A-B-C-D Trade - page 203
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Rumors again of BOJ intervention during this week has sent Yen weaker from open.
Early trading and low volume has seen gold products go up at week's open. Approaching previous Friday high of 1878.
Shorts layering in.
Using Aug 21st 22:00 open 1848 as Low, and High = 22:45 1875.75
38.2% retrace = 1865 (just hit) for Take-Profit Level 1
Conservative traders exit here. If entry was 1874.75, profit about $9 against S/L of 1880. R/R = 1.8:1
Can always exit portion.
50% = 1862 and XAU_USD is basically here now.
Orders at 1876 and 1877 not filled. Remember to cancel as another approach to 1878 resistance may end up breaking through. First approach always highest probability of bounce.
Here is XAU_USD 15-min. The black fib from daily identifying Friday's High as the 200% extension was discussed as a BAJA bearish divergence and short.
Blue fibs derived from tighter extension plot Friday. Red fibs are today's retracement fibs.
The open saw price spike up as it often does when there is fear over weekend developments/events.
Trading the bounce must anticipate that price may not reach the exact price of previous significant resistance. In this case, $1878.05 established on Friday 10:45 GMT.
Technique is to layer entry orders as price approaches vicinity of target. Here's one plan:
Target = 1878
Entry 1 = 1877
Entry 2 = 1876
Entry 3 = 1875
Stop-loss = 1880
We must calculate R/R based on each entry against TP levels. This would be an estimate as the top has yet to be registered when planning. We can use the entry prices as top temporarily.
The Low price was logically the week's open, price of 1848.10. There was a pivot low of 1844.88 nearby.
The market respected both lows. Using 1848.10 saw the 15-min candle close at the 50% fib. Using 1844.88 saw a precise hit to that plot's 50% fib by the candle's wick.
Approximate R/R trading to:
38.2 = 1.8:1
50% = 2.5:1
Blended R/R exiting half at each level = 2.1:1
1st chart is a continuance of the last EUR/USD 4-hour chart, but reduced to a 1-Hour interval with PSQ9. The aqua blue fibs are the same.
Fibo fan (yellow) from top pointing down:
High = Aug 17th 1.45162 Low = Aug 19th 07:00 1.42578.
Fan's 78.6% ray caught Aug 19th high.
Directional fib plot (white):
Low = Aug 19th 07:00 1.42578 High = Aug 19th 14:00 1.44513.
The period separator marks start of week.Lime green box brackets yesterday's Sunday's range (Aug 21st).
Early trading saw price respect the blue 50% and 38.2% blue fibs, and retracing 50% from the directional plot, prior to spike up during 07:00 European open.
Pair made a 127.2 micro-extension to the blue 61.8 fib. This level is intersected by the red Moon 90-degree. It is also the 78.6% retrace level of plot using swings of
High = Aug 19th 14:00 1.44513 and Low = Aug 22nd 06:00 1.43460.
That cluster of resistance was the set-up for a short.
Retracement plot (not shown) was very obvious:
Low = Aug 22nd 06:00 1.43460 High = Aug 22nd 10:00 1.44333
***
2nd chart is a 15-min focusing on the retracement.
Red dotted fibs derived from above Aug 19th/22nd plot.
Retracement plot/fibs in black.
Fibo fan plot using same low/high as retracement plot, had its 88.6 ray catch the bottom.
This is also the black horizontal 78.6 retracement level.
After retest of the red 78.6, HAS candles (not shown) were red all the way through the close of the European session end 15:00 hour.
The HAS or its histogram version is a tool used in attempt to keep trader calm through move. However, it lags like most indicators and other moving average-based indicators.
Targeting a fib and using other techniques is better than using the HAS to exit. Let's look at the RSI(4) at the 61.8 and 78.6 retrace levels.
The end of the 14:45 candle period registered a RSI(4) reading of 7 at the 61.8 fib. The 15:15 had a 27 reading with a pullback.
Therefore, it exit not taken at the touch of the horizontal 78.6, it should have been by the close of that candle. The fibo fan's 78.6 resistance and red 38.2 also there.
Gold CFD XAU_USD 30-min chart with PSQ9, Sunday range.
Fib extension fib plot (white):
High = Aug 19th 1878.05 Low = Aug 19th 1837.32
ABC (yellow):
A = Aug 19th 1837.32
B = Aug 22nd 1878.76
C = Aug 22nd 1863.47
The 1st blue arrow points to short we narrated at 22:30 peak.
2nd peak during 00:00 formed BAJA bearish divergence. We advised caution as it was 2nd test of Aug 19th $1878 high.
Maximum gain was $11 and $15 respectively, with S/L at $1880. Realistic R/R were 1.5:1 and 5:1.
****
Price made a 138.2 extension to $1895 during 07:00 period. This was also the FE 78.6 of the ABC plot.
The European session proceeded to sell off, perhaps ahead of psychological $1900 level and maintained pressure as stock markets rebounded.
The German DAX index had similar pivots (opposite/divergence) with 07:00 start of upswing, and 13:00 top. XAU_USD had 07:00 top and 12:30 bottom.
The 09:30 pivot was the Low for extension plot down (not shown) from the 138.2 top. Its 161.8 ($1862) was equivalent to the white 38.2 fib. That was also area of Swing C of ABC.
Price moved back up to the top after U.S. open.
CFD NAS100 daily chart, with Andrew's Pitchfork (APF) and horizontal fibs (yellow). Selected this example as APF plot easy to see.
APF:
Handle = June 20th low 2176
Upper corner = July 26th high 2437
Lower corner = Aug 9th low 1973
Did not show AML interior lines, but will update if price stays inside APF.
Horizontal fib plot is from upper corner to lower corner.
The APF's median line (center fork) acted as resistance on Aug 15th-17th.
This is the 50% level of the horizontal plot.
This was a SELL set-up.
Switch chart to 4-hour and apply fibo fan plot at Aug 9th low to Aug 15th high. The 88.6 ray caught move's bottom thus far. This is the horizontal retrace plot's 78.6 (not shown).
Low = May 5th 1462.05 High = Aug 10th 1814.94
127.2 extension = 1910.93 hit Aug 22nd
BAJA bearish divergence:
1st peak is High with RSI(4) reading of 96
2nd peak the 127.2 with RSI(4) of 94
Price had came down $22 from high of 1912.
2nd chart is intra-day.
Attached is continuance of EUR/USD, 30-min with PSQ9 and lime green Sunday range.
The German Zew data missed forecast badly at 09:00 (arrow).
Fibo fan: High = Aug 17th 13:30 1.45162 Low = Aug 22nd 05:30 1.43460
Low was moved from previous location as price ascended.
Horizontal fib plot (wide - blue) is same as advised earlier in 8-week post.
Fib Extension plot (white Swings B-C:
High = Aug 19th 14:00 1.44513 Low = Aug 22nd 06:30 2.43460
We spoke about the short at the Moon 90-degree and blue 61.8.
Today, the pair plunge after the German ZEW, bouncing off the cluster of resistance at the
blue 78.6, white 138.2/127.2, 86.6 fan ray, and Mars 90-degree.
Retrace plot (not shown): Low = Aug 23rd 05:00 1.43631 High = Aug 23rd 09:00 1.44989.
Price dropped all the way down to the 88.6 retrace fib. Also in area of blue 50%, Sunday range high, fan's 50% ray, and white 61.8.
HAS candles, even on the 15-min, offers assistance/guidance en route down.
Trading EUR/USD up today had a couple of hints.
BAJA bullish divergence 2nd dip at 23:30 (30-min chart).
Price bounced off blue 50% at 02:30 prior to extending further.
Break of key resistance/previous high at blue 61.8 during 07:30 candle period (breakout trade).
After initial pullback at the blue 61.8, HAS candles remained blue all the way to top on 30-min chart.
*****
We converted same chart to 15-min (attached) and highlight the BAJA bearish divergence at top. Note that lower time-frames will have more false signals or formations that don't pullback as much.
In this case, with the cluster of resistance, it was another confirmation for the short.