A-B-C-D Trade - page 322
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Reference GOLD Post # 3201 on Oct 17th had 2 Bull Triangle plots.
The tighter plot is in yellow, and its Plot Line a-c can be seen on today's attached chart on the left of the split-screen.
A 1-hour view of the last 3 swings is on the right chart. It uses a Bear FCT plot (all times GMT + 3 hours).
A = Sept 21st 16:00 high 1786.20
B = Sept 26th 17:00 low 1735.90
C = Oct 5th 04:00 high 1794.80
The high, low, and 127.2 extension to the downside are diagrammed with yellow trendlines. The 50% pullback was at the 4-hour plot's Plot Line a-c (yellow on left chart).
The 127.2 extension on Oct 19th 17:00 bar was at the 1-hour FC 68.6.
The bear HAMA_T3 and red Gann Activator Bars guided traders down from High or the pullback area.
What was next?
Plot a small FCT using the 1-hour's Low (A), 50% pullback (B), and 127.2 (C).
Move Point C to subsequent new lower dip.
***
Note: Plot Line B is 0 (zero) in the numbering sequence. With Bear FCT plots, levels below Plot Line B are positive ratios. Above Plot Line B are negative ratios.
These extension ratios are as follows:
Below Plot Line B:
31.4
50
68
etc.
Above Plot Line A-C:
-131.4
-150
-168.6
etc.
In between plot lines are always -31.4, -50, and -68.6
Try to plot and assess recent price action from FCT on GBP/USD. Use a 1-hour chart. Configure Gann_SQ9 indicator:Angle = 45ExtDepth = 35 (increase until swings you desire are captured)Hints are:The A-B leg was 180-degrees down.Point C was 78.6% retrace of AB, but it doesn’t have to be exact. Point C happened to be same as Mars 90-degree (using PSQ9 indicator).S/L just above the 88.6% retrace fib.Figure out the reward to risk ratio for each TP level at -68.6, -50, and -31.4. If you make the correct plot, you’ll see that price did not adhere to the TP levels, as it usually does. Now, position fib channel tool’s Point C exactly at the 78.6 and at the same date and time as that peak. You should be able to see the precise adherence to the TP levels. We see this behavior on occasion.We’ll post the pic of this chart later during the weekend.
The instructions to configure the Gann_SQ9 indicator would produce A-B swing from Oct 5th 13:00 (1.162162) to Oct 9th 15:00 ( 1.59754).
Point C = Oct 17th 11:00 high of 1.61774. This is where we asked you to place it alternative at the 78.6% retrace of A-B, which is shown in grey fib 1.61647.
The Point C dot won't stay there, so just move it a little to the right and stay aligned horizontally with the 78.6% fib. Moving it to the top of the 16:00 candle seems aligned as well.
We can now see compliance with the FC levels en route down, including this mornings 15:00 candle at the Plot Line B.
The Gann_SQ9 (horizontal) levels down from Point C were also respected, including the 180-degree near the bottom pivot.
Using the GAB and HAMA_T3 on the 1-hour as trend guidance, would have gotten the trader to the FC -68.6, intersected by the Gann_SQ9 135-degree (not shown).
The intra-day pullback from the 135-degree, was contained by the next level up, the 90-degree, before making an extension to Plot Line B. This is also a 127.2% extension of A-B.
Wolf Wave swings:
1) Sept 20th 04:00 low 80.95
2) Sept 21st 08:00 high 82.30
3) Sept 26th 08:00 low 80.22 **
4) Sept 28th 08:00 high 81.25
5) Oct 8th 08:00 low 79.40
** Swing 3 closing position of candles aligned with 1-5.
Swing 5 was a 2nd hit to the 1-3 trendline. First hit occurred Oct 3rd 04:00. This is entry point for BUY.
TP is at 1-4 trendline, which was hit Oct 17th 16:00 period.
We aligned fib channel tool to WW swings:
A = 1
B = 2
C = 5
HAMA_T3 as trend and/or trailing stop-loss guide.
We posted a Wolf Wave indicator, use the "search this thread" function in this thread or Gann Is The Man thread.
As the market awaits the 18:15 GMT FOMC rate decision and statements, let's take a look at EUR/USD with an overlay of the Andrew's Pitchfork and interior fibs with indicator AML_v1-1.
We conveyed the FCT plot for the bear triangle last week. Now, we will make an APF plot using obvious points, on a 1-hour view.
The handle is the FCT's Point A: Oct 5th 14:00.high 1.30704
Lower corner = the FCT's Point B Oct 11th 01:00 low 1.28241
Upper corner = the FCT's Point C Oct 17th 15:00 high 1.31126
Optionally, we can also add the Gann_SQ9, set on ExtDepth = 25, to capture the swing coming down from Point C.
The subsequent pivot on Oct 19th 15:00 (1.3012) was at the intersection of the FCT's mid-channel (FC -50), and the APF's first level down (Upper_ML2).
We also had BAJA Bullish Divergence (RSI 4-Period), with dips on the Oct 18th 18:00 bar and the Oct 19th 15:00 bar.
This level was the 50% of low using Oct 15th 01:00 1.38895 and Point C.
The Gann_SQ9's 90-degree level also nearby at 1.30240.
This was a cluster of support derived from different plots, which created a BUY opportunity.
Price rose up to the FC -68.6 on Oct 22nd 10:00 period (1.30754) for a gain of approximately 50 pips, when trading from mid-channel(1.30160). This was also a 50% pullback.
S/L options included the Gann_SQ9 112.5-degree level of 1.29955.
Net R/R = 45/20
***
From that key pivot low, EUR/USD made a FE 127.2 to the downside to mark this morning's low. Use the fib expansion tool to plot this.
This is also the 68.6% retrace level of the FCT's B-C leg, and just shy of the Plot Line B (yellow) and the APF's Upper_ML1.
This expansion was a SELL opportunity since the pullback can be anticipated with resistance at the 50% horizontally and the FC -68.6 diagonally. We posted other remarks about this pullback level previously.
The other entry point was the break of 1.30120.
When entered at the very top Point C, the trader can understand movement after these plots. The APF's upper channel line was also resistance at pullback area.
We had channels going up and channels going down.
Update to one of our recent post on AUD/USD 4-hour FCT plot 1.04356/1.01483/1.4101.
Price met resistance at the Plot Line AC on this morning during the 04:00 period. The next candle was a doji, prior to the decline during the 12:00 candle period.
Chart on the left is a 1-hour with the same FCT and APF plots. We added the PSQ9, and its Mars 180-degree intersected the APF's Upper_ML1, acting as support cluster above Plot Line B.
Chart on the right is a bull triangle with Point C at that same pivot low (Oct 24th 10:00 low 1.29191). You should be able to figure out Points A & B.
We can see the strict adherence to the -68.6, with first hit during this morning's 06:00 period. Price has since declined and is near the Plot Line A-C.
2 FCTs on the same EUR/USD weekly chart.
In aqua blue color:
A = Jan 8th low 1.2623
B = Feb 19th high 1.3485
C = July 22nd low 1.2041
In orange color:
a = Feb 19th high 1.3485
b = July 22nd low 1.2041
c = Sept 9th high 1.3168
On the 2nd FCT, Point c is a 78.6% retrace of the 1st FCT's B-C leg. It also hit that FCT's 31.4 extension.
The SELL from there hit its -68.6 during the Sept 23rd period. This pivot low was also at the top of the HAMA_T3 candle. The bounce up met resistance at the Plot Line a-c during week of Oct 14th.
We used regular candles, but inserted indicator Gann Hi-Lo Activator SSL. This is the same as the GAB, but displays in line form.
Last note would be to keep an eye on a potential "pennant" formation. Take the Sept 9th low and line up the subsequent lows for the bottom trendline. The daily time-frame can be an easier view. The Plot Line a-c (orange) is the top trendline.
If you haven't heard, U.S. markets and most investment banks are closed today ahead of Hurricane Sandy, which is expected to make landfall on the East Coast within 24 hours.
Possible 11-foot surge would exceed height of seawalls.
Obviously, major flooding, some of which is already underway in Virginia, and airline flight cancellations are in play.
We’ll expand on other ways to trigger off a Point C on a Fib Channel Triangle (FCT).
Chart 1 is a 4-hour of AUD/JPY, with indicator MurreyMath1.0 (MML) supplying horizontal S&R levels.
The yellow lines denote a fib extension to the upside culminating in a 131.4% extension to 83.47.
Looking back, we can see the previous high of 83.56 established on Aug 21st. As price approached this level, we also note that it is near the 7/8th MML.
A predetermined cushion for entry would be necessary near the previous high of 83.56, with the stop-loss just above the 7/8th MML of 83.59.
Reducing the time-frame until we get MML levels in between the levels seen on the 4-hour will result in 7/8th MML of 83.40. Therefore, the trader can have an automatic entry just below this price, let’s say 83.35.
This entry would have triggered Oct 25th at 13:30. We would proceed to use that as the Point C location for the FCT. Point A was the Sept 14th high 83.07 and Point B = Oct 8th low 79.40.
At the time of entry, the take-profit (TP) at the FC -68.6 was 82.24. With cushion the price coordinates were:
S/L = 83.70
Entry = 83.35
TP = 82.35 (hit Oct 26th 10:45)
R/R = 100/35 and ratio about 3:1.
***
This example does not utilize a fib extension of A-B. Rather, it uses a revisit of the significant high of 83.56 and allowing for some cushion prior to that level. It is counter to the slope of the FCT.
This also takes advantage of the MML levels to place a tight S/L.
Using our rule of entry at 78.6% retrace of AB and S/L at 88.6%, trading in direction of the slope, the TP at the FC -68.6 is generally a 2:1 R/R, if it is reached relatively soon after entry. That R/R will shrink when trading counter to the trend (extensions).
This is one way to maximize the R/R in a counter-slope trade.
Here are 2 daily charts with inverted and regular Head & Shoulder patterns, and FCT plots aligned to their necklines (Plot Line A-C).
Chart 1 is EUR/USD with optional PSQ9 Mars 90-degree. The Inverted H&S:
Left Shoulder = May 19, 2010 low 1.2143
Head = June 7, 2010 low 1.18754
Right Shoulder = June 29, 2010 low 1.2151
Align FCT's Plot Line A-C to the neckline points of Inverted H&S:
May 21, 2010 high 1.2470
June 20, 2010 high 1.2466
Point B is at the Head.
Entry with these patterns usually effected at the break of the neckline (A-C).
This breakout to the upside made substantial gains.
Chart 2 is GBP/USD
Left Shoulder = June 29, 2009 high 1.6586
Head = Aug 5, 2009 high 1.7042
Right Shoulder = Sept 11, 2009 1.6741
Align FCT's Plot Line A-C to the neckline points of Inverted H&S:
July 8, 2009 low 1.5982
Sept 1, 2009 low 1.6112
Point B is at the Head.
This breakout of to downside gained to the FC -131.4. This is one level down outside the Plot Line A-C