A-B-C-D Trade - page 269
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Approaching the end of the year, EUR/USD broke strong to the downside. The attached 30-min chart uses MurreyMath1.0 indicator.
Channeling since Dec 21st, price broke support at the 3/8th MML during the 14:00 candle period just ahead of the U.S. open.
Price just bounced off of the -1/8th MML during the 17:00 period, marking price of 1.2911.
When we zoom out on the chart, we can see the most recent significant high, on Dec 21st 10:00, was at the 8/8th level area. Price was at one extreme, and now at the opposite extreme.
Split-screen with 3 charts on EUR/USD.
Left = 15-min session colors with MML and fibs.
Center = 30-min PSQ9, yellow retrace fibs, and SDC plot using low-to-low:
Dec 28th 17:00 and Dec 29th 00:00
Can also see BAJA bullish divergence.
Right = 1-hour with SQ9(Price) using start date Dec 2nd high 1.35485 (Month's High). Blue horizontal retrace fibs based on plot:
High = 1.30794 and Low = 1.28860
****
While watching price decline further, after retrace of large downside move, a BAJA bullish divergence registered after the close of the Dec 29th 00:00 30-min chart.
Since down move was so strong, used caution on seeking BUY set-up.
Enter after price pivoted at 1.28860, and surfaced above the lower SDC channel and 0/8th MML price 1.2909.
Since SDC is small, and entry somewhat far from pivot low, must target TP beyond normal mid-channel (conservative).
Therefore, options include SDC upper channel, Mars 270-degree 1.29270, and 23.6% retrace fib 1.29316
****
The 2nd chart shows price meeting resistance at the SDC upper cahnnel and 23.6% retrace fib.
The SQ9(Price) indicator is geared for currency pairs that are similar to EUR/USD in decimal placement on price. Example: 1.3200
For XAU_USD the indicator has been altered and can be downloaded on page 206, post #2054.
Use the "Search This Thread Function" and type in key words:
FOR DOWNLOAD SQ9(Price) for Gold.
***
We hereby attach the SQ9(Price) for USOIL, USD/JPY, and intruments with decimal placed in same location, example 99.50
Attached is 1-hour XAU_USD with SQ9(Price) start price 1641.62, which was the Dec 21st high. We can see this high was a revisit of the Dec 14th level.
Excellent adherence to levels, especially at 90-degree, which previously acted as resistance Dec 16th - 20th.
One way to use the SQ9 levels is to match them up with Overbought/Oversold (O/B O/S) on the RSI(4 period).
We labeled 1st approach to these levels en route down, when RSI(4) was in O/S. We use 85/15 setting for O/B & O/S levels.
Dec 22nd 04:00
Dec 27th 02:00
Dec 28th 08:00
Dec 28th 16:00 ( small pause only during plunge)
Dec 28th 20:00
4 of the 5 occurrences listed above were successful in bouncing up at least 1 level of 22.5-degree. That's about $10.00.
Therefore, in keeping with money management, trader must set stop-loss just below each support level. Let's call it 25%, and $2.50.
The Reward/Risk = $10.00/$2.50
Ratio = 4:1 gross
After deducting spread and any slippage, still very good and about 3:1.
Price marked a new high during the 07:00 period. Moving the 2nd plot point of the SDC there results in
Candle closing at upper channel, and near blue 0/8th MML.
The mid-channel target just met, and testing below that now.
As emphasized lately, intra-day plots can often require adjustments "on the fly" as price changes.
The attached EUR/USD is a continuance of our 1-hour plot with SQ9 using December high 1.35485 as start price and direction down.
After yesterday's plunge down, price probe lower twice after small pullbacks. Today's 11:00 candle period new low of 1.28646 registered an O/S of 6.8.
This candle broke the previous 00:00 low of 1.28858, which is also the SQ9 518-degree level.
We now can move the blue horizontal fib plot's LOW to the Dec 28th 17:00 1.29108. This paints the picture of price making a 127.2% extension to the downside with that 11:00 candle.
Plot SDC using the 2 pivot lows of Dec 29th 00:00 and 11:00.
As price surfaced above the lower channel during the 12:00 period, entry can be made for the BUY position. 1.2974 + spread = 1.2977
Price made a probe lower to the 540-degree, where stop-loss resides, with cushion below that point of 1.2954. Risk = 23 pips.
TP targets include mid-channel (1.29000), 485-degree 1.29159, and upper channel (about) 1.2927.
As the 12:00 candle period closed, we can try to affix the SDC's 2nd plot point to the new low. With this adjustment, we can see the 12:00 candle body open right at the lower channel. Therefore, we can keep this plot.
Price made hit all of the TP options and managed to return to the 23.6% fib level. The 473-degree level right there, and we can see reaction to this resistance level as it did Dec 28th.
Although it's getting close to the end of the week, let's examine the same chart going forward.
Price marked a new intra-day high on the 17:00 candle period of 1.2958. Move the SDC 2nd plot point there. Entry at open of 18:00 price 1.2940. Risk = 21 pips after cushion.
Attached is chart with this adjustment. We now have a mid-channel (1.2912) as target for a short. The 495-degree of 1.2916 also there. Reward = 21 pips after spread.
As always, your money management rules may dictate moving stop-loss (which is just above 17:00 high) to break-even at some point.
This example poses more risk due to impending end of week. It is used to illustrate adjustment on the fly.
On the EUR/USD 1-hour, if the 18:00 closes without exceeding the 17:00 high of 1.2958, it would form a 5-candle "fractal". This is a sign of a possible reversal.
This indicator can be found on the MT4 under the Bill Williams tab. A "hatch" mark will appear on top of the 17:00 candle. This can lag one candle. The formation is a 5-candle formation. The hatch mark may disappear if price does not continue in direction of reversal after the 3rd candle.
Continuance of our SQ9(Price) plot for this gold instrument, using 1641.62 as start price, direction down.
We had marked the pivot points of support at SQ9 levels en route down.
Now, let's look at the revisit of 2 levels on the way back up thus far. The 2 blue arrows point to previous support at the 203-degree and 180-degree levels.
Each time, there were pullbacks. The 1st arrow was a hit/approach to the 203-degree occurring on Dec 29th 19:00 and declined about $6.00.
The 2nd arrow is approach to the 180-degree on Dec 30th 01:00, with price declining about $8.00. This candle closed with an overbought reading of 90. The decline was to the next level down, the 203-degree price $1551.
These are very simple behaviors that if recognized, can be manipulated into quick profit, at good R/R. The 2nd scenario was net R/R of $3.00/$7.00
Reviewing EUR/USD short per recent post, we saw only a small decline off the upper channel not exceeding 1.2933. Therefore result is loss or break-even depending on whether S/L moved.
The end of the U.S session can provoke some traders to tighten their stop. End of any session can have squaring of positions (exits).
****
The next peak established involves moving SDC plot to Dec 28th 19:00 and Dec 29th 21:00. 1-hour chart had double fractals on top (2 consecutive fractals) = stronger chance of reversal.
SELL entry upon open of next candle at 22:00 price = 1.2959.
Mid-channel TP target = 1.2927
S/L above high of 1.2963
R/R = 18/10
Chart on left is 1-hour with same SQ9(Price) and blue horizontal fibs.
Chart on right is 4-hour with SQ9(Price) 22.5 Factor 56 indicator since start price is so far back. We used the significant May 4th high of 1.4939.
The 338-degree of 1.2956 acted as support on Dec 14th. The Dec 29th high encountered this level as resistance, probing to 1.2963.
TP at mid-channel mean hit during today's 05:00 period.