I really can't give an exact answere in regards to smaller time frame retracements. It does seem like the gbpusd moves 2 steps forward 1 step back and continues to repeat that pattern. Knowing the daily s & r and the statistical probability of each one (see attachment) along with knowing the range of motion (ROM) see post 230 helps you to determine high probable entry and exit strategies. Also knowing the fib retracement helps you to determine if you want to be in a trade all day and see the gbpusd move 96 pips like it did today then retrace 60 pips to the 61.8 fib. See post 220 on the frequency of retracements. If you look it normally tops out or bottoms out by around 10 am to 12pm eastern time. That can be a good time to exit and pick up a few pips on the retrace. Here of late it has not been so cut and dried with it retracing after those times today being one of those days. To fully take advantage of fib retracements you are not going to have a perfect set up every day. You can definitely keep it in mind on your trading during the day though so you are not caught off gaurd in your trade. The weekly retracements again you are not going to have perfect set up all weeks. This week was a nice set up because it had only retraced to the 23.6 fib and had an 87% probablility of going 50 pips more to the weekly fib of 38.2 and a 77% probability of going another 40 pips beyond that to the 50 fib which it came within 9 pips of that. Hope this helps.
Statistical Probability Trading With Price Action
- #263
- Jun 13, 2007 12:29am Jun 13, 2007 12:29am
- Joined Aug 2006 | Status: Trader | 1,852 Posts
