A-B-C-D Trade - page 124
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Euro Zone CPI missed across the board, and we should see EUR/USD break below the 138.2 of 1.3814, which is current support.
Next is CAD GDP at 13:30. Heavy pricing in of positive figure forthcoming.
EUR/USD managed to float back down despite higher than expected USD/CAD GDP number, which caused a spike down and against USD.
After a small reaction up, EUR/USD reversed course just below previous significant daily high of Feb 2nd 1.3860, and now at 61.8 retrace fib of 1.3795 and near previous 1.3785.
There is a trend line at the daily peaks which we thought would contain pair for at least today.
Note a that 4-hour also has a Bearish Butterfly
Her's the 4-hour Bearish Butterfly that triggered at 16:00. The white arrow points to yesterday pattern which resulted in 38.2% retrace for more than 100 pips.
Also attached is 30-min BAJA SELL. 2nd peak candle 13:30 registered just below significant high (red). 15-min trigger entry at 14:30 price 1.3838. Max gain thus far to 1.3789 for + 49 gross pips from entry.
Attached is EUR-USD 1-Hour with Gann SQ_9. We can see respect of the 45 and 90-degree levels with each swing, including current move which stalled around 45-degree of 1.3795.
2nd chart is the EUR-JPY 30-min BAJA SELL, 2nd peak 13:30. Entry 15:00 113.26, and currently at 112.88 for + 38 gross pips.
The EUR/USD 30-min chart contains arrows pointing to February BAJA signals, with blue for wins and red for losses. The swings are numbered, in order to view how the BAJA did during certain conditions.
Up to the start of Swing #2, we saw 8 out of 9 signals as counter-trend.
The BAJA caught the reversal that started Swing #2, going up on Feb 7th. 4 of the 6 signals were counter-trend.
The BAJA caught the reversal at the top that started Swing #3 on Feb 9th. 4 out of 7 signals were counter-trend.
The BAJA caught the Swing #4 reversal going up on Feb 14th. 7 out of 12 signals were counter-trend. This move saw the most losses, 5 out of 12.
The BAJA caught the reversal that started Swing #5, going down on Feb 20th. This was a large pullback swing lasting only 3 days, triggering only 3 signals of which 2 were counter-trend.
The BAJA caught the start of Swing #6 on Feb 22nd, going to the upside to present. Thus far, there have been 11 signals, 6 of which were counter-trend. The BAJA suffered only 1 loss.
****
Notes regarding the posted log for EUR/USD Feb BAJA signals, which can be found at this link:
https://www.mql5.com/go?link=https://docs.google.com/previewtemplate?id=0ApbniYyOER5MdDlwTlc1RFpaYXBUNUlja183b0dyaVE&mode=public
Wins = 33 (75%)
Losses = 11
Average Win = 24 Pips
Average Loss = 18 Pips
Average Stop-Loss = 23
S/L > 30 = 7 (16%)
R/R 1.3:1
Wins >20 Pips = 16
Wins >30 Pips = 9
Losses >20 Pips = 4
Losses >30 Pips = 2
Gains <10 = Logged as Losses
Some signals had one “leg” (peak or dip) that was not in oversold or overbought level, as defined by 85/15 on RSI(4). These were noted on log with “Note 1” or “N1”.
As with the January example, we used a 41.5% capture rate of maximum 24-hour gain from entry.
Prior to that calculation, the BAJA generated gross gains of 20+ pips 82%, and 30+ pips 73% of all signals. This part of the analysis allows the trader the option to use a fixed number of pips for all or partial exit. Note that it would not involve moving the stop-loss.
We used 3 pips for spread and cushion/slippage. This aspect will vary and can impact results.
The last trade on log (and for the month) was pending at time of writing, but gains logged to that point.
Attached is the same chart as the previous post, with the February BAJA signals, but converted to a 4-hour interval.
We added the EFT cross-over version, and we can see it catch swings 1 and 2 in a timely fashion. The cross-over for swing 3 was there, slightly late. The level of the EFT at swings 1, 2, and 4 was extreme.
Note the divergence lines in pink color that would gives us advance notice of trend change. This was evident for swings 2, 3, and 4.
Swing #5 was actually a large correction (pullback). When we apply the fib retracement tool and plot from Swing 4 to swing 5, we see the 61.8% retrace to swing 6, before pair extended to its 138.2.
The EFT was at an exteme (overbought) to upside near the 138.2. That forced it back to the Swing 5 price level.
Now, on the last chart, we can plot the ABC for swings 1, 2, and 3. Swing #3 is a 61.8% retrace of A-B or 1-2.
Your fib expansion tool should have the FE 61.8 and 78.6 levels, as they become more relevant on higher interval charts.
This ABC plot saw the Swing #4 bottom as its FE 78.6.
Furthermore, Swing #6 was supported by the ABC's FE 61.8, which was also similar to the Swing #2 price level.
This is a good example of what we mean by "monitor the higher interval charts, and trigger on the shorter interval charts. While the EFT cross-over was good, the 30-min BAJA signal and its own trigger provided a better entry at 5 out of 6 major reversals.
Here is the USD/CHF 4-hour chart. The BAJA caught the reversal up on Feb 24th. The 2nd dip was the 16:00 candle, with 30-min trigger BUY entry at 20:00 price .9247.
The lowest pivot is .9233, which made this a very tight S/L, that can be leveraged well. Add 4-5 pips for stop-loss and input into the quick scale calculator to get number of lots to trade.
The MurreyMath_1.0 indicator is also on the chart. We can see the pair was below the 0/8th line suggesting oversold.
The fib retracement tool plot (yellow):
High = Feb 16th 12:00 .9738
Low = Feb 20th 19:00 .9429
161.8 = .9238 which was basically the Feb 24th bottom
Alternate fib plot:
High = Feb 22nd 00:00 .9505
Low = Feb 23rd .9307
138.2 = .9231
Let's take a look at the last 2 days, including the last 2 European sessions.
1) Feb 28th Euro Session:
ABC from the Asian Low to High to Pivot, produced the FE 127 top for European High.
BAJA divergence peak 30-min candle 13:30. SELL entry 14:30 price 1.3838.
Retraced to 78.6% fib at 18:00 GMT, based on plot Euro Low to Euro High, for about 58 gross pips.
2) Mar 1st Asian Session:
From plot Euro High to U.S. Low (the 78.6 of last move), pair retraced upward to 61.8% fib at 00:00 GMT, for about 46 gross pips.
BAJA divergence peak 00:30 candle. Sell entry 01:00 price of 1.3824.
Retraced to 61.8% fib at 01:30 GMT, based on plot U.S. Low to Asian High, for about 25 gross pips.
3) Mar 1st Euro Session:
Data 08:30 through 10:00 GMT. Pair bounce off bottom near previous day's U.S. Low, leading into Euro session.
BAJA divergence 10:30 peak candle. SELL entry 11:00 price of 1.3842.
Retraced to 61.8% fib at 12:30 GMT, based on plot Asian Low to Euro High, for about 30 gross pips. Pair did not want to advance past this area as it was support during Asian.
U.S. data at 14:00 and 15:00.
Purpose of last post and comments/chart was to isolate exits on BAJA trades, against total distance of moves generated by BAJA entries.
As noted, the moves reached certain fib retracement levels. Let's now apply a scenario whereby the trader chose to exit one fib level prior to maximum move.
We then would calculate the percentage of the move that represents.
1) Feb 28th Euro Session:
Entry SELL = 1.3838
Max gain (24-hours) = 58 pips
Max = 78.6% fib
Use 68.2% fib of 1.3795
Gross gain = 43 pips
Minus spread/cushion of 3 pips = 40 net pips
% of max = 69%
2) Mar 1st Asian Session:
Entry SELL = 1.3824
Max gain (24-hours) = 25 pips
Max = 61.8% fib
Use 50% fib of 1.3805
Gross gain = 19 pips
Minus spread/cushion of 3 pips = 16 net pips
% of max = 64%
3) Mar 1st Euro Session:
Entry SELL = 1.3842
Max gain (prior U.S. data) = 38 pips
Max = 61.8% fib
Use 50% fib of 1.3818
Gross gain = 24 pips
Minus spread/cushion of 3 pips = 21 net pips
% of max = 55%
****
Total 3 trades:
Max gain = 121 pips
Applied net gain scenario = 77 pips
% of max = 63%
The BAJA Log allows users to apply the percentage of maximum move pips captured. Input that % in the yellow box.
Amount of pips for spread/cushion can also be input or changed in the other yellow box.
A new blank BAJA LOG has been posted on google docs templates at this link:
https://www.mql5.com/go?link=https://docs.google.com/previewtemplate?id=0ApbniYyOER5MdHotMWZKWS04Q2IyTzVqd3J1bmltQmc&mode=public
The title is "Copy of BAJA Divergence Log Blank Template (Revised Mar 1st)"