A-B-C-D Trade - page 21
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I skipped over the breakout of the US low during late Asia. Slept through it as Asia has been flat.
Attached 5-min chart shows ABC using new low beyond US session low. There was a false breakout prior that was mentioned.
A = 06:55 GMT 1.2353
B = 07:20 GMT 1.2316
C = 07:30 GMT 1.2327 (small retrace = stop-loss area)
FE 100 = 1.2289
FE 127 = 1.2279
FE 161.8 = 1.2205 (distance A-B small = target)
Entry on opening of 07:45 candle 1.2306
Risk/Reward = 25/95
"You snooze, you lose" LOL
Truth is, would have stopped out just above the FE 127 since we move our stop behind each fib level, and it retraced dramatically prior to continuance of extension.
Actual reward = 22 pips
Attached is the 5-min chart of EUR/USD that saw the breakout of the U.S. low upon the opening of the Asian session.
I was not able to trade this due to another commitment. We do try to have a life
.
A = 18:00 GMT high of 1.2329
B = 19:20 GMT low of 1.2295
C = 21:10 GMT high of 1.2315
U.S. low = 1.2295
FE 100 = 1.2281 (hit)
FE 127 = 1.2271 (hit)
FE 161.8 = 1.2259 (just hit)
Gross profit 46 pips
Because the break of Point B involved a large/fast 5-min candle, it was hard to get in if we waited for the close of a 5-min candle to confirm below the U.S. low - unless we have a certain tolerance level to enter regardless of a close of the candle.
A 15/15 strategy was a winner.
Cheers
I was just asked by a friend and former student, that happens to be here:
" why did I pick that particular ABC?"
When we look at the 5-min chart, we see 3 candidates for the ABC during the U.S session.
The last and most recent - the retrace for Point C was almost 100%, exceeding 78.6%. It also was too small.
The first ABC - this was actually similar to the middle ABC that was chosen, as witnessed by the almost identical FE 161.8. Since they were similar, we take the most recent ABC, the middle candidate.
And as designed, when A-B is smaller than 45 pips, we target the FE 161.8.
Hope this makes sense.
FE 161.8 = 1.2336
Move stop-loss
+ 30 just hit at FE 161.8 price of 1.2336.
Nice surge in Euro/USD continues. Nearing next level 1.2367/8 (hit). Next 1.2396
Attached is the 5-min EUR/USD. We had plotted both waves/ABCs, which provided to target levels mentioned on the last posts.
1st ABC:
A = 07:15 low 1.2241
B = 07:35 high 1.2282
C = 07:50 low 1.2267
Asian High = 1.2299
FE 100 = 1.2309
FE 127 = 1.2320
FE 161.8 = 1.2335 (target)
These swings were easy to spot and occurred just before European open.
- We noticed that Point B was some distance (17 pips) from the Asian high.
- We determine that A-B was under 45 pips and the profit potential to the FE 161.8 was worth it.
Stop-loss just below last 5-min pivot 1.2291 minus 1-pip cushion =1.2290.
Entry BUY = 1.2306 (including 3-pip spread), open of 08:25 5-min candle.
Profit target = 1.2335 minus 1-pip cushion - 1.2334
Risk/Reward = 16/28 pips
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2nd ABC
A = 07:50 low 1.2267
B = 08:45 high 1.2339
C = 09:00 low 1.2323 (stop-loss 1.2322)
FE 100 = 1.2396
Since A-B was more than 45 pips, we target the FE 100.
Risk/Reward = 20/54
If the trader were to stay in the first trade, we had moved stop-loss to just below the 1st FE 127 price of 1.2320, after extension reached the FE 161.35 price of 1.2335.
Extension balsted through next FE 236.2 price of 1.2123, where we move stop-loss again to below that level. A pivot formed on the pullback at 09:30 to provide us with a stop-loss just below 1..2364.
Hit a high of 1.2393 before significant retrace. Therefore, if we didn't take profit near that area, we would have hit our stop-loss at 12:10 candle. It did eventually reach and probe above the FE 100.
The 2 major pull backs were 23.6% and 38.2% retraces.
To look at the retraces, pull fibs:
07:15 low 1.2241
09:50 high 1.2393
Retraced to the 23.8 fib price of 1.2357.
07:15 low 1.2241
13:15 high 1.2408
Retraced to 38.2 fib price of 1.2344
We move the high since a new peak was established.
thank you for this wonderful series! i really appreciate your efforts. I am new to forex and looking to learn as much as i could.
thank you for this wonderful series! i really appreciate your efforts. I am new to forex and looking to learn as much as i could.
Your very welcomed. I'm not a guru by any stretch, just want to share.
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The order of periods by volume/volatility (best time to trade):
1) European session. The term "London Breakout" pertains to trading GBP/USD the first few hours from the London open. Breakout is either from the previous session or the preceding few hours. Different methodology from different traders/gurus.
I've taken the traditional trading of GBP/USD and switched to EUR/USD. The reason for my preference is that the 2 pairs trade in the same direction, but the EUR/USD consistently moves in larger number of pips.
2) U.S. session, which overlaps the 2nd half of European, but up to the close of New York.
3) Asian session. Usually sideways, unless there is major news or economic data.
No matter what drives the market, we don't care nor want to get too caught up in those fundamentals, we use tools in an attempt to take advantage of the thrust.
While we can see the large movements and wish we can participate, that would be employing trend techniques. The ABCD is not a trend technique. It is a pattern technique. I've married it with the breakout of the previous session, mostly breakout of Asian session per above, to provide thrust.
Aside from thrust, the entry rules, and money management are the other important elements.
Each trader will make their own rules, after practice. My suggestion is to limit each trade to 1% risk, and have at least a 1:1 risk/reward scenario.
Demo trade and keep a log. If you are down 8% of the original account balance, stop trading (practice account first). There is something wrong. Go over your trade log to identify problems.
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The last Asian and European sessions saw EUR/USD probe previous sessions' range, going into the weekend.
The Asian breakout of the U.S. high registered 13 pips and the European breakout of the Asian low extended only to the FE 61.8 for 13 pips.
If we look closer at the breakout of the U.S., during Asian, we can see the previous European high nearby. That price level is where the breakout halted.
Let me reiterate that the Forex market is trending only in a minority of the time. With this ABCD technique, we need the trust to achieve our goal of taking profit at certain FE levels.
End of week in generally not a good time to trade, unless you know how to scalp, or utilize a system based on an end-of-week technique.
Have a great weekend all.
EUR/USD opened with gap to the upside. Tokyo due to open soon, when more accounts trade.
Pair moved up to major resistance of 1.2450 (previous significant high) and had a small bounce.
1) We need to expand to higher time-fram chart to locate next significant high. The 4-Hr chart shows this to be May 21st 04:00 candle high of 1.2672.
2) Plot ABC extension on 1-Hour for guidance with S&R. Times are GMT.
A =June 17th 07:00 low 1.2241
B = June 17th 14:00 high 1.2412
C = June 17th 15:00 low 1.2338
FE 61.8 = 1.2445 (already acted as support)
FE 100 = 1.2511
FE 127 = 1.2558
FE 161.8 = 1.2618
If 1.2450 is broken ( now testing above that at 1.2463), we can anticipate next levels per above.
If it pivots, we use that as Point C on new ABC.
Reverting.