A-B-C-D Trade - page 299
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Here is 30-min AUD/USD, with SQ9(Price) and divergence. The CCI sent an alert just a few minutes ago at 07:33 GMT.
Fib plot uses Apr 11th High/Low 1.02248/1.03317. The peak during 06:30 touched the 161.8 and near 585-degree resistance.
S/L just above 585-degree.
This short is now gaining more momentum toward our TP at the 127.2. Manual exit if stall anywhere near our TP. Now at 1.03733.
Our AUD/USD short worked out as price has just hit the top of the T3 candle.
EUR/USD has an almost identical move off bearish divergence and resistance at the 6/8th MML. Price has declined to round number 1.3100 - good exit point ahead of EU version of FED Beige Book at 08:00.
Entry = open of 06:30 candle 1.31424
S/L = 1.31581 (just above 6/8th)
TP 1.31000 +cushion = 1.31050
The 1st chart uses Mars at 45-degree intervals on 1-hour. Fib plot uses Apr 11th Low = 1.30650 High = 1.31560.
After a 61.8% retrace, pair made a 161.8% extension to 1.31122 level during the 17:00 period, where lurking shorts existed. The Mars 135-degree was at the 138.2 fib, where shorts can also enter as price curled back.
TP options include High of fib plot, and is the same as the 50% retrace level as mentioned on the next chart.
2nd chart feature Camarila_AlertwFibs, as viewed on 30-min, along with our fib retrace plot in white that is based on Low = 1.31009 and High = 1.32116.
After stalling at the 38.2% and 50%, which matched the indicator's S&R, decline pivoted at the 61.8% fib during the 09:00 period.
It has bounced up to the previous consolidation level at the 38.2% of 1.31693.
Here's the indicator, in the event it has not been previously posted.
After resting near the High of our plot, data and verbiage drove pair down to current price near Low.
Some lurking BUYS in this zone here for sure
These experienced traders (scalpers) won't allow their position to get stuck past the close of week.
Additionally, the Credit Default Swap (CDS) for Spain rose:
Spanish credit default swaps rise to record of 498 bp
Attached is split-screen on EUR/USD. Left is 15-min with HAMA_T3, MML, and retrace fibs form plot using Apr 12th High 1.3208 and current Low.
Right is the same 1-hour PSQ9 chart, with HAMA_T3 added. We also measured the lowest 2 Mars level with the fib channel tool, to arrive at .618 level near 127.2 (white) to downside for S/L.
TP targets include the 38.2% retrace level of 1.3217. Fingers on button for optional manual exit, as well as S/L adjustment to protect profit.
The attached is a 1-hour EUR/USD with Mars at 45-degree intervals. We feature the indicator Stoch Candle Overbought-Sold, matched up with the S&R provided by Mars45.
The default setting for the Stoch is 30,10,10, and is represented by the white arrows on Chart 1. The blue arrows used a faster setting of 8,5,5 and can be seen on Chart 2.
We added the RSI(4-Period) to define BAJA Divergence, which presents a powerful picture of possible reversal.
Last week contained 3 SELL opportunities.
1) Apr 10th 01:00-03:00 met resistance at Mars 90-degree (1.3135), and that cluster was the 2nd peak of BAJA Divergence.
When entering just below Mars 90 price during 03:00 period, S/L placed just above high of 1.3143 made the risk with cushion = 15 pips.
Trading down to the next Mars level (Mars 45-degree) of 1.3078 produced about 50 net pips. R/R = 50/15 and ratio of 3.3:1.
2) The 2nd scenario (Apr 11th 10:00) did not have the red overbought Stoch candles when viewing at the default setting. It did have BAJA Divergence. Decline did not quite make it to the next Mars45 level. Protecting profit by moving S/L would prove to be prudent.
3) The 3rd example (apr 12th 17:00) had the red Stoch candles (on faster setting) on approach to Mars 135-degree. This was also the 2nd peak of BAJA Divergence.
The default setting saw red Stoch candles illustrate struggle to overcome resistance at Mars 135. Price declined after losing that fight, and the bears took it down 2 Mars levels to finish the week.
Certainly, the 2nd leg of that decline can be attributed to data and verbiage, as we recapped.
S/L = 1.3215
Entry = 1.3190
TP1 = 1.3140 (just above Mars 90)
R/R 50/25 and ratio 2:1
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The 2nd and 3rd examples had "inside bars" at the 2nd peaks.
Working with OB/OS systems and indicators will see it not always work during strong trends. Also, many traders curve fit their settings. We want to avoid curve fitting.
Incorporating BAJA Divergence attempts to be more selective, and essentially trades off extensions peaks that lost strength.
You'll need to study the setting that best works for the instrument you trade. For this example, we showed default and a fast setting. You may compromise and use something like 13,5,5.
The default OB/OS levels are 80/20. That can also be changed to suit your taste.
We randomly selected this older example EUR/USD 1-Hour. It uses the just posted combination of tools, with an Andrew's Pitchfork (APF) plot:
Handle = Aug 7th (2011) 21:00 high 1.44300
Lower corner = Aug 8th14:00 low 1.41283
Upper corner = Aug 10th 09:00 high 1.44000
The upper corner point for the plot had 2 options, with the Aug 9th 21:00 being the other. However, once we moved it to the Aug 10th 09:00 location, we saw that price hit the middle fork on Aug 10th 14:00 and bounced.
This type of "curve fitting" is O.K., and actually desired. It set up this trade opportunity. Once the retrace was finished, the pair made an extension to the downside and a revisit to the middle fork on Aug 10th 22:00-21:00.
This 2nd dip registered a higher RSI(4) reading after the close of the 21:00 candle period - denoting BAJA Bullish Divergence.
The Stoch OBOS was set to faster 8,5,5, and became green for oversold. The default setting also saw green at the 2nd dip to the middle fork.
The S&R component not only had price meeting support at the middle fork, but also at the Mars 180-degree. The 2nd dip was also near previous pivot low on Aug 8th, which is the lower corner of the APF.
The subsequent upswing gained about 150 gross pips. TP options included the Mars 270, where price stalled during early Asian.
Thereafter the Stoch candles turned red during its probe above the Mars 270 (1.4228). This foretold the subsequent decline.
Looking left, we saw the Mars 315 (1.3286) act as resistance Aug 9th, and support on Aug 7th. The upper fork was also nearby. The market was uncomfortable in that neighborhood.
Entry BUY =1.4140 (at open of Aug 11th 00:00)
S/L = 1.4090 (31.4% extension of Mars 225 to 180) + cushion = 1.4085
TP1 = 1.4228 (Mars 270) + cushion = 1.4223
R/R = 88/55 and ratio of 1.6:1
Alternative S/L = 1.4108 (Mars 225) + cushion and below round number = 1.4095
R/R = 88/45 and ratio 2:1
Amongst the alternatives for entry is setting an automatic BUY order just above the middle fork during the 22:00 period. When we mouse over the middle fork, it read 1.4125.
As we can see, the differences were small and would not have destroyed the R/R, making it unworkable.
We're going to add more layers of hindsight plots to last week's price action. This is the same EUR/USD 1-hour chart with Mars, BAJA Divergence and Stoch OBOS adjusted to 13,5,5.
That was the compromise setting between the default and fast setting featured on our last chart.
Now we add Standard Deviation Channel plot using swing Apr 9th 01:00 to Apr 10th 12:00. These points are marked with 1 and 2.
White vertical lines point to confirmation of plot on 4 occasions:
Apr 9th 16:00, Apr 10th 01:00, Apr 10th 09:00, Apr 11th 06:00
This sets up the short off the middle fork on Apr 11th
We left the arrows on the chart, and they point to the 2 peaks on the BAJA Bearish Divergence.
When we add the use of the Fib Time Zones tool, plotted with the same 1-2 points, we arrive at the 161.8% extension on Apr 11th 10:00. This is the exact location of the 2nd peak of BAJA Bearish Divergence at the middle fork.
Chart 1 is continuance of our plot using SQ9 22.5 Factor 56 version, with StartPrice = 1.26229 and Direction Up. We added fib plot based on March Low 1.30027 and March High 1.30844.
We can see the support at the 68-degree level, which was the revisit to the March Low. This plot provides the same S&R as one using StartPrice of 1.18754, which is a longer range significant Low.
Chart 2 is a split-screen with both using the 1-hour time-frame. On the left is session colors, generated by indicator time_modified, and MurreyMath1.0 (MML) for intra-day S&R.
The pivot low during the Asian session was at the 1/8th MML. We also had the Demark Sequential which produced a 9 during early Asian, denoting possible exhaustion of down move.
On the right is PSQ9. We drew trendlines at each swing. This is basically an Elliot Wave. We won't get into the details, which can be a bit complicated.
The down move from Apr 13th 01:00 made 2 extensions. This is the same as saying there was a 5-wave move.
The next swings to the upside was an ABC 93 swings), which is the typical Elliot Wave follow-up after the 5-wave move.
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The 12:30 U.S. Retail Sales data was positive, producing the current rally.