A-B-C-D Trade - page 328
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You and the other viewers are more than welcome. It is a result of the interest and cooperation shown here. Glad you enjoy it.
Working towards occasional on-line video meetings, discussions, presentations, and will let you guys know more as it develops.
Down to the very basics of Gann's SQ9, as it relates to these MT4 indicators.
Gann's division of a price range into 8ths, was translated into these indicators. With the version Gann_SQ9, as seen on the attached AUD/USD charts, we will get automatic adjustments for these levels.
The settings can be altered to change the swings where the indicator would measure with its formula.
1/8th = 45-degrees
In the 1st chart (4-hour), we left the settings on default. The 3 swings shown each made a bounce at the 45-degree level.
Those bounces are tradeable. Add money management as usual, and additional confirmation as per your style of trading.
Price respected other SQ9 levels at various times within this example period.
Now, let's switch that to the 1-hour time-frame, as seen on the 2nd chart. The same pivot low on Dec 13th 19:00 GMT was also at the 45-degree. The automatic adjustment to the swing used the Dec 13th 13:00 high..
The 4-hour view had the same pivot at 67.5-degrees using the Dec 12th 17:00 high.
The rebound upward also made a 45-degree gain on the 1-hour chart.
Here's a daily chart of AUD/NZD, with a FCT plot with A-C plot line based on pivot low to pivot high.
It was able to find the support for a bounce at 1.2454, despite positive NZD data and speculation of RBA increased easing in 2013.
A = June 26th low 1.2673
B = Oct 2nd low 1,2370
C = Nov 14th high 1.2778
A horizontal fib plot B-C would produce the 78.6% fib at this pivot area.
Now let's zoom in on this pair using a 1-hour view. We made a similar FCT plot (yellow) using A-C = pivot low to pivot high.
A = Dec 11th 10:00 low 1.2512
B = Dec 16th 23:00 low 1.2454
C = Dec 14th 12:00 high 1.2529
We can see the revisit to Point B during the Dec 17th (today) 01:00 period. Price eventually made its way to this FCT's -50 mid-channel today during 12:00.
The aspirations are higher making this a swing trade, at the daily chart's -31.4 channel line.1.2584 (but ascending as time moves forward. Subtract some cushion and we have a TP of 1.2575.
S/L = just below the 88.6% horizontal fib 1.2422 = 1.2417.
Entry at 1.2478 a little late, but we wanted to see some upward activity first.
Reward/risk = 96/61 and ratio of 1.6:1
Remember, when trading in the direction of the slope, time is on our side and TP levels increase as time moves forward.
With entry of 1.2478, this example's R/R would be 1.6/3.0/4.2 and increasing with time
A perfect entry would bring R/R of 3.0/5.0/7.0 and increasing with time.
We should clarify the last post's example for taking profit at the first FCT level. It was identified as the -31.4.
This was based on the stated bearish FCT plot on the daily chart.
Since price hit support generated by Plot Line B precisely, we did not even have to make a plot for a bullish FCT.
If we did, we'd use that Sunday pivot low for Point C and the numbers (ratios) would be reversed. Take-porfit (TP) would therefore be at the -68.6 channel line.
The way we set up the FCT interior ratios allow us to use it in either directions in this type of situation. A gain of 31.4, from either plot line, is represented by -31.4 as well as -68.6.
Repeating our reasoning, we use 31.4 as a derivative of 3.14, which is pi. We feel this is an underused ratio. Price adherence to 31.4 and 68.6 is exceptional, especially as it relates to the Fib Channel Triangle plots.
The Attached EUR/USD daily chart utilizes indicator Gann_SQ9, and plots a bullish FCT.
The SQ9 levels are set to intervals of 180-degree, half of a full cycle. Change the setting for Angle to 180.
With the rest of the settings on default, we can see the 3 swings it captures. Each swing's beginning date is marked with a vertical line and labeled accordingly.
The upswing from July 24, 2012 made a peak of 900-degrees. We need to recognize the larger moves as a multiple of the 45, 90, 135, 180, etc. series of Gann 1/8th ratios. In this example 900 would be treated the same as 90.
The 2nd swing (down), was approximately 360-degrees, from Sept 17th to Nov 13th.
The 3rd swing, going up, is still in play. Notice the nice adherence to the 180 and 360-degree levels.
The FCT plot was derived from Point A = Aug 28th. Point B was peak of Swing 2, and Point C was Low of Swing 3.
The reason we selected Point A, using that pivot low, was to affix Point C as close to the 78.6% retrace (A-B) as possible.
The first take-profit (TP) level at the -68.6 intersected the Gann_SQ9 180-degree level. This was the most conservative exit/TP area.
A bounce also took place at the -50 mid-channel. Price was next rejected at the 360-degree of 1.31132, and declined all the way down to the 180-dgree 1.28851.
Price has since swung up, with a 2-day pause at the FCT -31.4. Today, EUR/USD has risen above resistance there as risk on resumes.
****
The 2nd chart illustrates moving Point A to the high of June 17, 2012. This is another example of positioning Plot Line A-C from peak to dip.
This plot produced resistance at Plot Line B, that resulted in the bounce down on Dec 5th at the 360-degree level. The bottom of that move also corresponded with this FCT's -50 mid-channel.
The rebound back up made a breakout through Plot Line B
****
We will review instructions on several SQ9 versions (as well as one or two other subjects) during our upcoming on-line meeting, which would feature the ability to show on charts and answer questions.
This meeting should occur during January. Notice of the exact date and time will be repeated on weekends in this thread. This will be a free event.
I like to use ichimoku indicator. Does anybody trade this way? Could you share as to settings?
I like to use ichimoku indicator. Does anybody trade this way? Could you share as to settings?
Hi Coleen,
We are not experts with the Ichimoku, like the legions in Japan. From what little we hear, a change of the default settings have not been noticed.
Another aspect is which time-frame a trader is using. That would impact strategy.
As with everything else, money and trade management is most important.
The Ichimoku provides support & resistance for those that do not use it as a whole.
Continuation of AUD/NZD BUY example. Split-screen has 1-hour on the left and daily on the right.
Price just bounced off of the daily HAMA_T3 lower candlewick. Our take-profit (TP) is placed at the FCT's -68.6 minus some cushion.
This is also the area just below the daily Ichimoku cloud's lower border (Senkou Span B), and area of congestion Dec 6-10th as best seen on 4-hour.
The 1-hour also uses the HAMA_T3 and it is acting as support during this uptrend.
S/L moved to1.2504 to protect some profit. This is just below today's low.
AUD/NZD BUY positioned survived yesterday's NZD GDP data, which turned out to be negative NZD.
However, there often are whipsaws even if data results in the favor of the trade direction. Widening spreads and slippage can still take out the S/L.
We had moved the S/L to just below the Wednesday's (Dec 18th) low, as marked by the yellow horizontal trendline on the 1-hour.
We cleaned up the charts for better viewing. The daily on the right of the split-screen shows price hitting our TP of 1.2575.
The chart 1-hour on the left had its moving averages removed from the Ichimoku. Since we use the HAMA_T3, it is a replacement, which gives us a visual of a tighter trend support.
We used a vertical yellow line to show the entry point in relation to the diagonal blue -68.6 (1.2583), which was the original location of the TP 1,2575 after cushion.
As best seen on the daily, 1.2575 was also the Dec 6th pivot low, which happens to align to the -68.6, as does the Nov 2-4 lows.
The lower border of the Ichimoku cloud also conveniently just above our TP level and the -68.6. This is also the HAMA_T3 resistance zone (not shown).
RSI(4) on daily at 80. This is the most conservative exit level.
Since this was a swing trade, the stress and maintenance level was low. We set the TP based on the original location of the -68.6, and moved our S/L once.
Monitor the daily as this pair would likely need to make a pullback soon, from its overbought condition, prior to any further upside gain.
If it makes a higher high than today's 1.2583, it might register a lower RSI(4) than the 80 seen on that peak. That event will make it BAJA Bearish Divergence.
Also attached is a 15-min chart with tight plot. NZD GDP represented by large candles, and today's upswing at European open and through other data events.
As with the posted 15-min, we don't want to confuse beyond the basic plot. These are just additional insights that might as well be classified as intermediate, but not necessarily critical to the set-up and subsequent assessment(s) during trade.
This daily chart plots 3 PSQ9 (Mars) ratios: 135, 180, and 225-degree, which are spaced at 45-degree intervals.
We did this to capture the Dec 16th pivot low, which also had the MurreyMath1.0 (MML) 2/8th there.
The FCT plot used its A-C from pivot high to pivot high: Oct 24th/Nov 27th. Plot Line B was logically placed at the Nov 4th low.
This created support for that Dec 16th low at the plot's 68.6.
The resulting price action saw upswing to Plot Line B resistance trendline, which is intersected by the PSQ9 Mars 225-degree, and the 3/8th MML.
Don't let the "Mars" part scare you. It is similar to the regular SQ9, except is slants upwards. MurreyMath also uses 1/8th levels, which Murrey took from W.D. Gann.
You can add additional PSQ9 levels above this resistance point, if price ascends. We just wanted less clutter for better viewing.