A-B-C-D Trade - page 302
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On Apr 22nd, we detailed a Bullish Butterfly on USD/CAD 4-hour.
The attached uses a retrace plot based on:
High = Apr 17th 04:00 1.00104
Low = Apr 17th 12:00 .98639
Price retraced to the 78.6% level during the Apr 23rd 08:00 candle period. This confirms plot and activity should conform to the other levels, going forward.
We also added the HAMA_T3 for trend and S&R. Price dropped below the T3 after its 78.6% retrace, for a trend trade SELL entry.. The Gann Activator Bars (Chart 2) became red for a strong move to the downside.
The pair barely paused at the Low .98639, before extending to the 138.2% .98078. A bounce up ensued, and we had a set-up for a SELL trade, anticipating a possible hit to T3 resistance, which is also near the Low.
The ZUP generated a trend line labeled _0Reaction1_0 and this was also at the point of resistance.
The Apr 26th 20:00 candle period met all of the resistance, and the ZUP tells us it’s a 38.2% retrace from the Apr 23rd high
The next candle was a Doji (Chart 1), and also conformed to resistance. Price then proceeded to decline back to the 138.2 fib.
GBP/USD 4-Hour
Andrew's Pitchfork (APF) plot:
Handle = Feb 29th 16:00 High 1.59912
Upper corner = Apr 2nd 08:00 High 1.60616
Lower corner = Mar 12th 12:00 Low 1.56013
Go to Objects list and change name of APF to AL1.
Insert indicator AML_1-1 to get interior fibs
Horizontal fib plot (yellow): High = 1.60616 Low = Apr 5th 12:00 1.58040
Fib channel plot from middle fork to upper fork, with expansion levels 31.4, 50, 61.8, 100, 131.4, 161.8.
Confirmation of fib plot at 50% retrace Apr 10th 00:00 candle period (check mark).
Trade opportunities at S&R points (arrows):
1) 1st revisit to 1.58040 Low Apr 10th 08:00 period = BUY
2) 1st revisit to upper fork 1.59760 & 61.8 fib Apr 12th 16:00 period = SELL
3) 2nd revisit to Low and interior fib Upper_ML2 1.58153 support = BUY
4) 2nd revisit to upper fork Apr 17th, and 61.8% retrace fib 1.59632 = SELL
5) Breakout from upper fork and 61.8% fib Apr 18th 08:00 = BUY
6) 1st revisit to High 1.60616 and fib channel's 50% expansion = SELL
As usual, calculate R/R.
We rejoin last assessment of EUR/USD that had resistance and SELL ZONE at 1.3261-81.
The attached split-screen has on the left, a 30-min chart with session colors, MurreyMath1.0 (MML), and fibo fan.
The chart on the right is a continuance of the last 4-hour chart posted, with APF and fib extension levels (green). The orange horizontal line marks previous high of 1.3161. We mentioned the 1st visit to the SELL ZONE.
This morning, during 06:00 GMT period, price came into the SELL ZONE again ahead of some Euro Zone data.
Despite better than expected data, concerns about Spain lingers and we saw pair make a decline.
The fibo fan used Friday's Low and today's high as its plot. The decline was to the 61.8%.
On the right, we also added SQ9(Price), with StartPrice 1.31561 (Friday's Low) and direction up. This plot places the 90-degree near the Apr 27th/30th peaks. This is another resistance level that creates the "cluster of resistance".
Price declined to the SQ9 45-degree. This means that there is acluster of support, with the 45-degree, 61.8 fibo fan, 5/8th MML, and even the 50% retracement of Friday's Low/High (not shown).
S/L placement just above 1.3281.
Entry = 1.3260
S/L = 1.3285
TP = 1.3218
R/R = 42/25 and ratio of 1.7:1
Surprise AUD/USD rate reduction 04:30 and better than expected U.S. data at 14:00.
Here is EUR/USD plunging off the 161.8 resistance 1.3281 and SELL ZONE posted earlier. Declined to SQ9 45-degree 1.3213 and 78.6% fibo fan support.
Surprise AUD/USD rate reduction 04:30 and better than expected U.S. data at 14:00.Here is EUR/USD plunging off the 161.8 resistance 1.3281 and SELL ZONE posted earlier. Declined to SQ9 45-degree 1.3213 and 78.6% fibo fan support.
The 2nd chart includes the initial breach into the SELL ZONE 07:00, If trading from the 90-degree (1.3271) to the 67.5-degree (1.3242) , net gain about 20 pips. S/L just above the 161.8 (1.3281).
Continuance of AUD/USD 1-hour with HAMA_T3, MUrreyMath1.0, and SQ9.
To the left, we had marked a 61.8% pullback and 138.2% extension to 1.0314 on Apr 19th.
For this example, we have the SQ9(Price) with StartPrice = 1.04734 (Apr 27th High). The large May 1st red candle was reaction to a surprise interest rate cut by Australia's central bank.
Our fib plot (aqua blue) used the "event". The Royal Bank of Australia (Australian Central Bank) rate decision was announced at 04:30. The high during that candle (use 30-min chart) was 1.04134.
The Low for the plot was May 1st 10:00 pivot, which was in the same neighborhood as the Apr 19th pivot. This is also near the yellow SQ9 135-degree and the red 2/8th MML support levels.
The white trendline and arrow points to the pullback during the May 1st 14:00 period. As previously discussed, we can wait for the pullback at the bottom of the HAMA_T3 candles. The S/L would then be placed on the opposite end of the T3 candle of entry, or the next fib up.
This pullback to 1.03478 was 38.2%, and to the 3/8th MML and SQ9 113-degree. When we look at the data window, the Value 2 price of 1.0347 is the low of that 14:00 candle. The high of that candle is the first number 1.0364 (Value 1), for S/L.
The pullback was also at the same level as the Apr 18th pivot low on our previous post. So we had 5 items that made up this resistance cluster.
As more data was released today, cross-pair EUR/USD made a dramatic move to the downside during the 07:30 period. The 07:55 and 08:00 data was worse than consensus.
When day trading with small S/L, advocate staying on the sideline during high impact data releases. This opportunity in AUD/USD saw a more muted reaction, since data does not directly impact this pair. However, there usually is cross-pair correlation, and in this case AUD/USD was dragged in a downward direction.
This is an example of how we can participate in movement reacting to surprise data, but shelter ourselves somewhat from larger whipsaws. If the surprise was toward the opposite end (up), wider spreads and slippage can trigger stop-out and even drag S/L.
As long as the trader did not trail the S/L too soon, a decent gain was achieved, to the Low or the 158-degree (1.02951) and 1/8th MML (1.02844) support cluster.
S/L = 1.0370
Entry = 1.0345
TP1 = 1.0310
Net R/R = 35/25 and ratio 1.4:1
The R/R can be calculated in advance when using the above tools and technique. TP1 at the Low (plus spread/cushion) is the most conservative option.
Let's now examine price movement and S&R by EUR/USD. The attached split-screen has to the left, 30-min with session colors and Murreymath1.0 (MML). Fib plot uses Apr 27th Low to May 1st High.
Today's bottom (thus far), after surprise data early European session, was at the 127.2%t extension level 1.31215, and same as the 2/8th MML.
The chart on the right is a continuance of our 1-hour with Andrew's Pitchfork (APF) and SELL ZONE at the 161.8 area. We aligned the fib channel (FC) tool to the APF's middle and lower fork to generate diagonal expansion levels to the downside.
Price pivot at the 61.8 during the 12:00 period, when medium-impact U.S. data was released (12:15). The bounce up has been contained by the FC 31.4 channel fib thus far, which is intersected by the SQ9 135-degree.
The bounce opportunity came during 13:45 when price met the Low 1.3156 and bounced down a gross 20 pips. Again, medium-impact U.S data released 14:00, would affect participation.
If trader remained in a short from the 161.8 area 1.3280, then the equity from this entry would have been sufficient going through data periods. Trialing by using pivot highs would protect some profit.
The May 1st pivot high of 1.3243 was the obvious choice. Once European data came in, driving pair down past the APF's lower fork, trader can move S/L again.
Use of SQ9 levels, MML, or HAMA_T3 are trail options. The FC expansion levels also contribute to S&R recognition.
GBP-USD Daily
Wide fib plot:
Low = Jan 13th 1.53187 High = 1.5999278 and High(2) = Feb 29th 1.59912
Tighter fib plot: Low = Apr 16th 1.59179 High = 1,61479
The ZUP V86 generated 3 trendlines (TL) when a Bearish Butterfly was triggered Apr 2nd.
Price bounced off the 138.2 extension of tight fib plot, which near the wide plot's 138.2 price 1.62811 based on High(2). Probed slightly above this cluster to 1.63003, and round number significance where S/L would be placed.
Price declined back to the tight plot's High, and near top ZUP TL (labeled Reaction2), where it bounced back up to resistance 1.61932 generated by wide plot using High(1).
SELL (Swing Trade)
S/L = 1.6315
Entry = 1.6270 (Apr 27th)
TP1 = 1.6165 (May 2nd)
R/R = 105/45 and ratio 2.3:1
BUY (Quick Bounce)
TP = 1.6205 (138.2 of H2 plot)
Entry = 1.6165 (61.8% Retrace fib 1.61614)
S/L = 1.6145 (Just below 1.6150 round number)
R/R = 40/20 and ratio 2:1
***
Now switch time-frame to weekly. We can see that the Apr 29th candle high 1.63003 is the 78.6% retrace of Aug 14th/Jan 8th swing.
The ZUP can act as an automatic fib tool.
Today's Non-Farm Payrolls data, released at 12:30 came out worse than expected. The attached 3-chart split-screen shows price action based on certain tools applied.
The first chart to the left is a 15-min with session colors, MurreyMath1.0 (MML), and fib plot based on today's High/Low prior to data. We can see whipsaw candles 12:15-12:45, and rise to the 138.2% extension level of 1.3178.
Price was rejected there, which was yesterday's high, and a strong reserve took place. Price bounced at the 178.6% extension to the downside 1.30861.
The middle chart is a continuance of previously posted 1-hour with APF, SQ9(Price), and fib channel (FC) expansion. We added HAMA_T3 to show May 2nd opportunity to rejoin downtrend.
Today's 13:00 candle closed at the SQ9 135-degree resistance, which is intersected by the FC 50%.
The chart on the right is a daily with SQ9 22.5 Factor 56 version of indicator. StartPrice = 1.26229 (Jan 13th Low). Horizontal fib plot (yellow) based on Apr 2nd high and Apr 16th low. price just bounced off the 23.6% fib 1.30847 as the decline is pausing or ready to reverse.
We also have a fib time zone plot in green, which used the 2 lows of Mar 15th and Apr 16th. We showed the 161.8% expansion ratio.
On the bottom is AstroIndicator4 (A4), with settings on Moon & Mercury (planets 1 & 2) and natal date 01.01.1999.
The 2 "time" indicators have a turn planned for the next trading day, which is next Sun/Mon. Since the RSI(4-Period) is oversold, the turn would thus be anticipated going up. Can use lower time-frame tools for entry. Bear in mind, it will be a new week and often news/developments over the weekend will end up impacting trading.
To use the QTA_v4 indicator for automatic fib time zone plots, settings can be adjusted:
Default setting uses 2 plots, high-high and low-low. You may elect to turn on the other plots:
ExtFibo TimeLH = true
ExtFibo TimeHL = true
ExtDinamic = true (this turns on color to see plots)
ExtVisibleDateTime = true
ExtObjectColor = change from none to color of your choice to see plots
Look for clusters of 2 or more expansions points. We see that May 5th/6th contains the low-low expansion point mentioned on our last post, and high-low (HL) 100% expansion from the Mar 27th/Apr 16th plot.
If the labels for the expansion points are too high or low, click on the dotted line that connects the 2 plot points and drag up or down. Here's a pic of how things should look with the QTA on the bottom of the chart.
Edit: A previous turn was accurate for May 1st/2nd. It was derived from plots:
HL .786 2012 5-01 (May 1st 1.786% expansion of Mar 27th/Apr 16th high-to-low plot)
LL .5 2012 5-02 (may 2nd 150% expansion of Mar 15th/Apr 1th low-to-low plot)
The daily chart shows 2 Doji candles on Apr 30th and May 1st. There were also horizontal resistance levels generated by 2 fib plots (yellow and blue), as well as the SQ9 113-degree. Putting all of these tools together, the SELL opportunity was there.