A-B-C-D Trade - page 97
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Pair broke support at the 383-degree. Plotting an ABC, we can see it bounce off near the FE 78.6 of .9816 during 05:30 candle (15-min).
Deepest sympathies to families hurt by severe flooding in Australia. They have to also brace for the next round.
No EU data during European session. Portugal rotated in as latest PIIGS nation debt concern. Asian session and early bird European session traders applying shorts leading into 08:00 open.
Testing session lows.
Breaking news may be driving Euro down this session, as we get Belgium in the spotlight, with record bond yield differential with German Bund.
Coupled with similar debt concerns with Portugal, it is theme for the day since no data is due.
EUR/USD. Selling at peaks intra-day can shave half-percent to one-percent here and there. Last pivot up places FE 100 RIGHT ABOUT AT session low 1.2912
In a range-bound day without significant data, there were still opportunities for the savvy trader familiar with support and resistance.
We had 2 peaks that showed divergence, with the 2nd peak during the mid-U.S. session. Although the candles did not ascend smoothly, and chopped down between peaks, we can still have use for this.
The divergence can easily be seen on the 30-min and 1-hour charts. However, since triggers are usually with lagging indicators, this one would have a late entry. The Ehler’s Fisher transform on the chart has the same entry as cross-overs and would be too late for this intra-day trade
The attached chart marks the 2 peaks of the candles and the RSI indicator, We switched to the 15-min for trigger. The marks are still valid and point to peaks. We added the fractal indicator, which caught the pivot at the top of the 2nd peak. A red arrow points to the entry point on the 4th candle after the 3 candle-formation and fractal locked in.
Notice the 2nd peak was also the Asian High. The fib plot was from the 01:45 spike candle during Asian which was the session low/high.
3 attempts to break the Asian Low failed during the European session. The first attempt was a bounce trade opportunity at 08:00 that captured 35 gross pips.
The first approach to the Asian High (1.2990) at 12:15 got as far as 1.2981 and became a Gravestone Doji. The bounce down pivoted at the 61.8 fib, before making a FE 161.8 extension to the day’s low
Just before the 2nd peak, we had a doji candle with a 1-pip body. Just after the 2nd peak candle, we had a hammer candle with a 2-pip body.
Entry at the open of the 17:15 candle (1.2975) was a short trade that made it to the 61.8 fib 1.2943 for a +32 gross pips. Risk was about 20 pips.
******
There were quick hitting shorts during Asian for a few pips. A divergence also occurred. Can you locate that one?
Queensland, Australia once again slammed by torrential floods. A continuance of shorts resumed from yesterday have found a bounce off of the 200% extension .9806 based on 1-Hour plot:
Jan 10th 15:00 low .9887 and Jan 10th 18:00 high .9968.
Look at the RSI readings during 05:00 and 22:00 hour candles. It shows divergence from candle direction.
LSMA Channel also on chart for S&R. Bounce now .9825 as Tokyo opens. Trigger on short time frame for BUY.
Daily also has 61.8 fib support of .9812, as posted recently on SQ9 chart.
AUD/USD also had ABC swings visible on 1-hour chart of Jan 11th 00:00/05:00/12:00 producing FE 61.8 = .9803 which was support area.
The fib retrace plot for exit levels would be high of 21:00 and low of 22:00,
38.2% = .9831
50% = .9839
61.8% = .9848
78.6 = .9860
Unfortunately, there reportedly is more severe rain and flooding ahead.
By the way, our research with turning point system produced: 19:00, 21:00, and 23:00 on the 30-min.
Nice place to exit at 61.8 .9847 for about +20 - +24 pips profit depending on your entry and fill.
.9856 is the 138.2 and should stall/ bounce
Attached is split screen on pair, with 15-min on left and 1-hour on right.
LSMA channel provided S&R on 15-min. We also can see the 138.2 fib (.9856) providing resistance, and the RSI at overbought level.
The 3 red arrows are our research system turning points. Actually entry for this trade would have been 23:15 candle open .9821 based on fractal (not shown).
1-Hour chart has divergence marked, ABC (pink), fib retrace exit levels (yellow). Background are SQ9 levels. Interesting aspect is that this ABC plot would place its FE 100 around the 360-degree SQ9 level for support in event pair dives back down.
The short selling derived from panic selling reaction to flooding. Good lesson on why not to chase the market. Watch these scenarios and learn.
This trade was a trade off of support (bounce) and not for a new direction. We take what we can get with no regret if it goes further in trade direction after exit.
Nice example of recognizing divergence on the 1-hour and taking advantage of early warning.