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  • #861
  • Dec 5, 2007 12:11pm Dec 5, 2007 12:11pm
ok.. i see...

thank you bo...
  • #862
  • Dec 5, 2007 2:17pm Dec 5, 2007 2:17pm
So Cable fell 300 pips overnight - I went to bed JUST before that happened. I caught some of it on a pending short order with targets placed, but wish I could have gotten more. Better than a loss still. This is why I want to master longer time frame perspectives asap.
Right now I'm feeling confident about short time frames with small targets so I'm doing that as a primary/fallback plan while I continue to learn.
By time frame I mean fib-wise. Everything is a 1 hour time frame. I think I'm cured of the 5 and 15minute investigations I used to do to supplement 1 hour.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #863
  • Dec 5, 2007 2:52pm Dec 5, 2007 2:52pm
Quoting Bobokus
Your fib levels are correct
For the longer timeframe fibs (Daily & Intermediate) you dont need the extentions past 2.382/2.618 on the long side and dont need the extentions
-1.382/-1.618 since you most likely are not going to leave those fibs in place that long for them to reach those levels.
For the Intraday and Swing fibs you may want to leave them since price does have the potential sometimes to reach those levels in a days time. Today is a prime example.
Just remember the most important levels on the longer term fibs the 38.2/50 and 61.8 and the most important...sometimes once those levels are breached and the subsequent low or high is broken i will most likely be loking to move them then.
The R1 and S1 levels wont do you much good on the swing fib since the Swing fib is just for following along with price...the R1 level is the midway points between the High to the Long fib level, the S1 level is the midway point from the Low to the Short fib level.I use those 2 levels mostly during trending moves since once they are breached it is a sign of weakness in the trending move and a retracement may be next.As long as price can be maintained above or below the R1 and S1 level that trending move is still pretty stong.
To make things easier you can leave all the levles on all but the Swing fib.
Is that what you asking for ?
I think so, thanks.
  • #864
  • Dec 5, 2007 2:55pm Dec 5, 2007 2:55pm
Quoting Thexder
So Cable fell 300 pips overnight - I went to bed JUST before that happened. I caught some of it on a pending short order with targets placed, but wish I could have gotten more. Better than a loss still. This is why I want to master longer time frame perspectives asap.
Right now I'm feeling confident about short time frames with small targets so I'm doing that as a primary/fallback plan while I continue to learn.
By time frame I mean fib-wise. Everything is a 1 hour time frame. I think I'm cured of the 5 and 15minute investigations I used to do to supplement 1 hour.
Just curious what is your success rate with this strategy? It seems like you might have figured out what Bobokus is trying to explain (I am still learning the basics of it).
  • #865
  • Dec 5, 2007 5:11pm Dec 5, 2007 5:11pm
Quoting Jared
Just curious what is your success rate with this strategy? It seems like you might have figured out what Bobokus is trying to explain (I am still learning the basics of it).
Did you see the PDFs I posted for October and November on this thread, pages 45, 46, 49? Some are notes showing the entries and exits that would have been taken and there's 2 files with some actual pip counts that could have been achieved following what I outlined.

In October I claim we could take in around 300 pips just trading some swing fib break outs despite some losses that would have wiped out a week's profit. In November there would have been some losses following this approach near the end of the month but even then I think there could have been 400 to 500 pips doing this because the first 2 weeks of the month were trending either up or down and break outs were highly successful. Then some ranging came and showed a bunch of losing short term break outs (I didn't document this, it was after Nov 20 when I created a november-to-date document).

But its' labor intensive to watch and wait all night/day for the proper short term swing bias to align with a break out and execute it, unless you get lucky and it comes at the start of the London session when you first start paying attention for a setup.

So it's more like a scalping approach. I don't believe the break outs I've been using (high or low of the fib levels) are directly translated into the longer term trading where bounces from long/short levels are more closely watched. THat's what I'm going to look into next. But if I can successfully pull in a few hundred pips a month in ranging or trending markets by scalping and sitting at the computer all night to do it, it's a sacrifice I'm willing to make while learning the more practical and possibly more profitable longer term techniques. I'd rather get to a level where I just wait for a setup and set things in play and then not have to sit there until the stars align. I need to have a life - but until then, money is money!

Call it a part time job while taking courses to establish a career.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #866
  • Dec 5, 2007 6:11pm Dec 5, 2007 6:11pm
Quoting Thexder
Did you see the PDFs I posted for October and November on this thread, pages 45, 46, 49? Some are notes showing the entries and exits that would have been taken and there's 2 files with some actual pip counts that could have been achieved following what I outlined.

In October I claim we could take in around 300 pips just trading some swing fib break outs despite some losses that would have wiped out a week's profit. In November there would have been some losses following this approach near the end of the month but even then I think there could have been 400 to 500 pips doing this because the first 2 weeks of the month were trending either up or down and break outs were highly successful. Then some ranging came and showed a bunch of losing short term break outs (I didn't document this, it was after Nov 20 when I created a november-to-date document).

But its' labor intensive to watch and wait all night/day for the proper short term swing bias to align with a break out and execute it, unless you get lucky and it comes at the start of the London session when you first start paying attention for a setup.

So it's more like a scalping approach. I don't believe the break outs I've been using (high or low of the fib levels) are directly translated into the longer term trading where bounces from long/short levels are more closely watched. THat's what I'm going to look into next. But if I can successfully pull in a few hundred pips a month in ranging or trending markets by scalping and sitting at the computer all night to do it, it's a sacrifice I'm willing to make while learning the more practical and possibly more profitable longer term techniques. I'd rather get to a level where I just wait for a setup and set things in play and then not have to sit there until the stars align. I need to have a life - but until then, money is money!

Call it a part time job while taking courses to establish a career.
Impressive relults! As long as they can be consistent.

I agree with you with trying scalping first on a smaller time scale. It gives you quicker results to judge if this strategy is something that would work for you or not.

I have a scalping strategy based on the RSI and moving averages, but it requires constant screen time, not fun. It doesn't work on larger time frames either. I would like to be able to trade less and less on larger time frames with bigger profit targets.

I am currently reading through your (long) pdf trying to follow along with what you have done. There are a couple of things I am having trouble understanding.

1. How do you determine the bias, whether long or short?

2. How do you define a "significant retracement"?
  • #867
  • Edited 6:50pm Dec 5, 2007 6:29pm | Edited 6:50pm
Quoting Jared
1. How do you determine the bias, whether long or short?

2. How do you define a "significant retracement"?
I think the November PDF did a better job defining those in the first few pages than October (I was learning as I went and later figured out what I was talking about).

The bias for the method I used is determined by looking at where candle bodies are located once a swing has been drawn, and only by looking at completed candles. The body of course is the part filled in between the candle's high and low, not counting the wicks.

Suppose a swing is drawn such that the swing high is the last occurring level (low occurs 5 candles ago and high occurs 2 candles ago). Then look at the body of the candles immediately after the candle where swing high was established. If the candle bodies have remained within 61.8% of the retrace from high to low (somewhere between swing high and swing short fib), then the bias remains long. If a break of swing high occurs while candle bodies have remained between swing short and swing high, I take a long entry on the actual break without waiting for a closing candle, and I set a target of T1 level, a stop of Pivot level (or swing low if the swing is less than 40 pips from high to low). If a break of swing low occurs while the bias is long, I miss the trade.

If a candle body had shown up somewhere greater than 61.8% (below swing short) then the bias would change to short and I'd ignore any long entries and only take short entries with the T1 short side target and same Pivot stop.

If the bias shifts from long to short as in the previous case, but then shifts back to long without any break out occurring (the candle now has to have its body reach beyond 61.8% of the swing low, meaning a body located above swing Long), then the bias becomes long again. It can change back and forth until a break out occurs but the swing high and low levels may require updating along the way, based on the significant retrace rules I determined.

A significant retrace occurs if a candle body has moved beyond at least a 38.2% retracement of the most recent swing high or low that was drawn, and a candle wick or body has exceeded a 61.8% retracement. In this case swing high was the most recent swing level pulled so with a long bias in play, if a candle body moves lower than swing Long (that would be 38.2% retracement from swing high), then watch for a candle body or wick reaching beyond swing short (61.8% of swing high). Then I say a significant retracement has occurred and if a candle body moves back to the long bias (above swing long), I would pull swing low up to the lowest price (wick or body, whichever) that showed up while price was moving down within the swing. Price is ranging without a break out so we keep tabs on the swing waves until it breaks out. Keep in mind that a swing range must be at least 30 pips. If it ranges in tighter than that, just keep the existing swing in play. Even with a swing of 30 pips from high to low the T1 reward isn't very great.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #868
  • Dec 5, 2007 6:33pm Dec 5, 2007 6:33pm
thanks
  • #869
  • Edited 6:54pm Dec 5, 2007 6:39pm | Edited 6:54pm
I actually just re-read my own november document and saw that the definition of significant retracement is a little different than I just wrote. I just edited the post so it should match now.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #870
  • Dec 5, 2007 7:03pm Dec 5, 2007 7:03pm
Bo,

So are you trading off the daily and intermediate fibs along with scalping with the intraday?
Shootist - Have Pip Shooters Will Travel
  • #871
  • Dec 5, 2007 7:05pm Dec 5, 2007 7:05pm
Quoting Shootist
Bo,

So are you trading off the daily and intermediate fibs along with scalping with the intraday?
Yes I trade both longer term and Intraday scalping
  • #872
  • Dec 5, 2007 7:56pm Dec 5, 2007 7:56pm
Lookin from the longer term view we have come very close to hitting (2.0227/UpMoves Short Fib) 61.8 retracement level from the Up trending move that started back on August 17th to the high of November 9th.
I like looking at momentum and the Daily momentum is down pretty hard right now.4hour Momentum is starting to arc around so we may see some retracement now.
The problem I see is it will take a 100pip + move just to reach the 38.2 (Short Fib) from the Last Swing on both the Daily and 4 Hour charts.
1 Hour momentum is already showing retracement but price is not traveling very far...signaling to me that the downside pressure is still pretty strong.
Ill be watching price through the 1 Hour Intraday Fib and pulling a Swing fib once we get some movement out of this consolidation period 2.0300 seems to be the cap on it as of now. We'll see what happens if the Intraday levels are tested.Be careful on a break of todays Low 2.0245 if no retracement occurs since the Uptrends Short Fib level is sitting at 2.0227 and it may hold price.Im waiting to see if it holds if tested and may take a long position there.
To take the Downside pressure off price will have to break back above 2.0510 and hold it by not falling back below 2.0410.
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  • #873
  • Dec 5, 2007 8:10pm Dec 5, 2007 8:10pm
Quoting Thexder

If a candle body had shown up somewhere greater than 61.8% (below swing short) then the bias would change to short and I'd ignore any long entries and only take short entries with the T1 short side target and same Pivot stop.

.
So, are you saying you would need to wait for a new candle to form below the 61.8% level to confirm the change of bias from long to short? If price breaks 61.8% but the candle is still open, you don't take the trade, you just wait and see if a new candle forms below the 61.8% level to take the trade?
  • #874
  • Dec 5, 2007 8:25pm Dec 5, 2007 8:25pm
Here ya go Jared an opening is the safest entry.
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  • #875
  • Edited Dec 6, 2007 12:43am Dec 5, 2007 11:55pm | Edited Dec 6, 2007 12:43am
Quoting Jared
So, are you saying you would need to wait for a new candle to form below the 61.8% level to confirm the change of bias from long to short? If price breaks 61.8% but the candle is still open, you don't take the trade, you just wait and see if a new candle forms below the 61.8% level to take the trade?
Yes I'd look for the candle body to have made it beyond 61.8% to change bias after the candle is completed, not just a presence temporarily that ends up closing not quite beyond 61.8%. That's why I nicknamed the area between swing long and short, the neutral zone. Bias only changes when fully crossing the zone with the candle body itself and this is evaluated when a candle is completed.
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #876
  • Edited 12:05pm Dec 6, 2007 11:40am | Edited 12:05pm
Last night is an example of how I can extract +32 pips from a ranging day with the swing method.

I found a swing high and low before the real trading session began, and the bias was initially long because the swing high was the most recent placement and the candle body of the next 2 candles were within 61.8%. In the first image there is a short break with a target met but the trade wouldn't have been taken since the bias was still long on the candle before that break out.

On the candle after the target was met, there was a retracement back into the swing area so the move is complete and the swing can be updated as in the second picture with the low pulled to where the target was met. The bias starts out short with the latest swing extreme being a swing low and a following candle body within 61.8% from there. The second candle after swing low will have its body moving beyond 61.8% so the bias would be long then. A reversal occurs as highlighted in the second image and the bodies move back to the short bias side. A significant retracement has occurred without a break out because a candle body has moved from the swing low to at least within the neutral zone (it went beyond the neutral zone in this case) and there was at least a spike across the neutral zone fully. So once the bias has returned to short without a break out, the swing high is pulled down to the highest point in that significant retrace as in the 3rd image.

Just before the swing is updated, the bias was short and this bias would be retained after the swing is updated as long as the latest completed candle body within the new swing is in a location of short bias (it can lay in the neutral zone and be considered short biased). In this case the candle body is physically on the short side so it's ok.

A short break occurs and the 32 T1 pips are taken out of the ranging market.
Nothing else happens for the day.

I don't show it in the images but this happens after the target is met: the same candle that met the target also retraced back to the swing area by the time it closed. The next candle gave a higher low when it closed so there was a point to pull swing low at the bottom peak that was just a T1 target, but once this swing is pulled the swing high is already broken by that same candle that allowed the new low to form, it was a bullish candle starting on the short side and spiking above swing high, triggering a phantom trade that wouldn't have been taken because 1) the bias was short anyway 2) the break out occurred just before the new swing was established (on a single candle that gave a higher low along with a swing high break out at the same time, then allowing swing low to be updated and a swing to begin). In that case I do follow the swing activity as if it were a real trade until it completes and the next few candles stopped it out at the pivot...then nothing occurred and the day was done.

So that's what I'm trying to combine with a longer term approach - in this case T1 gave 32 pips and price retreated - but yesterday it continued down for 300 pips - I need to learn how to account for this possibility and not just take the 32 and run if there is another sign suggesting I could get more out of it.
Attached Image (click to enlarge)
Click to Enlarge Name: Cable.jpg Size: 106 KB
"Support and Resistance either holds or it doesn't." -Anonymous hillbilly
  • #877
  • Dec 6, 2007 12:13pm Dec 6, 2007 12:13pm
Has anybody tried this with GBP/JPY?
  • #878
  • Dec 6, 2007 12:14pm Dec 6, 2007 12:14pm
Quoting Thexder
Last night is an example of how I can extract +32 pips from a ranging day with the swing method.

I found a swing high and low before the real trading session began, and the bias was initially long because the swing high was the most recent placement and the candle body of the next 2 candles were within 61.8%. In the first image there is a short break with a target met but the trade wouldn't have been taken since the bias was still long on the candle before that break out.

On the candle after the target was met, there was a retracement back into the swing area so the move is complete and the swing can be updated as in the second picture with the low pulled to where the target was met. The bias starts out short with the latest swing extreme being a swing low and a following candle body within 61.8% from there. The second candle after swing low will have its body moving beyond 61.8% so the bias would be long then. A reversal occurs as highlighted in the second image and the bodies move back to the short bias side. A significant retracement has occurred without a break out because a candle body has moved from the swing low to at least within the neutral zone (it went beyond the neutral zone in this case) and there was at least a spike across the neutral zone fully. So once the bias has returned to short without a break out, the swing high is pulled down to the highest point in that significant retrace as in the 3rd image.

Just before the swing is updated, the bias was short and this bias would be retained after the swing is updated as long as the latest completed candle body within the new swing is in a location of short bias (it can lay in the neutral zone and be considered short biased). In this case the candle body is physically on the short side so it's ok.

A short break occurs and the 32 T1 pips are taken out of the ranging market.
Nothing else happens for the day.

I don't show it in the images but this happens after the target is met: the same candle that met the target also retraced back to the swing area by the time it closed. The next candle gave a higher low when it closed so there was a point to pull swing low at the bottom peak that was just a T1 target, but once this swing is pulled the swing high is already broken by that same candle that allowed the new low to form, it was a bullish candle starting on the short side and spiking above swing high, triggering a phantom trade that wouldn't have been taken because 1) the bias was short anyway 2) the break out occurred just before the new swing was established (on a single candle that gave a higher low along with a swing high break out at the same time, then allowing swing low to be updated and a swing to begin). In that case I do follow the swing activity as if it were a real trade until it completes and the next few candles stopped it out at the pivot...then nothing occurred and the day was done.

So that's what I'm trying to combine with a longer term approach - in this case T1 gave 32 pips and price retreated - but yesterday it continued down for 300 pips - I need to learn how to account for this possibility and not just take the 32 and run if there is another sign suggesting I could get more out of it.

I think your starting to show some promiss here! Long term fibs work in the same manner, all you have to do is apply what you are doing scalping to the longer term fibs....They work the same way.
Dont worry about missing pips...its hindsight.The market isnt going anywhere, never get in the mindset that youve left pips on the table you will become to anxious to reenter to try and gain what you feel youve lost.
Take the money and run is the correct mindset....everthing resets the next day wait for your setup and do it all over again the next day.
  • #879
  • Dec 6, 2007 1:01pm Dec 6, 2007 1:01pm
Ok, Ive read through the entire thread!! My mind is reeling. I did your fib exercise with the up and down fibs. This is for long-term fib trading. so they would be equivalant to your daily and intermediate fibs? If your retracement fib has to be at least 30 pips across for decent mesurement, What(if any) is the minimum span for your intermediate fib? Your daily has to span the largest swing that encompasses most recent movement from your daily chart. Your intermediate would be the most recent retracement or correction swing after your daily. I want to make sure I understand long term fibs before I go to scalping or intraday fibs. BTW thanks a ton Thex!! Your consistent OCD(obsessive compulsive diorder) regarding your trades helps a ton. I can't thank you guys enough! About the intermediate, does it follow a swing or do you just drag the highs and lows?
  • #880
  • Dec 6, 2007 1:01pm Dec 6, 2007 1:01pm
You are using 1 hour candles for scalping right?
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