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Powerful Fib Based System - by DAZfx

  • #61
  • Mar 20, 2008 11:45am Mar 20, 2008 11:45am
Quoting Dazfx
Yes for the 4Hr Wave (Large wave on the Hourly) you would have entered at around 200.60 with S/L at 201.80.

But I prefer working on the 1Hr TF, so you would have caught yesterday's wave:
(Swing High: 201.17 ; Swing Low: 195.80) which retraced 61.8% (199.12)
Entry: 197.65
S/L: 199.15
Target 1: 195.90

And today's wave:
(Swing High: 199.21 ; Swing Low: 195.41) which retraced 78.6% (198.31)
Entry: 197.40
S/L: 198.40
Target 1: 196.00
Target 2: 195.35

Thanks
Cheers Daz! I appreciate your help.
  • #62
  • Mar 20, 2008 12:20pm Mar 20, 2008 12:20pm
@ Daz;

Can you elaborate more on the use of the 5SMA? Are we waiting for the candle to close above the 5SMA on a Long setup and below on a Short setup? Usually price is always near the 5SMA?

TimeFreedom

Quoting Dazfx

1) The new candle following the Confirmation Candle is on or near the 5 SMA.
  • #63
  • Mar 20, 2008 12:27pm Mar 20, 2008 12:27pm
might be a valid signal ?
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 15 KB
  • #64
  • Mar 20, 2008 12:55pm Mar 20, 2008 12:55pm
Hi DazFX & Fellow Traders,

To calculate your fib exp. target levels do you pull your fib tool to the retracement high since by default the fib expansion tool shows a retracement to the 50% level.

Daz, it's very gracious of you as a professional trader to share your insights with us on your system. Thank you sir!
  • #65
  • Mar 20, 2008 12:58pm Mar 20, 2008 12:58pm
Quoting TimeFreedom
@ Daz;

Can you elaborate more on the use of the 5SMA? Are we waiting for the candle to close above the 5SMA on a Long setup and below on a Short setup? Usually price is always near the 5SMA?

TimeFreedom
Hi,

5SMA is used to give you a better entry, as price usually retraces to this level. It is not used as a confirmation for entry, only to give you the best RISK/REWARD trade.

For example, in a short trade setup, you will see the confirmation candle (next candle after the retracement candle[Point C]) breaking the 5SMA on the downside. The next candle (entry candle) would normally go back up to test the 5SMA. Your precise entry would be when the candle is on the 5SMA, or even better if it goes above the 5SMA. Ofcourse, sometimes it may not even retrace to the 5SMA and continue going down. In these cases, just wait until you are a few pips away from the 5SMA as price usually hovers up and down before it pick up the downward momentum. Ofcourse, if you feel price has gotten too far away from the 5SMA (hence making the Stop too wide), just look for another setup.

Usually, if you see a setup in USDJPY, you will see similar setups throughout the Yen pairs, and so, you can take the best setup (Best RISK/REWARD trade).


Thanks
  • #66
  • Mar 20, 2008 1:04pm Mar 20, 2008 1:04pm
Quoting Dazfx
Hi,

5SMA is used to give you a better entry, as price usually retraces to this level. It is not used as a confirmation for entry, only to give you the best RISK/REWARD trade.

For example, in a short trade setup, you will see the confirmation candle (next candle after the retracement candle[Point C]) breaking the 5SMA on the downside. The next candle (entry candle) would normally go back up to test the 5SMA. Your precise entry would be when the candle is on the 5SMA, or even better if it goes above the 5SMA. Ofcourse, sometimes it may not even retrace to the 5SMA and continue going down. In these cases, just wait and enter when you are a few pips below the 5SMA.

Thanks
Sorry Daz I had 1 more question, how did you come to choose 5 SMA over EMA or WMA ? Thanks again....T-Wolf
  • #67
  • Mar 20, 2008 1:07pm Mar 20, 2008 1:07pm
Quoting thunderwolf
Hi DazFX & Fellow Traders,

To calculate your fib exp. target levels do you pull your fib tool to the retracement high since by default the fib expansion tool shows a retracement to the 50% level.

Daz, it's very gracious of you as a professional trader to share your insights with us on your system. Thank you sir!
Hi ThunderWolf,

Yes, for Fib Expansion, your points would be A, B, C. C being the retracement high. Please take a look at the charts in my first post, the blue dotted lines are Fib Expansion lines.

Thanks
  • #68
  • Mar 20, 2008 2:06pm Mar 20, 2008 2:06pm
Quoting Dazfx
If you want to get a better entry, go to the 5/15min TF after the confirmation candle has been formed. Look for a reversal candle to make the entry (ideally near the 5MA on the hourly). This way, you will be able to place the tightest of stop and enter just before the momentum kicks in.

Thanks
Hi Daz,

I was wondering if you could post an example chart showing a better entry using a 5 or 15M chart. Very impressive work you have here!!
  • #69
  • Mar 20, 2008 3:10pm Mar 20, 2008 3:10pm
Quoting thunderwolf
Hi Daz,

I was wondering if you could post an example chart showing a better entry using a 5 or 15M chart. Very impressive work you have here!!
Okay.

This is an example of a Jan 17 trade (perfect setup).

1H on GBPJPY
http://b.imagehost.org/t/0296/abcdnew1.jpg

This is the 5min chart of the same trade showing how you can enter on the break of a support level (some knowledge in candlesticks ideal).
http://b.imagehost.org/t/0296/abcdnew.jpg

I hope this helps.

Thanks.
  • #70
  • Mar 20, 2008 3:17pm Mar 20, 2008 3:17pm
well done sir,
one thing pls, that fibo that is one your first post is it attached with one software attached to your patform or you draw it manuallly yourself then if you draw it manually yourself how come it has a lot of writing on it?????????

Quoting Dazfx
Hi ThunderWolf,

Yes, for Fib Expansion, your points would be A, B, C. C being the retracement high. Please take a look at the charts in my first post, the blue dotted lines are Fib Expansion lines.

Thanks
  • #71
  • Mar 20, 2008 3:24pm Mar 20, 2008 3:24pm
Quoting fxguy
well done sir,
one thing pls, that fibo that is one your first post is it attached with one software attached to your patform or you draw it manuallly yourself then if you draw it manually yourself how come it has a lot of writing on it?????????
Fibonacci Expansion is a tool that comes with almost every platform. I did not draw it manually, I just chose the 3 points (A,B,C) and the Fibonacci Expansion (FE) Levels should come up automatically. You can add more levels by clicking on 'Properties'.

Thanks
  • #72
  • Mar 20, 2008 3:46pm Mar 20, 2008 3:46pm
I tried taking this trade some time back but lost on it.

If you see the black circle - that's where I shorted (based on a bearish engulfing candle) but after 2 candles it started shooting up and hit my SL.

Any inputs will be welcome.

Thanks.
Attached Image (click to enlarge)
Click to Enlarge Name: t1.JPG Size: 93 KB
  • #73
  • Mar 20, 2008 4:29pm Mar 20, 2008 4:29pm
Quoting apume
I tried taking this trade some time back but lost on it.

If you see the black circle - that's where I shorted (based on a bearish engulfing candle) but after 2 candles it started shooting up and hit my SL.

Any inputs will be welcome.

Thanks.
Hi there,

I see you tried it on the 15min TF. As you go onto lower TFs, the setups become less accurate, though you do get more setups which make up for it.
A problem with that chart is that the AB wave was too big. You can find the retracement off a large wave, as long as the setup is present on the bigger TF, and on your instance, it wasn't (as Stochastics on the hourly was still looking up, Confirmation candle wasn't closed).

It looks like it wants to retrace off the 78.6 level.

Thanks
  • #74
  • Mar 20, 2008 4:37pm Mar 20, 2008 4:37pm
in one of your charts i saw some other blue lines on your fib, pls how do you get that on your for your fib mine doesnt have such
pls respond as quick as you can i have a lot of que here
thanks , sincerely you are doing a lot of work here
no doubt
Quoting Dazfx
Okay, here are some recent trades. AB is an impulse wave with recognisable swing points. Please refer to {chart 1} on my first post where you can see how a wave is always followed by a retracement. So your Point A in a downtrend would be the first Swing High after a retrace. Point B would be the immediate Swing Low (as intraday traders you should look for waves consisting of 4-10 1Hr candles).

GBPJPY on the 1hr
http://b.imagehost.org/t/0284/abcd5.jpg

GBPJPY on the 1hr
http://b.imagehost.org/t/0284/abcd6.jpg

EURCHF on the 4hr.
http://b.imagehost.org/t/0284/abcd7.jpg

EURUSD on the 4hr. I did not take this trade as it was against the trend setup, but it did work out very well. You could have taken this as the Stop Loss is very tight giving an excellent Risk/Reward setup.
http://b.imagehost.org/t/0284/abcd8.jpg


By the way, I hope you have noticed how the time it takes to form 'AB' wave is roughly how long it takes for 'CD' wave to form. Using this, you can predict your exit point.

I hope this helps.

Thanks
  • #75
  • Mar 20, 2008 4:41pm Mar 20, 2008 4:41pm
thhanks that one is settled
i still mintained my laguage you are great
Quoting Dazfx
Fibonacci Expansion is a tool that comes with almost every platform. I did not draw it manually, I just chose the 3 points (A,B,C) and the Fibonacci Expansion (FE) Levels should come up automatically. You can add more levels by clicking on 'Properties'.

Thanks
  • #76
  • Mar 20, 2008 4:44pm Mar 20, 2008 4:44pm
Quoting Dazfx
Hi there,

I see you tried it on the 15min TF. As you go onto lower TFs, the setups become less accurate, though you do get more setups which make up for it.
A problem with that chart is that the AB wave was too big. You can find the retracement off a large wave, as long as the setup is present on the bigger TF, and on your instance, it wasn't (as Stochastics on the hourly was still looking up, Confirmation candle wasn't closed).

It looks like it wants to retrace off the 78.6 level.

Thanks
Daz, I had the same observation as apume (on the 15m). But what I also noticed, was the fact that (using fractals for visibility) there were a number of swing highs and swing lows in the AB wave on the 15m chart that apume posted below.

I can see that things look a lot more promising for a GBPJPY short on the 1hr at 107.40 right now.

Do you find it reliable to draw waves using the swing highs and lows plotted by fractals? If so, this might help the less experienced eye (like mine) identify the waves.
  • #77
  • Mar 20, 2008 4:47pm Mar 20, 2008 4:47pm
Quoting fxguy
in one of your charts i saw some other blue lines on your fib, pls how do you get that on your for your fib mine doesnt have such
pls respond as quick as you can i have a lot of que here
thanks , sincerely you are doing a lot of work here
no doubt
To enter fib levels, you right click on the dotted lines, and go to 'properties'. There you enter the levels you want. 0.50, 0.618, 0.786 & 1.000. And in the description field, just add FE 0.50, etc.

If you are talking about the blue lines below the candles, don't worry, that is just for illustration.

Hope this helps.

Thanks
  • #78
  • Mar 20, 2008 4:50pm Mar 20, 2008 4:50pm
in your thread you reiterated that it should be traded in the direction of the trend but this one that i attached was in a up trend and where you put
A to B should be the retracement or what are you explaining over the use of this magical tool with trend,
dont mind my amateur question amm still new to this not quit so loong that i started, so pardon my question.
thank you sir
Quoting Dazfx
Fibonacci Expansion is a tool that comes with almost every platform. I did not draw it manually, I just chose the 3 points (A,B,C) and the Fibonacci Expansion (FE) Levels should come up automatically. You can add more levels by clicking on 'Properties'.

Thanks
Attached Image (click to enlarge)
Click to Enlarge Name: fib 2.gif Size: 18 KB
  • #79
  • Mar 20, 2008 4:52pm Mar 20, 2008 4:52pm
Can someone please tell me how to draw the Fib Expansion?

I clicked the fib expansion at A, then B, it stopped at B and nothing happened after I clicked at C

Thanks
  • #80
  • Mar 20, 2008 5:00pm Mar 20, 2008 5:00pm
Quoting priceaction
Daz, I had the same observation as apume (on the 15m). But what I also noticed, was the fact that (using fractals for visibility) there were a number of swing highs and swing lows in the AB wave on the 15m chart that apume posted below.

I can see that things look a lot more promising on the 1hr at 107.40 right now.

Do you find it reliable to draw waves using the swing highs and lows plotted by fractals? If so, this might help the less experienced eye (like mine) identify the waves.
Yes fractals may help. But if you keep your waves relatively small (by working on the appropriate Time Frame), you would easily identify the swing points. When I wrote this system, I was under the assumption that people would easily identify swing points, and hence, the criteria for large waves. But if you work on smaller waves by moving to the right TF, the large waves criteria won't be needed.
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