A-B-C-D Trade - page 307
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EUR/USD gapped up about 65 pips from Friday's closing hour's high, at open of new week, due to weekend news that Spain was approved for bailout funds.
The attached 15-min uses session colors (time_modified indicator), MurreyMath1.0 (MML), HAMA_T3, and a fib plot.
We can see price touch the 7/8th MML before consolidating during the Asian session. As Europe opened at 07:00, price started to decline rapidly, breaking through the Asian Low of 1.2616 and beneath the HAMA_T3 candles.
The 07:30 pivot up from 1.2590 was contained by the T3 and became a 50% retrace to 1.2618. This is also the area of the Asian Low.
Fib plot: High = 1.2646 (Asian High) Low = 07:30 pivot 1.2590.
If the trader did not enter at the break of the Asian Low during 07:15, entry can be effected:
- at pullback 1.2618
- when price broke Low of fib plot 1.2590
S/L options include placement just above the T3 candles, and trailing accordingly, or MML levels.
T3 can help keep the trader calm by displaying price being clearly in down trend.
TP to fib extension level or MML level.
On strong moves, and in smaller time-frames, the RSI(4) is not reliable, often registering OB/OS and continuing to extreme.
Price reached the 200% extension level of 1.2533 during the 11:30 period, essentially "filling in the gap".
Attached is a daily chart of EUR/USD with ATR set at 25-Period.
We drew trendlines on the ATR swings taken for fib retrace measurement. The yellow arrows are the entry points derived from the fist candle after the 50% level was breached. The number above the arrows are the previous candle period's RSI(4) reading.
We used 70/30 for overbought/oversold, but included one turning point that had 32.
Of the 10 signals, 8 were deemed winners. First ATR swing measured was Sept-Nov 2010.
Three significant tops were amongst the winners, and these are the entry dates:
May 5, 2011
Oct 31, 2011
Feb 27th, 2012
Light on the data, with exception of GBP, and thus cross-pair correlation creating chop.
The first attached chart is a continuance of yesterday's 15-min with session colors, MML, HAMA_T3, and fibs.
As price continued to decline and stay below the T3 candles yesterday, we needed to move the Low of the fib plot. Since it was a large pullback, we should select June 11th 11:45 low of 1.25266. Pullback was approximately 23.6%, and the T3 candles held as resistance.
The High remained the same, at yesterday's Asian High of 1.26460.
During yesterday's U.S. open, price action made a hit to 138.2% extension to the downside of 1.24810, which is also the 1/8th MML. It consolidated for the rest of that session, closing at that level.
Prior to today's open at 00:00 GMT, price made a quick courtesy hit to the 161.8 1.24528 at 22:15, which is about the same as the 0/8th MML.
During today's 10:15/10:30 periods, the fib plot's Low acted as resistance, and price bounce down and back to the 138.2. This was a short opportunity, as well as the first approach to that Low during 07:30.
Left chart: 30-min with SQ9 StartPrice 1.26671, direction down. GAB and HAMA_T3.
Right chart: 1-hour with fibo fan plot
Low = June 5th 11:00 1.24086
High = June 10th 22:00 1.26671
Horizontal fib plot
High = June 10th 22:00 1.26671
Low = June 11th 22:00 1.24465
***
Yesterday's plunge was a revisit of June 8th lows, and the SQ9 180-degree. This bottom is also the 2nd hit to the fibo fan's retrace 88.6% fan. The first hit was on the aforementioned June 8th.
Bounce up is a 38.2% retrace on horizontal fib plot. Bounce down from that now pausing at the fibo fan's 78.6% ray.
Since trading with support and resistance often utilize previous significant high/low levels, for bounce trades and/or exit, we include an indicator that can help view these levels.
Attached is a 1-hour chart of EUR/USD with this indi. We marked:
The Previous Weekly Low (PW) on June 4th 00:00 1.23846, which is displayed by the indicator in gold colored horizontal line.
The last Monthly Low (ML) of June 1st 1.22868, which is displayed by the indicator's red horizontal line.
Using the PWL and June 10th high 1.26671 for fib plot, we arrive at 78.6% retrace price level of 1.24451 (not shown).
This is precisely the low just made June 11th 22:00 (arrow). The bounce up to 1.25281 is at the 50% fib level.
Using the ML as the low for plot, produced a 38.2% level at 1.25207 and 50% at 1.24760, which are acting as S&R today.
Here is a 1-hour EUR/USD with PSQ9 Mars in 45-degree intervals. We have the entire week view and can see on Sunday/Monday price reverse off the Mars 45-degree level.
The gradual rise, partly due to speculation of QE3, revisited the resistance at Mars 45-degree on Friday morning 04:00 GMT.
The Stochastic OB/OS candles (default setting 30,10,10) turned red, and we also have BAJA bearish divergence (RSI-4Period).
The S/L = just above the week's high of 1.2667.
Entry = 1.2646 minus cushion = 1.2643
TP = next Mars level down Mars 0-degree 1.2590 plus spread/cushion = 1.2597
R/R = 46/24 and ratio 1.9:1
More conservative exit options at other pivots, but must ensure R/R adequate.
We mis-calculated this one originally and now post the correct parameters of this example.
While Venus was in retrograde motion (backwards), we selected the high of 11-4-2010 13:00 (GMT) as a significant turning point. Coordinates = 1-degree 43' 6".
The next time Venus made a hit to the same coordinates, while in direct motion (forward), was 12-3-2010 (19:00 GMT). The chart marks this with an arrow. It had a range of 1.3360-1.3382 during the 19:00 hour, which was only 39 pips from the pivot high 1.3421.
We also have indicator PSQ9 Earth 180 and Venus 180-degree for S&R.
Price dipped after 12-5-10 to 1.3163 on 12-9-10, before a pop up (to 1.3497) that hit resistance at the Earth 180 (1.3515) on 12-14-10. Therefore a S/L just above that level was a risk of about 140 pips.
The choppy period did have declines for TP levels, to the Earth 180 1.3054 on 12-23-10 and Venus 180 1.2900 on 1-9-11.
Trading to Earth 180 was R/R = 320/140 and ratio of 2.3:1.
Trading to Venus 180 was R/R = 475/140 and ratio of 3.4:1
****
Homework
Venus is currently in retrograde motion. Let's use the June 1st (find GMT time to nearest hour) pivot low of 1.2287 as the significant turning point. Use the ephemeris to calculate the coordinates at this date and time.
Then spin the ephemeris until it reached the coordinates again while in direct motion. We will post the results soon, and then wait for that date and time to see if a pivot occurred as well as comment of supporting techniques for that potential turn.
Here is an example for Microsoft, with a daily chart of CFD MSFT.
We have a Mercury retrograde high on Mar 15, 2012 17:15 GMT, with coordinates of 6-degree 1' 19".
The very next time Mercury reaches that coordinate, while in direct motion, was on Apr 22nd 18:15 GMT. Since this was a Sunday, we marked the open of the Monday candle Apr 23rd, price of 32.30.
We used the Gann Activation Bars to show trend and have fib plot based on High = Mar 15 32.94 and Low = Apr 11th 30.23.
The signal therefore was a revisit of the Mar 15th high. Price action proceeded to bounce off that high, make a hit to the Low, bounced up to the 50% fib, and then made an extension down to the 161.8.
Those fibs are S&R levels for TP options.The color of the GAB showing trend can assist trader in staying in the short position during pullbacks.
Also attached is a pic of the ephemeris for both retro high and next hit to same coordinate while in direct motion.
Attached daily example uses slower moving Jupiter. Selected is the swing high of 11-4-2010, with coordinates of 23-degrees 49' 49".
The next time this planet reached those coordinates was on 12-2-2010. This was 2 days after the pivot low of Nov 30th 1.54836. Therefore, the opening price of Dec 2nd (1.56109) was 127 pips from the bottom (for a BUY).
We can see the RSI(4-Period) swing back above the O/S level on Dec 1st.
Other tools on the chart are PSQ9 Jupiter in 90-degree intervals, HAMA_T3 denoting trend (retro-direct are always counter-trend), and SQ9 22.5 Factor 56.
1.54836 used as start price with direction up. The SQ9 levels of 22.5, 45, and 67.5-degrees are marked with yellow trendlines,
Price made the hit to the 67.5 (1.59000) on Dec 14th, before reversing back down. R/R to this level was 280/135 and ratio 2:1.
Other TP options include the top of the HAMA_T3 candle of Dec 8th (1.5827), since this is resistance. R/R = 206/135 and ratio 1.5:1.
This example is USD/CAD, with the retrograde swing high 1.0523 of 11-25-11 (11:00 GMT), and coordinates of 19-degrees 56’ 56
The very next hit to these coordinates, while moving in direct motion, occurred on 1-1-12 (02:00 GMT). Since that was New Year’s Day, we’ll use Jan 2n
We added PSQ9 Mercury levels at 90-degree intervals and Earth at 180-degree intervals, and used the 4-hour time-frame for better view.
We mentioned that astro techniques can be off, which is to be expected, otherwise there will be no market and everybody would be on the same side of the trade.
In this case it was off by one day. We drew a trendline on the 12-8-11 support of 1.0050. The Jan 3rd candle stopped just short of this level and bounced up. This is also the location of Earth 180, and just below that, the Mercury 270-degree.
Whether or not entry was made on Jan 2nd, the 1.0050 support is key for S/L placement. Now we’ll discuss entry options
1) The 4-hour Jan 3rd 12:00 candle was a Doji, with entry upon the open of the 16:00 candle price of 1.0090. RSI(4) also in extreme O/S.
2) Another practitioner mentioned elsewhere that their technique is to wait for price to exceed the previous day’s high or low, before entering count-trend. If this technique was used, entry would be at the openof Jan 4th 1.0113.
3) Use of a cross-over trigger. When applying the Ehler’s Fisher Transform (EFT), we can drop down to the 4-hour time-frame. The entry would have beenthe Jan 5th 04:00 price of 1.0139.
TP options include the next Earth level up, the Earth 0-degree 1.0252. Price reached this level on Jan 6th 12:00 period, and was intersected by the Mercury 90-degree.
1) R/R using the candle after the Doji = 140/50 pips and ratio of 4.8:1
2) R/R using the exceeding previous day low technique 130/70 and ratio of 1.9:1
3) The R/R using the EFT C/O was about 105/95 pips and ratio of 1.1:1
***
Note we did not plot PSQ9 below 1.0000, as that requires different input in number of digits. It was not necessary for this example since price action remained above 1.00000.