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  • #3,601
  • May 21, 2008 2:03am May 21, 2008 2:03am
  •  FxChi
  • | Joined Dec 2007 | Status: Cash Rules Everything Around Me | 749 Posts
Quoting piphitman
A Classic Cable Bo fib trade last night/yesterday morning,

Intraday fib shows a 1H candle close above the DZ, entry at 1.9557 with a 40 pip stop loss set at 1.9517. price retraces to the pivot so i only have to sweat out a brief 20 pip drawdown and then it was all gravy from there to my T1, a little better than a 3:1 RR.....
Good trading. I saw the set-up too, but I didn't take b/c my stochs were already overbought. Next time I'm jumping in whether stochs like it or not. But I did catch the ride back to the inner fibs. Was a bumpy ride, but worked out ok.
"Wishful thinking dies hard." Igor T.
  • #3,602
  • May 21, 2008 2:31am May 21, 2008 2:31am
Very Nice trade piphitman, you made over hundred and thirty pips riding cable up in a downward trend. Now can any1 explain what a trend is?

This just show Bob Fibs Rules.............
  • #3,603
  • May 21, 2008 10:10am May 21, 2008 10:10am
Quoting piphitman
A Classic Cable Bo fib trade last night/yesterday morning,

Intraday fib shows a 1H candle close above the DZ, entry at 1.9557 with a 40 pip stop loss set at 1.9517. price retraces to the pivot so i only have to sweat out a brief 20 pip drawdown and then it was all gravy from there to my T1, a little better than a 3:1 RR.....
Thats how its done !, now if we could get this thing into a steady trending move we can knock out several of these in a row. This would have been a scalp that turned into a golden opportunity. Nice job.
  • #3,604
  • May 21, 2008 8:51pm May 21, 2008 8:51pm
All in a days work,
In the next few posts I’m going to go over how I played out today’s trading beginning with a short position I took early on, following it with a stop and reverse point considering the news event that is posted late in the day and how I handled the trade along with the stop loss and as much of the logic as I can remember at each point, this will also show how I use the swing fib by moving it around to get a snapshot of the markets movement.
General short term bias is long and looking for a bounce…UK decides to hold on rates and later if the US follows suit we should be getting the bounce at that point.
The things I was looking for from the short was just a simple scalping trade back to the intraday levels of the previous day and with the previous days high very close to the Long level if we were going to get a bounce I was looking for this level first. I added a red horizontal line just to give me a visual aid as the where I was looking for price to go and possibly stop and reverse my position hopefully early enough before the late US news and go with the momentum before the announcement. First chart shows the short entry at 1.9666, originally you can see I’ve placed my stop and reverse point above a previous high and if we were to get any whip during the day I wanted it far enough for me to feel comfortable with it. As time goes and the trade develops I will follow price down with the stop and reverse point. I could have closed the short as it touches the previous day’s Long level but I wanted to hold it in case I was wrong and we retrace farther…which would fit with the recent price action so I held it and looked for a resistance point to break as the exit and reverse. Placing a swing fib on the retracement we’ve gotten to the intraday level Chart 0521/2. I see everything is good to go for the short but price is hanging just above the Long level of the previous Days intraday, the previous days high is also in play here and we could get the bounce from here. Just for the sake of it I wanted to see the upper trend line and how it played into the current price action, chart 0521/3 shows this.

Continued……..
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  • #3,605
  • May 21, 2008 8:52pm May 21, 2008 8:52pm
At this point in the trade it looks safe to pull the stop and reverse point down closer to price in anticipation of the bounce, it’s always best to wait for each candle to close and a new one to open before making your decision to make adjustments. Chart 0521/4 the stop and reverse point is moved up. By stop and reverse I mean that my stop loss and my buy stop are equal. I use a buy stop in this situation since I want to get picked up by the momentum if it makes a run up…on its way up it will pull me in along with it as it moves up.
In chart 0521/5 the progression continues and I move my stop and reverse up now protecting 10 pips profit. By the 1400 candle now momentum appears to be picking up as the pace of price change is getting more rapid…it’s on now. I am set now if the bounce occurs and we begin to start breaking previous highs now 10 pips protected and looking to go long now off the bounce. The 1400 candle dips to the intraday long level (sorry I was using 2 swing fibs for this but later I realize it and change to the proper fib tool, the blue swing is the previous days intraday). Shortly after the dip price retraces the length of the candle and a previous bearish candle is now a bull candle minutes before it closes. The 1500 candle now opens and it takes a while but breaches the stop loss and buy stop order sitting at 1.9656. Banking 10 pips from the scalp. I moved my blue horizontal line to represent where I now need price to be maintained above. Also just as the 1500 candle closes it closes very high on the candle and we now have a higher low on the closure of this candle. Chart 0521/6 is the point the stop and reverse has occurred.
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  • #3,606
  • May 21, 2008 8:52pm May 21, 2008 8:52pm
Price closes the distance to the upper trend line from this retracement pretty quick and closes very close to it but does not even penetrate it yet, the 1600 candle now opens below the trend line and we could retrace some if the momentum slows. Chart0521/7 is the opening of the 1600 candle and now its time to make an assessment…do we close here or hold out. My bets are too hold out and use my swing fib and get an idea from this little push up, where is the breaking point to let me know it can move against me here. Me I would not close this unless support from this push gives way. Pivot of this comes in around 1.9640 so that is what I would consider a breaking point to my long position, but to be safe I look for low point below this 1.9640 and Ill use the previous candles low less the spread and enter a stop loss now…no reverse position at this point. Previous low is 1.9629 so the stop is set to 1.9624 for a stop loss of -27 pips not bad…letting it ride now. Placing my swing back across this movement price has only made it as far as the pivot of the retracement and looks to fall on me, but we have to wait out the candle and let it close. Chart 0521/8 and chart 0521/9 show the placement of the swing on both movements and where price is in relation to those. The trade is still good above 1.9640ish. Holding out for the close now.
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  • #3,607
  • May 21, 2008 8:53pm May 21, 2008 8:53pm
Chart 0521_10 is the point I place the stop loss now below the previous low and let the trade run…no manual closing letting the market close the trade to prove to me the trade is bad. As the 1700 candle opens and giving it some time to breathe the trade looks to survive as the 1700 candle shows no bearish intent 30 minutes into the candle. Support looks to hold now and I want to move my swing back the measure the overall retracement to see the breakout point ( Long level) from its levels and watch how price reacts as it approaches the trend line once again. Chart 0521/11 is the opening of the 1700 candle, Chart 0521 is the closing of the 1700 candle. Price will break the upper trend line now and give more weight to the trade to hold out. At this point we can now install a stop loss since support is holding and I should be safe from whip now. Setting the stop loss and sell stop to the low of the 1600 candle for a safe distance…you never know.
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  • #3,608
  • May 21, 2008 9:00pm May 21, 2008 9:00pm
As the 1800 candle opens now and everything is going according to plan I can move up the stop loss and reverse point now to the low of the 1700 candle. Once the 1800 candle opens though now the momentum begins to slow indicating to me everything may consolidate now ahead of the US news still some 2 hours away, hopefully the prepositioning is over and we are in with Flynn and the Billionaire club on the right side of the market. The only problem is we are hovering with around 30 pips as we go into the announcement. The stop Loss at this point is sitting at 1.9649 so my risk is only -7 pips now so I will hold out with these odds.
I was hoping we could get a test of the high on the 1800 candle but it falls short and the momentum is all but over for now, sit and wait game.
Keeping in mind we have shown signs here over the past couple of days and upward push is going on and we were looking for the bounce we have taken the bounce.
Charts 0521/13…0521/14 and 0521/15 show the above mentioned.
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  • #3,609
  • May 21, 2008 9:01pm May 21, 2008 9:01pm
The next series is the boring part of the day and the loss of momentum is evident by the small candles, everyone is waiting for the same thing now. This is also the point I decided to remove the stop loss since the momentum is lost and I didn’t want to be taken out if price began to trickle down. Once the announcement is made the 2000 candle opens and everything picks up again. I placed a trend line now on the lows from yesterday and now today since we have a new higher low established.
Now we are getting the test of the previous high and the move is strong, I’m expecting it to break. There is a Daily fib level not visible on the charts sitting at 1.9756 and where I’m expecting price to eventually test. I will close the trade there and take profits.
Chart 0521/16 is the market prior to the announcement, Chart 0521/17 is the open of the 2000 candle. Chart 0521/18 is the test on the high and the subsequent break.
I think at some point I even move my stop back some just incase we got some whip from an initial rejection from the high.
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  • #3,610
  • May 21, 2008 9:01pm May 21, 2008 9:01pm
Once the high is broken it runs out of steam and it appears the push is over for now and we could consolidate for the day. If so I now use the Intraday on today’s movement and give myself the support points if we retrace some of today’s movement.( Chart0521/19). I’m looking for the previous high, just broken now to act as support on a retrace so I’ve placed my Red line as a warning to me that price is below the level so I don’t have to sit directly in front of it. If this level holds we could see another attempt to push higher without any retracement.
Chart 0521/20 I’ve added my resistance fib from the last movement down on the Daily chart and price is testing the long level of this at the close of the day and where we have run out of momentum at. 1.9733
I’m going to continue to hold at this point in case we get the continuation later. Another failure to break at this point 1.9733 and I will move the stop up to just below the last low point around 1.9705 for +49pips.
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  • #3,611
  • May 22, 2008 1:24am May 22, 2008 1:24am
Very nice examples BO thanks
  • #3,612
  • May 22, 2008 5:30am May 22, 2008 5:30am
Price has reacted to our main Intraday levels to day but seems to be heading for the intraday target from yesterday...Also price has push passed a major resistance such as the 38.2 coming down from the daily chart....


Also we are having the unemployment claims today thats expected bad for the dollar so we might see some more bullish movement for Newyork session.
Bo please let me know what you think.

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  • #3,613
  • May 22, 2008 11:56am May 22, 2008 11:56am
Hi Bo,

I have started paper trading since the start of this week and have been in money since start. I had some minor losses though.

About cabdlestick formation, bo. We know that candlestick can change shapes and sizes until the time is over.

1) In our trading style do we wait for the candlestick to close before making judgement about it

or

If candle price crosses above or below against the trend i.e. if there is downtrend and candle crosses high of last candlestick.

2) How often do you watch your trades? I mean after openning a trade, Do you sit in front of it or check it hourly or every 30 min etc etc.?
Why am I asking this? so I could adapt to this time frame because different behaviour of a candlestick may influence the decision.

What do you suggest?

Many Thanks
  • #3,614
  • May 22, 2008 3:43pm May 22, 2008 3:43pm
Quoting FaRmAn
Hi Bo,

I have started paper trading since the start of this week and have been in money since start. I had some minor losses though.

About cabdlestick formation, bo. We know that candlestick can change shapes and sizes until the time is over.

1) In our trading style do we wait for the candlestick to close before making judgement about it

or

If candle price crosses above or below against the trend i.e. if there is downtrend and candle crosses high of last candlestick.

2) How often do you watch your trades? I mean after openning a trade, Do you sit in front of it or check it hourly or every 30 min etc etc.?
Why am I asking this? so I could adapt to this time frame because different behaviour of a candlestick may influence the decision.

What do you suggest?

Many Thanks
Yes, its very important for us to wait for a candle to close, the reasoning is that price can travel the distance of its length several times before it closes...what appears to be a bull candle can turn into a bearish candle before it closes, sometimes you will see a candle breaking an important level only to find once it closes it has wicked back and the market turns in the opposite direction. Inthe logic of trading breakouts from levels sometimes one will get away by waiting for it to close, youll see this often when a candle breaks a level and proceeds 75 pips above a level you were looking at to take the break of....just let those go and wait for the next one, it will come around again. Sometimes its best to miss one than to loose one by chasing it.
One of the things i am looking for in a reversal type situation is for previous candle highs and lows to be broken, as well as previous low and highs of waveforms.
And If im trading Im in front of it,Trading in forex everything can change in an instant and the analysis you made earlier may now be old news and youll have to adapt to a new one because something has changed in the market that isnt published or known publically yet, basically adapting on the fly, so to me its important to watch over your trades. Trading from something like the Daily you dont necessarily have to be in front of it all the time, but Intraday...needs constant management.

  • #3,615
  • May 24, 2008 11:18am May 24, 2008 11:18am
Dear sir: I have relized the importance of the fibs. i just started to learn it. i have read the posts in the first three pages. i was greatly confused by so much fibs lines. would you please give me some hints how to study it, do you have some tutorials lectures about it. Regards
I need time ,I need money, I need more patience
  • #3,616
  • May 24, 2008 1:09pm May 24, 2008 1:09pm
Quoting ztdep
Dear sir: I have relized the importance of the fibs. i just started to learn it. i have read the posts in the first three pages. i was greatly confused by so much fibs lines. would you please give me some hints how to study it, do you have some tutorials lectures about it. Regards

Fibs are used on many different timeframes all at the same time and its wise to know where they are from the higher timeframes when your trading from say a 1 hour chart. The higher timeframe the fib is on the stronger the levels will be. I most likely cant explaign it in text form but you have to know the positioning from all the timeframes to understand the bigger picture and trade on the faster timeframes like the 1 hour. You dont always have to have all the fibs on the chart, when I first began posting here I would have all them on the chart I felt necessary becasue I could tune the ones out I wasnt watching not realising how confusing it would be for someone trying to read and follow what i was doing. Its best to try and illustrate it 1 step at a time. In the next few posts Ill go over how to set up on a currency and youll see why there are so many, i use for the most part use around 5 fib tools each one serving its own purpose.
I start with the higher timeframes and establish the trending moves and how price is reacting to those. I also use a longer term view and a shorter term view that is somewaht illlustrated in the next few posts.
With Cable (what i trade most of the time) I have to go to the weekly chart to see the last encompassing move...the uptrend beginning back in 2005.
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  • #3,617
  • May 24, 2008 1:12pm May 24, 2008 1:12pm
I establish the longer term view then, from the Daily look for the current movements and establish my setup from that.
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  • #3,618
  • May 24, 2008 1:15pm May 24, 2008 1:15pm
From this point I continue the process from the higher timeframes down the timeframe i wish to trade from. To trade Intraday I use the 1 hour timeframe, so I continue down to the 1 hour.
To clean thing up a bit I will use a trading chart with just my Intraday and Swing fib and one with the Weekly,Daily, 4 hour timeframes to use as a reference.
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  • #3,619
  • May 24, 2008 1:19pm May 24, 2008 1:19pm
On the 1 hour I use the Intraday and Swing fib to trade my way through the weekly,daily and 4 hour levels.
Here is a little of the logic in why the are used this way and how it was applied over the past 2 days.
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  • #3,620
  • May 24, 2008 1:25pm May 24, 2008 1:25pm
Until we get to the curent place in time and what were looking for.
Its not that there are alot of fibs on the chart, they are necessary to get the entire picture.
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