A-B-C-D Trade - page 324

We've made mention of trendline tools in the past. A couple out there are free, but is a use-at-your-own-risk situation.

The ones that are for sale range about $250-$500. These are Magic Stick ($500 with discount) and one other that was improved from the original version posted on this site. We can't recall the name but the original version was called trendme leaveme or similarly named.

Another option is to rent one. This can be done with the product FxAutomatic, for about $49 USD per month.

Now, let me present a FREE trendline tool. You need to go over to:

stevehopwoodforex.com • View topic - Tipster Trendlines 2P (TT2P) - BE and 1 or 2 targets

or cut and paste: stevehopwoodforex.com/phpBB3/viewtopic.php?f=21&t=192

Remember, the copy right on these products and not to violate. This is FREE so don't push your luck.

There are a few scripts that also have to be downloaded, so don't forget that part. They also provide a link to a full instruction manual. We cannot answer these questions, and I doubt they will spend time on it either.

And last, we posted an indicator that alerts at trendlines, called Chin Breakout Alert that uses audio and pop-up alerts.

These are the type of tools you will need when trading larger time-frames, or when you prefer not to be glued to your monitor.

As usual, test on demo accounts first, and then with a very small real account. If you can't win with the free one, then you need to reassess your trading skills, BEFORE spending money on advanced tools.

One important aspect is that the Magic Stick and FxAutomatic features stealth stop-loss and take-profit ability. In other words, the broker cannot see them.

MagicSstick had on-line payment processing problems and the new set-up is through click2Sell, which allegedly may contain phishing. Be extremely careful about that. It's a pity since their product sounds good.

Always read unbiased reviews of products first.

This is an updated pic on the Ascending Wedge for EUR/USD, which saw a breakout to the downside on Nov 2nd.

When plotting a FCT pointing up, we get support below. The plot aligns Plot Line A-C to Swings 1-5.

Today, price has been trapped in the FC -50 thus far. We highlighted in green, the congestion from the previous dip and peak of May and June. This is also in the area of the 50% retracement fib of A-B.

Here are instructions on how you can plot the GannBox_144, and fitting it to 2 dips for the 1/1 angle.

Look for 2 dips. Let's take the pair USD/CAD on the daily time-frame.

Sept 14th low .9632 & Nov 11th low .9874

To calculate height:

The number of pips between the 2 prices is 242.

242 X 2 = 484 input this number into the setting for “prices” (height of box)

For 5-digit charts, add a zero to the end of this number.

To calculate width:

Use the trendline tool to count the number of bars/candles from the left of the box, which is the location of the 1st dip, to the location of the 2nd dip. (double-click trendline and drag to see bar count)

For this example it is 38 bars, for charts that do NOT have Sunday data/candles. For charts that do have Sundays, the count is 46.

Now double that number.

No Sundays = 76

With Sundays = 92

Input this number into the setting for “times” (width of box).

The objective is to center the low of the 2nd dip. That is to say, it should be in the exact center of the GannBox.

It is also a way to align the 2 dips into the 1/1 angle line (red), which Gann considered the major trendline. A break of this 1/1 angle is considered a change in trend.

Note that the width will not compute and align correctly for the 1/8th vertical lines if the input number is not divisible by 8.

That’s O.K., ignore them. Look at the blue 1/4 vertical lines. If you need 1/8th, simply divide those blue lines in half.

This is a 2-part example, with the 2nd part to follow in a separate post. Using the technique detailed in the last post, let's look at a plot for EUR/USD dialy.

1st dip = Jan 10, 2011 (1.2872)

2nd dip = July 12, 2011 (1.3836)

prices (height) = 19280 (5-digit chart)

times (width) = 314

The white arrow points to the Sept 5, 2011 break (to downside) of the red 1/1_angle0 line.

We added the HAMA_T3 for trend guidance and to assist in trailing stop.

The yellow horizontal lines divide the box into 3rds. They are labels as HLine1 and HLine2.

The HL1 intersected the red 1/1_angle2 which slopes down. Price made the hit to this area on Sept 12th, and proceeded to bounce up to the HAMA_T3 zone.

EUR/USd made 2 more pivot lows before a large retrace. Adherence to the various angle lines was excellent throughout time in the box.

We also labeled 3 points for a FCT plot: May 4/July 12/Aug 29. This resulted in the FC 50 catching the pivot low of Oct 4th. The Jan 13, 2012 low was this FCT's FC 68.6.

Now, we can reverse the direction of the FCT plot and make a bullish triangle.

Jan 10/May 4/Oct 4

The Oct 4th low is a 88.6% retrace of A-B.

Priced gained to the FC -50 (mid-channel) on Oct 27th and saw additional resistance in form of yellow HLine2 and green -sq2 0.

The subsequent decline stay beneath the HAMA_T3 and made an extension to the plot's FC -131.4 on Jan 13, 2011.

Several entry and exit points based on the S&R provided by all tools described herein.

Now things get even more interesting.

Using the same GannBox_144 plot just detailed for EUR/USD, we align the fib channel tool to certain locations - twice.

1) The 1st alignment is to the 1/1_angle1 0 (red) and _sq3 0 (green).

These 2 angle lines slope up.

2) The 2nd alignment is to the 1/1_angle2 0 (red) and _sq1 0 (green)

These 2 angle lines slope down.

We carried out the extensions to 3 (300), and then removed the GannBox for better viewing of the resulting grid. The examples listed below came after conclusion of the GannBox anyway.

2 examples of resistance at grid lines are labeled FC 68.6 (Feb 9, 2012) and FC 200 (Apr 27, 2012) , with both SELL opportunities accompanied by BAJA Bearish Divergence.

We drew 3 wedges (sometimes called pennants).

May 4, 2012 SELL

July 5, 2012 SELL

Aug 21, 2012 BUY

Nov 2, 2012 SELL

The grid lines can act as S&R prior to and after trade entry.

In the attached split-screen where we can see the revisit of the Nov 9th low occur on Nov 12th during the 08:00 period.

The 15-min chart of the left utilizes MurreyMath1.0 (MML) and a Bearish FCT plot with Oct 25th/26th/31st swings.

The Nov 9th low was an extension to the FC 131.4 and 0/8th MML. Price bounced off on the revisit Nov 12th and made a gain of 37 pips to the FC 100.

The chart on the right plots a Bullish FCT using the most recent 2 dips and peak Nov 8th/9th/9th prior to entry. We saw price respect the S&R levels enough to validate plot and guide this smaller trade. Entry was at support provided by the FC-68.6.

In its entirety, it looked like sideways activity or consolidation. Understanding S&R, even at a micro level will allow the trader to trade “between the fibs/S&R”.

In this example, the opportunity was a higher probability opportunity with the revisit to the Nov 9th low. We were able to see and understand the resistance below the 2/8th MML. This afforded the trader a conservative take-profit target to go along with a horizontal fib plot (white).

***

After price broke support on Nov 13th (this morning) Asian session, it found support at the -1/8th MML , bounced up to the Low, and respected the FCT channel.

The blue line is Gann Activator SSL. This showed price in a bearish condition during the BUY outlined above, which was a reason to keep trade on a short leash.

Let's revisit this plot that was addressed a few days ago, illustrating the wedge and breakout to the downside. The attached chart moves the FCT to the triangle highlighted by the ZUP pattern Oct 11th/17th/26th.

As with the former plot, price found support at a FCT channel line. In this pic, we can see the FC -200 as current support, and intersecting the horizontal 50% fib of 1.2662.

The ZUP is used to remind us of any fib ratios that may have developed. Today's pivot low is a 2.613 extension of the B-C leg of the ZUP pattern.

The ZUP also provides diagonal S&R based off its X-B swing points. The lowest support line is the same as the FC -200. To get more diagonal support, just add more ratios below -200.

The green highlighted rectangle was shown and described as support cluster in the last post.

Thanks fxbaja... I really am new here so this kind of step by step tutorial is very helpful to me...

Using the technique just featured, let's review a GannBox for GOLD on the 4-hour time-frame. All times are GMT +2 hours.

1st dip = Aug 31st 16:00 low 1645.80

2nd dip = Sept 26th 16:00 low 1735.90

Difference is 90.1

Double that = 180 plus 2 zeros = 18000 for height input (prices)

Distance from 1st dip to 2nd dip = 108 candles

Double that = 216 for width input (times)

Break of red 1/1_angle0 occurred Oct 8th during the 04:00 candle period.

If stop-loss placed above blue HLine5 0 (108), it would have survived bounce up off the yellow HLine2 0.

Movement drifted sideways until Oct 12th 20:00 when a stronger decline took price to the blue HLine4 0. The diagonal green sq2 0 angle line acted as resistance en route down.

As price moved outside of the box, we can use the fib channel tool to align the 2 plot lines to certain angles of the box.

The green sq2 0 and red 1/1_angle2 0 that slope down was ideal (not shown).

Today, we're going to feature how to use the fib channel function that is embedded in the complicated indicator Golden Section (which we also have attached).

Let's apply it on the daily EUR/USD. This way, some viewers can still see the automatic plot for the next few days, since it readjusts as time elapses.

In the settings, we want to turn off the following (by choosing "false"): Some are off in the default, but just make sure.

ExtPitchfork

ExtPitchforkRevers

ExtSpiral

ExtFan

ExtArc

We want to have ExtRec set to "true". This is the rectangle.

We leave ExtBack set to "true", because we haven't figured this function out as of yet.

Now, we want to set RightChannel or LeftChannel. For this example, let's select RightChannel (true).

Under Var 6 for right or left channel, we need to choose a fib ratio. The default is 1.618, so we'll use that.

The attached chart shows plot of rectangle based on the 2 peaks of June 17th (lower corner) and Sept 17th (middle of rectangle).

The indicator proceeds to plot fibs based on the bottom of the rectangle to the high of the 2nd peak. The plot is not visible.

The fib plot's 1.618 extension level is ALIGNED to the right side of the rectangle for the fib channel plot point.

Just double-click on the fib channel, at the high of the second peak or the bottom of the rectangle, directly below that peak (same day). The 3 dots of the fib channel tool will appear.

We will see that the right plot dot is positioned on the right side of the rectangle. This is the 1.618 level. When the user changes that ratio input, the indicator will change the angle of the fib channel.

Since the indicator automatically adjusts, you can plot your own fib channel right over the indicator's plot to ensure it stays. You can then delete the indicator.

....or you can simply bypass the indicator, by following the indicator's technique and plot that rectangle yourself with the fib channel.