A-B-C-D Trade - page 149
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2 more EUR/USD charts, on a daily interval. The 1st is an update on the GannBox. We can see today's low settled on the peak 138.2 from Mar 22nd.
The 2nd chart is a zoom-in on that. We have yellow "X" marking coincidence S&R levels. Plotting a fib retracement, the Low is the same as the peak on Feb 1st. From this plot, today's low is the 61.8% retrace fib.
Analyzing the bottom, including the previous post's observations, we conclude that a bounce would be highly likely. It has happened, for about 50 pips thus far.
***
The daily also had a BAJA bearish divergence on top on May 3rd. This was a short opportunity because that top was the FE 161.8 extension, as illustrated on our previous post (the one with the Gartley pattern). The 4-Hour EFT trigger had entry price at May 4th 04:00 1.47967. A stop-loss of more than 45 pips above the preceding high of 1.49009 was required to survive the probe.
We went over the use of fibs for S/L placement. With the higher intervals, this is a good technique. Let's take the last high pivot of May 2nd 12:00 1.49009, and Low pivot of May 3rd 08:00 1.47532.
Your fib retracement tool should be configured to have the 138.2 and 161.8 extensions going in both directions, for easier use. This simply allows us to pull the fibs in either direction, and get the extensions. In this case, the 138.2 = 1.49573 can be used for the S/L.
Total S/L for this swing trade scenario is 165 pips (with cushion). The gross gain to aforementioned support level today is 530 pips.
Attached is an updated EUR/CHF 4-Hour chart. We had identified Head & Shoulders and ABCD patterns.
We now add the Andrew's Pitchfork and Fib Channels. Use your APF tool and make the right shoulder of the H&S the upper fork trend line, and Swing B of the ABC pattern as the lower fork trend line.
We always look to have confirmation of a hit to the center fork. Swing C was pretty close, so we'll take this plot. Once again, we fit the fib channel to the middle and lower fork's trend lines. The fib channel's 100% extension is highlighted with a white arrow, which is also the FE 127, per previous comments.
On the bottom of the chart, we have the QTA, which identifies potential future turning points. We adjusted the 2 plots by clicking on them to illuminate the dots.
We moved one set to the 2 Lows of Mar 23rd 12:00 and Apr 18th 12:00, as seen on the Zig-Zag.
The other plot is the 2 High of Apr 6th 00:00 and Apr 28th 08:00.
These 2 plots created "fib clusters" (marked by white "X") at:
May 6th 16:00, which is the FE 127
May 10th 12:00
May 12th 12:00
***
Note; for easier use of the QTA (customized version of the fib time zone tool on MT4), we can double click on the auto-generated highs and lows of the Zig-Zag, to illuminate the dots. We need to drag these dots to our desired locations.
The lines connecting the dots are invisible by default. We can change that by going into the indicator's edit function by selecting:
chart, indicator list, QTA, edit, Ext Object Color - click right column to select color.
We previously covered the instructions on how to use the QTA in the Pattern Recognition thread.
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Picking up from our last post with this pair, we look at the 30-min chart. As mentioned, the bottom was a 161.8 extension of the wider plot, and also landed on the Mars 0-degree and Moon 270-degree lines.
This bottom also registered a BAJA bullish divergence. The chart shows the fib retracement plot from High = May 9th 12:00 1.44072 and Low = May 9th 14:30 1.42530.
The bounce up reached the 78.6% fib and just beneath the Mars 90-degree, and near the fib channel's 261.8%, for about 100 pips. The pivot high was also a BAJA bearish divergence formation. "X" marks the 2nd dip/peak of each, on the RSI(4).
Here's another example of using the Andrew's Pitch Fork (APF) and Fib Channel tool to generate diagonal S&R.
The 3 points to click for the APF:
1) Handle = May 4th 14:00 high 1.49388
2) Upper Trend Line = May 9th 08:30 high 1.44410
3) Lower Trend Line = May 6th 18:30 low 1.43144
The confirmation hit on the center fork/trend line, that legitimizes plot =
May 9th 14:30 low 1.42530, which was the bottom per previous posts.
Align 1st and 2nd lines of fib channel to middle and upper APF trend lines.
The next fib channel was the 61.8 (expansion), which coincided with the retrace to the horizontal 78.6% fib. This became another confirmation for the short.
Swiss CPI was released at 07:15 GMT, and it was lower than expected. Chf weakened across the board accordingly. Let's update our USD/CHF chart and study the S&R.
Obviously, we always advised not to trade (intra-day) during these periods of high-impact economic data releases, unless you are an expert at trading the news.
The 1st chart is the same USD/CHF 4-hour, with ABCD extension levels, APF, and fib channels. The data lifted this pair to current resistance at the PSQ9 Mars 90-degree line (thick red), and where fib channel's 423.5% is located.
Dropping down to the 1-hour (not shown), we can see the spike up during the 07:00 candle from the FE 61.8 fib, which was the same as PSQ9 Mar 0-degree.
The 2nd chart is the EUR/CHF on a 30-min interval, zooming in on the last few days. This pair made a double bottom ahead of the data, and even had a BAJA bullish divergence with 2nd dip at 05:30.
The bottom was also a 161.8 extension (yellow) off of a tighter fib plot: High = May 6th 1.27472 and Low = May 6th 16:30 1.26037.
The spike up met resistance near the Mars 180-degree, pivoted and extended. Currently at the 50% retrace level, and near the Moon 90-degree.
When we plot an ABC from the bottom, the current price is near the FE 78.6 and 61.8 retrace fib.
***
EUR/USD dragged up slightly by EUR/CHF, but contained by resistance at the Mars 90-degree thus far.
Set-up leading up to May 10th short on 30-min chart.
Low = May 5th 11:00 79.556
High = May 6th 06:00 80.636
138.2 extension = May 10th 22:30 81.049
Top is also met by PSQ9 Moon 0-degree. It is also 2nd peak of BAJA bearish divergence. The 1st peak is May 10th 07:30 high 80.870, which is also on the Mars 90-degree.
15-min EFT trigger entry SELL = 23:45 81.000
S/L above high pivot of 81.084 + cushion = 15 pips risk
Trading to level of High 80.636 would be about 30 net pips.
Reward/Risk ratio = 2:1.
Blue "X" labels identify the peaks on candles and RSI(4) for divergence.
Busy day for most markets, as risk off trading took place. Commodities down, USD up.
Attached is EUR/USD 30-min, continuance from last post on pair. We have the 161.8 at bottom May 9th. That was also Swing A on the reversal upward that culminated at the FE 127 of 1.44220.
Pair could not break that level during May 10th Asian session. We also had the diagonal PSQ9 Moon 0-degree slicing through to provide resistance.
BAJA bearish divergence at 09:00 was heads-up for downturn.
Plot from Swing C to D provided 138.2% fib at downside of 1.42104 (hit May 11th 16:00). Currently pair at Moon 180-degree and attempting to hit the 161.8 of 1.41743.
USOIL bounced off of the FE 100 and made a 61.8% retrace from Point A. The drop went from $104 to 98. The blue fibs are extensions from wide plot as posted previously.
XAU_USD (golf CFD) had made an ABCD ending with a May 5th bottom, to form a BAJA bullish divergence. The up move made a 78.6% retrace (1526.60) from A-D, as mentioned on our last post.
BAJA bearish divergence at this pivot, along with PSQ9 Moon 180-degree (blue). The bounce down has now reached the 50% retrace of D-78.6 at price of 1495, for about $31 gain.