A-B-C-D Trade - page 158
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1) Plot a Reverse Andrews Pitchfork on the 1-hour chart.
2) Align fib channel using technique interfacing with Andrew's Pitchfork, as previously shown. Make sure you have extra fib channel levels beyond default ratios.
3) Plot wide horizontal fibs, using clues found on last chart posted (blue fibs).
Update of our Reverse Andrew's Pitchfork (yellow) & fib channel (blue) plot from May 25th post #1541.
The May 23rd bottom was the FE 127, as noted. We added white horizontal fib retracement plotted from handle (1) to bottom. We won't show the vertical extensions as they are covered in other posts and accompanying pics.
Here we can see price action adhere to horizontal fibs en route up as S&R. The top had hugged the fib channel's 2nd line (B). When we pull the fib channel plot, it is the same, from A to B.
The move down paused briefly at the channel's 61.8% before making a direct hit on the 100%. That was also the 88.6% horizontal fib (white).
If pair breaks 100% channel fib, we anticipate the next level down, the 161.8, will be support.
Spectacular recovery by Euro, Especially EUR/USD. Same 1-hour chart attached shows pair regaining top.
Fib plot from bottom to 01:00 pivot high 1.43643, resulted in a 261.8% extension to 1.4456, which is same as previous 200% level. Slight probe above but settled back at fib level (which acts as support) thus far.
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Also attached is the Reverse Andrew's Pitchfork and Fib Channel plot for US30.
RAPF:
1 (Handle) = June 1st 05:00 high 12596
2 (upper Corner) = May 24th 13:00 high 12425
3 (Lower Corner) = May 25th 05:00 low 12247
The blue horizontal retracement fibs was based on wide plot:
Low = Apr 18th 12092 and High = May 2nd = 12918
BAJA bearish divergence at top. Revisit to May 25th lows (Lower Fork Corner).
Consolidation at the bottom gathered at the 78.6% retrace fib (blue) and intersected the 261.8% fib channel (white). Moon 225-degree acted as resistance thus far is wedge-shaped containment of price action.
And here is EUR/USD with Reverse APF & Fib Channel plot.
Updated price action since reversal at bottom shows hit at the same lower fork channel line (B) (3) as well as the 138.2% horizontal extension.
Here's EUR/USD split-screen, with 5-min chart on left and 1-hour on right.
We can see the 1-hour containing S&R. We focus on Moon 135-degree (red), and 314.2% fib channel (white). Also, fib plot Low = 1.43060 (June 1st bottom) and High = 1.44234 (June 1st high)., we have the 138.2 at area of top.
The 5-min chart has a "X" marking pivot at 16:20 high 1.44434. Plotting fibs, from low 1.44013 to 1.44434, we arrive at 261.8% fib for the top.
That cluster gave trader 4 reasons to short at the top. If trader requires a cross-over for entry, we can use the 5-min EFT. Entry is made after one red histogram closes, and upon opening price of next 5-min candle which was 1.45014.
The retrace plot is shown in white and identifies exit levels. Pair just broke support at the 23.6% fib 1.44865 and raced to the 50% fib 1.44570.
We can see on the 1-hour that this level has support by Moon 90-degree and former 200% fib (yellow). It was also the June 1st high.
That trade scenario was worth about net 40 pips. This is an example of monitoring a larger time-frame for additional S&R.
Here's an interesting 4-hour plot with the Andrew's Pitchfork, with AML indicator.
1) Handle = May 16th 00:00 low 1.40470
2) Upper corner = 08:00 high 1.43443
3) Lower corner = May 23rd 08:00 low 1.39682
The arrows are S&R points provided by "interior fibs" created by AML indicator. The instruction for this indicator was posted recently, and is also in the code. Mouse over each line for label name.
The pink arrows point to horizontal fib extensions 161.8% and 200%, which intersect diagonal S&R lines.
Horizontal plot: Low = May 25th 04:00 low 1.40122 and May 26th 12:00 high 1.42053. Top on June 2nd 16:00 is the 261.8% extension.
Current price action has been supported by AML's ML2 line since June 2nd 20:00.
Practice using these tools and go back periodically to see how the fared. This particular plot used an easy-to-see 3 points. Price complied very quickly as seen through May 26th. That is 3 days after low corner date, as well as pivot for High plot.
After that we wait for potential intersecting of horizontal fib extensions with diagonal AML lines. Sure to be additional clusters at those levels, just need to look for them now that you are familiar with certain tools. Example is fibo fan's 61.8 intersecting the 200% horizontal fib.
As usual, this info and skill in locating fib clusters is good for both entry and exit, as well as intraday or swing trading.
EUR/CHF testing 1.2200 support.
EUR/CHF testing 1.2200 support.
23.6 = 1.21860 (just hit)
The largest market-moving regularly scheduled data is NFP.
U.S. Non-Farm Payroll (Change) released at 12:30 GMT missed projection by a wide margin. U.S. Unemployment, released immediately after NFP also missed.
Projected versus Actual:
NFP: 54,000 vs 165,000
Unemployment Rate: 9.1% vs 8.9%
The economic Calendar recently linked will have these details. For immediate news of data, watch a financial show. FXStreet.com also excellent source of up-to-the-minute data as well as daily chartists projections.
We repeat that news/data trading bears extreme risks that include missed projections and whipsaw price action that can drag stop-loss orders. Trained "experts" ply these waters, and understandably most employ a large stop-loss.
The EUR/CHF short had to exit at near the 23.6% retrace fib of 1.21860 as above data due out. Immediate reaction to data was a large spike down to the 61.8. A fairly quick return back up was due to Euro strength in light of just reported preliminary agreement on Greek debt.
USD/CHF had been a one-way street down since 06:00, with the usual pivot ahead of NFP. Using those levels, the bottom was the 261.8 extension.
EUR/USD channeled between the Moon 135-degree resistance and Moon 90-degree support until data. Also had white 314.2 fib channel act as resistance.
The yellow horizontal line marks previous high of June 1st 15:00, which acted as support. The Mars 180-degree line intersected price action right at release time.
Plot for extension on 1-hour chart for good view was:
Low = June 1st 21:00 1.43060 and High = June 2nd 1.44210
161.8 = 1.46406 (hit 16:00 candle period) Mar 270 intersected Moon 225
Some of the Asian countries were closed Monday June 6th, but Japan was open.
Let's flash back to our original lesson, the breakout of the Asian high/low. For those of you that have been here since then, one year ago, you probably have a better grasp of how being familiar with support & resistance can assist us.
The attached 30-min EUR/USD uses indicator Time_modified 2. We adjusted the U.S. session start time to 14:00 GMT. This makes the color overlap the blue European session. We also have RSI(4) and EFT.
We want to plot a fib retracement. There are 2 choices for the low. The European low of June 3rd 12:30 1.44498 is too far for our intra-day use.
We have an up arrow pointing to the pivot low on the 14:30 candle of 1.45599. The high = June 5th 23:15, which is just ahead of the de facto Asian open of 00:00.
We see that it is pretty quite and range bound through the Asian session.
Last Friday ended at the 161.8 extension, with Mars 270-degree acting as further resistance. Sunday price action could not beak through to the upside, and bounced down to the 38.2% retrace fib area at 1:30 to establish session low (1.46211).
From the bottom, the pair made a choppy ABCD upward to the FE 100 (candle closed at FE 100). The candle's wick retouched the session high at the end Asian. This is a bounce trade entry for intermediate/advance level traders.
Now let's look at the bounce down off of the Asian high. It dropped slightly below the Asian low to 1.46153. Notice that the candles closed at the actual 38.2% fib. of 1.4619.
Breakout traders unaware of the 38.2% fib would have entered and likely stopped out on the spike back up. That movement up was a 88.6% retrace, which is also an intermediate/advance-level skill entry for a SELL.
The subsequent push down at 09:30 was successful in breaking that support. Switching to the 15-min interval will also show adherance to fibs. How can we tell that this push down was significant?
The 09:30 30-min candle closed at 1.46081, well enough below the Asian low. The 2 peaks prior to that had declining RSI(4). The 08:30 and 09:00 candles closed with a lower RSI than the 1st peak of 6:30-07:00.
The 15-min chart also shows the 09:45 candle closing at 1.46081. Price proceeded to bounce off the 50% fib and back above the Asian low. When we understand that these are natural bounces, we are not going to panic and immediately exit the trade.
One of the stop-loss options was (just above) the 23.6% fib level, which is about the same as the pivot high of 1.46364 on the 09:30 15-min candle. This made the risk about 30 pips, rather large considering the target options.
Fib action and probability has us targeting the 61.8% fib of 1.45966 as a safe exit level. However, the reward to risk ratio was not palatable if entered at 1.46081.
The HAS candles (not shown) were red from pivot, all the way to the 61.8, on both the 15-min and 30-min charts. The EFT also had declining strength at wider peaks. BAJA bearish divergence at top on Sunday.