A-B-C-D Trade - page 153
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Our May 19th Post #1512 was made due to a professional analyst, working for a forex media outlet, wondering out loud if the pullback was finished. We didn't mention that, as we do not intend to show anyone up.
This is a follow-up. The last Daily chart illustrated our analysis that the fib/resistance cluster will push prices down. We mentioned 2 PSQ9 support levels for take profit.
Today's attached chart is on the 1-Hour time-frame, allowing us to see the details better. We placed a white arrow pointing the the next 03:00 candle's open price of 1.3395, following our 02:30 post.
S/L above high pivot of 1.34571.
The pair broke the ascending Moon 180-degree (gold color diagonal line) support during the 07:00 candle and quickly hit its 138.2% extension. This plot not shown, but high/low marked with "X". High = May 18th 15:00 Low = May 19th 02:00 1.33865. The low was a direct hit to the Moon 180, and that created a bounce up (pullback) prior to break.
Intra-day traders use that to pick up a few pips.
The big picture with this swing trade is that the large pullback made a revisit to the top twice, then proceeded to walk up the Moon 180 (Micheal Jackson).
May 20th 08:00 candle broke the Moon 180 and the push down was on. The pivot on May 20th 12:00 was a direct hit at the Mars 0-degree, which is 1 of 2 support levels mentioned in our previous post.
Plot High = May 19th 21:00 and Low = May 20th 12:00.
138.2 = 1.32864 (hit May 20th 16:00)
161.8 = 1.32579 (hit May 20th 19:00)
Another option for exit was the 2nd support we had mentioned, which was the Moon 90-degree ( gold color diagonal line). The May 20th 15:00 candle hit that and bounced.
We're not saying that 1.3395 was the optimal entry. Just wanted to mark time of our analysis with a price.
We enter with the same philosophy as taught here with breakout scenarios, whether the S&R is horizontal or diagonal.
Once the S&R is confirmed, we can plan our entry on break. Plotting fibs to ascertain swings and extensions is the objective, in order to target entry and/or exit.
If the trader entered at the first break of the Moon 180 (about 1.33840), there was the wait through on the pullback, prior to the extension. Profit to levels:
Mar 0-degree 1.33300= +50 net pips
Wide 61.8% 1.33143 (white) = net 65 pips
Moon 90-degree 1.33000 (round number) = net 80 pips
138.2% 1.32864 = net 94 pips
Wide 78.6% (white) 1.32755 = net 105 pips
161.8% = 1.32579 = net 120 pips (end week, not realistic)
Due to risk/reward, the obvious swing trade exit targets must be the Moon 90-degree or better. At the time of entry, we could only target the Moon 90 because the pivot had not occurred yet. (edit add) However, fib extension based on the May 19th 07:00 pivot could be used, and essentially provide the same lower exits.
Trail the S/L using pivot highs or fibs/SPQ9. We spoke extensively on money management and trailing S/L. We included trailing S/L and R/R calculators posted on googledocs template. The most intriguing calculator might be the one where we can find the break-even point for partial exit, and trending the balance.
In case you are not aware, there was a few questions answered that pertained to the GannBox_144, in the "Gann Is The Man" thread found in the indicator section.
An update and pic of the most recent plot was attached.
Attached is EUR/USD Daily. Let's focus on the Mar lines, which are applied with 90-degree intervals. This interval is simply 1/4th of 360.
Find a pivot that starts at a Mars line. We will see that the subsequent important pivots will also happen at a Mars line.
In the attached example chart, we plotted a fib extension using:
Low =Jan 9th 1.28745 (Mars 180-degree) and High = Jan 14th 1.34559 (Mars 180)
138.2 = 1.36780 hit Jan 24th and a direct hit on the Mars 270-degree
161.8 = 1.36780 hit Feb 1st, Mars 90
Look at the subsequent S&R provided by the Mars lines. Plot more fib extensions and we can see the same compliance with the Mars lines. Sometimes the candle close price (body of candlestick) is at the Mars S&R instead of the candle's wick.
The Moon lines have a more severe slope/angle and is best viewed on 4-hour and lower time-frames.
Support & resistance (S&R) is not a system. They are areas where price stalls or reverses. Traders use tools to identify S&R. Fibs and PSQ9 levels are examples of these tools.
Fibs have the extra characteristics of predicting price. Plotting fib extensions and expansions have been discussed here for one year. Predictive tools are opposite of lagging tools.
How exactly do fibs predict price? The safest manner is when Point B of an ABC plot is broken, we know under certain conditions (intra-day for example and certain pullback ratios) price will extend to the 138.2 and/or the 161.8 level(s).
We discussed those conditions throughout this thread, including the very beginning.
Murrey Math Lines (MML) is also a S&R tool. It takes 1/8th levels, which was taken from Gann. 1/8th of 360 = 45-degrees. We featured that a little bit too.
Gann_SQ9 indicator discussed and pics attached numerous times here. This is horizontal intervals of Square of Nine, and adjusts automatically with zig-zag.
SQ9(Price) is almost the same as Gann_SQ9 except we can have the plot fixed and not adjust.
More later.
Wide ABC
A = May 20th 08:00 high 1.43443
B = May 20th 14:30 low 1.41379
C = May 20th 17:30 high 1.42316
FE 78.6 = 1.40690 (hit May 23rd 04:00)
FE 100 = 1.40248
FE 127 = 1.39685
FE 161.8 = 1.38970
Tight Plot
High = May 22nd 22:15 1.41425
Low = May 22nd 23:15 1.40943
Reg 138.2 = 1.40760
161.8 = 1.40646
200 = 1.40462
We have the HEMa along with divergence indicators on the attached 30-min chart.
We are approaching 06:00 GMT and more volatility will set in from here and anticipated through the European session.
The current price level is a revisit to the May 15th low, which was a 138.2 extension of 1.40589 on the daily chart.
Our plot on the daily was slightly off due to alignment, trying to get fibs wider. We step down to the 4-hour and the plot shown is:
High = May 4th 08:00 1.48774 Low = May 6th 16:00 1.43144
The 138.2 was first hit on Sunday May 15th. For that week, the pair was contained between the Moon 180-degree (resistance) and Moon 90-degree (support).
The breakout to the downside occurred on that week's Friday, May 20th and is now at the Mars 180 and intersect of Moon 270, after just having broke the 138.2 of 1.40759.
The 161.8 = 1.39285 and about same as Mars 90.
This is the bigger picture, and we need to keep this handy for reference.
Update on the Greek debt situation. Rating agency Fitch states that restructured Greece's debt amounts to default.
Fitch had downgraded Greece again last week. Other "Dinner conversation", which is our description for fundamental news. etc., include pressure on commodities and reported decline on number of long positions on the Euro and commodities.
Attached is EUR/USD split screen with both 30-min and 4-hour charts mentioned on previous post.
Just like we advise on the fibo fan, we can move the low of the tight plot as price declines. In this case we also chose to move the high. New tight plot on 30-M made:
High = May 23rd 00:00 1.41339
Low = May 23rd 04:00 1.40633
That was fixed when we saw how the 138.2 was hit end 06:00 candle. It was later reaffirmed at the 161.8%, and 200% fibs (07:30).
The diagonal red fib is from a fib channel plot, and we can see the support it supplied. It was not an easy plot, so we won't go over it. This is because we could have been off by a little and it would have thrown the channel off by a lot. It was not assisted by the Andrew's Pitchfork.
We expect a hit at the Mars 90, about same as the 161.8 of 1.39285 on the DAILY.
Attached is daily chart as we await anticipated price action to reach the 161.8/Mars 90-degree.
Zooming out, we plot retracement fib from most significant bottom and arrive at fact that its 50% is also at this level.
There are 2 other tighter plots that result at same level which can be best seen on the 4-hour. Try to find them.
We placed white arrows on hits to this particular Mars 90-degree line on the daily. Going back to October, there were 8 hits, 5 of which resulted in significant turns.
EUR/USD intra-day only got as far down as the FE 127 (see 30-M chart previous post) during early European.
This bottom is also the 720-degree level on the #Gann_SQ9 horizontal indicator chart per attached (daily or 4-hour). We believe the overshoot at the very top was the reason the bottom was not conforming to the Mars 90-degree, although that has time to play out on Daily chart.
If you read this after today, the #Gann_SQ9 indicator may adjust and change the swings, etc. To study what we are referring to, use the SQ9(Price) indicator and input the top price 1.49388 as start, and false for "direction up".
The daily chart with PSQ9 in previous post: count the number of Mars line from Jan 9th bottom to May 4th top. There are 16 Mars lines. Each is a 1/4th of a 360 circle or cycle. The up move went 4 cycles. The down move to the Mars 90 would be 8 lines or 2 cycles of 360. This is effectively the same as a 50% retrace, which is also illustrated on the fib plot.
We reason above that the #Gann_SQ9 has its 720-degree (2 cycles of 360) at today's bottom because there was an overshoot of the Mars line at the top (starting point for measuring down move). Hope this makes sense.
That's why on a recent post we asked you to select a move that started at a Mars line. The subsequent extensions will comply with other Mars lines. This type of movement is simply at 25% intervals (Mars lines in 90-degree interval), and is 90 divided by 360.
Murrey Math Lines is 1/8th or 45-degree intervals.
The point with the Mars plot/interval is that we selected that particular planet and it's aspect/angle, to apply to the currency pairs and commodities for S&R.
We also noticed that using the default application of the Moon is effective best on 4-hour chart interval and lower.
High = May 20th 17:30 1.42316
Low = May 23rd 09:00 1.39681
38.2% pullback = 1.40688
Baja divergence 2nd peak candle 05:00
15-min EFT trigger SELL entry = 1.40656
High pivot = 1.40802
Plot retrace fib levels for exit