A-B-C-D Trade - page 104
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All heck breaking out, large spike now.
We're thinking BOJ
OK here it is S&P downgraded JAPAN to AA
Well, that added some spice to an otherwise boring day (except for GOLD). AUD/USD make a regular 161.8, EUR/USD regular 138.2, both to downside. USD/JPY spiked up to regular 200% and EUR/JPY to regular 161.8.
Gold with delayed reaction only now breaking support pivot, making signal even more profitable for those that stayed in.
Credit downgrade was from AA to AA-, down one notch.
Rating agencies seem to be more proactive, albeit still somewhat slow last year with the PIIGS nations. As mentioned, Japan has a 200% debt-to-GDP ratio. Positives include their high per-capita savings rate.
Bullish divergence signal on EUR/USD Weekly, Jan 2nd 2nd dip, utilizing Daily trigger.
Chart shows fib plot from High = Nov 4th 1.4281 and Low = Nov 16th 1.3448.
Made about 161.8 regular extension on Nov 30th. Popped back up near low and could not break that resistance for 6 weeks.
Revisited 161.8 area Jan 8th/9th, which was low of divergence candle. Daily trigger with EFT effected BUY entry on Jan 13th price of 1.3124. It has since made a 600-pip move to the upside.
Weekly signal also caught the upswing early June filling at 1.1988, with Daily trigger June 10th. Pair went on to make a 161.8 regular extension above 1.4200.
BAJA TRADE
After the market’s reactionary spike to S&P’s downgrade on Japan, the volatility created several signals (GMT) on the 30-Min charts.
EUR/JPY ---12:30--13/33/17 (Stop-Loss/Max Intra-Day Gain/50% of Max Gain)
GBP/USD---08:00--49/64/32
GBP/USD---13:30--20/83/43
EUR/GBP---10:30--23/19/10
EUR/USD--13:30--40/42/21
Gold dropped $30 (300 pips) after news and extended gains from earlier signal per previous post.
Keep a spreadsheet log on major pairs, gold if you want, and a couple of pairs that doesn’t have large spreads, such as the AUD/USD which is good for traders in certain time-zones.
Log should have heading similar to:
Pair------Date------Chart Interval-----Time (GMT)----B/S----Entry Price----Pivot Price----S/L Pips
Max Intra-Day Gain (Price)-----Pip Gain----% Gain (50% for assumptions)----Risk/Reward Ratio
Comments
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I’ll try to post a template on google docs soon.
With this kind of research, you can determine which trade opportunities might contain a stop-loss too large, relative to average gain. For example, we can throw out trades with 45-pip S/L or greater. So far the larger stop-loss trades haven’t been a problem, but we can’t let our average loss be too much greater than our average win.
Our unofficial stats for Jan. Almost all on 30-Min, with 3 signals on 1-Hour:
EUR/USD 13W-1L
Avg L/W = 36/31
After throw out S/L 40 pips+ = 8W-1L and Avg L/W = 26/33
Gold 23W-2L-1 B/E
Avg L/W = N/A
We’re sure we missed 3 or 4 signals, but wanted to post this ASAP before we comb through.
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The above should be enough to garner viewer interest to move forward and manually back test and forward test. Then comes demo trading. When the exit strategy for each trader is disciplined and results in win% above 65%, it can be tried with small money in real account.
Other comments:
The EFT was purposely utilized to keep the trader from entering too soon. You’ll notice that once divergence is recognized, the market can continue in the direction of the trend with the next candles. We give up possible front-end pips to be safer.
The EFT will hold trader back until enough movement in trader’s direction is registered. From the small sample size thus far, this saves us about 25-35% of the time.
The EFT histogram version, when input parameters for color of bars are changed, assist in easy viewing while waiting for trigger. Especially convenient when monitoring multiple pairs. Bars above and below the zero-line is somewhat close to other trend indicators such as HAS. This can eliminate having too many indicators.
When devising money management and exit strategy, bear in mind that for a beginner, keeping strict rules is better. I will post an exit EA that has a few options that might be of interest.
An experienced trader can use S&R such as fibs. This thread has described use of the ABCD tool (Fib Expansion tool) to determine where we are and where market might to going. This of course impacts take-profit plan.
Take note on how system works when the market is flat, very choppy, and in strong trend. So far so good, ON PAPER. If things work out and show good live results, groups of beginner traders can team up, with one mod, in chat rooms to double check each other.
Keep it simple.
Set-up view is on 30-M or 1-Hour chart with 15-Min trigger.
4-Hour set-up view can use 30-Min trigger
Daily set-up can use 1-Hour trigger
Weekly set-up can use Daily trigger.
AUD/USD trigger coming in 4 minutes on 15-min for BUY.
30-Min divergence signal 01:30 candle.
The AUD/USD BUY position triggered by the "Baja" signal stalling after hit at FE 100 from small ABC.
The bottom is also MurreyMath 0/8th on 15-min and 1-hour charts. We'll post charts with MML, fibs, fib fans, fib arc, divergence, etc., in due course.
.9916 is max of move thus far and represent +23 net pips from 02:15 entry price of .9893 after spread. S/L below 01:30 30-min candle pivot .9882 + 2 pips cushion = .9880. This is 13-pip risk. TP target = .9925, which is area of cluster of fibs, is 32-pip reward.
Took 62% out at 61.8 fib .9918, tightened stop to .9895.