A-B-C-D Trade - page 317
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After Crude had a bullish run in August, price consolidated, Sept 7-13th period when 3 high-impact events sent all risk-on assets on a bullish pop.
Attached chart features an APF plot using Sept 7th 10:00 GMT, Sept 14th 06:00, Sept 20th. For interior fibs, we used indicator AML_v1-1
We also utilized an RSI divergence indicator named DPTRSI, which was previously posted, set on 4-period. This also displays reverse (hidden) divergence.
We can see that the last 2 divergence signals, a BUY on Sept 12th 14:00 and a SELL Sept 20th 23:00 or Sept 21st 10:00, were in the direction of the HAMA_T3 trend.
The fib plot saw pullback of 50% contained by the HAMA, and a 178.6% extension. Price currently back down to the lower fork.
Continuance of our 1 and 4-hour charts with Ichimoku.
On the left, we can see the 1H test but fail to break previous low. The bounce up now at the upper border of the Ichimoku cloud.
The 4H illustrates BAJA Bullish Divergence on that test of low. It was also at the bottom border of the Ichimoku, intersected by the 88.6% retrace fib (blue).
The bounce up met resistance at the 61.8% fib and the top of the HAMA_T3 zone.
Some intra-day longs exited ahead of 14:00 GMT U.S. data. Therefore these S&R tools and plots would serve a purpose in that scenario.
BUY entry options included at open of 08:00 period, after 4H BAJA Bullish Divergence: 1.2900 + spread.
On 1H, a GAB Pivot at close of 06:00 bar, meant entry at open of 07:00 1.2901 + spread.
S/L below 1.2885 + cushion = 1.2880.
TP target area as per resistance outlook outlined above. Generally, TP at 1.2955 including cushion, which made R/R = 50/25 and 2:1 ratio.
Here's an update on the Libor scandal. These criminal bankers make the mafia look like boy scouts.
RBS Managers Said to Condone Manipulation of Libor Rates - Bloomberg
or cut & paste: bloomberg.com/news/2012-09-24/rbs-managers-said-to-condone-manipulation-of-libor-rates.html
Using the fib channel tool, which comes standard with the MT4 platform, we make the following plot.
Take the 1st plot line (A), and pull from Jan 13th 2012 LOW to July 24th 2012 LOW.
The 2nd plot line (B) is moved to the Feb 24th HIGH.
(Double click on plot lines to see dots, which are dragged to locations)
In the "Fibo Levels" tab, make sure to add the ratio of .314 (Level). The Description would be 31.4%. Double click to make changes, or click "Add" button to make new levels.
We can see the double-top Sept 14th and Sept 17th met resistance at the 31.4% expansion. The bounce down now at the Plot Line B, as well as the bottom of the HAMA_T3 zone.
This is a bigger picture, in addition to the recently posted fib plots and other S&R. Its use would depend on trader's strategy of course.
The hit to the 31.4 was the first confirmation of plot. The hit to the Plot Line B is a 2nd confirmation.
Some shorted at the double-top.
Some are still long on a position or swing trade, and want to see support on the most recent pullback.
31.4 ratio is "pi", and its discovery goes back to ancient times.
http://ualr.edu/lasmoller/pi.html
We believe that it is underutilized in trading. We often use its multiples, and consider 31.4 very important.
Somebody requested a MACD without the histogram. Don't know if a multi-timeframe version is acceptable, but here it is.
APF plot points:
Handle = Sept 7th 13:00 GMT
Upper corner = Sept 14th 05:00
Lower corner = Sept 13th 13:00
Go into "Objects" and change name of Andrew's Pitchfork to AL1.
Insert indicator AML_v1-1 to get interior fibs.
GAB and HAMA_T3 also featured on chart. Check marks at 1st touch to Upper_ML on Sept 14th, and 1st touch to middle fork on Sept 18th are confirmation.
Arrows point to major trade opportunities at:
Middle fork Sept 20th 09:00 GMT (BUY)
Upper fork Sept 21st 09:00 (SELL)
Lower fork Sept 26th 13:00 (BUY)
The opportunities at the upper and lower forks allow for tight stop-loss, which can bring tremendously attractive R/R.
TP to interior fib levels (including middle fork) or HAMA_T3 zone for conservatives.
Here's the 1H view of that APF plot.
Currently, price bumping up against the HAMA_T3. It is also the horizontal level of the Sept 18th pivot low at the 1st hit to the middle fork.
As mentioned the high R/R derived from a tight S/L can produce, for example the BUY off the lower fork that just hit the lower wick of the HAMA, a 3.00 S/L risk and 14.00 reward for a ratio of 4.7:1.
APF plot points, let's start with 4H for easier viewing.
Handle = 9-05 12:00 high
Upper corner = 9-26 16:00 high
Lower corner = 9-21 04:00 low
Horizontal fib plot (wide): High = 9-05 12:00 Low = 9-12 08:00
Horizontal fib plot (tight): High = 9-26 16:00 Low = 9-25 12:00
Chart 1 was the set-up, with the APF and wide fibs. We also added fib time zones plots from High of Low of wide fib plot, with expansion ratios of .314, .618. 1.0, 1.314, and 1.618.
An "X" marks the Sept 4th 12:00 bar Low. Some trading this would wait until price drops below that level before entry.
Chart 2 is entry chart, after price dropped below that level.
Chart 3 is the 1-hour view, illustrating decline to the APF's Upper_ML2 during today's 05:00 hour. That is also the horizontal 38.2% retrace fib of the tight plot (yellow).
Price subsequently bounced up and met the upper fork during 13:00. This was a SELL opportunity.
Chart 3 also shows the current price action, with the decline off the upper fork thrusting down passed the Upper_ML2, and testing the tight horizontal 50% fib level.
***
If entry effected at Upper Fork at .9850, this SELL position has now gained to .9805 for +45 pips. As previously mentioned, these scenarios allow for tight stop-loss and good R/R.
S/L options included placement just above 9-26 19:00 high of .9859 + cushion = .9865 for risk of 15 pips. R/R 40/15 and ratio of 2.7:1
If entry just below Sept 4th pivot Low, entry price = .9836 for R/R of about 30/20 and 1.5:1
This is the 1-min view with session colors, MurreyMath1.0 (MML), and intra-day fibs.
Low = 06:00 .98018 High = 13:00 .9853
Price just touched the 161.8% extension to the downside of .09797. The red 2/8th MML is also there.
The 1-H hour's tight fib had its 61.8 at .9795.
This is a support cluster in 2nd half of the U.S. session, which often spells exit for near-term traders.
The last chart is a 15-min not a 1-min on USD/CAD.
***
Here is a 4H split-screen on Crude taken last night during the 23:00 GMT period..
Chart on the left is the one we last posted on Sept 24th , with APF. Price met resistance at the Lower_ML2 and HAMA_T3, and bounced down to the lower fork.
After price broke the lower fork, we adjusted the plot of the APF, and made a fib plot:
Low = Sept 20th 06:00 $90.66 GMT High = Sept 21st 10:00 $93.83
The APF uses
Handle = Low
Upper corner = High
Lower corner = 161.8 extension to downside
Add interior fins with AML_v1-1 indicator.
The 2nd chart is the current price action that just made a hit to the new APF's middle fork, after rising from the APF's lower corner and stalling at the Lower_ML2.
These observations and plots are examples of critical assessments required as price action changes.
If the trader was able to see the 161.8 extension to the downside during the 14:00 GMT period, and make a new APF plot, a BUY position would be guided accordingly.
Further confirmation of the new APF plot was acknowledged when price hugged the Lower_ML2. This enables those that want to hang on for more upside, to have an intra-day TP option at the middle fork.
Be advised that we are using charts with GMT+3 covering commodities and CFDs, but commenting adjusting time to GMT. Obviously a 4-Hour chart will look a certain way, with GMT+3 price feed, and have its particular candles attributed to that divisions of time.