But the high from June 2007 is current major high (since 2002) and it wasn't proven that downtrend is over. I'll stop asking this if anyone tells me why we should drop the downtrend here. What tells us that new big uptrend started, and it's not the continuation of downtrend that retraced exactly to 50%.
- #282
- Edited 10:58am Sep 6, 2008 9:48am | Edited 10:58am
Hi Tommy,
I trend to agree the GBP should retrace soon. My point was more of where and when do you decide to stop pulling down fibs and reverse the process.
I think that as you move to larger TFs, the more fundamentals come into play. Right now the GBP is starting to feel the pain.
re: Some will say that you're in an uptrend, and others say you're in a downtrend. Which one is right?
Hopefully, I can make this clear as mud.
You're in both. Because the market is fractal (ie the same patterns exist in the 5min TF as they do in the weekly TF) you can be in both, just on a different scale. It really depends on your targets and your willingness to give up several hundred pips to stay in a larger move. As you can see M is talking about trades that last months. In any given month there are dozens of different trends on smaller TFs. Your job (should you choose to accept it) is to determine what the bigger picture is and move yourself to the center of the stream of where the fib patterns are producing. Personally I use the break of a weekly trendline and the break of the 78.6 fib as confirmation of a reversal.Here's the way I look at USDJPY:
- #286
- Sep 6, 2008 3:03pm Sep 6, 2008 3:03pm
- Joined May 2007 | Status: Ozziedave | 1,344 Posts
Ozzie,
I think that as you move to larger TFs, the more fundamentals come into play. Right now the GBP is starting to feel the pain.
re: Some will say that you're in an uptrend, and others say you're in a downtrend. Which one is right?
Hopefully, I can make this clear as mud.
Here's the way I look at USDJPY:
That was a very nice analysis on the jpy. Yes, I realise the market is fractal. The point I was trying to get across is that if you are in a downtrend you just wouldn't start pulling fibs for an uptrend until you had a good reason too. For example, lets take the daily chart of the usdchf. We were in a strong down trend until the bottom at 0.9638. Looking back at it we now know it was a bottom but in real time you wouldn't know that. I pulled a fib from the last swing high to what became the bottom point and you can see when it retraced it respected the 61.8 Fib. So to me, at that point I can confirmed that we should be going in the down direction still. About 3 weeks later we get a higher low which becomes the start of the up trend, The up trend is confirmed when it breaks the pink line. Notice that I didn't say the overall trend has reversed. The overall trend reversal doesn't occur until we get a break above the yellow line which is about to happen in real time. To me, I wouldn't have thought about pulling an up fib until the pink line was broken. I've placed the fib Zones on the chart and as you can see by the time price gets to the pink linewe're already at the 987 zone. It seems to me that you've lost alot of trading oppertunities because you won't recognize or confirm the uptrend until it has actually happened on your chart. Now, you can go to a lower time frame chart and it will appear as an uptrend sooner but in reality it is still a retrace on the Daily chart because it's respecting the 61.8 fib until that level is broken at the pink line.
Great video's so far, I'am looking forward to a video about entry and exit strategies. Keep up the excellent work.
Well, I'll give it a shot...
The recent moves on the GBP/JPY have been so huge, it's only really effective to use the weekly chart, which I've attached.
As you can see, the high of 251.07 was made last summer. Since then, it has fallen like a stone. It fell right through the 610 and the 987. After the 987, it retraced a little, but then fell all the way through the 1597 and 2584. Then we had a decent retracement all the way to 987 level. Shooting a fib expansion from that move predicted that it would move through the 4181 and probably all the way to the 6765 which is so far down it's off the chart. The 6765 is at 183.42 and the 161.8 expansion from the first retracement is at 184.22.
Now, the slightly scary thing is that, after moving through the 4181 level, there was another significant retracement. After shooting the fib retracement, you can see that it respected the 38.2 level. If it respects the retracement, it should respect the expansion. The 61.8 expansion is at 185.23, which is close to the 6765 level, as well as the 161.8 expansion from the first retracement. With that confluence of fib zones and fib expansions, it seems likely that price will, at least, go to that level.
The 100 and 161.8 expansions of the second retracement are so far down it seems nearly impossible. the 100 expansion of the second retracement is at 162.79, and the 10946 fib zone is at 141.61.
Will it actually get that far? It's anyone's guess at this point. That would be nearly 11000 pips. Still, it does seem safe to say that it will probably go down to the 6765 level at 183.42. That would be my next target.
Edit: Oh, I do want to say that, after reaching the 6765 level, it would probably retrace back up, maybe to the 4181 level, before continuing to head back down...
Any thoughts or comments would be appreciated...
what does everyone else think?
- #296
- Edited Sep 7, 2008 12:55am Sep 6, 2008 9:19pm | Edited Sep 7, 2008 12:55am
- Joined May 2007 | Status: Ozziedave | 1,344 Posts
I have just re-listened to the CHF anaylsis video and I can see a potential issue for many of us will be the entry point or the patients to wait for an entry point. Let me explain a bit more. On the CHF daily chart you have your move up to the 987 Fib zone. You pull your fib retracement and your fib expansion to that point (point A). Now from what we have learned we would expect some sort of pull back and then for price to continue to go higher and take out the most recent fib expansion targets and then continue to the 1597 Fib zone.
So price has reacched point A, then we have a retrace to point 1, which is the 610 fib zone and the 38.2 fib retracement. At this point I would be thinking..damn...I'm jumpping in with both feet and enter a long position becasue you know it's going to the 1597 fib zone. But wait..it goes higher and then boom...drops to below the 987 fib zone all the way down to the 50% fib retracement level/610 fib zone (point 2). Again you go long at point 2 and again price turns around without even getting back to the 987 Fib zone and it falls to the 50% fib retracement/610 fib zone (point3). At this point, in real time, you would have to start thinking that price is just not going to go my way and hit the 1597 fib zone. So you take one more shot long and ..dman...it fails again and pulls back even lower to the 377 Fib zone. At this point you're feeling a bit dejected since you more than likely have lost more pips than you've gained. Now being a bit gun shy you sit on the side lines and watch as price climbs slowly up and before you can get out of your funk it's hit the 1597 fib zone. It has taken 3 weeks for all of these ups and downs to transpire before the real move happened.
I'm sorry for such a long winded story...but think about it. Most people on this forum typically trade 5, 15 , 60 minute charts a few may trade 4hr or daily charts. I seriously doubt that many people in this forum would have the mental focus and drive to keep on taking long entery positions over the 3 week period until they hit the real move to the 987 fib level. I know for myself if I would have had several losses in a row I would have stopped placing long entry orders. I believe what I have described above is exactly what the mindset of many people on this forum would be after the 3 week period.
I think the frame work of what Mouteki has giving us is outstanding and I believe it will help all of us in our trading. What I hope will follow will be an entry and exit methodology that will help to reduce those false entries or minimise the losses. Let's face it, 80% of being a consistently profitable trader is your mindset. Ask yourself this question...would you have been one of the people who would have taken the 4 long entry and enjoyed the ride to the 1597 fib zone??? Think about it...Are you disciplined enough to take the next valid trade signal?
but Mouteki hasn't finished explaining his method yet...if you watch the videos carefully he says that this is not how he trades....he looks at 3 things; the technical analysis which are these fibs, and then volume and fundamental analysis.
Its true that this alone already helps our trading though but im sure Mouteki will elaborate further about his method and hopefully in the future include entries and exits. give it time
