A-B-C-D Trade - page 342
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Here's a 1-hour chart on the futures instrument GCQ3.
We aligned the SDC to the 2 peaks of Aug 25 23:00 GMT and Aug 27th 00:00 GMT.
The SDC is set on Standard Deviation = 2
Align the fib channel to the full size of the SDC and drag upwards. The bounce down at the 100% expansion level occurred on Aug 27th 12:00 GMT period.
An attempt to break resistance stopped at the stop-loss level of 12.5%, which is 1/8th, a Gann ratio.
Review:
This was a counter-slope trade opportunity. This means we are trading on a SELL, while the channel is sloping UP. As time elapses, out take-profit will shrink and our stop-loss will increase.We need to keep that in mind.
Otherwise, this type of technique has a PREDEFINED RISK/REWARD RATIO.
Most traders don't know what the R/R will be, until after the trade. They back-test, but find out in most cases, that the past will not dictate future price movement.
A major broker conducted a study of about 2 million trades. The result was that the win percentage was more than 50%. However, they were net losers because the R/R was below 1:1.
Part of that must be related to emotions too. For example, a trader will exit because he/she thinks the move is over, instead of staying with the technique's rules.
Don't over-trade your account. For example, a 2% risk per trade should be a good maximum, especially for beginners.
If you develop a technique that is successful 55-60%, then you must take the losses in stride, and look at very large sample sizes.
If the R/R is predefined and more than 1:1, the trader understands the limits of both wins and losses. If the R/R is 2:1, the break-even is about 40% win. This contributes to the control of negative emotions.
You're welcome.
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The attached daily chart of Gold is marked with the 3 plot points for the fib channel:
A = Apr 16, 2013 LOW 1321
B = June 28th, 2013 LOW 1180
C = July 23rd High 1346
Notice points A and C are not in the usual positions, and have been depicted as alternative plot points .
Now, we drag the channel upwards to align the lower channel to A-C.
A separate horizontal line is aligned to the high of June 6th 1423.50, and marked with an "X".
This is a set-up for a SELL when price meets resistance at the fib channel's 50% expansion level, which occurred on Aug 28th 1433.30.
This diagonal level corresponds with the resistance from May 30th - June 7th. Notice that cluster of candle bodies respecting that 50% level.
A diagonal view of S&R can often shed light on why price probes beyond a significant horizontal high/low. It also acts as another option for placement of stop-loss.
AUD/USD Daily chart:
A = July 24th High .9317
B = Aug 5th Low .8847
C = Aug 19th High ..92324
Drag Fib Channel Triangle (FCT) upward and position lower channel to Point A-C.
We can see that resistance at the 50% expansion level, yesterday Sept 12th, produced a bounce down. This diagonal resistance is confirmed by the peaks of June 6th - June 17th.
hello guys i am new to forex. i have started reading this thread and am finding it very useful. for the time being i have started trading using the zup indicator. can you please tell me that which is the best? should i use the default setting or any tweaking should be done?
regards
Nice contributions here guys, please can someone make a pictorial illustration of the pending orders.
Here are some examples of our latest posts, on the attached chart.
hello guys i am new to forex. i have started reading this thread and am finding it very useful. for the time being i have started trading using the zup indicator. can you please tell me that which is the best? should i use the default setting or any tweaking should be done? regards
and your private message:
i am new to forex trading. i saw your threads about the zup indicators. how good is that strategy? dos it still work? i have started reading your thread of ABCD pattern.
******
I assume you have read the thread devoted to the ZUP entitled Pattern Recognition Indicators
https://www.mql5.com/en/forum/198423
The main points include trading the "perfect patterns" as defined by Guru Carney, which can be found on his website Harmonic Trading
With Forex, there will be very few perfect patterns. Carney has software that can scan dozens/hundreds of stocks, which allows the user to trade more frequently. It's very comprehensive and allows for adjustments.
As far as the ZUP, we pointed out that Point D (place of intended entry) can extend further. You need to understand how to place your stop-loss, and of course have a plan to take profit.
The ZUP author(s) also uses Guru Pesavento patterns. Google him for more details.
I cannot sit here and infer that I fully understand all of the available settings on the ZUP, as it is probably the most complex indicator for MT4. I think I use to have a manual for it, although it is likely a little outdated by now due to several revisions on the ZUP. Will search and post if found.
Obviously, before you trade real money, you need to practice on a demo account, and then advance to very small money first.
This pair currently testing support. It has been cycling to a particular number, and if support is broken, there will be a decent bounce at .9485 or thereabouts. We can easily see previous resistance at/near that level.
EUR/JPY 4-Hour
3 more bounces at the 100% expansion level, from the SDC plots.
1) Sept 24h 04:00 & Sept 26th 00:00 Highs = Oct 2nd 04:00 Bounce Up
2) Oct 7th 20:00 & Oct 29th 12:00 Lows = Oct 10th 16:00 Bounce Down
3) Oct 11th 08:00 & Oc 14th 20:00 Highs = Oct 15h 20:00 Bounce Up
Attached is a 1-hour chart on AUD/USD. We labeled the swings:
1-2 = Oct 13th 21:00 low .94243 - Oct 15th 08:00 high .95465
3 = Oct 15th 18:00 low .94978 (38.2% of Swing 1-2)
4 = Oct 16h 21:00 high .95673 (138.2% of Swing 2-3)
5 = Oct 17th 02:00 low .95263 (50% Swing 3-4)
Currently, Swing 5 is testing the 200%, which is a 100% extension of Swing 3-4.
There obviously were economic drivers, with the U.S. Debt Ceiling, China's downgrading of U.S. to A-, speculation with interest rate policy by RBA, etc.
Cross-pair GBP/USD gained on strength of strong retail sales data.