A-B-C-D Trade - page 64
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If all of the fib plotting is confusing and you cannot put the time in, try demo trading with the SpudFibo indicator.
This indicator plots fibs based on the previous day's high/low. It starts its measurement of "yesterday" from midnight (00:00) GMT. It also has extension levels.
You would need to identify which fib to trade the bounces.
The major retracement fibs are 0%, 100%, 38.2% and 61.8%. Other significant fibs include the 161.8% extension.
Note that the indicator's -61.8% fib is the same as our regular 161.8 fib. It is displayed as such to denote that it is an extension below the LOW. The -41.4 fib is also the same as the regular 138.2.
Apply your fib retracement tool to overlap the values of this indicator to get the translations.
No further official comments by the government of Ireland except to confirm that they have not applied for EU assistance but are working with the EU, IMF and ECB. This was acknowledged by other EU Finance Ministers in Brussels.
It has just been reported that Ireland's debt is equal to an average of 35,000 EUR per person (including children).
Here is a link to a Debt-To-GDP ratio list by country. Interesting to say the least. These are 2009 figures. Ireland's situation has gotten worst since these figures I'm sure.
List of sovereign states by public debt - Wikipedia, the free encyclopedia
Another notable is that Argentina's percentage is lower than the U.S.
The smaller countries are incapable of simply printing money, such as done by the U.S. and Japan, who possesses about a 200% debt-to GDP ratio.
I've actually been to a small country that is very near the top of this list, and spoke to a former Finance Minister regarding their debt and credit rating. Their debt is crippling and about USD 6,500 per person. That makes Ireland's debt per capita truly astounding.
Updated article/figures:
News Headlines
"Out of the world's 75 largest economies, the United States has the 20th largest as debt-to-GDP ratio, standing at 94.3%, with a gross external debt of $13.454 trillion and an annual GDP $14.26 trillion. In fact, out of the largest 75 economies, this number is just above the worldwide average of 90.8% Western-European and North American countries dominate the upper end of the spectrum, with Switzerland (422%) and the United Kingdom (408%) at the #2 and #3 spots, respectively, and Ireland representing the most drastic debt-to-GDP ratio. According to the most recent World Bank data, Ireland's number stands at a staggering 1,267%.
So, relatively, the United States' debt isn't all that bad.
The current analysis was limited to the 75 largest economies in order to dismiss outliers existing simply due to their size, as small countries like Monaco or Luxembourg have disproportionate debt-to-GDP ratios of 1,850% and 4,910% respectively."
Quick recap on EUR/USD. Positive GBP Jobless Claims data at 09:30 saw pair get dragged up by GBP/USD until 10:00.
Pair probed below Asian Low but halted at 1.3460 around 12:30 GMT. This was ahead of 13:30 U.S. CPI and Housing Starts & Permits.
Worse than expected U.S. data sent EUR/USD upward, extending to 16:00 high of 1.3554. Selecting this high for the plot looks unusual. We had identified this time for fib plot high based on curve fitting subsequent fib action.
ABC swings on the 15-min chart of 12:30/13:30/13:45 produced:
FE 100 = 1.3543 (hit 14:45)
FE 127 = 1.3558
FE 161.8 1.3577
We are nearing the end of the European session and pair may resume its volatility soon after.
Edit: when applying the fib retracement tool and pulling from Swing A to B, the 161.8 is 1.3551 (hit 15;15). This level is not on the default mode for the tool and you'll need to add it, along with the 138.2. You should have these 2 levels above and below high/low (interior fibs).
We went over this subject in a previous post. When inputting the extension levels, we need to use -.382 for the regular 138.2% and -.618 for regular 161.8. These levels are above the high.
For extension levels below the low, 1.382 = 138.2 and 1.618 = 161.8.
Also add minor fibs of .236 = 23.6, and .786 = 78.6
At 17:35, EUR/USD has been retracing. Nearing next minor support pivot of 1.3424 from 16:20 for small bounce trade up. This area also was resistance in early Euro session.
Support for EUR/USD
1.3524 as 38.2% retrace fib from 12:30 low to 16:30 high.
1.3512 as the 50% retrace fib.
Next level is 1.3500 which is the 61.8% retrace fib and a previous 161.8 extension price (as well as round number).
1.3516 was recent pivot high.
EUR/USD retrace to 50% fib of 1.3512 and bounced. Ploting retrace from top of 16:50 GMT 1.3564, results is retrace levels:
38.2 = 1.3532
50 = 1.3538
61.8 = 1.3544
Advanced money management can use about half of positions with exits at different levels.
Hurdled resistance of 1.3528 and now approaching 38.2 and fibs above.
As the U.S. session winds down, we see EUR/USD make it back down to 1.3512, which was the bottom impacting our bounce trade scenario.
The attached 5-min chart shows pair pivoting after initial thrust down from 16:50 high. It was a small pullback with its Point B at 1.3528.
We identified a minor support area of 1.3524 as good place for a bounce trade going up.
When applying our ABC tool (expansion tool) we saw it reverse at its FE 61.8 of 1.3515, probing to 1.3512 which was bottom. At this point, we are about minus 14 pips.
We adjust original profit target to fib levels produced by plot derived from newly established low. We posted the take profit fibs of 1.3532/38/44.
Stop-loss placement: One way to measure is to use the retracement tool and pull from:
16:20 low 1.3524
16:50 high 1.3564
This produced 138.2 = 1.3509.
Projected net risk/reward:
Risk = 17 pips
Reward = 18 pips (basis trading to 61.8% fib)
Actual net was 14/11 (basis take-profit at 50% fib)
The markets respond to data and news.
At 15:30 crude oil inventories were much less than expected by analysts. This may have dragged EUR/USD down, but is opposite belief that oil strength = USD weakness (up on EUR/USD).
Just prior to 17:00 GMT, reports of terrorist threats in Europe surfaced. We attach the article below. This also sent EUR/USD down.
We don't chase reaction to data or news, but attempt to trade the bounces for the most part. Often, we do wait for a pivot and trade with the direction of the herd, as guided by our ABC plots and other fib S&R.
We're going to attempt to comment more about the market's action during the U.S. session, and review same. This may benefit those of you that cannot watch the Asian or European sessions.
BBC News - Germany tightens airport security over attacks threat
EUR/USD bounced off of yesterday's high of 1.3564 upon first approach, probing to 1.3570. Note that 1.3573 is a strong resistance level as well.
As mentioned a few posts back, the indicator SpudFibo can be used to automatically calculate fibs based on the previous day's high and low.
We then plot a retracement from high to low and see that the 38.2 = 1.3547. This fib ratio in our opinion is the highest probability for a move of this size. Thus, bounce trade down produced about 15 net pips, minus any cushion, but including spread.
Edit: Note this copy of SpudFibo has its fibs upside down. It can be fixed. Meanwhile the major fibs of 38.2 and 61.8 are the same if inverted.
After the 38.2% pullback, EUR/USD extended to its regular 138.2 of 1.3593.
Hopefully the predictability of these retracements and extensions are getting clearer