A-B-C-D Trade - page 8
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
We have another ABC formed after pull back from breakout. Here is how it looks on the 5-min. It paused at the minor extension fib of FE 61.8. Let's see if it goes to the FE 100 of 1.2229.
Remember the guru specified that 40% of all extensions hit the FE 100. But not all
That's why I lke using the ABCD to trade the previous session's breakout, as there is more thrust.
O.K., it did hit the FE 100, as well as sitting on the FE 127 now.
Here's a look at the 1-Hour chart. We can see the break of the trend line as well as the fib channel.
Here's the ABC as Asia opens. Notice the probe between sessions. Probably some lagging traders from the US session that don't want to be caught long. It touched and bounced off of the FE 61.8.
Asia is the lowest volume of the 3 sessions, but that doesn't mean that the breakouts are not true.
Make sure you adjust the "Time" indicator to reflect daylight savings, etc. Asia starts at 00:00 GMT.
New pull of ABC.
Nice breakout of Asian high of 1.2228 (red horizontal line) occurred during European session. Attached 5- min chart illustrates:
#1 ABC (black fibs) was a Move-In-Progress. However, with A-B being small, trading to the FE 161.8 was still profitable (38 gross pips) even if entered after break of Asian high rather than Point B.
#2 ABC (white fibs) was a second thrust upwards that eventually hit the FE 161.8. A-B was large, and I trade only to FE 100. Gross pips available for that was 45 pips. Gross to FE 161.8 = 82 pips.
Notice Point B was taken off the high of that black candle instead of the quick spike up (red candle), which was probably a large institutional trader going long.
Around 13:00 GMT, there were rumors of an EU intervention to prop up the Euro. Another report has the Swiss National Bank (Swiss Central Bank) selling Swiss Francs to help their country's recovery.
I've adjusted the formula for this indicator, which colors the 3 sessions with the time. Also changed the colors to suit my taste since the default colors were too bold. You can change colors by going to MetaEditor.
Note that the U.S. open in New York overlaps the European session. The indicator's U.S. open time has not been changed to reflect this.
Also attached is a simple spreadsheet with the session open and close times. There is a column for my local time (PST). You can change that for your own local time. The column heading "Local" refers to the session's local time.
Further my note about the rumors of intervention. Having gone through the 1990's and the massive whipsaw action caused by the Bank of Japan's verbal and physical intervention, I don't recommend being in the market during these volitile moments.
Although intervention rarely works beyond a few hours or days, it does impact traders, specifically day traders.
Chasing the market direction is also a bad idea, as there often are spikes back to the original area prior to the market's reaction. Your stop-loss can be dragged beyond your original setting. This is due to slippage as well as a wider spread that often occurs during these spikes.
Have a good news outlet readily on your toolbar. Here's a good one:
Latest Forex News
Here's a pic of the EUR/CHF pair, which either confirms the rumor of Swiss intervention and/or the market's reaction to the rumors.
This also impacts other cross-currency pairs.