A-B-C-D Trade - page 242
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
1-hour PSQ9. Horizontal fib plot:
High = Oct 19th 12:00 1.58466 Low = Oct 19th 19:00 1.57504
Price made a 161.8 extension today during the 06:00 period. The European session starts at 07:00 and reversal tot he upside occurred.
The Fib Channel (FC) plot Moon 180 pulling up to Moon 270.
The 161.8 extension was to the FC -31.4. The move up hit the Moon 315, and near the FC 61.8.
Another swing down after U.S. data 12:30 and 14:00.
One of our points here is the support now at the diagonal levels. In other words, don't chase it down, it could be too late and considered more risky (intra-day).
At the moment, price has just bounced off the -40.
We have all heard the description. Markets move up and down (trend), but most of the time it does not (consolidation or range-bound). We see it operating in a diagonal fashion.
As mentioned, if you make 200+ plots using the fib channel tool and PSQ9 (on 1-hour), you will see how the channels are respected.
Caution; Greek P.M. just made a statement about vote will pass. This might impact EUR/USD, at least on intra-day basis.
Here's the trade scenario off the bottom after end European. Takes some guts to counter-trend trade, so as we always say: reserved for experienced traders.
Split-screen has 3 charts.
15-min with session colors, fib plot European High/Low has 23.6% retrace as TP 1.36993.
Middle chart has MML and red line at previous low.
Right chart has PSQ9 and fibo fan as support.
Price just hit our TP.
Price stalling for a reason.
Plot your FC from Moon 90, pulling up to Moon 180. This is the FC 31.4 level.
Here's that chart. This is not a coincidence that price is stalling here. Next resistance is horizontal 38.2.
EUR/USD continues to make nice swings for the intra-day traders. The never ending European saga has more acts.
ECB's Trichet spoke early European and basically pointed the fingers at the politicians again. Nobody forgets that the ECB raised rates earlier this year and that did not help the "peripheral" nations.
EU summit this weekend, and it looks like the market is betting on some goods news as equities and the Euro are up.
****
Attached is a 1-hour illustrating a 161.8 extension. Upswing started at 08:00. The 161.8 was hit during 13:00 period which has U.S. open at 13:30.
If we look at the 15-min session colors chart (not shown), we can see break of Asian High. There were 2 pivots en route up, on 09:30 and 12:00.
Here's the view with PSQ9 and FC aligned to Moon 45, pulling down to Moon 315.
We can see the top (161.8 extension on last post) is a -31.4 overshoot of Moon 315.
We labeled last 2 day's peak, and how it aligns from a diagonal basis.
Oct 17th aligned with Moon 45
Oct 18th and 20th peaks aligned with Moon 315.
Oct 19th peak aligned with today's peak on the -31.4.
Same chart as last post, but with Andrew's Pitchfork.
APF plot:
Handle = Oct 17th High
Upper corner = Oct 19th High
Lower corner = Oct 18th 09:00 Low
Align fib channel to middle fork, pulling up to upper fork.
This produces FC 161.8 at today's High, intersecting the aforementioned FC -31.4.
Attached is AUD/JPY 1-hour with PSQ9. Fib channel plot is Moon 135 pulled down to Moon 45.
Horizontal fib plot: High = Sept 26th 00:00 75.401 Low = Sept 26th 06:00 73.374
The 2 yellow price labels are:
75.050 = S/L at -40 fib channel
74.932 = SELL Entry at -25 fib channel
The Sept 26th 11:00 period high was the hit to the -25 and 78.6 horizontal retrace fib.
74.463 = Green price label Take-Profit (TP) at FC +31.4 (add spread & cushion)
Reward = 43 pips Risk = 15 pips Ratio = 2.9:1
If trader made 10 of these R/R trades per month, and only won half (50%), profit = 18% per month. Account of $10,000, at 2% risk per trade, would average $1,800/month.
Here's a 1-hour EUR/USD chart with PSQ9 and Ichimoku.
Fib channel plot is from M315 pulling down to M225 (90-degree interval).
The large move down from Aug 1st 10:00 had to retrace at some point. It started its retrace at the 15:00 period. We proceed to make a horizontal fib plot.
Trader is waiting for price to touch the area of the -25 level for SELL entry. Price action below the Ichimoku clouds denote downtrend, therefore trader is attempting to trade in direction of the trend.
This supports the assumption that price action upward is a retracement only, and price shall resume in the trend direction.
Aug 2nd 00:00 had price hit the -25 level. This is also near the 38.2% retrace level (gray).
This time, we're looking for TP at the FC 61.8. Price arrived there during the 06:00 period, which intersected the 15:00 period Low 1.41869.
*****
Here's the math:
-40 = S/L
-25 = SELL Entry
+61.8 = TP
The pip distance between Moon lines is about 55 pips. We are pulling the fib channel plot over 2 channels. That means the distance is 55 X 2 = 110 pips.
The S/L risk is 15% (difference between -40 and -25). Multiply that by 110 pips = 16.5 pips. A SELL must add spread. Also might want to add cushion.
S/L risk with spread and cushion of 5 pips = 22 pips.
TP calculation: Entry 25 + TP 61.8 = 86.8%
110 pips X 86.8% = 95 pips reward. Minus spread and cushion = 90 net pips
Reward/Risk = 4:1
At 2% risk per trade:
10 trades per month, while winning only 50% = 30% return.
6 trades per month, while winning only 50% = 18% return.
****
The diagonal nature of the channels has the R/R moving as time elapses. Buy positions increase in TP and decrease in S/L. Opposite for Sell positions.
Over a large sample size, the number of Buys should be about the same as the number of Sells, which nullifies the fluctuations in R/R.
Therefore when working with systems using S&R, the Reward/Risk ratio can be close to constant.
This is in contrast to momentum systems, such as MA cross-overs, and derivatives of such.