A-B-C-D Trade - page 191
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Attached 30-min EUR/USD chart with session colors, has black dotted lines as wide fib plot based on July 27th High/Low.
The purple fibs are the intra-day plot: High = 03:00 1.43994 Low = 07:00 1.42557.
Pullback was 38.2% to 1.42966
!27.2 extension = 1.42840 (hit 10:30)
2nd chart is updated 1-Hour with SQ9(Price and fibo fan)
Negative U.S. economic data at 12:30/13:45/13:55.
Along with U.S. debt ceiling & budget "stare-down", EUR/USD spikes up, trumping Moody's review of Spain for possible downgrade, at least for now.
President Obama just made a quick speech. It was less confrontational with the opposing party, and somewhat grim.
The U.S. credit rating is at stake, and the political parties are playing with fire. There will be tremendous backlash from the U.S. citizens if the inept law makers don't have a meeting of the feeble minds to resolve this.
The law makers receive a special health plan as a perk for their duties. Perhaps this should be removed, along with removing the top representatives on both side.
Another vote scheduled for later today. This is Friday, therefore the market will be indecisive and jockeying for position going into the weekend.
The big mover was EUR/CHF, which is logical as the USD is underpressure, and a flight to safety into swissy.
The attached 30-min chart uses PSQ9 with an ABC plot: July 28th swings 08:00/12:00/15:00. This produced a FE 161.8 = 1.13175 which was hit at 12:30 today. The moon 90-degree right there at bottom.
There was a small bounce off aforementioned 1.14032 support, up to 1.14173 (and Moon 180-degree), which is the Point B price level.
Support broken during 12:30 due to negative U.S. data and political situation, extending to the FE 161.8.
***
EUR/JPY swung in opposite direction, and made rebound up after negative U.S. developments. Fundamental traders might be concerned that Japan has heavy U.S. debt exposure.
Attached 30-min chart has PSQ9 and fibs from plot:
High = July 29th 00:30 111.434
Low = July 29th 06:30 110.580
Pullback was 50% and met by Moon 270-degree at 09:30 today.
Extension to the 127.2 at 12:30 was quick, before reversal to the upside. Pair is currently at the 61.8 of 111.108
Attached is updated chart, where we can see current price sitting on the left fib channel plot's 161.8 extension line.
We circled the points of the channel plot A-B, which was automatically generated by this indicator. It can repaint/adjust. Therefore we drew yellow trend lines to protect against losing the plot.
When we use the fib channel tool, manually, and pull from the top circled point to the low circled point. This will produce the 161.8 to confirm the indicator's action.
This is a continuance of our 4-hour plot with APF and fib extension. When we switch it to the 1-hour (not shown), we can see the spike up after the negative U.S. GDP data was released.
We don't want to chase the market as these kind of situations can whipsaw. Instead, we can wait in the tall grass at the 161.8 level of 1632.53 and trade a bounce down. Institutional traders lurking there both manually and with robotic algorithms.
Plotting the retrace uses 07:00 Low = 1610.49. The 50% retrace just hit at 1621.41 represents a $10.00 decline. The R/R ratio is at least 5:1, depending on entry fill.
Dropping down to the 5-min interval (2nd chart), you can see that the market moves very fast at these tops/bottoms. Therefore, a conservative automatic SELL order needs to be well below that 161.8.
There was a Double Top as well, with the 2nd hit after 13:45/13:55 data.
Let's say 1629.00 was a reasonable entry price. S/L above high. That's still a good R/R, even if trading to the 38.2%
Here are:
EUR/USD daily chart and template using the bumasoft aspectarian indicator. We set it on Moon (1) and Earth (14), and at each 1/4 turn aspect angle (degree):
90, 180, 270, and 0 (same as 360)
We color coded each angle degree and plotted vertical lines. Also on chart is RSI(4) and EFT.
We added eclipses to highlight signals that were in overbought/oversold levels, including instances where the preceding candle was OB/OS. The RSI(4) used 85/15 as OB/OS levels. Some examples were just shy of those levels.
You can download the indicator at the proprietor's web site for free at marketnaturalcycle. Here is link: NaturalCycle - Harness the power of market cycles
Once you have that in your computer, you can download this template. It can be used for other currency pairs or instruments on the MT4 platform. To remove the eclipses, click "chart", then "objects" to view, then select each and delete. After deleting, you can save template again.
We'll post the template using other planets, hopefully this weekend. Just remember that nothing is ever perfect. If it was that easy, we wouldn't have buyers AND sellers. Everybody would be on one side of the trade.
Our suggestion to use or analyze pairing it up with OS/OB is just that, a suggestion. Please be analytical and see if you can improve it.
Obviously, plotting fibs would give us additional assistance.
Cheers.
Here is a daily chart on SPX500, which is a Contract For Difference (CFD) that tends to mimic the Standard and Poor 500 Futures (SP500).
We applied the same template that was attached on the last post. We noticed the white 0-degree (same as 360-degree) aspect caught some good turns. We placed lime green colored arrows pointing to those signals.
Out of the 6 signals, going back to January,
4 had overbought or oversold conditions based on RSI(4) 85/15
4 had caught turns
Here are the dates:
1) Jan 13th SELL
2) Feb 9th SELL
3) Mar 8th SELL (not OB/OS)
4) Apr 4th SELL
5) May 2nd SELL
6) June 26th BUY (not OB/OS)
Signal #1 was a loser. Signal #3 did see a down turn the very next candle. Obviously money management needs to also be applied. If the stop-loss was placed at the high pivot prior to the signal, this was a winner.
July 24th also had a signal, but we omitted it due to news that the U.S. Debt Ceiling talks collapsed, which was announced after the market closed for the week on Friday. July 24th was the following Sunday. We can see the gap down at open Sunday, and it did make that signal a winner too.
The other eclipses identified other aspect angle signals that had OB/OS conditions.
These are swing trades, and the trader needs to stay in despite the small fluctuations.
The indicator HMA_Russian_Color was overlaid onto chart to illustrate trend. This can be substituted by another trend indicator of your choice. It can also prevent entry on false signals.
We recommend using S&R and of course money management.
To be analytical, try the template on different pairs and instruments to see which aspect seems to work best for each. Also try different planets. Saving your plots on templates makes it a lot easier.
This chart merges the vertical turns generated by Moon-Earth 0-degrees, with a fib plot.
Low = Mar 16th 1246.0
High = Apr 6th 1340.6
To get to the High, use the Low and a high of Mar 28th 1319.9. The peak (High) of 1340.6 was this plot's 127.2 extension. This was the location of the first signal.
We illustrate the last 4 signals on:
Apr 4th (SELL), the 127.2 micro-extension as described above. RSI(4) above 83.
May 2nd (SELL), the regular 127.2 extension. Previous candle's RSI(4) = 91.
June 26th (BUY), was a retest of the 88.6 fib. Candle closed at RSI(4) = 32
July 24th (SELL), gapped down on Sunday, below the High. Down to 61.8
***
When applying indicator Murrey Math Line X for SR (not shown), we get:
Apr 4th - just below 6/8th
May 2nd - precise hit to the 8/8th
June 26th - candle closed at the 1/8th
July 24th - 6/8th was exact resistance
Note that these MML indicators adjusts and the number changes. They can also be different when applied to different intervals. We used this version of MML because it gave us more levels for this particular chart versus MurreyMath1.0
Attached is EUR/USD 4-hour, with period separators that partition each week. Right click on the chart. Click "properties", "common" tab, and check "period separators".
The 1st candle of the week incorporates all of the trading (4-hours) on Sunday for this broker. You must use a broker that offers Sunday trading. In this example, trading starts at 21:15 GMT Sunday each week.
We have Heiken Ashi Smooth (HAS) candles, RSI(4) and EFT. We labeled the approximate number of pips gains, yellow to the downside and bue to the upside.
What do you see on this chart? You should see enough guidance for you to devise a pretty simple technique to take advantage of these movements.
One might be to simply draw horizontal lines on the high and low of the Sunday candle, and trade the breakouts. Add money management. Decide how to place your stop-loss. Would it be 20 pips above/below the Sunday high/low?
Often we can see that the initial direction ended up reversing. That is O.K., as long as you have a certain rule in place to exit and take the reverse direction. This can be your thinking:
After I moved my stop-loss on the SELL position to break-even, I stopped out when the market reversed. I then waited for the break of the Sunday high and entered a Buy.
I placed the S/L below the low just established. The HAS helped me stay in the trade going up. I moved my S/L every few days in accordance to my rules.
I plotted fibs to ascertain how price action is behaving and where it may be going upon certain events. I also used them for trailing my S/L.
My maximum loss tolerance per week is 3%. My maximum risk per trade is 1%. I will scale each trade to the number of lots.
***
Trading doesn't have to be complicated.
Same chart, but with swings on each move, using fibs. BAJA divergence also marked.
Sorry, can't detail each one, you'll have to look at the chart.
Media outlets are reporting that a tentative U.S debt deal has been reach. The Republicans are not announcing the same yet. If the compromise is confirmed, it will go for ratification vote, likely on Monday.
Apparently there is concern that the proposed amount of cuts to the budget may not be enough to satisfy the credit agencies.
We are seeing a slow initial reaction pro-USD, such as in EUR/USD just ahead of the Asian open.