A-B-C-D Trade - page 270
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Continuance of our 4-hour chart with SQ9(Price) start price .83015, direction up.
We have the SDC plot Dec 21st 04:00 and new 2nd point of Dec 29th 16:00.
16:00 candle closed with RSI(4) reading overbought at 85.
Entry at open of next 20:00 candle price of .84029, and at upper channel.
TP target at about mid-channel .83740 just hit during 08:00 period, probing to 68-degree.
The S/L options include 16:00 candle high .84204 or 113-degree .84158, plus cushion.
R/R = 25/20
As mentioned, trading counter to SDC slope will see shrinking R/R as time progresses.
Review of our last 3 plots, with this one first:
XAU_USD 1-Hour with SQ9(Price) start price 1641.62. We illustrated bounces off SQ9 levels en route down, and 1st 2 bounce at same levels on the way back up.
That set up the next hit to the 135-degree level, which was support on Dec 28th 09:00 period. The anticipated bounce did indeed occur during the Dec 30th 16:00 candle.
A BAJA bearish divergence also formed.
SELL entry at the 135-degree of $1581.41 minus cushion = $1580.
S/L options include 25% = $2.50
TP1 = 158-degree $1571.48 + spread/cushion = $1573 (hit during 18:00)
R/R = $7.00$/2.50 and ratio 2.8:1
TP2 = 180-degree 1561.59 + spread/cushion = $1563
R/R = $17.00/$2.50 and ratio = 6.8:1
Price currently at $1564
Pulling S/L to break-even or protect some profit would be of course prudent.
Chart 1 = continuance of our EUR/GBP 4-Hour SDC plot using Dec 21st 04:00 and Dec 29th 16:00. Moving the 2nd plot point to that peak was obvious as it was a high not seen since Dec 19th.
We detailed entry at upper channel and target TP at mid-channel. Since then, price has hit the lower channel, closing the 12:00 candle there. The SQ9 45-degree, which acted as significant S&R, right there as well.
Those that rode it below the mid-channel would move S/L to protect profit.
Chart 2 = continuance of our EUR/USD 1-hour SDC plot using Dec 29th 00:00 and Dec 29th 20:00. The first trade opportunity from the 21:00 period at the upper channel to the mid-channel was successful.
Another 2 opportunities arose with this plot.
A BUY off the hit at the lower channel on Dec 30th 08:00 period. Candle also closed in oversold reading of 15. Mid-channel target achieved during 10:00 period.
A SELL off the hit to the upper channel 1.2975 during 14:00, intersected by blue 38.2 fib. A probe above that was considerable, to 1.2997. Tight stops triggered.
This is so close to the psychological round number of 1.3000, that some traders will place S/L above that level. This increases R/R, as S/L = 28 pips.
Mid-channel TP target price = 1.2942, and near SQ9 473-degree level. Projected reward = 30 pips
The 15:00 candle was basically a Doji, which represents possible reversal. The next candle also small in body, staying below upper channel.
Price arrived at the mid-channel during the 19:00 candle period.
Alternatively, some may have waited beyond the first touch and probe above the upper channel. If this was the case, entry can be effected at the 17:00 open price of 1.2970.
A fractal appeared atop the 15:00 candle.
S/L as prescribed above, or layered with partial position tight and balance of position placed above 15:00 high.
We have some time to take a closer look at the earlier set-up on XAU_USD. Attached is a 5-min chart zooming in on the details, with the same SQ9 plot levels.
The pink trendline is the BAJA bearish divergence. The white horizontal fib plot is High = 10:35 1573.83 and Low = 14:30 1561.33.
We can see the top was also the 161.8 extension, with corresponded with the SQ9 135-degree level, which was identified as the area for the SELL.
As price dipped below the next SQ9 level down, which is the 158-degree, trader can move S/L.
Green trendline is 17:30 pivot low 1573.74, which was the horizontal fib plot's High. We want to move the S/L just above this price level, call it 1574.50.
Another move of the S/L can be made and placed just above the 18:45 pivot high of 1567.50. This is also the 50% fib level.
Price hit the 180-degree level 1561.50, which was defined as TP2, during the 19:50 period. This was also the fib plot's Low.
Experienced traders had lurking bounce BUY orders there. This includes robotic (computer algorithm) action. We can see how precise price action was back up to the 23.6 and 38.2 fibs.
We haven’t featured the SQ9(Time) much at all. The attached is AUD/USD 1-hour, with setting of start time/price at Oct 27th 16:00 1.07530. Set “square hour” = true, with other intervals fals
We also used that price for the start price for indicator SQ9(Price) 22.5 Factor 56.
Horizontal fib plot: High = Oct 27th 16:00 1.07520 Low = Oct 31st 04:00 1.05058.
Not a stand-alone tool, therefore seek confirmation to improve probability. Dropping down to the 1-hour and using RSI(4) for O/B O/S, and using the SQ9(Price) are other supporting methods.
This example had turns at each resulting vertical line, with Default NumberOfProjections of 5.
This plot based on the May 4th significant high of 1.49388 as the start price for the SQ9 22.5/56, as previously posted.
Horizontal fib plot:
High = Dec 28th 08:00 1.30838 Low = Dec 29th 12:00 1.28571
Currently, price testing 61.8% 1.29945 fib on revisit, and round number 1.3000.
For those that monitor the larger time-frames, we've labeled BUY and SELL zones:
SELL at or near fib plot High 1.30794. Can use 10-pips zone, thus 1.3069-79. This also 315-degree level of SQ9. We can see respect of this resistance level ahead of New Year.
BUY at or near Low of plot 1.28571 as this would be first revisit. A bounce would entail measuring retrace.
A reversal off this level = "Double Bottom"
Plot on 1-hour was low-to-high of Dec 29th 10:00 and Dec 30th 16:00.
Horizontal fib plot same low-to-high as the SDC plot. The indicator MurreyMath 1.0 also is on this chart.
The Jan 2nd 15:00 candle registered a RSI(4) reading of 18 oversold. That candle abutted the lower SDC channel. This was also a 50% pullback to the 1.54654 fib level.
Entry for this scenario is at the open of the next candle at 16:00 price of 1.54680 + spread and any slippage.
Stop-loss options include just below the 1/8th MML level of 1.54419. This is the same as the 61.8% retrace fib level.
TP target once again at the mid-channel (mean), which at onset was 1.55623. This level intersects the 3/8th MML, as well as the fib plot/SDC High.
Reward/risk = 90/30 and ratio of 3:1.
Price achieved TP during the Jan 3rd 06:00 period.
ABC plot uses swings Nov 8th/Nov 21st/ Dec 2nd.
SDC plot was high-to-low of Nov 8th and Dec 15th.
The Dec 15th low was a Doji candle, and also closing at an oversold RSI(4) reading of 5. The ABC's FE 138.2 of 1573 also there.
Next candle Dec 16th open price was $1575 for BUY entry.
TP target at mid-channel = 1638 minus cushion.
S/L just below Dec 15th low of 1560 + cushion = 1558.
Reward/risk about $60.00/$19.00 and ratio of 3:1
***
Dec 29th hit to SDC lower channel near the FE 161.8, has bounced up and currently at the FE 127.2 level of 1588.
Pair entered the SELL zone, as defined in previous post.
The 1st chart is 1-hour with SDC overlaid on SQ9 plot.
SDC plot was low-to-high of Dec 30th 08:00 and Jan 3rd 16:00. This fitted upper SDC channel to peaks. The 18:00 period touched 1.30760. BAJA bearish divergence at top.
The 2nd chart is a 15-min session colors with retrace fib plot using
Low = Jan 3rd 08:15 1.29730 High = Jan 3rd 18:45 1.30760
Trendline from that same low to dip on Jan 3rd 17:30 candle low. The bounce off 1.30760 hit the trendline during the 19:15 candle period, probing near the 23.6% retrace fib level.
This would be the conservative exit area.
Let's recap:
Entry in SELL Zone about 1.3074
S/L = just above 1.3078 + cushion = 1.3084
TP = at 23.6% fib or trendline 1.30600 + cushion = 1.30640
R/R 20/10 pips and 2:1
19:00 saw FED Minutes release.
Attached is update on split-screen of last set-up and trade scenario.
Left if 15-min with session colors and retrace fib. After consolidation at eh 23.6% level, price made strong move to the 50% fib of 1.3025, during the 02:30 period.
Right is continuance of 1-hour with SQ9 and SDC. Price hit the mid-channel 1.3029 during 02:00 candle. This intersected the 405-degree level. RSI(4) at close of candle was oversold 16.
To 23.6% = +20 pips and R/R ratio 2:1
To 50% fib or mid-channel = +40 pips R/R 4:1