A-B-C-D Trade - page 277
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This 1-hour is a view over 2 weeks of Planetary Square of 9 (PSQ9) levels as defined by diagonal Moon and near-horizontal Mars set on 45-degree intervals.
We aligned the fib channel tool to last week's Moon 225-degree, pulling down to the Moon 135-degree. These 2 plot points are in pink color.
The level exactly in between is the Moon 180-degree, which is labeled as the minus 50 level. This simply means that it is a 50% retrace from the low plot point.
Price declined to the Moon 90-degree level on Jan 11th before retracing all the way back up to the Moon 225 on Jan 13th, which is the high of the plot point. The Mars 225 was right there, and price probed above the Moon 225 to touch that.
Then the large decline occurred and the plunge made a 100% extension to the Moon 45-degree and consolidated to end that week.
***
This week has a rise from the lows and just concluded a 161.8% extension. The pivot for high plot is Jan 17th 1.2808.
Now, the main focus of this post is the Moon 225 level from LAST WEEK. It is acting as a trendline for the just concluded peak during the 12:00 hour.
We also placed a "thumbs up" symbol at the Asian High of 1.2878. This level is also at the Mars 225.
We used the minus 50 level in order to extend last week's Moon 180 into this week. We can see price respect that level for several hours, prior to the breakout of the Asian High.
***
Chart 2 is a zoom-in on the breakout. We inserted the yellow fibs. We can see all of the aforementioned resistance levels, and this week's Moon 180, near/at the 12:00 period peak.
The white line labeled -50 is last week's Moon 180.
The natural bounce of the 161.8 usually comes back at least to the 138.2, which happens to be last week's Moon 180 (-50%).
***
The 09:00 EU Monthly Report is similar to the FED's Beige Book. This looked to be a non-event this time.
The 13:30 U.S. CPI was definitely of high-impact variety, and not recommended to stay in for day trading. Therefore, the bounce trade off the 161.8 was risky.
USD/CHF 4-Hour Wolfe Wave. Price approaching 1-3 trendline (TL). This is buy zone, but some wait until overshoot and resurface above 1-3 TL.
Price fighting through 138.2 extension off 3-4 swing.
161.8 = .93021, which was also pivot low from Jan 3rd.
CAD/JPY did reached the 76.56 area. There were multiple resistance calculations up there, as mentioned. MML, 200% extension, wide 161.8 extension, and per attached, the Mars 225.
Blue fibs are for the immediate extension. We labeled the Asian High level of 75.97. After price made its top, price declined back down to the Asian High area by Jan 20th 03:00 period.
The Moon 90-degree was also there as support.
USD/CHF 4-hour Wolve Wave pattern update. Price walked down the 1-3 trendline as leg 5. When we await overshoot and eventual resurface above the 1-3 TL, we can drop down to the 1-hour.
Resurface occurred during the 23:00 candle. ENTRY BUY should fill at about .9325-27.
Support at 161.8 = .9302 and round number .9300.
TP levels include:
127.2 = .9360
6/8th MML (on 4-hour) = .9406 and near Swing 3 pivot low.
50% retracement from plot using Swings 4-5 = .9439
Continuance of our PSQ9 plot, with price breaking through last week's moon 225-degree (pink).
07:00 had negative Euro data outcome and that period's high became the peak, which was contained by this week's Moon 225, and Mars 315. THis level also the yellow 200% fib extension.
The decline currently back at last week's Moon 225 (pink).
We made a post on this pair on Jan 15th, regarding a BUY scenario at support identified as the upper edge of the Ichimoku cloud. It didn't quite get that low, and bounce off of the 4/8th.
Let's rewind further and look at an ABC:
A = Dec 19th 20:00 low .98822 (also 1/8th MML)
B = Dec 21st 08:00 high 1.02182
C = Dec 29th 00:00 low 1.00429 (lower edge Ichimoku cloud)
FE 61.8 = 1.02537
FE 100 = 1.03840
We added labels that denote extension levels based on regular fib plot using swing B-C.
The 127.2% extension is the same as the FE 61.8 and the 4/8th MML.
The 200% is the same as the FE100 and the 5/8th MML.
There are several opportunities with this ABCD pattern. When we drop down in time-frame, we often get other confirmation.
1) At Swing C level of 1.00429, the 30-min chart shows BAJA bullish divergence. This would go along with the 4-hour view, which has the lower Ichimoku cloud as support.
This is another example of monitoring a larger time-frame, and triggering on a smaller one.
The S/L can be placed just below the 4-hour 2/8th MML of 1.00098. TP options include Swing B 1.02182, and the expansion levels above.
R/R to TP Swing B Level = net 170/40 and ratio 4.2:1
R/R to TP FE 100 about same as 5/8thMML = 325/40 and ratio 8.1:1
2) The bounce trades off of FE levels had a smaller outcome from the FE 61.8 and a larger outcome off the FE 100.
Dropping down to the 30-min chart view, we see that the decline off of the FE 200 also had BAJA bearish divergence.
The two Jan 3rd peak RSI(4) readings were 11:00 = 94 and 15:30 = 83. Your readings may differ, but as long as the 2nd peak was lower, it's divergence.
The 30-min chart also had BAJA bullish divergence at the declines Jan 9th 02:00 low. Price had stayed below the Ichimoku clouds.
When we flip back to the 4-hour chart, this pivot low was not only near the 3/8th MML, but closed at the lower edge of the Ichimoku cloud.
Based on: Entry = 1.03660 (10 pips below 5/8th MML)
S/L = 1.03940 (10 pips above FE 100)
TP1 = 1.02639 (10 pips above 4/8th MML)
TP2 = 1.01790 (upper edge of Ichimoku)
To TP1 R/R = 102/28 and ratio 3.6:1
To TP2 R/R = 187/28 and ratio 6.7:1
For TP2, it would have been realistic to exit near the end of the week price 1.02204.
***
Subsequently, price continued to respect the 4-hour Ichimoku clouds, with the last bounce on Jan 13th. Friday's ascent ended at the FE 127.2 level.
This, of course, is an example of swing trading. S&R tools were used together with divergence. Multiple tme-frames assisted in recognizing the bigger picture and triggering entry/exit.
Trader also had the option of staying with intra-day trades, while understanding the S&R and ABC swings on the 4-hour.
Why is that? Some intra-day traders use higher leverage and exit earlier. These types on traders can trade;
Double bottom of Swing A
Breakout of downside from 3/8th
Bounce off Swing C
Bounce off FE 61.8
Bounce off FE100
Bounce up from 3/8th
Bounce down from revisit of 5/8th
Bounce up off Upper Ichimoku, probe to 4/8th and FE 61.8 (Jan 11th 12:00)
The intra-day trader can recycle their capital more often. Obviously, this makes sense only if trader is successful.
Here is a 4-hour EUR/JPY. After price made a 127.2 extension to the downside, off of the Jan 11th low/Jan 13th high, an ABC formed.
A = Jan 16th 00:00 low .97024
B = Jan 17th 12:00 high .98319
C = Jan 17th 14:00 low .97641 (seen on 1-hour)
Indicator SQ9(Price) 22.5 Factor 56 uses start price of Swing A .97024
A 2nd chart would use the Heiken Ashi Smooth (HAS) indicator, for guidance to stay in a longer swing trade.
Price respected the 22.5% SQ9 level as witnessed by the closing of the 08:00 candle body at Swing B. Swing C was about a 50% retrace of A-B.
Right away, we know that using the Swing C as the stop-loss, for breakout trade from Swing B, would produce a R/R of 1:1 when targeting the FE 100.
Cheating would place S/L just below the 22.5-degree level of 98.130.
Let's review why it's called the FE 100. This means the fib extension is 100% of leg A-B distance in number of pips. THis TP level was hit on Jan 19th, and better seen on the 1-hour 09:00 and 10:00 candles.
We labeled previous pivot highs, with a check mark. These levels correspond with the TP levels.
TP1 at the FE 100 is near the Jan 13th 04:00 high
TP2 at the FE127.2/FE 138.2 is near the Jan 4-5th peaks
TP3 at the FE 200 is near the Jan 3rd 12:00 high
The SQ9 45-degree level of 99.243 is also at the TP 2 area.
The SQ9 68-degree level of 100.380 is just above the TP3 area.
Swing trades often require a looser trailing S/L. An example would be to move S/L from Swing C to just below the FE 61.8, after price breaks FE 100. We would tighten S/L only when profit is adequate.
*****
The top of 100.324 near the 68-degree level was also the 2nd peak of BAJA bearish divergence on the 1-hour. The 07:00 candle on the 1-hour was also a Doji, which is a sign of potential reversal.
Trading the decline saw price settle back on the FE 138.2 level of 99.431. Optional exit was at the FE 161.8 price level of .99736.
When entry of SELL at the open of the 08:00 1-hour candle price of 100.112:
S/L = 21 pips = CUSHION = 26 Pips
TP1 @ 161.8 = +35 net pips R/R = 1.3:1
TP2 @ 138.2 = +65 pips R/R = 2.5:1
If trader understood resistance levels, entry would be better, and thus increase the R/R.
We posted the 4-hour USD/CHF Wolfe Wave just prior to Leg 5 reaching the 1-3 trendline. We notified when the 1-hour resurfaced that 1-3 TL, at about .93200. Price touch our 1st TP level of .93600 before end of week.
The attached split-screen shows GBP/CHF correlation, and Wolfe Wave pattern. The last candle off the 1-3 TL ocurred at the same candle period of Jan 20th 04:00 (Friday).
We added the Andrew's Pitchfork in blue, using plot of Swing points 1-4-5. Price rose and made an uninterrupted streak to hit the middle fork to end the week.
The GBP/CHF 1-3 TL at bottom was 1.44225. The middle fork was 1.45494. That's a move of 127 gross pips. Minus cushion = net 122 pips.
Stop-loss just below the 6/8th MML of 1.44043, resulted in risk = 18 pips plus spread/cushion = about 23 pips.
Trading to 7/8th MML of 1.45264: R/R = 100/23 and ratio of 4.3:1
Trading to middle fork 1.45494: R/R = 122/23 and ratio of 5.3:1
And here is EUR/JPY Wolfe Wave pattern with Swing 5 coming down to the 1-3 TL. This is also a FE level as illustrated on the last post about this pair.
Swings:
1) Jan 10th 12:00 high .98462
2) Jan 11th 16:00 low .97420
3) Jan 13th 04:00 high .98394
4) Jan 16th 00:00 low .97024
5) Jan 20th 04:00 high 100.324
Since the SQ9 45-degree is there as support at 99.243, submerging below this can be the qualifying factor. Alternative, can use a shorter time-frame trigger with that.
Just note that this pair is alleged being monitored by BOJ (possible intervention). This means caution on shorts. If this makes trader too nervous, simply pass. There's always another trade.
There was talk that the U.S. was not pleased with Japan's last intervention, which was not coordinated with other countries. Therefore some theorize that Japan will not intervene individually.
We have the same Wolfe Wave plot previously posted on the 4-hour. We lower the time-frame to 1-hour.
The 1st chart labels Elliot Wave count 1-5 going upwards to Friday's top.
1) Jan 17th 12:00 high 98.319
2) Jan 17th 14:00 low 97.641
3) Jan 18th 21:00 high 98.864
4) Jan 19th 01:00 low 98.540
5) Jan 20th 07:00 high 100.324
According to basic Elliott Wave theory, there should be a 3-swing downturn from the top at Point 5.
The 2nd chart zooms in at this area, with an ABC plot.
A = Jan 20th 07:00 high 100.324
B = Jan 20th 19:00 low 99.410
C = ?
We estimate Swing C to be 38.2% (99.769), which happens to be the FE 161.8 (blue) from an ABC that started at the very bottom of this move.
We can also see how price respected the Wolfe Wave 1-3 trendline (green) as support on Friday Jan 20th. That support level is also the blue FE 138.2. The WW 1-3 TL is the entry for that technique.
Basic Elliott Wave points to the downturn going near the Point 4 area 98.54 (white horizontal line).
We labeled 3 areas for TP.
TP1 = 99.06 the 138.2 extension of A-B
TP2 = 98.83 the 161.8 extension of A-B, FE 100, and 5/8th MML
TP3 = 98.55 the Point 4, and surrounded by FE 127.2, FE 138.2, 200% of A-B, blue FE 61.8, 4/8th MML, and 50% retrace level from bottom.
*****
On the fundamental/sentiment side, there may be reaction to results of this weekend's Greece debt talks. Some of it has been priced in with recent Euro strength last week.
This analysis accounts for a pullback as Swing C, prior to a healthy move to Point D. If our projection for the Swing C level is wrong, there is no money lost.
We would proceed to move the plot for Swing C to the actual price, and wait for it to break Point B. It may not do that, but once again, there would be no money lost.
When the price confirms below Point B, let's say we require a candle to close below that, then the trade if off and running. Some place automatic orders at a certain price below Point B.
We detailed stop-loss options in the beginning of this thread. They include the 7/8th MML 99.61, the WW 1-3 Tl, Point B, Point C, etc. Calculate Reward/Risk in advance.
Trail S/L per S&R and/or pivots. Tighten when satisfactory or entering volatile period when you decide not to exit.
This is an observation of a particular currency pair. You can take whatever you desire from this, but as usual, do not consider it trading advice.
Thanks
Attached is GBP/USD. Fibo fan plot:
High = Jan 4th 08:00 1.56679 Low = Jan 13th 12:00 1.52322.
We labeled levels of resistance respected by the market en route up. These levels had both horizontal fib ratios and diagonal fan ratios.
Price ended the week at the horizontal 78.6% retrace, which intersected the fan's 88.6% ray.
Looking to the left, we labeled numerous occasions where price respected this level of 1.55750.
Should this pair open the week with a gap to the upside, we would wait until price falls below 1.55750, for a SELL position. Some will have qualifiers such as a 15-min closing below that level, and/or price fall a fixed amount of pips below that threshold.
Can elect to add indicator MurreyMath1.0 (MML) and plot fib retracement from Jan 13th low, for more S&R. Drop down to 1-hour to see more MML levels. Use these for S/L and eying clusters for TP levels.
We see the 1.54500 level as significant support within the context of this scenario.