A-B-C-D Trade - page 48
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
EUR/JPY bounce trade effected off of previous pivot 113.13, and retraced 61.8% to 113.31 fib. That's a +18 gross pip trade with S/L of 10 pips max.
EUR/USD did not hit the same type of pivot, falling shy by about 10 pips. Auto entry did not trigger yet, but its making another effort.
Bounce trades are best conducted during first approach to significant support/resistance. That is highest probability scenario.
EUR/USd bounced at 1.3355, just above support of 1.3352. It has retracaed 38.2% (1.3369) and rising. Top of retracement pull is 1.3391.
Obviously, if we are not in at 1.3355 or a couple of pips higher, it's too late (considering we only wnat to trade first approach).
EUR/USD bounce trade made it to the 50% fib of 1.3373 for a gross gain of 18 pips. This pivot formed a Point C. Extended to its FE 61.8 of 1.3349 and bounced. Re-attempt to extend further under way.
EUro going through some medium data through 08:30.
Monitoring support with EUR/JPY of 112.73, but major intra-day fib from last Euro session at 112.76.
Measure retrace fibs from top of 113.02 to whatever price it bottoms at for bounce trade (practice if you're new of course). Session pivot of 112.94 important and our basic area for exit should entry be made.
Pair did not bounce off support due to negative data for both GBP and EURO. Extension to FE 127 now.
EUR/JPY 112.60 is also the FE 1010 based on Point a using Asian High. Extension below Asian Low of 113.04 driven by several data releases.
Meanwhile, cross-pair USD/JPY made a revisit to support and bounced.
EUR/USD extended to FE 100 of 1.3335.
Let's take one pair at a time.
Follow-up comments on EUR/USD
Pair unable break Point B to upside after test end Asian. Instead, formed ABC to downside and breakout driven by negative Euro data released through 08:30:
A = 07:45 high 1.3391
B = 07:55 low 1.3357
C = 08:00 high 1.3371
Asian Low = 1.3357
FE 100 = 1.3337
FE 127 = 1.3328
FE 161.8 = 1.3316
Various data releases caused choppy trading. Break of Point B was only by 1-pip to 1.3356 during 08:05 candle. If we stick to our rule to avoid high (and most medium) impact data releases, we would wait.
As it turned out, Point C was breached before pair resumed choppy downtrend to 1.3307.
If entry held back until dust settled after 08:00 release, we are looking at 08:30 candle opening price of 1.3354.
Remember, we had a post analyzing support from previous Sept 22nd U.S. session at 1.3352.
1.3353 is also the 50% fib for the massive upswing during Sept 22nd Euro session.
Good entry would be opening price of 08:50 candle 1.3349, since previous candle closed at 1.3348 which is below support figures listed above. The attached chart show 2 horizontal red lines. One for Asian Low of 1.3357 and one for support at 1.3352. We hurdled both time and price concerns but must keep min 1:1 risk/reward.
We have to recalculate the ABC swings since Point C was invalidated.
A = 07:45 high 1.3391
B = 08:05 low 1.3355
C = 08:10 high 1.3373 (50% retrace of A-B) (Stop-loss + spread)
FE 100 = 1.3337
FE 127 = 1.3827
FE 161.8 = 1.3315 (target - hit)
Risk = 27 pips
Reward = 32 pips
If we trailed our S/L after a 5-min candle closes below the FE 100, then we would have stopped out just above FE 100 for profit of about +9 net pips.
Extensions can encounter choppiness due to various reasons. Could be from minor data, cross-pair action, or in this case a bounce off support at 1.3333. This is the 61.8% retrace fib from the Large move during Sept 22nd European session.
If you read the post from yesterday on the 3 pairs, we ended with the "set-up" procedures ahead of the upcoming European session. We draw fibs for S&R.
The experienced trader therefore would anticipate the bounce off of 1.3333. It did during 09:10 candle and went back up to 1.3352, our other price of interest. It was support and now acted as reisistance.
Another action we track, that calms the nerves with pullbacks, is the retrace from:
High = 08:40 1.3362
Low = 09:10 1.3332
The pullback was a 61.8% retrace to 1.3351. We'd also peg just above this price to move our stop-loss.
S/L moved again to just above pivot of 1.3344, after bounce off of the regular 138.2% extension price of 1.3319. That retracement pull is from:
Low = Sept 22nd 1.3352 to
High = Sept 22nd high 1.3439
If we waited through that, we would have realized profit target to the FE 161.8.
This is a lot to absorb and learn. After all, we are in the advanced section of this informal tutorial. This example shows how an experienced trader can turn a losing trade into a winning trade.
Part 2 of the 3 pairs we are reviewing.
USD/JPY
Getting set up for Sept 23rd European session, we plot retrace fibs on previous day's Euro session from:
5-min chart
High = 12:15 84.72
Low = 15:15 84.27
ABC swings:
A = 07:30 high 84.66
B = 08:10 low 84.53
C = 08:25 high 84.61
Asian Low = 84.49
FE 100 = 84.48
FE 127 = 84.44
FE 161.8 = 84.40 (target -hit)
Target is not enough to trade. Additional concern with jitters due to previous intervention also was not attractive for shorting this pair.
We know that 84.40 is the 50% retrace fib from previous massive move. Thus, we have 2 support areas = 84.40 and 84.27. We can expect bounces from both.
That was it. Extension too small to trade, but bounce trades had high probability. Number of pips bounced:
84.40 = 15 gross pips to just aboe 50% retrace from Asian High, and 61.8 fib from previous day's Euro session.
84.27 = 24 gross pips to 61.8% retrace from Asian High.
Targeting profit can utilize FE levels (black fibs), retrace of previous day's Euro session (blue fibs), or retrace of last move.
caution, just saw a large spike up on Yen pairs.
Japanese intervention with Yen has NOT be confirmed yet. Will post as soon as we hear.
Everybody has been waiting for official confirmation on Yen intervention.
This just in: "BOJ says no comment on Forex intervention".
LOL. Not unusual to attempt to keep shorts nervous, as this tactic has been used before as well. Could be that they simply called to check rates, another tactic used before.