A-B-C-D Trade - page 206
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Here's final price action on XAU_USD GannBox_144 at end week.
Price broke resistance at the yellow 1/3rd level and ended at horizontal blue 36 (1/4 level), which is Point B of our ABC plot. Also right there is red 1/1 angle line.
Attached is the 1-hour. What we did was set the interval to 900. In the settings for "Angle", change that to 900.
Since the move and thrusts were so large, we wanted to eliminate the smaller intervals. Clearly, this instrument adhered precisely to the intervals.
We last commented on this chart when price hit the 3600-degree level. A nice bounce of $25.00 ensued. Remember, we saw price respect the 900 and 1800 en route down and bounce each time.
A S/L risk of about 3.00 brought back a great reward/risk ratio, as much as 8:1.
Price continue to push down until it hit the 4500-degree level. As mentioned, this is the FE 161.8 of the ABC plot from top.
We also labeled in yellow, a tighter directional extension plot:
High = Aug 24th 12:00 1850.13
Low = Aug 24th 22:00 1741.90 (3600-degree level)
138.2 = 1700.56 (same as 4500-degree level)
***
Price reversed upward, halting just short of the 3600-degree for +39.00. Using a S/L of 3.00 made this R/R as much as 13:1
From 1739, price declined to 1704, almost back to the bottom.
Let's say the bounce trade filled at 1738 (SELL), Taking profit at the direction plots's 127.2 = 1712 for + $25.00 net gain. S/L at 1743. R/R = 5:1
The lesson here is that if the trader recognized that XAU_USD was moving in thrusts of 900-degrees, opportunities to trade the S&R at excellent R/R ratios existed going forward.
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What we're saying is that we've changed the code to allow application to instruments that are priced 4 digits in front of the decimal, such as XAU_USD and SPX500.
The reason we like to use the SQ9(Price) is that is allows us to go back and manually select a start price.
The sister indicator Gann_SQ9 self-adjusts and we can only go back so far. It often requires using larger time-frames to get us back to a desired peak or dip.
Going back to significant price peaks and dips allows us to study price adherence to the Gann levels by each instrument/currency pair.
This also may become useful going forward. For example, if we have a 4-hour chart that shows previous compliance, we can still use those levels as our "wide plot". You've seen this on some of our charts.
Note that this indicator in its current form is limited to 720-degrees. The attached chart uses the same high of 1912.32 as the chart for the Gann_SQ9 just posted.
We can see the levels are the same except that they are 360 instead of 3600 for example.
Those that bought gold or related instruments such as XAU_USD, liekly did so when dipping back to 1823/25 level after a small pop at week's open.
Resistance levels:
1854 (Aug 24th pullback)
1867 (1/8th level GannBox)
1872 (3600-degree on 1-hour GannSQ9)
1879 (127.2 extension)
Price action on XAU_USD is telling us plot:
Low = Aug 26th 1757.07 and High = Aug 28th 22:00 1834.87
23.6 = 1816.51
38.2 = 1805.15 (price hit 1806 during 01:00)
Sunday (Aug 28th) range: High = 22:00 1834.87 and Low = 23:00 1820.35
Attached is 30-mi EUR/USD with session colors. We had illuminated the 1.4500 resistance last Friday and bounce trade scenario.
After testing that resistance level upon opening Sunday, and bouncing down again, the 3rd time was a break.
The 05:00 candle made a strong thrust to the 127.2% extension level, based on plot using Friday's high/low..
As the volume increase in the U.S. session, we likely saw large positions unwinding longs placed Friday ahead of Hurricane Irene.
From Low = Aug 26th, price settling on the 61.8 retrace fib of 1786.
Other S&R;
Price probed to MML 1/8th level as well as location of diagonal Moon 0-degree.
Price broke through Asian Low (also 38.2 retrace fib) of 1806 during 13:30 period. Distance between 38.2 and 61.8 = $19.00
Attached 15-min chart also features Demark TD Sequential indicator that counts. 9 and 13 are reversal points in Tom Demark's methodology. This indicator places emphasis on 9
9 appeared at the pullback 38.2% fib and 1/8th MML levels.
Continuance of chart in 1-hour interval with PSQ9 and Lime Green Sunday Range. Same yellow fib plot using Aug 23rd Low/High.
After small initial dip, pair made a modest move to the upside to the 138.2 and Moon 90-degree. Also notice Mars 90-degree which had acted as resistance last week. It was respected as support today.
Th PSQ9 Mars aspect (degree) intervals for this chart are set at 0, 90, 180, 270. When we insert Mars 135-degree (pink), we can see it catch the 2 hits at the top.
Been asked to expand a little more on the Demark TD Sequential indicator.
Attached is XAU_USD. We started with a 15-min interval and marked the #9 locations with yellow arrows. We proceeded to switch the same chart to a 30-min time-frame.
Of the 11 arrows on the chart, 10 were decent turning points. Remember, turning points do not always mean it is a major reversal.
Also, no single indicator should be a stand-alone tool. Use this indicator with S&R (especially fibs), divergence, OB/OS, etc. Whatever works for you (that you can read) and the instrument you are trading.
Example: High = Aug 22nd 1911 Low = Aug 24th 1761
The 138.2 extension (1703) to the downside had a #9 on the 15-min chart. There was also BAJA bullish divergence paired with the dip/arrow just prior to that, which is the Low 1761.
****
2nd chart is 15-min with MurreyMath1.0 indicator. We plot ABC:
A = Aug 28th 22:00 high 1834.87
B = Aug 29th 01:00 low 1806.20
C = Aug 29th 04:15 high 1825.51
FE 161.8 = 1779.12 (hit 14:00)
The 4/8th MML near FE 161.8 and where #9 appeared. Bounce up went back to Point B price level near FE 78.6 for gross gain of about $37.00.
Attached is a 15-min EUR/CHF. All we have on this is the RSI divergence indicator and fibs.
Wide plot in gray uses plot: Low = Aug 26th 14:00 1.14174 High = Aug 26th 16:30 1.17348
Tighter intra-day: High = Aug 29th 16:00 1.19070 Low = Aug 29th 18:45 1.18163
Pair just testing resistance. yellow labels are resistance for bounce opportunities:
1.19069 which is 100% (high of tight plot)
1.19313 = 127.2 of tight and 161.8 of wide