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Powerful Fib Based System - by DAZfx

  • #1,221
  • Oct 9, 2008 10:26am Oct 9, 2008 10:26am
Hi Everyone:

What are your thoughts on a possible LONG on the 1 hr chart for EURUSD trading the zone and Daz system?

We still have to wait for the confirmation candle to form and close and stoch to point upwards in the next hour and a half.
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  • #1,222
  • Oct 9, 2008 11:34am Oct 9, 2008 11:34am
Hi bro,

I think this would not be the best of trades as the 4H down trendline is just a couple of hours ahead. It is always difficult to trade on a wave correction in my opinion. Would prefer to sit out when in doubt.

Nevertheless I guess you could scalp a 1:1 with a good candle formation (bullish engulfing, morning star or tweezer bottom).
  • #1,223
  • Oct 9, 2008 12:16pm Oct 9, 2008 12:16pm
Usdjpy h4 looking good. We'll see in 45 minutes.
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  • #1,224
  • Oct 9, 2008 12:42pm Oct 9, 2008 12:42pm
Quoting boomswitch
Usdjpy h4 looking good. We'll see in 45 minutes.


No clear direction in either way...true scapling only...

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  • #1,225
  • Oct 9, 2008 1:05pm Oct 9, 2008 1:05pm
Pay close attention for short...

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  • #1,226
  • Oct 9, 2008 1:25pm Oct 9, 2008 1:25pm
Quoting Shermenator
No clear direction in either way...true scapling only...
You are right but with the divergence I still took it as it was a good setup. Let's see how it develops...
  • #1,227
  • Oct 9, 2008 3:53pm Oct 9, 2008 3:53pm
Quoting soyabean
Hi bro,

I think this would not be the best of trades as the 4H down trendline is just a couple of hours ahead. It is always difficult to trade on a wave correction in my opinion. Would prefer to sit out when in doubt.

Nevertheless I guess you could scalp a 1:1 with a good candle formation (bullish engulfing, morning star or tweezer bottom).
Hi buddy:

Thanks for the quick feedback.

I did not place the trade and I feel really good now that I did not.

Before stepping out, I did not get the candle formation anyway.

Thanks again for the help.
  • #1,228
  • Oct 9, 2008 8:12pm Oct 9, 2008 8:12pm
Looking like a great setup for short in the making...

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  • #1,229
  • Oct 9, 2008 10:45pm Oct 9, 2008 10:45pm
Quoting Shermenator
Looking like a great setup for short in the making...

Attachment
Nice! Head and shoulders... good spot sherm

A closer look at the 1H chart also reveals a possible gartley pattern with entry at a tweezer top supported by a down trendline! Missed this entry =(
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  • #1,230
  • Oct 10, 2008 8:33am Oct 10, 2008 8:33am
Quoting boomswitch
Usdjpy h4 looking good. We'll see in 45 minutes.

2 first targets hit for 130 and 190 pips, third lot still running with SL at BE.
Even if it was not a real good Daz trade I took it because of the strong divergence and the good risk/reward ratio.
  • #1,231
  • Oct 10, 2008 8:38am Oct 10, 2008 8:38am
Quoting boomswitch
2 first targets hit for 130 and 190 pips, third lot still running with SL at BE.
Even if it was not a real good Daz trade I took it because of the strong divergence and the good risk/reward ratio.

Very nice trade...I did not like because it did not show me high probabilty and I only like high probabilty trades but very nice trade
  • #1,232
  • Oct 12, 2008 6:41am Oct 12, 2008 6:41am
I’ve been trading a very similar system for the last couple of years with quite good results. I however use 61.8 – 76.4 fib levels and 10-3-3 low/high for my stochastic. I think that those who only look at 1 and 4 hour timeframes miss out on a lot of trades though because I take most of my trades off the 15 minute. I always look at the 1 and 4 hour for direction, but get in of candlestick patterns on the 15 minute charts, basically the CI System that’s found in Rob Moubray and Ken Marshall’s e-book, Guide to profitable forex day trading. Candlestick patterns off the 15 minute usually coincide with the 5/13 ema crossover so you could actually do a search in this forum and get one of those crossover indicators with an alert so every time the 5 and 13 ema cross the alert goes off and I just check my charts to see if it is a valid trade on the 15 minute. The downside of the alert is that when the market is going sideways it goes off all the time, but of course you don’t take those trades, just use the alert as an alert to check your charts. The other advantage of the 15 minute charts is that you don’t need as much of a stoploss as the swing low or swing high is smaller. Anyways, don’t discount the 15 minute, if you learn to trade it properly you wont get whipsawed at all. I also use a macd and look at Elliott waves as extra filters and am getting a very good win/loss ratio.
  • #1,233
  • Oct 12, 2008 6:48am Oct 12, 2008 6:48am
I’m unsure if I’m allowed to post it here... but if anyone wants that 2 part e-book that is similar to this system but goes into more depth and also has other chart patterns besides fib levels for your entry, just send me a private message with your email address and I’ll email it to you.
  • #1,234
  • Oct 13, 2008 9:41am Oct 13, 2008 9:41am
Please help me, am I doing something wrong? Watch my charts
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  • #1,235
  • Oct 13, 2008 10:55am Oct 13, 2008 10:55am
Hi Kuba, I think the firsrt chart has too many candles for the impulsive wave. It has been reocmmended to keep it between 4-10.

The second chart, I just took a quick look at the daily, stoch has already crossd down. It looks like the move is topping out, hence we should should be looking to short it at the 1h, or just sit out until the next retrace.

my 2 cents...
  • #1,236
  • Oct 13, 2008 1:19pm Oct 13, 2008 1:19pm
Very good risk reward/ratio, I take it.
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  • #1,237
  • Oct 14, 2008 8:11am Oct 14, 2008 8:11am
Quoting boomswitch
Very good risk reward/ratio, I take it.

...failed ! That was a crappy market yesterday...
  • #1,238
  • Oct 14, 2008 6:52pm Oct 14, 2008 6:52pm
Quoting boomswitch
Very good risk reward/ratio, I take it.

You were trading against divergence with that one. Look at the previous swing low on 6 Oct and the low on 10 Oct. When you get divergence like that you normally get an ABC correction, so look for a 3 wave correction before jumping on and as a guideline the anticipated target of the correction is the previous swing high, double top from 9 Oct. More importantly though you need the ABC correction. Always look at waves on degrees lower and 1 degree higher to the timeframe you are taking the trade off. I advice that you also throw on Bill William’s Awesome Oscillator or the standard MACD and then drag your stochastic over the top of it and then go to smaller timeframes before taking the trade. Never trade against the AO divergence until it has completed a correction. I would only have started looking for shorts on the eurusd after I had divergence on the AO on the 15 minute chart, and of course I would want a candlestick pattern and a resistance area such as a double top or trendline. Don’t take every setup, look at the bigger picture and take only the trades with more things going for it and you’ll find the win/loss ratio will improve.
  • #1,239
  • Oct 14, 2008 8:20pm Oct 14, 2008 8:20pm
Quoting splb007
You were trading against divergence with that one. Look at the previous swing low on 6 Oct and the low on 10 Oct. When you get divergence like that you normally get an ABC correction, so look for a 3 wave correction before jumping on and as a guideline the anticipated target of the correction is the previous swing high, double top from 9 Oct. More importantly though you need the ABC correction. Always look at waves on degrees lower and 1 degree higher to the timeframe you are taking the trade off. I advice that you also throw on Bill William’s Awesome Oscillator or the standard MACD and then drag your stochastic over the top of it and then go to smaller timeframes before taking the trade. Never trade against the AO divergence until it has completed a correction. I would only have started looking for shorts on the eurusd after I had divergence on the AO on the 15 minute chart, and of course I would want a candlestick pattern and a resistance area such as a double top or trendline. Don’t take every setup, look at the bigger picture and take only the trades with more things going for it and you’ll find the win/loss ratio will improve.
Great advice. Could you elaborate more on this part, "always look at waves on degrees lower and 1 degree higher to the timeframes you are taking the trade off."? A chart would be nice.

Also, interesting viewpoint on checking for divergence on the lower charts. I have been checking on higher tf charts instead.
  • #1,240
  • Oct 14, 2008 11:19pm Oct 14, 2008 11:19pm
Quoting soyabean
Great advice. Could you elaborate more on this part, "always look at waves on degrees lower and 1 degree higher to the timeframes you are taking the trade off."? A chart would be nice.

Also, interesting viewpoint on checking for divergence on the lower charts. I have been checking on higher tf charts instead.

I look at Elliott Waves and as you probably know the Elliott Wave Principle works on motive and corrective phases. The theory is that in an uptrend you have 5 waves up (numbered) and 3 waves down (lettered). And every wave has smaller subwaves within it, so for example wave 3 on the 1 hour will have 5 subwaves which can be easily spotted one degree lower (on the 15 minute chart). When wave 3 on the 1 hour is completed you will normally get divergence on the 15 minute chart which means you now will have an ABC correction so if I’m trading the 15 minute chart I wouldn’t be taking the next candlestick entry signal to go long, because more likely then not it is wave B. When wave B has finished you could trade wave C if you wanted to, but if you prefer to only take trades with the trend you would wait for wave C to complete and then trade wave 5 on the 1 hour which again should have 5 subwaves going up. It depends on how aggressive you are, you could enter wave 5 (on the 1 hour) off a candlestick pattern once you can see an ABC, remember to make sure that the ABC is complete otherwise you will jump in half way through wave 4 and of course you will get stopped out. I am more conservative and will wait for subwave 1 and 2 to complete and then jump in on subwave 3 of wave 5. Of course it’s not as simple as that because you often get wave extensions but after a while you can easily count the waves, and if you can’t, just leave that market alone and move to another currency. It’s a bit hard to explain but read this, and remember these aren’t true Elliott Waves, Elliott works on price alone, these are waves of momentum. They are however often the same as Elliott Waves only they don’t take the 3 rules of Elliott into account. It will however keep you out of trouble and give you a basic understanding of Elliott Waves. I don’t trade it strictly the way the manual says, I use candlestick patterns to enter my trades rather then a dma, and like I said, I look at price to mark my waves rather then momentum. I do however use the Awesome Oscillator for divergence at the end of wave 5 and want the oscillator to pull back to zero for wave 4 to be complete and then start looking for entries into wave 5. Remember to always look at subwaves though ALWAYS.

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