A-B-C-D Trade - page 30
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We've plotted 2 consecutive ABCs upward.Point B (Break Price) = 1.3087Both targets 1.3112/13.Try to plot yourself. If current Point C holds, otherwise we must adjust of course.
Also watch Asian Low = 1.3055
Below are swings of 1st ABC mentioned on last post. The 2nd ABC did not hold.
A = 07:30 low 1.3026
B = 06:30 high 1.3083
C = 07:15 low 1.3055 (50% retrace of A-B)
Asian High = 1.3083
FE 100 = 1.3112 (target)
FE 127 = 1.3127
FE 161.8 = 1.3147
FE 236.2 = 1.3190 (hit)
Entry BUY = 12:45 open price 1.3097 + spread = 1.3101
- Fast/large break candle ate up profit.
False breakout/probe at 08:00 candle but failed to close convincingly (1.3084).
A-B distance was more than 45 pips, hence our rule targets FE 100.
Reward = 11 pips
Stop-Loss Options:
- Just below Asia High (same as Point B) 1.3083. Risk = 18 pips
- Just below 5 min pivot 12:30 low 1.3076 = 25 pips
- Just below 23.6 retrace fib of A-B 1.3070 = 31 pips
- Just below Point C 1.3055. Risk = 46 pips
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Point C was 50% retrace of A-B and we also had a large break candle. Assessing trade using our entry rule resulted in a pass.
If entry prior to close of candle, we must analyze worst entry price we can accept to keep risk/reward to 1:1 ratio, when trading to FE 100.
Using risk of 26 pips, our stop-loss = 1.3076
Target = 1.3112
Difference = 36 pips
Divide by 2 = 18 pips
Using Stop-loss of 1.3076 + 18 = 1.3094 worst entry price
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The 15/15 pip strategy was a winner, if you waited until 12:40 candle to enter.
Extension did reach the FE 236.2. IF we switched to the Daily chart, we can see the 200EMA providing resistance.
- using a moving stop-loss would have taken advantage of large extension. Each FE level was respected by market.
Cheers
To further understand the movement(s), we can plot the retracement fibs from the last significant move.
Low = 1.3057
High = 1.3194
23.6% = 1.3161 (hit)
38.2% = 1.3142
50% = 1.3125
61.8% = 1.3109
78.6% = 1.3086
If you don't have all of these fib ratios, you need to add. Read the MT4 help section for retracement fib tool.
Pair did retrace to the 23.6% fib at 16:10 GMT 5-min candle. It may consolidate between the high and either the 23.6 or 38.2 fibs as volume lower due to close of Europe and first half U.S.
Waiting for EUR/USD to cycle through a high-impact data release (CHF CPI) at 07:15 GMT, which is 5 mins aways.
After European session opens at 08:00 GMT, and if breakout is to upside from Asian high, we'd have to hurdle 1.3194 which was established last Euro session.
Extension-In-Progress just prior to Euro session open.
Backing off psychological round number 1.3200 at moment.
Extension-In-Progress swings and FE levels
A = 06:20 low 1.3146
B = 06:55 high 1.3186
C = 07:10 low1.3163
FE 100 = 1.3203 (hit)
FE 127 = 1.3214
FE 161.8 = 1.3228
Extension-In-Progress swings and FE levels A = 06:20 low 1.3146 B = 06:55 high 1.3186 C = 07:10 low1.3163 FE 100 = 1.3203 (hit) FE 127 = 1.3214 FE 161.8 = 1.3228
O.K., we took the trade and just exited ahead the FE 161.8 @ 1.3228.
Our entry was 1.3209 after spread. Net + 17 pips (exited 1.3226)
We wanted substantial confirmation since there were 2 hurdles above the Point B:
1) the previous Euro session high 1.3194
2) Round number 1.3200
A = 07:20 low 1.3168
B = 07:30 high 1.3229
C = 08:00 low 1.3216 (retrace 23.6% of A-B)
Asian High = 1.3229 (same as Point B)
FE 100 = 1.3277 (target)
FE 127 = 1.3293
FE 161.8 = 1.3314 (beware round number 1.3300)
Currently meeting resistance at 1.3231 area. This is a Daily FE 100. You should be able to plot those swings, as easy to see.