A-B-C-D Trade - page 9

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Review of Asian and European (thus far) sessions.

Quick note: Dow and S&P Futures telegraphed a bad opening for the U.S. stock markets, which prompted heavy EUR/USD selling (spike) at opening just now. But it has stabilzed for the moment. If you chased that with a small stop-loss, you'd likely be behind or stopped out.

Attached chart divided into 2 parts for analyzes.

Chart 1 (5-min)

Asian (yellow box)

Pair only probed previous US session high but did not confirm as witnessed by the candle wicks.

Pulled vertical fib channel, and dragged tool (dots) to Asian Low and High. This created targets upwards, with fibs of 61.8, 100, 161.8. You have to add the 127 fib by amending the input fib levels of the fib channel tool.

European (blue box)

Several probes of Asian low.

The bue ABC lines show how we would not take that false breakout. It told us that the Move-In-Progress is most likely going to end at the FE 100, which is only 11 gross pips from the Asian low.

The 2 subsequent attempts never confirmed below the Point B swing price.

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Chart 2 - 1-Hour

We can easily see that the pair has refused to break the 38.2 fib, for now, after several attempts.

It had made a "W" from previous high/low. It is currently stuck in a range from that high and the 38.2 fib. That's 1.2430 and 1.2320.

We can use tha fib channel tool to see what the levels are for breakout, whether it's to the upside or downside. That will be for the next post.

 

14:25 candle now at FE 100 of last ABC, and even touched FE 127. The FE 100 wa about the same as the one I just posted. Therefore not enough profit. Wait ntil it pivots to form a new ABC.

If we entered at the FE 100, we'd be +14 at the FE 127. Not a very good risk/reward. In fact it's bounced back to above the FE 100 now.

 

Latest ABC pull after probe. Break of B to FE 100 = 27 gross pips.

A-B is 50 pips, therefore I trade to FE 100.

You can set whatever size of A-B you like for trading to FE 100 or FE 161.8. I use 45 pips as the divider. It will differ with other currency pairs. You just need to watch them behave.

Also attached are fib channels charts for up and down, plotted on the 15-min.

 

C did not hold, so wait to redraw ABC

 

Breakout of European session high of 1.2417.

Point B was 1.2389

Target of FE 100 = 1.2431. This is a reward of only 14 pips gross from break of European session high as we'd be joing a move in progress.

C-D did hit the FE 161.8 of 1.2490 for +73 pips gross.

If we trade for 15 pips, this is winner. With the ABC, we would understand what the pair is doing and if necessary take early profit.

Another report of EU intervention to prop up Euro.

 

Go to your 1-Hour EUR/USD chart. Draw an ABC going up. Look at the price level now.

 

Now, in keeping with monitoring the bigger picture, draw your retracement fibs on the 1-hour chart, from the last significant move upward.

The market bounced off of the 38.2% retrace fib.

Add a 200-period Exponent Moving Average (EMA) and a 50 EMA. Notice the support and resistance for the last, current, and previous market action.

The more you watch how the market adheres to fibs, the more confidence you'll have in them as part of our trading acumen.

 

U.S. high is 1.2597

Move in Progress already hit the FE 100 of 1.2586

Let it reset and draw new ABC.

 

Broke B from new ABC, at previous session high of 1.2597, but my FE 100 is only at 1.2615. Also should wait until it clears round number of 1.2600. No profit for me considering highest probability is FE 100. Pass.

 

C-D leg leaped from 1.2600 to 1.2606 and hit the FE 161.8.

I don't cry over it, always another trade. At least I had drawn the ABC correctly, as this one was not easy.

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