 pips, not any more, when 500pips SL or more might not be enough. That is the reason that I have had to consider this principle and apply it. When I do not apply this principle more often then I like to admit I simple get in trades and sweat the trade or simply loose more that I would like, so I want to save you and myself hours of sweating and even a possible loss.
Delta is very helpful in providing a sense of direction, and on that account alone it has proved to be very rewarding and profitable. This also allows to get into trades lasting several days with multiple entries and exits affording larger positions, providing larger profits. But these entries have to be correct, and in the cathegory of the High Probability Trades, otherwise the larger position will provide a larger loss, not because Delta is wrong, but because it has been abused. That is especially so if one does not work on his/her own counts and solely depnds on the counts of others. If you do your own count you know its week points and are more careful at implementing the given count to your trading. The strong points usually take care for themselves, the weak points are the area that we like to discuss and compare with each other.
Back to the priciple of trading away from:
1. The point has to be establish within or around the Delta Time zone for the points in the given TF.
2. The point has to be confirmed and one should have some rules regarding this confirmation. Cmellon on his blog is kindly poiting us with one of the ways. Please study his postings.
This process has to provide a clear guidance in relation to the entry zone, SL and at least provide a minimum PT, being based on fibs or mometum. or both. I like fibs and use them a lot, but on cable I also have observed that when the price has reached the other side of STARC Bands on H4, I will take profits, and consider reversing, it is not an automatic reversing, this is an example of a momentum PT provided by the market's moves.
3. It is also reassuring if the considerred delta point is recognised by the trader as a significant EW structure or a part of it. (R.Miner books highly recommended for this very reason). Delta is preoccupied with TIME, and this makes it simpler. Possible entry zones and Profit targets are further marked by EW, Fibs and S/R.

There are many benifits of trading away from this well confirmed points, less stress, SL placement, and generally less work in maintaing the trade, making it possible for the part time traders to participate in the market.

There are few setups that I use to trade using Delta to provide a mid term and longer TF direction. Among others they are DiNapoli set up, Phillip Nel H4 Macd or cornflower on H1 or Bill Williams Aligator. Once you get familiar with a set up or two, it is good when they confirm the trade and the direction. Currently I am looking at the relation between Delta points and H4 MACD system by Phillip Nel, having all the time DiNapoli set up in the background too. I also have found H1 cornflower with Bobokus fibo very helpful, especially for the intraday trades, but being aware od the Delta direction.
I have attached the Starc bands indicator if you want to have a look at it. I use it a lot, together with Bollinger bands and the Centre of gravity, they all do a similar job, so do not put all of them on one chart. I also like ATR, indicators attached.
Have a great weekend everybody,
2be
PS: Over this long weekend you might like to do some studies, it is quality and free.
Phillip Nel, cornflower, Bobokus fibonacci or DIBS will give you some great insights. All this threads available on FF, and there are some great threads on T2W too.
Attached Files
File Type: mq4 STARC Bands.mq4 (2.4 KB, 237 views)
File Type: mq4 Center of Gravity.mq4 (5.4 KB, 226 views)
File Type: mq4 BobokusFibo.mq4 (4.6 KB, 233 views)
File Type: ex4 ATR & Range Data.ex4 (3.2 KB, 237 views)
File Type: mq4 Avg Range.mq4 (3.9 KB, 228 views)

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Old May 26, 2009, 5:10pm   #19
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G/U is in a strong up trend. the zone of 1.5730 seems to be a reasonable support zone for a while. In such trending market, the counts on the way up might resemble the reverse situation cable was facing when it was sharply falling down. The ascent is not that strong as the downfall has been, but nevertheless, there seems to be a strong trend up, and one shall observe the levels I have posted earlier on. By its rescent price action cable has open much greater potencials to the upside, and the SLTD2 LOW looks certain to have been reached at 1.34 zone. I do expect a retracement, but not to the level of the SLTD2.
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Old May 27, 2009, 1:24am   #20
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Hi guys,

Two days ago, I posted three possible turning time zones for long term high (LTD 15) at my blog.

1. LTD 15 could be due at ITD 11. If this is the case, then long term top should be due around May 27.
2. LTD 15 could be due at ITD 1. In this case, ITD 11 inverts and long term top should be due around June 11.
3. LTD 15 could be due at ITD 2. If this is the case, long term top should be due around June 22.

Posted are the charts. In the next post, I would post what I think is more probable scenario out of the three above.
Attached Thumbnails
gbp-usd-delta-itd-may-25-ver-1.gif   gbp-usd-delta-itd-may-25-ver-2.gif   gbp-usd-delta-itd-may-25-ver-3.gif  

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Old May 27, 2009, 1:35am   #21
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Gbp yen

Here's a related Delta analysis of GBP JPY. This is a Medium Term Delta chart. Since GBP JPY is quite correlated with GBP USD, if we could project GBP YEN with some degree of confidence, I think we could also get some insight on GBP USD.

I posted GBP JPY MTD count chart on May 14 in another forum, which has been confirmed recently by a break of 151.5. This means that for GBP YEN, Medium Term trend is UP until end of June or early July with price target probably around 162 - 167.

I therefore tend to think for GBP USD that long term high (LTD 15) will be due at ITD 1 or ITD 2 in June, which is closer to the long term high time zone of GBP YEN.
Attached Thumbnails
gbp-jpy-mtd-may-14.gif   gbp-jpy-delta-mtd-may-27.gif  
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Old May 27, 2009, 1:05pm   #22
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I favour for the time being scenario similar to cmellon 2nd possibility. The other two are not exluded, however cable seems to be ready for a pulback, possibly clipping the 200EMA. The last candle has been manually inserted, but todays close shall provide some insight. Weak candle shall indicate a poss ITD H is very close, or possibly has been reached today.
Attached Thumbnails
gbp-usd-itd-mtd-27-05-09.gif  

Last edited by 2be; May 27, 2009 at 1:14pm.
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Old May 27, 2009, 1:24pm   #23
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Quote:
Originally Posted by cmellon View Post
Here's a related Delta analysis of GBP JPY. This is a Medium Term Delta chart. Since GBP JPY is quite correlated with GBP USD, if we could project GBP YEN with some degree of confidence, I think we could also get some insight on GBP USD.

I posted GBP JPY MTD count chart on May 14 in another forum, which has been confirmed recently by a break of 151.5. This means that for GBP YEN, Medium Term trend is UP until end of June or early July with price target probably around 162 - 167.

I therefore tend to think for GBP USD that long term high (LTD 15) will be due at ITD 1 or ITD 2 in June, which is closer to the long term high time zone of GBP YEN.
Thanks for posting the count on this pair, and thanks for explaining Delta on your blog. I am asking others to read it. You are doing a great job!
On a larger scale and taking the fundamentals into consideration, I am of the opinion that the current equity rally migh be suspect, very suspect indeed, but how long it shall last?, who knows. I am not that comfortable to consider recovery based on more debt incurred by the US, I think that there is a lot of false hope in the market, and when all is squerred in, who knows where the USD will be? -DEE???
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Old May 28, 2009, 12:15am   #24
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The daily bar has closed at the time zone for the ITD H and it displays weakness in relation to the up move potential. ITD TF is in the Invertion Time Window so it is likely that this invertion will take place. ITW often is accompanoed with high volatility, and "unusual" moves, so it is important to be particularly careful and use good trade management. This move might preserve symetry in relation to the prievious between the ITD 4 & 5, ITD6 &7 , or be a deeper corrective marked with the red box. A note of caution, one has to be aware ot the LTD15 H, from which a more substantial move down is expected. The placement of that LTD15 for certain is very important, so please be on your guard, and do not allow yourself to be married to any position or uncertain opinion as to where the market should go. I shall consider short tomorrow when cable gets below my "war zone" thus declaring its direction (war zone - +/- 20 pips from the US closing, or below the low of the 27 -05-09 it also has to be in agreement with H1 and preferable H4 momentum settings.
Attached Thumbnails
gbp-usd-itd-mtd-27-05-09-02.gif   cable-d-27-05-09-din-pn.gif   cable-h4-27-05-09-din-pn.gif  

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Old May 28, 2009, 12:48pm   #25
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The daily bar has closed at the time zone for the ITD H and it The placement of that LTD15 for certain is very important, so please be on your guard, and do not allow yourself to be married to any position or uncertain opinion as to where the market should go.
I have thought about the LTD15 and comparred my counts with another delta friend.
Looking at the count from the larger TF to the next lower TF, that is from SLTD to LTD, I am taking the assumption that the Low SLTD2 has been established on 23rd Jan 2009 @1.3508, that means that cable on that TF is travelling to the next H SLTD3, that would make LTD 15 to come "on time or late". I shall continue with this post later on, trading atm.
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Old May 28, 2009, 1:06pm   #26
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I have thought about the LTD15 and comparred my counts with another delta friend.
Looking at the count from the larger TF to the next lower TF, that is from SLTD to LTD, I am taking the assumption that the Low SLTD2 has been established on 23rd Jan 2009 @1.3508, that means that cable on that TF is travelling to the next H SLTD3, that would make LTD 15 to come "on time or late". I shall continue with this post later on, trading atm.
2be,

Thanks. That's my assumption too.

Another thing that I am now thinking is that... the time window for LTD 16 is quite short. This makes me think that this SLTD upmove we have now is very strong, and thus I won't be surprised at all if LTD 17 is due at MTD 2. Price level wise, maybe we retrace 1000 pips or so.

This is exactly the mirror image of last year's credit crisis. Take a look at my (your) Delta chart to see how short is the distance (time wise) between LTD 12 and LTD 13. Between LTD 12 and LTD 13, there is only 1 MTD, 1200 pips distance in just 10 trading days.

So this time I won't be surprised if LTD 16 is also due one MTD away at MTD 2. SLTD 3 high will be due around November of this year. We could see 1.8 - 1.9 by November, it won't be totally out of question.

Just something to think about.
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Old May 28, 2009, 7:43pm   #27
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I have thought about the LTD15 and comparred my counts with another delta friend.
Looking at the count from the larger TF to the next lower TF, that is from SLTD to LTD, I am taking the assumption that the Low SLTD2 has been established on 23rd Jan 2009 @1.3508, that means that cable on that TF is travelling to the next H SLTD3, that would make LTD 15 to come "on time or late". I shall continue with this post later on, trading atm.
The big question atm is: IS THE LTD 15 IN???
I think that it is likely that LTD15 is in, I would point to the 1.6428 as a remote possibility, but atm I think this level shall not be reached.
The C has got a great crudencials to be called in, and the time is running out on the delta count for this LTD15 to get in, in another place. It would also involve ITD invertion, and poss MTD invertion too, in a fast succession. Single invertion is supposed to happen no more then 35% and a double invertion only 15%, so it is safer not to build the strategy on invertions, they are there to square the otherwise challenging counts, and they can only happen on the either or both (in the case of a double invertion) sides of the 1st point of the new cycle of the given TF.(tbc)
Attached Thumbnails
cable-wk-ew-28-05-09.gif   cable-daily-ew-28-05-09.gif   cable-wk-ew-28-05-09-02.gif  


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Old May 29, 2009, 1:01am   #28
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This is a very long shot.
I have inverted MTD (12) (MTD (12)arriving late in the direction of LTD15 which itself is late in the direction of SLTD3). By this I shall be able to use MTD1 as a first leg down to LTD16. LTD16 shall come on time or early, as it is against the expected move up to SLTD3. I have left a lot of space on the right of the chart to provide perspective as to the possible arrival of LTD17 and SLTD3.
Please look at it as a perspective, it is not a prediction, and this count indicates time and not a price levels. For some idea of price zones pleas look at my silver colour charts posted earlier, there you will spot that cable has been range trading for several years, some of this range is likely to be repeated on this cycle. I would not be surprised if cable is rangebound between 1.5 to 1.9 for the next couple of years after establishing LTD16, again this is based by the levels prieviously observed.
We shall see, for now then I am expecting the 5th wave down, terminating at LTD16, thus ending the 5 EW impulsive which have started on the 9th Nov 2007 @2.1161. It is possible that this 5th EW will fail, but this large move down is expected to terminate this summer, poss in August.
It is dangerous to try such long projections for they might be blown to peaces by the market doing something very different. The reason I have posted this chart is to illustrate the type of perspective afforded by applying Delta. I am not trying to prove that Delta is the best approach in the world, but it does make you consider different possible scenarios well in advance, and this perspective can be filterred in to the position or intraday trading using different TF, and other filters.
If you lough at this chart, lough loud, (it is healthy) that is ok with me, I shall not be offended, if you make some pips, well spend them well.
So far this move from the H ITD12 has already provided serious pips by a few shorter term trades, the long multientry position is open and it is in profit too, protected by Stop well above BE.
I am expecting a serious re-test of this H, therefore the propective Stop. In the unlikely but nevertheless possible scenario that this H is taken, I shall look for the new levels to establish shorts, that is trading, nothing to be taken for granted or as 100% certain.
Many pips to you all,
2be
Attached Thumbnails
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Old May 29, 2009, 1:28am   #29
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2be,

I like your idea of MTD 12 inversion, and therefore establishing MTD 1 as the first leg.
If the SLTD move is so strong, in your case MTD 1 itself could have been LTD 16 since it's within the time frame of LTD 16 arrival, but this is assuming that LTD 15 has arrived.
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Old May 29, 2009, 7:01am   #30
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Hi everyone,

I still could not confirm the arrival of ITD 11 because there's still no reversal confirmation that I am looking for. I am looking for a daily candle close below the low of the signal day (signal day is the latest day that makes the highest high). In our case, the low of signal day now is 1.592, and we still could not get a daily candle close below 1.592.

There are three possibilities at this point:

1. If 1.608 holds, then ITD 11 may have arrived on time at May 27.

2. ITD 11 could arrive late in which case we should see more high in this next couple of days before a more meaningful reversal

2. ITD 11 has arrived on time at May 27, but then inverted at 1.585, and now going higher to ITD 1 due around June 11. You could see this illustration in my previous post titled 3 possible locations for LTD. The inversion is illustrated at the second chart.

We need several more days to determine which one is more likely.
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Last edited by cmellon; May 29, 2009 at 7:19am.
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