A-B-C-D Trade - page 15
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Breakout successfully hurdled 1.2273 and hit FE 10 of 1.2291.
Filled 1.2278 + 3-pip spread.
A-B = 40 pips therefore good chance it will go to FE 161.8.
A compromise would be to exit portion at the FE 100 and pull up stop-loss to at least break-even or +5 pips
Now that pair has gotten past the FE 100 of 1.2291 nad bounced off of the FE 127, good time to move our stop-loss to just below FE 100, say1.2289.
Remember, we already paid the spread on entry.
The last breakout did hit the FE 161.8, but had a pivot that would have stopped-out a tight trailing S/L at around the FE 100 per my last post.
The Asian low was breached per attached charts. It was a bit tricky since location of Point A had 2 possibilities. We plot ABC for BOTH.
Chart 1 is the 5-min and chart 2 is the 15-min.
When it hit the FE 100 on the 5-min, we exit. Why not? Only about 4 pips difference.
We don't enter at 1st break of Asian low because we cannot see a discernible ABC pattern at the time. Or we would be joining that small ABC move in progress (see 5-min). After it pivoted Points B and C were clear.
Another note: the indicator Time_modified2 shows a different Asian low on the 15 min versus the 5-min. We use the 5-min since that candle is the first of the session and clearly has the low for the bottom of yellow box. I guess it's a quirk in the indicator.
43 gross pips on this breakout.
June 3rd EUR/JPY 15-Min Chart
I plotted a trend line on this pair's ascent (blue dotted line).
I used the Heiken Ashi Smoothed indicator candles to help me see the pivots better.
This enabled us to see Points B and C established. Traders seeing the break of the trend line may jump in, only to see it retrace and stop out. We, instead, understand that Point C is likely coming.
While we can't see the wicks of the candles, the C-D leg did hit the FE 161.8.
This is just another way to use the ABCD.
Note; I left the ZUP indicator on the chart to monitor the pair conforming to the trend lines it produced, on its way down.
The pair was stuck in a very tight range during the Asian session, which alerts us to a potentially good breakout.
Attached is the 15-min chart. I'm going to quickly address the false breakout to the upside first.
There wasn't a large ABC to draw for the upside, therefore I pull a retrace fib set (red lines). We can determine which retrace level is worth trading.
The Asian high was 1.2190, with 50% fib 1.2210, and 61.8 fib 1.2224.
-Stop-loss just below last pivot of 1.2171
Risk/Reward, if targeting 1.2224 = 23/31 pips. Move S/L to break-even after hurdle of 38.2 fib.
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Downside breakout was spectacular as the pair establish fresh low not seen since 2006.
Chart illustrates logical ABC. Although there was a high Point A available, we err on the side of conservativeness.
Entry
If we switch to the 5-min, we saw the entry after a 5-min candle closed. Entry made on opening of next candle at 1.2141 (11:05 GMT).
Stop-loss
Last 1-min pivot of 1.2174 + 4-pips = 1.2178
This was also location of lower edge of Ichimoku.
Alternative was last 5-min pivot of 1.2182.
Target profit
FE 100 1.2100 + 4 pips = 1.2104
Risk/Reward
37/37
Because the breakout 5-min candle was large (fast), we gave up pips on the front end. Therefore a quick decision on which pivot to use had to be made to keep our risk/reward satisfactory.
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I had plotted the fib channels earlier at 00:30 during Asian.
Pull: peaks of 09:00 to 18:45
Drag 2nd line (dot) to 00:30
This pull provided diagonal price channels, which the pair respected as support and resistance.
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C-D leg eventually hit the FE 161.8.
There was a higher Point A at 07:00 GMT. If this was utilized, pair stalled at FE 127 price of 1.1997 with next support at FE 161.8 price of 1.1938
Long night, as we here on the US West Coast must be like vampires.
Note: Traders were generally out of market or waiting for impact data on U.S. employment at 13:30 GMT U.S. session. Fortunately, the FE level was hit just prior to that time. Otherwise, I would exit the trade about 30 minutes before data release.
Cheers
Assessing the EUR/USD going forward.
The market action is confirming my aforementioned higher Point A placement for the last ABC. That puts the FE 161.8 at 1.1938, which is close to the ZUP produced Bullish Butterfly preferred target for Point D 1.1928 (see other thread "Pattern Recognition Indicators).
Meanwhile, tight ABC pull has pair bouncing off the FE 61.8 price of 1.1955 (blue fibs) and at 1.1966 upon New York close.
Any BUY orders at 1,1928/38 for scalp, can use the area just below the FE 100 fib of 1.1914 or psychological 1.900 level.
Thanks
We can see after opening of new week, EUR/USD gaped down to the area we anticiapted would be immediate support, probing to 1.1922.
Volume is always lower at this time, and there is no major data release today, or news affecting the market thus far.
If we are looking to BUY, we'd like to see the Multi-Time Frame oversold resurface above 30.
We also need to track the ABC pattern that might be forming. Attached chart has:
A = 1.1922
B = 1.1957
C = 1.1923
Alreqady, we can see that Point C does not make sense, as it is not a fib retracement ratio. It is practically a 100% retracement.
Thus, we are looking at a tight channel and must draw retracement fibs instead.
We look at the 1-Hour chart. Taking the high of 1.2077 (14:00 candle) and a low of 1.1922 (20:00 candle), we have profit/fib targets of:
50% = 1.1999
61.8% = 1.2018
Pair now at resistance of 1.1959 whichis the 23.6 retracement fib.
Let's wait for a candle to confirm above 1.1959 as well as end of last week price of 1.1966.
Also monitoring oversold indicator for a resurface above 30.
Gotta go, pair nearing last week's close.
Attached is the 5-min chart. We can see the the pair bounce off of the 161.8 fib channel near the 1.1966 end of week. Immediate support is 1.955, which is previous session low. So, right now it's trapped between.
This confirms our wait for par to move above 1.1966.
We'll need to monitor any developing ABC pattern going upwards.
Quickly, here is 5-min chart, which shows ABC patterns going both directions. As mentioned, 1.1914 is support and pair is testing. wait for close of ancdle prior to any short.