A-B-C-D Trade - page 312
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Mixing it up a little again, we have a 4-hour chart on the CFD GOOG (Google), with GAB Pivot and HAMA_T3. THESE TIMES ARE GMT + 2 HOURS.
The white arrows are conforming pivots in the direction of the trend, while the dotted vertical lines point to non-conforming and mostly counter-trend pivots based on the HAMA_T3 direction.
The "X" mark non-conforming pivots that had no trend leading up to the pivot. The "E" labels are for engulfing bars.
Conforming pivots (white arrows), with entry at open of next candle period:
3-19 16:30 BUY (E)
3-29 16:30 BUY
4-3 16:30 SELL
4-19 16:30 SELL (E)
5-24 16:30 SELL
5-29 16:30 SELL
7-6 20:30 BUY
Non-conforming pivots (dotted lines) with entry at open of next candle period :
3-1 20:30 SELL
3-12 16:30 BUY
3-27 20:30 SELL
4-23 16:30 BUY
4-30 16:30 SELL (X)
5-7 16:30 BUY (E)
5-9 20:30 SELL (X)
5-10 20:30 SELL (X)
6-7 16:30 SELL
6-11 16:30 SELL (X)
6-19 20:30 SELL
6-28 20:30 BUY
7-5 20:30 SELL
7-17 16:30 BUY (E)
We can combine the GAB Pivot HAMA_T3 technique with Ichimoku. Here is the CFD JPM (J.P.Morgan) 4-hour chart. We eliminated the moving average lines of the Ichimoku by selecting no color.
We have 5 numbered arrows pointing to pivots in the direction of the trend, on this chart which is GMT + 2 hours. Entry is always at the open of the next bar.
Of the first 2 pivots, Feb 16th 16:30 and Feb 27th 16:30, only the 2nd pivot is the right blue GAB color for uptrend. You may choose to use the 1st pivot despite wrong GAB color.
Both stopped at the top of the Ichimoku cloud for support, and thus the qualifying factor.
The 3rd and 4th pivots are SELLS ( Apr 5th 16:30 & May 3rd 16:30) and have the right red GAB color. Only the 4th pivot is just below the Ichimoku and HAMA_T3 resistance, which is the qualifying factor.
The 5th pivot was on July 27th 16:30, with the right blue colored GAB (BUY) and just above the Ichimoku cloud and HAMA_T3 support. This opportunity, of course, is still pending.
Here's a 4-hour chart of USD/SGD, with GAB and HAMA_T3. We highlight the most recent 3 pivots that had the characteristic of the first pullback that was not far from the beginning of its GAB trend (color). RSI(4) divergence is NOT considered.
With these examples, the S/L is placed above/below the HAMA_T3 plus cushion.
1) July 16th 00:00 SELL Entry = 1.2647 S/L = 1.2681 + 10 pips = 1.2691 Risk = 44 pips. TP = July 19th 16:00 1.2534 plus10 pips = 1.2544. Reward = 103 pips. R/R ratio = 2.3:1
2) July 24th 00:00 BUY Entry = 1.2590 S/L = 1.2576 - 10 pips = 1.2566 Risk = 24 pips. LOSS
3) July 16th 00:00 SELL Entry = 1.2564 S/L = 1.2595 + 10 pips = 1.2605 Risk = 41 pips. TP = July 27th 16:00 1.2468 plus 10 pips = 1.2478. Reward = 96 pips. R/R ratio = 2.3:1
The 2nd pivot was a loss. The 2 winners had opportunities to exit when an opposite GAB Pivot occurred after a substantial gain (white dotted lines).
Using 3% risk per trade, the result was +14% and -3% for net gain of +11% on account in 11 calendar days.
The 3 pivots had different characteristics. The first had a red thrust candle down through the HAMA, followed by small candles of indecision, before the first pullback.
The second trend was choppy, and actually had a pullback prior to our arrow. It just did not pull away enough from the HAMA_T3. In any case, this ended up a loser as the larger trend was down and the pair eventually made an extension down.
In our opinion, the 3rd pivot was ideal. We can see a steady trend down, of which the last 3 bars were red. The pullback was the first and fairly early in the trend.
Since these trades can be for long periods, a pre-set take-profit can be used. This can be based on R/R, such as 2:1. Alarms can also be used in the event you want to assess the situation.
The RSI-TC indicator can be set for alarm as well, when it reaches a certain level. The trader may also elect to get a simple script programmed to alarm at RSI divergence with a 2-bar formation.
Here's the CFD for SPY on a 4-hour time frame. The start point is May 1st 16:30 (GMT+2).
We can see price hit the bottom of the box on June 4th. Further compliance with S&R en route back up.
June 19th 20:30. White arrow points to the 61.8% retrace level, same as the GannBox 54 level price of 136.25 (SELL entry area).
The blue ray emitting from the upper left hand corner _1/2_angle2 0 acted as additional resistance. RSI(4) divergence.
Max S/L just above yellow HLine1 0 of 136.83 Good to excellent R/R.
All times GMT+2:
TP1 = 72 level 134.45 (hit 6-20 16:30)
TP2 = 90 level 132.65 (hit 6-21 20;30)
TP3 = 108 level 130.85 (hit 6-25 20:30)
This is 4-Hour Gold on a GannBoxx plot using the July 12th low. We can see the GAB Pivots from previous commentary.
The setting for the height (prices) is 10800, while width (times) is left on default of 360.
Reviewing interaction with the Gannbox S&R, we can see initial price to the 54 level with a double hit. The subsequent decline respected the diagonal Gann angles coming from the lower left hand corner: blue _1/2_angle2 0 and red _1/1_ angle0
The extension to the yellow HLine2 0 had a double hit there as well July 27th – 31st. The short of the revisit on July 31st was one opportunity.
Another opportunity came when price retrace 50% to 1591.20 on Aug 1st 20:00 (GMT+2). This was one exit option for the aforementioned short, and an entry for a quick bounce BUY.
Nice tight S/L option just below the yellow HLine 1 0 price level of 1589.70.
The HAMA_T3 clearly shows price still in a downtrend. Therefore considering the tight S/L, a TP target at the bottom of the HAMA_T3 (1606.20) is workable. This area also near blue 72 level which can act as additional resistance.
After cushion, net R/R = 13.50/3.00 and ratio of about 10:1
A more advanced trade management includes recognition of candlestick action viz-a-viz pivots and high/low of previous periods.
At time of writing, position is +11.00. Can move S/L to protect some profit.
The 1-hour chart has price meeting the HAMA_T3 now.
This next chart is a daily of CFD AAPL, which tries to mimic Apple Computer. GannBox plot uses peak of April 10th, and height of 14400 and width 360.
The first 3 arrows are GAB Pivots that correspond with the HAMA_T3.
The 4th arrow points to July 10th high of 619.61. This level is the 78.6% retrace of Apr 10th/May 18th.
The important red _1/1_angle0 intersected that 78.6% fib and thus acted as additional resistance for the SELL.
A tight stop-loss can be about $4.00 at 622.60 . Target TP at the top of the HAMA_T3 candles, which was also at the yellow HLine1 level of 595.63.
Net R/R 21.00/4.00 and ratio of 5.2:1 (achieved July 12th)
Busy week included GBP, ECB, and FOMC rate decisions and verbiage. Friday contains U.S. Non-Farm Payrolls and Unemployment.
Center stage today was ECB Draghi’s press conference. Verbiage stated no immediate plans to intervene (but mulling rate cut), and generally did not satisfy markets.
Commerzbank’s most recent reported view of the FED suggests they are not convinced QE3 would aid jobs increase.
Yesterday’s impact event/news was Knight Capital’s computer glitch that caused it to accidently rapid purchase and sell hundreds of stocks. The new computer software problem caused a USD 440M loss, resulting in Knight’s stock getting hammered down by 50%.
Knight Capital Says Trading Glitch Cost It $440 Million - NYTimes.com
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Risk-off today and thus USD strength versus most pairs. Stocks and commodities down. Gold down, and testing below GannBox plot’s yellow HLine1 0 level of $1589.70. Support at red 1/1 angle.
Crude testing July 25th pivot low of 86.25.
U.S. Non-Farms Payroll surprised the market and came in much higher than consensus, while Unemployment ticked up. However, this was trumped by new out of Europe that "the EFSF wants repurchase facilities, unsecured and secured loan proposals from banks.'
Forex: EUR/USD rallies on EFSF news
About EFSF
****
Another area of concern has been the drought affecting grains such as corn. Although some traders don't like to trade food, we'll take a look at it from an educational platform.
Attached is ZCU2 4-Hour, which tries to mimic September Corn Futures.
We position the start of the box on June 15th 17:00 Low 512.00. The height (prices) is set at 3600, while the width (times) left at default 360.
We also used GAB and HAMA_T3. Price ascended almost without a discernible retrace until July 20th. The dip on July 11th was illustrated with red GABs, which met support at the blue 72 level. This is equivalent to the box's 50% level.
After peaking at the 126 level on July 20th, price consolidated until a revisit of that high occurred. The 2nd chart is a zoom-in at the 2 peaks.
This was a short opportunity at the revisit. We look for other confirmation, and saw the diagonal _1/4_angle3 0 from the upper left corner, act as resistance. We also had BAJA Bearish Divergence with 2 peaks of July 30th and 31st.
Let's call entry at 820.00 after price declined below the July 31st 09:00 bar (07:00 GMT bar as all chart times GMT+2).
The GABs met the HAMA_T3 and struggled before risk-off environment pushed price lower.
Fib plot using Low = July 26th 21:00 776.00 High = July 31st 09:00 (not shown).
This produced exit option levels based on retrace fib levels. The pivot low came on Aug 1st 17:00 period, which was at the 88.6% fib (781.60).
This was also just above the blue HLine5 (same as 108 level). We can see this area act as previous support.
Let's call exit at 785.00.
S/L just above July 20th high 828.40 + cushion = 830.00
The R/R = 35.00/10.00
Thus, the trade anticipated a move down of ONE section of the GannBox, from level 126 to level 108. The GannBox is made up of 8 sections/levels. The plan was to trade a 1/8th move.
That fraction of course is a focal point of Gann, as well as Murray Math Lines (which took that from Gann).
Price had already retraced this amount. This was a repeat within the same boundaries.
Let's update the GannBox for Gold. We had recently posted the plot using height (prices) setting at 10800.
After price spiked down on Aug 2nd 16:00 (GMT+2), and another 2 subsequent GABs closed, we saw respect based on another height setting on 12600.
These height numbers are derived from the levels of the GannBox. After level 108, there is level 126. Just add zeros after that.
The attached updated chart with the adjusted height clearly shows price respecting the important diagonal red 1/1 angle. Horizontal level 36 also right there.
This adjustment is rather small, but can be of use going forward. When we look left, we can see the yellow HLine 1 was resistance early in box.
Gold is modestly up after data and news as close of week approaches.
Attached I a 4-hour of AUD/JPY, with GAB and HAMA_T3. We focus on the pivot bottom on July 25th during the 00:00 period.
We had both BAJA Bullish Divergence and RSI(4) Divergence on the 2 GABs.
As price ascended and broke through the HAMA_T3 in a change in trend, we can see the SQ9(Price) levels that used StartPrice of 79.471 at the July 25th pivot low.
We also have a fib plot High = July 19th 82.18 Low = July 25th 79.471 (blue).
Price consolidated after reaching the High, and ahead of Friday’s U.S. NFP. Results of data sent pair down, as witnessed by large red bar.
A swing trade like this can opt to have a larger S/L cushion while wading through such high-impact data. Otherwise staying on the sidelines is prudent.
A GAB Pivot formation occurred Aug 2nd 20:00/Aug 3rd 00:00, with RSI(4) divergence. The uptrend was reinstated and price made a hit to the important 360-degree level of 83.077 (same as 138.2% fib extension) on Aug 3rd during the 12:00 period.
That hit to the 360-degree was a shave opportunity, selling back down to the HAMA_T3.