A-B-C-D Trade - page 198
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Good exit point at very nice profit
US30 hit the 138.2 precisely within 15 minutes of short. This level is also the 23.6% retrace using Low = 10,614.
While it may go further down, this trade was successful and basically as easy as it gets. When you learn how to recognize the signs ahead of time, and have a plan, you WILL DO VERY WELL.
The math on the last trade was a reward/risk ratio of 3:1.
Let's say a trader waits for great set-ups like this and trades 15 times per month, and wins 70%. A starting balance of USD 25,000 will have an average annual return of 324% or USD 81,000 (non-compounding). That would be USD 6,750 per month average.
Here's a chart that can be filed away for possible reference at a later time.
Let's look at the 1-hour EUR/CHF, which spiked up yesterday on news that the Swiss government is actually considering pegging its currency to the Euro.
We have MurreyMath1.0 and PSQ9 Mars 180-degree.
Wide fib plot (blue): High = July 22nd 1.18910 Low = Aug 9th 1.00673
Retrace fib plot (yellow): Low = Aug 10th 1.02516 High = Aug 11th 1.09190
Week's Sunday High = 1.09255 Sunday Low = 1.08562 (gray dotted lines)
The 2 white "X" marks H/L points for tight fib extension plot.
High = Aug 11th 14:00 1.09190 Low = Aug 11th 16:00 1.06846
We labeled 1.09800 level for short. Cluster of resistance includes:
- Mars 180-degree (red)
- Wide 50% fib (blue)
- 127.2 extension based on tight plot (not shown)
- 5/8th Murrey Math Line (green)
The pair had bounced off the Sunday High at the end of yesterday's spike up. Therefore, any retest will have a fight between the bears and bulls. There will also be stop orders up there.
Once the Sunday High is breached, our SHORT PRICE will provide the next resistance for a bounce trade.
S/L above tight 138.2 1.10085. Conservative Take-Profit = 1.09190 (High)
Reward = 55 Pips (including spread/cushion)
Risk = 35 pips (including cushion)
R/R Ratio = 1.57:1
EUR/USD made a breakout of the Asian Low of 1.07360 to aforementioned pivot of 1.06850 (yesterday 16:00), for +51 gross pips.
Natural bounce to 1.07302 thus far.
EUR/CHF now in area of short opportunity.
EUR/CHF short at 1.09800 area only produced small bounce of 20 pips to 1.09600.
Pair is above the 138.2 of 1.10084 with 161.8 at 1.10636.
Another plot is being respected, using
High = 1.00856 and Low = 1.06837. Its 200% = 1.10352 (just hit and bouncing)
The 161.8 = 1.09781 (which was our short price)
Moon 0-degree also at current area.
Original S/L would produce a stop-out.
gap in crude fills today in us mkt
yes, thanks james.
USOIL made a 127.2 extension during Euro session. Plot = week's high/low.
Support for the last ratchet up was wide fib plot's low of 83.84 (Feb 15th). That level also the 88.6. Attached is 1-hour session color chart.
2nd chart is 1-hour (mimics Dow 30 futures). We have PSQ9 and that s US30ame yellow horizontal line at price 11,260 representing Aug 12th 2010 price at start of QE2.
We mentioned the short off that resistance during yesterday's Asian. We plotted ABC with swings:
A = Aug 11th 11:00 low 10,614
B = Aug 11th 19:00 high 11,276
C = Aug 12th 07:00 low 10,925
FE 61.8 = 11,337 (hit 15:00) Bounced back down to yellow line
The volume is not presently there at this point There was divergence between RSI(4) going up and MFI going down. End of volatile week, but day trader's dream.
U.S. data includes negative Consumer Confidence at 13:55.
Note that some countries in Europe have banned short selling in their stock markets. This is a controversial strategy as critics cite 2008 lock-up in legitimate counter-party transactions.
Let's take a look at this instrument's turning point at the bottom. On the 4-hour, we have an ABC plot (blue) of:
A = Aug 3rd 12:00 high 93.73
B = Aug 5th 04:00 low 82.73
C = Aug 5th 12:00 high 88.18
We then saw 2 dips, the 1st was Point B, and the 2nd dip was during the Aug 9th 00:00 candle period.
The 2nd dip hit 75.68, which was the 161.8 regular extension level (yellow). This 00:00 candle closed at the FE 100.
The close of the candle also produced a BAJA bullish divergence. Notice the MFI (set on default 14) in agreement with divergence.
If using an EFT trigger, the 30-min open price at 03:30 was 77.71 for entry.
When price got to area of Point B, there was a natural bounce (and some traders trade it). This is a logical take-profit target for conservative trade off the BAJA.
Reward/Risk about 5.00/2.50