A-B-C-D Trade - page 253
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Our Nov 5th post with the US30 (mimics Dow Jones 30 Futures) 4-hour GannBox_144 plot used a height/width of 4500/360.
We now want to confuse viewers even more by overlaying 2 more plots:
1) Standard Deviation Channel (SDC) plot (orange): Oct 4th 08:00 and Oct 27th 16:00
2) Fib channel (FC) aligned to SDC's upper and lower channel lines.
Price broke the red 1/1_angle and dropped down to the blue horizontal 36 line. This is where the SDC's lower channel provided support.
Price walked up that channel line until break down on Nov 9th. That break also breached GannBox yellow HLine1.
Price pivoted at the FC 31.4 on Nov 10th, and intersected GannBox blue 1/2_angle3.
Trade opportunities include the breakout of the SDC lower channel line, going down as far as the FC 31.4. Next would be a reversal off the bounce at that FC 31.4.
Attached is 30-min with ABCD. The ACB swings were yesterday 07:00/16:30/18:30. Thus, joining a move-in-progress during today's Asian.
Swing C was a 50% retracement of A-B. Point D was at the FE 100 1.34326.
Today's early European session saw pair rise back up to the Swing C level 1t 10:00. Once EUR-Zone CPI data was released (as estimated) market started to short.
Bank of England verbiage included "EUR lack of credible plan affects U.k."
We can also see the MurreyMath1.0 levels at each swing. The 10:00 top is also a 138.2 extension of Asian High/Low. On the PSQ9 chart, the top is at the Moon 90-degree. Point D is at Moon 0-degree.
This 1-hour PSQ9 chart utilizes SDC low-to-low plot Nov 10th 07:00 and Nov 14th 17:00. We align the fib channel to SDC's upper and lower channel lines.
We can see the Nov 10-11th adherence to the -31.4, which is a good confirmation of plot. Today's 06:00 pivot low was at the 131.4% expansion, and Moon 0-degree.
After the 10:00 data and staying on the sidelines, trader can join short.
Entry 1.34762 after price dropped below FE 61.8 (on ABC chart).
TP target is just above diagonal 131.4 of 1.34384 plus spread and cushion = 1.34400.
S/L 1.34960, just above 1/8th MML.
R/R 36/20 pips and ratio = 1.8:1
The last example saw pair halt its decent at the 78.6 retrace level, bounce up and stop-out. We added the retrace fibs to the session colors chart on the left.
Understanding why we lost is important. We see the fib and how the market respected that.
We also managed the risk, as it only represented 7/10th of 1% on account balance. We declined to exit when the R/R was 1:1, at that 78.6 fib.
Sometimes, we can exit under those circumstances, but we can't regret it when we don't. Don't beat yourself up over one trade.
Here's the Contract For Difference (CFD) that is similar to the S&P 500 Futures.
This 1-hour SPX500 chart is a continuance of our plot aligning the fib channel (FC) to this week's Moon 0-degree and Moon 270-degree.
We pointed out the Nov 10th 07:00 hit to the 31.4 expansion channel. The 2nd hit to that occurred on Nov 15th 11:00. As mentioned in another post, some traders trade off the 3rd bounce of a trendline.
Prior to that, price rose up to the -31.4 on Nov 15th 18:00, offering a SELL entry point for traders experienced with that technique (OS Trade). At 2% risk, a trade from -31.4 to +31.4 has a reward/risk ratio of 4.25:1, with generous allocation for spread and slippage.
The 3rd hit to the 31.4 was this morning during the 05:00 candle period, marking a low of $1241. S/L at 40 level $1235.
As with our example on EUR/USD, price made a top at the 10:00 period, when EUR data released. Therefore an exit of this BUY position must be effected before 09:30 and 10:00 data.
Price closed at $1256 at 09:00, for a gross gain of $15.00. Net R/R $14/$7 and ratio of 2:1.
The 31.4 continued to act as support through today's U.S. session.
Attached is a 30-min chart of the CFD US30, which is similar to the DOW JONES 30 Futures.
We try to use obvious plots in our examples. In this case, the Standard Deviation Channel (SDC) uses high-to-low of Nov 13th 23:00 and Nov 15th 11:30. Note the high was the open of week, therefore your broker feed may differ.
Yellow check marks label confirmation after plot was made, at hit to upper channel Nov 15th 14:30 and mid-channel Nov 15th 16:30. Compliance with the -31.4 also evident as price declined.
We proceed to align the fib channel tool to the SDC's lower and upper channel lines. Expansion to the 31.4 occurred on Nov 15th 18:30.
This intersected another plot using Moon 315 (A) to Moon 45-degree (B).
The 1st hit to the SDC/FC 31.4 marked a price of 12,157 on Nov 15th 18:30. Price declined to a low of 12,107 during the next candle.
A revisit to the Moon/FC 31.4 occurred a few hours later on 20:00. This hit also had BAJA bearish divergence.
In both instances, a S/L at the Moon/FC 40 level 12,169 plus 10 points spread & cushion = 12.179.
Entry = 12,157 made the risk 22 points each trade.
Exit options include
TP1: the Moon/FC -31.4, which was the close of the 20:30 candle, marking price of 12,091. After spread and cushion = 12,101. Net R/R 56/22 and 2.5:1.
TP2: Exiting at the SDC upper channel = 12,068 + 10 = 12,078, hit during 21:00 candle period. Net R/R 79/22 and 3.6:1.
TP3: Exiting at the SDC/FC -31.4 = 11,971 + 10 = 11,981, hit Nov 16th 02:30. Net R/R 176/22 and 8:1.
In 05:00 hour. Attached is 3 charts on split-screen.
Upper left is 30-M session colors with red retrace fib plot. Also has DeMark Sequential. The 50% fib is at the pivot high here, along with 1/8th MML, and the #9 will appear next candle since it lags one candle.
Lower left is 4-hour SDC with 2nd point of plot moved to Nov 16th 04:00. Interior fibs provided by alignment of FC to upper and mid-channel.
Right is 1-hour PSQ9 with blue retrace fib and yellow FC aligned to Moon 270 and pulling up to Moon 0-degree. Price hit the FC 40 during 04:00, and next candle entry opportunity for SELL.
*****
There is ECB intervention with bond purchases, impacting pair and causing rise in Euro.
Pair peak at end Asian after reports of ECB buying Spanish and Italian bonds during auction.
Another "9" registered on 15-min DeMark (and 3/8th MML) as price bounced off FC 61.8 on 1H PSQ9 chart. Recover back down to Moon 0-degree.
Here are 2 charts on a split-screen. On the left is the continuance of the 1-hour SDC plot with interior fibs.
On the right is PSQ9 with FC aligned to Moon 270 and M180. This plot produced good S&R at the bottom of the move, and during choppy consolidation the last 2 days.
As evidenced, the 100 and 200% expansions are also Moon lines. The consolidation has been contained between the Moon 0-degree and 90-degree levels (100% & 200%).
The current resistance at the 131.4 can also be calculated as a 31.4% expansion of Moon 0-degree and Moon 45-degree. This simply illustrates how we can pull S&R from different plots. It is all related.
Horizontal fib ratios also respected (not shown). Using High of Nov 16th 18:00 and Low of 17th 01:00 resulted on 78.6 being respected near last peak.
Haven't featured this pair in a while. Attached is a 15-min chart with MurreyMath1.0 indicator.
We can see the U.S. session provide the last wave down. Pair went into consolidation until 02:15 Asian (circle).
Breakout of 0/8th MML to upside came within 5 pips of 1/8th MML. The distance between levels is 40 pips.
Reward/risk must make sense.
A 25% S/L = 10 pips
This example TP = 23 net pips
R/R = 2.3:1
***
If you make 10 of these trades using 2% risk, and win only 50%, the monthly ROI = 13%.