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Kewltech-ish TA

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Kewltech-ish TA

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  #11 (permalink)
San Jose, California
Experience: Intermediate
Platform: Ninjatrader
Posts: 122 since Apr 2018
Thanks: 18 given, 136 received

Daily MACD is still looking beefy, but it is right at the zero line which historically has signaled a turning point.

The 4H is showing hidden divergence. This suggests that the bear wedge will fail despite the distribution that has been occurring.

1/16/19: This is for Wednesday. Price action is starting to get a little messy, but we are still getting price that mostly respects S&R areas. The patterns are still somewhat clean, but if you take a look at the MACD, you can start to see the choppy bullish price action (I boxed the areas). Compare that to the beautifully clean down cycle MACDs. Instead of a smooth trending cycles we are getting divots and bumps on the MACD. This tells me that despite the 4H divergence, we are still in a distribution mode as the bears are fiercely combating bulls. This could also very well be an accumulation just under the resistance line for a breakout seeing as the 4H is suggesting a weakness in distribution.

Since the sellers still mean business what I kind of expect to see is a breakdown from the 4H wedge that turns out to be a failure when the bulls catch the bears with their pants down. Of course it's just as possible that we get a surge of bullish momentum that breaks the bear wedge and then comes back down for a retest of resistance. Nonetheless at the moment I am bullish in the coming week/month.

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  #12 (permalink)
San Jose, California
Experience: Intermediate
Platform: Ninjatrader
Posts: 122 since Apr 2018
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Today was a big bear wedge that started from premarket and it seemed to be obeying previous days' support and resistance very well until it popped up into uncharted territory. It was the perfect time to break down too since we were near the top of the bear wedge and at resistance. This is what stops are for, eh? I have to wonder if the funnymental news about the US removing the tariffs to expedite the china deal caused the surge in upward momentum. Who knows the reason. Price quickly crashed back down and while it's above resistance, it is looking relatively weak and I have doubts whether we can hold this level short term.

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  #13 (permalink)
San Jose, California
Experience: Intermediate
Platform: Ninjatrader
Posts: 122 since Apr 2018
Thanks: 18 given, 136 received

I've been on a haitus; been preoccupied with life. As much as I love to theorycraft, it doesn't pay the bills. The way I see it is Kewltech TA is simply the application of classical technical analysis--levels and patterns-- to trade momentum and trends. It's nothing complicated, but it is fairly subjective. That is the crux and why I haven't been investing my limited time to make posts and have instead been studying methodology. Anyone can find patterns looking at historical data, but only a trader can trade the unknown (aka "hard right edge"). In the interest of solidarity I attached my Monthly Execution Review. This is a summary of whether or not I followed my entry and exit rules. Ironically.. my win rate is about 50%, which is almost equal to my good/bad execution rate... The BIG difference between my execution sheet and the TA i've been doing is the timeframe. I don't have hours (or the patience) to sit monitoring a trade so my entries have been on a much smaller timeframe and arguably less clean TA. I'll try to keep this thread regularly updated and I may need to adjust my reviews to the timeframe I'm trading. I'm also looking to make this a little more mechanical, but I don't want to stray too far from the tree. Have a good weekend!

As you can see... very subjective...

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  #14 (permalink)
Posts: 45 since Jan 2019
Thanks: 25 given, 15 received

I use this method and this doesn't look like it. You have the basics of momentum but much more to it

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  #15 (permalink)
Atlanta, Georgia
Posts: 5 since May 2020
Thanks: 4 given, 0 received

trepidation View Post
Trading KewlTech has been too discretionary for me since I like having set and forget trades. However, the market structure and knowledge that Kewltech teaches is invaluable if somewhat indecipherable. In one of the compiled PDFs there is a Course Summary by Unknown which helps to cement Kewltech's teachings. I thought I'd create a journal where I review the market. Please note that all these charts are analyzed in hindsight and I'm not currently taking any trades off of them.

/ES 2584T - 12/28/18 - New York Session

Since the markets are closed. We must go backwards. 12/28 was more of a trade the naked chart day using standard technical analysis. However, the general teachings of Kewltech apply. On the higher timeframe, we are distributing. This doesn't matter too much as long as we stay within the confines of a supply and demand zone as we are essentially trading the chop. The most difficult thing was identifying the supply and demand zones. Were we able to do that, we could then frame the market in a way that makes it easier to trade. For example, if we broke a supply zone early in the morning without signs of stopping, we could adjust our bias for a strong trend day. If price failed to do that, we could keep a range bound bias.

Trading the compressed channels and wedges, using MACD as entry confirmation would have resulted in entering far too late and wouldn't have have been useful for entries. However, using crossovers as an exit signal was still useful as it allowed us to trade through the chop and ride trends. However, we would have still been exiting late on smaller chart patterns. This isn't as bad as entering late--assuming we've identified a valid pattern--because we can still use a tighter stop in the event the pattern fails or we were wrong. On another note, using the MACD as general momentum was useful in giving us confidence in our market bias.

In the morning we had a channel and wedge form. Before we can trade channels and wedges, we need to identify that they have formed. The blue dots represent areas where we are still discovering the patterns. Without conflunece such as a supply/demand zone we wouldn't want to trade these blindly (This is why I don't like using oscillators because they tend to lie as often as they tell the truth). Please refer to the chart for my logic on entries and exits. I included 1 chart with approximate tick values and a clean chart.

Despite the market being volatile and seemingly random, it is still efficient in that things aren't happening randomly. The market is still moving purposefullly.

Yea I agree with you that Kewltech is hard to understand, do you still use a market structure/price action method similar to this? Also, I agree, it's difficult to know which levels are going to be hit and which are not, that's why I've heard you have to scale into and out of positions. Very curious to hear how you've progressed since you started this!

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  #16 (permalink)
Atlanta, Georgia
Posts: 5 since May 2020
Thanks: 4 given, 0 received

Why is it called exaggerated Divergence? Also, I think I may've just gotten Hidden Divergence, it's the reverse order of regular right, so when price is trending down, the oscillator is trending up?

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  #17 (permalink)
Site Moderator
Sarasota FL
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Platform: Sierra Chart
Trading: ES, YM
bobwest's Avatar
Posts: 5,936 since Jan 2013
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Over time, four separate threads have grown up on relating to Kewltech, seriously splitting up the topic.

In the future, please use the existing main Kewltech review thread for Kewlteck-relatated material:

This thread is closed, to prevent further fragmentation of this topic.


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