A-B-C-D Trade - page 4
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Here's a pic of dragging the fib channel tool from A to B highs.
Drag 2nd line to first expansion (first arrow).
You can see the support levels with the arrows. Those are fib levels, just shown diagonally.
Just add the fib level labels.
Edit: This is the zoom out look at 5-min chart. Sometimes, we need to look at a bigger picture.
Here's another one. I've labels the 3 points as 1,2,3 where you have to place the tool.
Drag from 1 to 2 first. Then after fib channel pops up on chart, drag 2nd line to Point 3. Point 3 should be the first movement away from top of Point 2.
At the time of Point 3, we can see the future channel for support and resistance on this down move.
Pull from bottom high Point 1, up to top high of Point 2. After lines appear on chart, adjust 2nd line to Point 3.
At the time of Point 3, you can see resistance with the 61.8% fib. That was seeing into the future.
Practice with this tool and you will have another advantage. By the way, when the move hit that 61.8% fib, that was also Point C on an ABCD trade! Kind of a nice advantage, don't you think?
This chart illustrates areas that we can have both fib channel support and resistance, as well as fib arc S/R.
The fib channel tool. Pull from Point 1 to Point 2. Adjust 2nd line by dragging it to the first expansion (Point 3). Also make sure the next expansions (Point 4) conforms to the 61.8% fib, and the next 100% fib is also hit. This allows you to see that the market is respecting this fib pull.
Pull from fib arc tool from top (A) straight down to bottom (B). Those are the high and low prices.
Now, everything after Point A is in the future.
Notice the areas that has BOTH arc and channel support.
To make it even more interesting, you can pull the fib arc from B up to C.
Late breakout from Euro session low. However, there was a Move-In-Progress (MIP).
Redrew fibs. New low 1.2656
A-B was only 29 pips, so I trade to the 161.8 fib extension
30 gross pips profit potential, but volume was dwindling.
Keep your eyes on this pair as we are entering the Asian market soon.
It has stopped/puased just short of Euro session low
Careful, as THere is a Move-In-Progress from ABC
A = 117.24
B = 116.93
C= 117.16
FE 100 116.84 already hit!!
Redraw fibs after C of retrace takes hold.
Here it comes, breaking new B now
Extension stopped at FE61.8 which is same as FE 1.27 on old ABC. Pulled trade at 116.69. +5 pips
This afternoon Pacific time saw another run on the Euro. Probably spurred by the resignation on the British Prime Minister...or all the concerns that the Euro zone bailout will put a ceiling on things there. In any event, for every action, there is a reaction. I'll continue to use tech tools to take advantage of it.
EUR/USd went down quite a bit after the first breakout. Retracing now, as shorts need to cover (exit).