A-B-C-D Trade - page 172
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After EUR/USD and ERU/CHF made their pullbacks, and after US GDP and Durable Orders, both pairs made extensions to the downside. USOIL followed suit and neared yesterday's low.
EUR/CHF touched the 2/8th MML, which is also the FE 78.6, and the wide (white) 161.8.
EUR/USD bounced at its FE 78.6 and probed just shy of its FE 100 and fibo fan
USOIL made a 161.8 to 89.83, and we can see that it was choppy en route down.
All of these swings can be seen easily live time.
We made this plot on the 1-hour when the June 24th 00:00 candle hit the 50% horizontal retrace fib. That peak was confirmation of APF plot since candles respected the Lower_ML1.
Handle = June 20th 08:00 low 1.04950
Upper corner = June 22nd 15:00 high = 1.06494
Lower corner = June 23rd 13:00 low 1.04540
Add AML indicator for interior fibs.
AUD/USD is a currency pair that reacts to commodities movement, since Australia is rich in that category. With the IEA intervention in the oil market, releasing from the strategic reserve, we expected this pair to move.
AUD/USD also generally moves in the same direction as EUR/USD. If you place the 2 pairs side-by-side, you'll see the similarity in the pivots/swings.
When EUR/USD made its move up during the 30-min 08:00 candle, so did AUD/USD. Both made new intra-day highs. AUD made a 161.8 extension and met the Upper_ML1.
We've attached another 4-chart split screen pic. This time, we have AUD/USD at the upper left to be next to EUR/USD. The lower left is USOIL.
We placed 2 pink arrow on USOIL, pointing to the 09:00 peak and 12:30 GDP peak candles. USOIL did not make a new high at this 09:00 peak. EUR/CHF had this same aspect.
Times of uncertainty and fear, always look at the CHF. A 2-day meeting in Brussels between EU Finance Ministers may emerge with more verbiage.
They tried to calm markets prior to meeting with news of a Greek 5-year austerity plan approved by IMF. This needs to be ratified by the Greek Parliament, which is far from being automatic.
Aggressive comments from the IEA after intervention was a warning to oil speculators.
FED/Bernanke realize "recovery" is slower than anticipated. With no comments on a possible QE3, markets are generally seeing weakness immediately ahead.
Right now, USD is a safety vehicle, along with CHF. Commodities took a step back due to perceived lower demand ahead. Gold went along since at those price levels, it is considered a risk asset.
Let's spend a couple of minutes on trailing stop analysis. The attached 30-min EUR/CHF chart employs the EFT and a MA(48).
We attached a exit Ea TrailingWithPartialClose. Don't have the instructions for this. Keeping it simple, we'll point out one of the options on this EA. It is called the Type 6 or ts6.
After we first input: TrailingStopType with 6, we can go to the settings for ts6. The chart zooms in on the settings, which should be:
TrailMA_TimeFrame = 30
TrailMA_Period = 48
When we watch charts, there is a certain amount of down time when nothing is happening, or channeling has occurred. We can use this time for analysis.
We can see the MA when set on 48, provide resistance at the areas marked with the yellow "X". Price also respected this setting during consolidation.
The 09:00 candle pierce the MA(48) slightly but was contained by the High. It is at this point a trader who enters a SELL position must place a stop-loss. Using a price just above the High is the start.
As price action dropped back below the MA(48) after the 09:00 candle period, we either take profit at some point during pair's descent, or stay in for the longer trade.
If the trader stays in, the S/L should be moved or trailed. Since this is a long stretch of time, a trader without help from a partner, must either stay up or place trade in the hands of an EA.
Note that trader still should program a take-profit. The EA is only the trailing stop.
The 12:30 U.S. GDP can be a market-mover if the figure comes in different than projected (consensus), resulting in whipsaws that can drag S/L.
We don't recommend the intra-day trader staying in during data. This is due to the small stop-loss associated with intra-day trading.
If an experienced trader has already entered much earlier, and is willing to risk those profits and perhaps a little more, then certain situations might be palatable.
In hindsight, it wasn't worth staying in beyond the 1st hit on the 138.2 (reward/risk from that point and obvious previous 2/8th MML low near). However, this is a good study example of decision making with the trailing stop analysis, and use of an exit EA.
If trader stays around, S/L can be placed manually above each pivot's high.
Will probably start a thread in the indicator or systems section entitled "Exit EAs or Scripts. This should make it easier for viewers to find. Meanwhile, we can deposit them here. We'll try to remember using the tittle "FOR DOWNLOAD", enabling viewers to use those key words in "search this thread" function.
Here's a 1-Hour chart on AUD/USD with PSQ9 and horizontal fibs (white).
High = June 3rd 1.07738
Low = June 12th 1.05231
This fib plot was obvious, as high is month's high, and low is due to large pullback from it.
The red Mars 180-degree was generally running along side the low for support and the Mars 270-degree acted as resistance on top.
When we zoom in on the extension (chart #2) on June 22nd-23rd, we'll see the probe above the Mars 270 for the top. The RSI(4) reading at this 2nd peak is slightly lower, and therefore considered bearish divergence.
The pair descended and pivoted at the Mars 180 registering a 23.6% retrace, which also intersected the Moon 270.
Price extended to the 161.8 (yellow), and virtually the same as the aforementioned wide FE 127.2 (white). The Moon 180-degree also there.
The EFT histogram remained below the zero line to keep trader calm en route to extension target.
Here's a EUR/USD 4-hour with this indicator. We had posted examples last year, but it deserves another mention.
We need to turn on the grid. Inputs tab:
Show_GridMatrix = true
Show_GannGrid = true
For this example we changed the green up trend line setting to yellow color for better viewing. That can be changed in the color tab.
On the attached chart, we can see price action conform to the grid's diagonal lines. Gann believed a trend moves at a 45-degree angle. When we use the GannBox_144, that 45-degree line is the red 1/1 angle line.
This channels provided generally contained the trends going up and down. If it broke the channel, price was usually subsequently boxed into the next channel.
The GridMatrix controls horizontal and vertical lines for additional S&R. This indicator locks in the scaling, preventing the grid lines from moving.
The red and blue arrows point to the breakout of the trend lines. Like other similar arrow functions working with trend lines, they can create false signals. We have to filter out some of these.
The calculations are extracted from info of the last 120 candles (default). Indicator also should be manually refreshed.
Updating comments on this plot. It uses Start price = 1.39682 from May 23rd,
May 31st, pointed out the hit to the 360-degree en route up
June 9th, we detailed the ABCD to the FE 78.6 top.
June 10th, reported the Head & Shoulders.
June 16th bottom was a 161.8 extension from the June 7th High and June 12th Low.
June 16th Low to June 17th High produced a 138.2 extension on June 22nd at the 360-degree level for the TOP.
- Notice the June 17th High had the largest pullback, that qualified it as the best selection for the plot. When the 138.2 was projected in advance, it also aligned with the 360-degree making this a likely level for a good size bounce or reversal.
- The EU Consumer Confidence data out at this top 14:00, just ahead of 16.30 U.S. Rate Decision and 18:15 Bernanke press conference.
- The other fib levels from this plot acted as S&R, including the June 23rd pivot at the 78.6 fib. The bounce went up to the 23.6 fib.
- As is the norm, there are micro-swings. An example is an ABC from the June 16th bottom, using the 1.42210 level of resistance as Point B. This produced a FE 200 for the top, as well as the FE levels en route up.
The post-Bernanke plunge was a 200% extension based on the pivot of 1.42853. The upward trend line was broken at 20:00.
Other notes:
The master plot had High = May 4th 1.49388 and Low = May 9th 1.42826
After the initial break of the Low, price made a rebound to that level on May 12th. This is similar to an ABC where Point B produces a support or resistance bounce.
The May 23rd bottom was a move of 720 degrees, or 2 cycles of 360.
The June 7th top was the 61.8 retrace fib of master plot. As evident by the SQ9 ratios, Gann used 1/4, 1/2. 3/4 and 4/4. The retrace to the 540-degree level is a 75% retrace of the 720 degree move.
The 360-degree was the 50% level of the master plot. It produced large bounces 3 out of 4 times.
May 13th low was the 127.2% extension of the master plot. The level also acted as support on June 16th.
The 270-degree has also been significant. This represents 37.5% of 720-degrees, which is close to the fib ratio of 38.2. Well documented that Gann's ratios were close to fibs ratios.
AUD/USD opens week lower, and below APF plot's lower fork. Natural bounce off previous low of 1.0454 has bounced 18 gross pips thus far. Plot fibs as pair now at resistance 78.6 fib based on High = 1.5453.
AUD/USD broke support and hit the 127% extension, moving further down now. The 161.8 = 1.4073.
EUR/USD facing it's support now. The 2 move in tandem, so shorts on auzzie take notice of any bounce on EUR/USD.
AUD/USD
Touch at 104615 is also the wide 138.2 extension form high/low of June 3rd and June 12th.
Mars 90-degree is at this level too.
Here we go.
Let's also apply the PAMA GannGrid to AUD/USD on 1-hour chart.