A-B-C-D Trade - page 106
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For those that like to swing trade and don't care for the intra-day fluctuations and monitoring of trades, we attach another example of the BAJA trade signal on the 4-Hour EUR/JPY during January.
We labeled the 5 signal candles that met criteria. The 30-min entry price and pivot candle hi/low for stop-loss is also displayed. Notice how tight the S/L can be, less than 37 pips for each opportunity.
All 5 were winners. Signal #2 was a small gain, while #1 was the major pivot up on Jan 10th. It also caught 2 major dips.
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And here is the same pair, EUR/JPY for the intra-day trader. The 61.8 retrace fib previously hit Jan 31st 13:30 was the play.
Sell near 112.69, also had fibo fan's 86.6 pointing down as resistance. Revisit of 38.2 area 112.17 makes this a 45-pip opportunity with tight S/L. R/R about 4:1.
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Yesterday's open for some pairs, including EUR/USD, had a gap down. This helped form a BAJA signal to catch the pivot up.
Jan 31st USD/JPY 30-Min BAJA sell 10:30 candle, with 11:00 15-min trigger price 82.19. Tight S/L of max 10 pips. End Euro session price 81.90 made this a +26 net pip trade and 2.5:1 reward to risk.
30-Min Gold saw BAJA catch major low pivot Jan 31st 16:00 candle. 15-min trigger at 1329.50 with bottom at 1324.20. This area is the 61.8 fib from major up move Jan 28th.
ABC made a FE 100 for about $8.00 move.
Previous to that signal, as pointed out on attached chart, was bottom trend line of triangle drawn by our TD indicator.
Yen pairs broke out of Asian to downside.
USD/JPY. Couple of applicable fib plots include:
From our last post, plot from yesterday's Euro session high to low. After 78.6 pullback, went on to made a 200% extension during today's Euro session.
Plot ABC with today's Asian High to Asian Low to Euro High. Pair hit its FE 100 at 11:00.
***
EUR/JPY, from last post with bounce trade, plot Asian session High to Low to get regular extensions. Pair hit 161.8 during 09:00 30-min candle. Fibo fan point up also provided support at that bottom.
***
EUR/USD bounce trade off high 1.3775 which was reg 138.2 from plot Asian Low to High. Retraced to 61.8 fib 1.3728 for +47 gross pips. R/R = 4.5:1
***
30-Min Gold had BAJA signal 07:00 candle. Entry SELL at 08:15 $1339.80, with tight stop since pivot high was only $1341.30. Bottom of 1335.60 worked out to be near 38.2 retrace fib:
$1.50 risk
$ 4.20 reward
Need to subtract spread.
AUD/USD still fluid situation. Had previous BAJA SELL at end Asian. Failed as pairs up move too strong. Minus 16 pips.
BAJA BUY signal effect for open 15:00 1.0073. Plotting fibs from Asian Low to High, we can see entry near 138.2 of 1.0075. Anticipating that the 161.8 of 1.0093 and round number just above that of 1.100, is too small of a reward ----- this is a pass.
Edit: Yesterday's action had 3 BAJA signals on 30-min. Net result were +20, -14, + 23 for total +32 net pips. This does not include catching major turning point up at 00:00, which is still going so had to measure where each trader would take-profit.
Had a bad copy up on google docs template. It had wrong field for calculating extension pip profit. Current copy is labeled REV Feb 1. Same link.
We had an imaginary AUD/USD 30-min signal per recent post. It did not qualify.
Meanwhile, another example of BAJA signal.
GBP/USD Weekly chart had Oct 31st BAJA Sell signal. A fibo fan pointing down had it’s 86.6 fan line as resistance, along with horizontal 78.6.
Plot was High = Nov 15th, 2009 and Low = May 16th, 2010 for horizontal and fan..
Oct 31st 2nd peak, with Daily trigger SELL on Nov 9th price of 1.6111. Pivot high for S/L 1.6278 makes this risk about 170 pips. Maximum gain was to 1.5344 for + 767 pips.
ABC swings to determine highest probable destination using Daily chart:
A = Nov 4th, 2010
B = Nov 16th
C = Nov 19th (50% of A-B)
FE 161.8 = 1.5349 (hit Dec 28th, 1st approach Dec 22nd to 1.5355)
There was a pullback after the hit at the FE 127, which was 61.8%, prior to advancing to the FE 161.8. At the bottom, it became a bounce trade BUY opportunity.
The 2nd peak signal candle closed on Nov 6th, which was end of that week. This means that the use of the Daily chart for the trigger allowed trader the luxury of only checking once at end of day (23:59 GMT).
We would wait for the EFT to change a histogram bar from thick to thin for the trigger entry. If you changed the color of thick/thin, we can read it with one glance.
Managing the trade includes moving the stop-loss. Trader can use master fib plot, daily fibs, HAS, or even fractals. The large pullback at the FE 127 likely would have stopped out trade.
The FE 100 was 1.5633 and many would place S/L just above that price level. That scenario represents about 470 net pips. R/R = 2.8:1. Traders that took profit at the FE 127 made 600 pips for R/R of 3.5:1.
Had a bad copy up on google docs template. It had wrong field for calculating extension pip profit. Current copy is labeled REV Feb 1. Same link.
Calculator can be used for pairs with fixed pip value of $10. EUR/USD, AUD/USD, and GBP/USD.
One of the best trades is the bounce from a significant high or low. On EUR/USD Daily, look at the price action from start of this week.
After the smallish Sunday candle (some brokers don't offer Sunday candles), pair went back up. We now determine that the the Jan 27th pivot high of 1.3757 is approaching.
Switch to a shorter interval chart, such as the 15-min. If we draw a horizontal line, we can see the bounce Feb 1st, on the last Asian candle at 07:45. It usually is very fast since many traders do this.
Good idea to hedge by placing about half your automatic Sell order at one price that is closer to 1.3757, and the other with some room. Due to its significance as the pivot high, the bounce usually is larger than less significant high/low points.
The Asian session had been trading in a very tight range up to that point. Therefore, we need to look for another low point to plot our retracement fibs.
We'll use the previous U.S. session low of 1.3662. After plot, we can now see the 50% fib of 1.3709 acted as support during Asian session. This would be the safer target for profit for about +30-35 net pips. Pair went on to make a 61.8 retracement to 1.3698.
Moving stop-loss to at least break-even en route down would be prudent.
With a 10-pip stop-loss the R/R was 3:1.