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Attachments: Hourly Fibonacci Method (Day Trading)
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Hourly Fibonacci Method (Day Trading)

  • #101
  • Jul 27, 2009 7:42am Jul 27, 2009 7:42am
Quoting Tunji
Lefteye, you’re absolutely correct!! Thanks. I’ve modified the H4 chart (attached).

Guys, I apologize, the most recent swing low is @ 94.64 (the green horizontal line) – as against 94.58.
Hi Tunji,
On your UJ H4 analysis, Can u explain why we take 94.37 and not 95.28 as the most recent swing high?

Cheers ^o^
  • #102
  • Jul 27, 2009 9:54am Jul 27, 2009 9:54am
Quoting lefteye
Hi Tunji,
On your UJ H4 analysis, Can u explain why we take 94.37 and not 95.28 as the most recent swing high?

Cheers ^o^
Lefteye, I was referring to the most recent of the swing highs that price broke upward – not the most recent swing high on the entire chart.

Again, the most recent swing high – as you rightly observed – is @ 95.28, BUT the swing high @ 94.37 was the most recent of the swing highs that price broke.

I agree the statement could be misconstrued if not read properly. It would probably be necessary to place emphasis on such statements in subsequent analyses. Thanks.
  • #103
  • Edited 4:52pm Jul 27, 2009 3:48pm | Edited 4:52pm
If you were able to identify the USDCHF Short trade set-up and took the trade, that’s nice. I took the trade, and I’m still in it.
Pls NOTE: I also took a Long trade on the EURUSD, but it didn’t work out.
Actually, the Daily charts analyses – for some time now – have often been telling us that the markets are choppy and indecisive. Hence, for more conservative traders, the analyses are good enough for them to stand aside. Personally, I’ve been reducing the percentage of capital risked per trade – until the Daily charts (and above) start giving signs that markets have started trending.

Using the Hourly chart (attached), I’ll like to chip-in one or two insights that I hope would assist us in managing our trades. Sincerely, I believe trade-management is one of the most effective ways of ensuring the steady growth of our equity curve.

I entered the trade with a Limit Order placed around the fib 61.8% ret (1.0706) – based on the confluence of overlapping fibs, a pivot, previous swing highs/lows. My initial Stop-Loss was @ 1.0740 (the most recent swing high before I entered the Short trade). As you could observe, price shot through my Limit Order @ fib. 61.8% upward, even some pips beyond the fib. 78.6% ret. before reversing.
Currently, price is yet to move enough in my favor for me to consider taking some profits; however, the new swing high @ 1.0733 has giving me the opportunity to move my Stop-Loss lower by a few pips. It might not be much, but every chance to reduce the potential amount that could be lost in a given trade is a golden opportunity that must not be disregarded.

Pls NOTE the fib 78.6% ret (1.0721) also had a confluence of overlapping fibs etc. supporting it. If you had placed your Limit Order around that level, unlike me, you would currently be having a more pleasurable time with this trade. However, you would have done that with the possibility of missing the trade.
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  • #104
  • Edited 5:08am Jul 28, 2009 3:01am | Edited 5:08am
Currently, on my USDCHF Short trade, price has moved in my favor enough for me to consider taking profit. My preferred level of taking initial profit was @ 1.0666; however, with the new doji formation around a weekly pivot, I decided to take out some profits.
Pls NOTE I’ve adjusted my Stop Loss to just above the most recent swing high @ 1.0714.

My next exit level is the primary profit target @ 1.0626 (the fib. 127% ext.)
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  • #105
  • Jul 28, 2009 3:26am Jul 28, 2009 3:26am
NOTE:To me, most of the majors are still choppy and indecisive; if you decide to stay in the market – and not stay away – proper Trade Management is the “HOLY GRAIL” here, and with that, please let us remember to keep our risks per trade very low. Large draw downs are very difficult to recover from.

On the Daily chart (attached), price is currently within an upward channel (thanks to Joetrece’s observation). We expect price to continue its upward move toward the upper part of the channel. However, there’s a critical resistance level – the most recent Daily swing high - @ 1.6585 (which we’ve highlighted using the lower blue broken line); it would be nice to see price break above this level.
Also NOTE that price is currently hovering around a very major year-high resistance level @ 1.6744 (which we’ve highlighted using the upper blue broken line). Price currently might be struggling against a possible intense selling pressure.

On the H4 chart (attached), price has broken above the most recent swing high @ 1.6523 (which we’ve highlighted using the lower blue broken line). From a day-trade perspective, this is a good sign supporting a Long trade. The green horizontal line @ 1.6380 highlights the most recent swing low, and as long as price stays above it – in the absence of any new and higher swing low – our bullish or upward bias remains intact.
The resistance level @ 1.6585 that also happens to be the Daily swing high discussed earlier (which we’ve highlighted using the upper blue broken line) is quite important. The less aggressive traders might have to wait to see price break above this level before seeking a Long trade set-up on the Hourly.

However, regardless of our individual decisions, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today’s up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.
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  • #106
  • Jul 28, 2009 7:14am Jul 28, 2009 7:14am
Here is an overlapping Fibs at the same area where Weekly R1 is plus broken resistance (0.8212). I'll be watching that area for possible entry.
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  • #107
  • Jul 28, 2009 9:20am Jul 28, 2009 9:20am
Quoting rumba68
Here is an overlapping Fibs at the same area where Weekly R1 is plus broken resistance (0.8212). I'll be watching that area for possible entry.
That’s a nice set-up; but, did you deliberately ignore the most recent swing low just below the 0.8212 level?
  • #108
  • Jul 28, 2009 9:40am Jul 28, 2009 9:40am
Quoting Tunji
That’s a nice set-up; but, did you deliberately ignore the most recent swing low just below the 0.8212 level?
I see what you saying. I drew the fibs on 4HR chart first so the swings look a little more obvious there. There are a quite a few swings on the 1HR chart. I went short this morning after triple top and reverse candle on Euro. I figured this is going to drag Aussie down with it.
  • #109
  • Jul 28, 2009 9:51am Jul 28, 2009 9:51am
Based on earlier analysis today, if you took a less aggressive position on the GBPUSD pair (also the EURUSD and USDCHF pairs), and waited for price to break the resistance level @ 1.6585 upward before seeking a Long trade set-up on the Hourly chart. Kudos! You succeeded in protecting yourself from a losing trade.
Also, if you identified the trade set-up on the Hourly chart (attached), and entered the trade around fib. 78.6% ret. @ 1.6476, you probably were able to manage your trade well enough to avoid loss.

I entered the trade around fib. 61.8% ret. @ 1.6493. Hence, I lost the trade; however, with a risk less than 0.5% of my capital.

For those of us employing trending methods, we need to fully understand the current market environment as that would protect us from seeking the HOLY GRAIL; and let’s always strive to keep learning about the strengths and weaknesses of our individual methods.
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  • #110
  • Jul 28, 2009 10:26am Jul 28, 2009 10:26am
Quoting rumba68
I see what you saying. I drew the fibs on 4HR chart first so the swings look a little more obvious there. There are a quite a few swings on the 1HR chart. I went short this morning after triple top and reverse candle on Euro. I figured this is going to drag Aussie down with it.
Using higher time-frames to draw fibs isn’t a bad idea since the higher the time-frame, the stronger the fib retracement levels.

Though I don’t trade the aussie, I won’t be surprised if it has plunged: seems the dollar is rallying broadly.
  • #111
  • Edited 11:01am Jul 28, 2009 10:45am | Edited 11:01am
Quoting Tunji
Based on earlier analysis today, if you took a less aggressive position on the GBPUSD pair (also the EURUSD and USDCHF pairs), and waited for price to break the resistance level @ 1.6585 upward before seeking a Long trade set-up on the Hourly chart. Kudos! You succeeded in protecting yourself from a losing trade.
Also, if you identified the trade set-up on the Hourly chart (attached), and entered the trade around fib. 78.6% ret. @ 1.6476, you probably were able to manage your trade well enough to avoid loss....
I thought about taking this trade as you brought it up yesterday but I saw signs of divergence that made me hesitant. Plus doing a little volume analysis on 4HR it appeared the bias is short. But as you said managing properly would've avoided loss.
  • #112
  • Jul 28, 2009 11:42am Jul 28, 2009 11:42am
Quoting rumba68
I thought about taking this trade as you brought it up yesterday but I saw signs of divergence that made me hesitant. Plus doing a little volume analysis on 4HR it appeared the bias is short. But as you said managing properly would've avoided loss.
Yeah, I notice those divergences at times, but I basically use them to weigh the strength of a set-up and see if I should reduce my risk & manage the trade more cautiously; but they don’t necessarily keep me entirely out of a trade once my set-up is in place.
Divergence is powerful, but, overtime, I concluded there would always be one reason or the other to keep off a trade, so I’ve tried to make my parameters as mechanical as possible.
  • #113
  • Jul 28, 2009 6:01pm Jul 28, 2009 6:01pm
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Broke the daily low and 4hr swing low - my limit was is at 94.50(61.8 of the last swing down on the 1 hr chart) Brought my stop down from 94.80 to 94.70. with 2 positions with 6 pips in profit so for. will see how it goes .My weekly pivot is at 94.43 according to actionforex. Will see how it goes. Tex
  • #114
  • Jul 28, 2009 6:33pm Jul 28, 2009 6:33pm
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We may have to be careful here with 61 -38 with trendline on 4hr chart.
  • #115
  • Jul 28, 2009 8:45pm Jul 28, 2009 8:45pm
Closed one position 18 pips.the other took me out - so all in all -2 pips . The way the ball bounces and the markets we are contending with now. Tex
  • #116
  • Jul 28, 2009 8:48pm Jul 28, 2009 8:48pm
Quoting tex123
Attachment Broke the daily low and 4hr swing low - my limit was is at 94.50(61.8 of the last swing down on the 1 hr chart) Brought my stop down from 94.80 to 94.70. with 2 positions with 6 pips in profit so for. will see how it goes .My weekly pivot is at 94.43 according to actionforex. Will see how it goes. Tex
This is simply great Tex! Definitely, I would have taken this trade if I was still in the market.
  • #117
  • Edited 9:19pm Jul 28, 2009 9:02pm | Edited 9:19pm
Quoting tex123
Closed one position 18 pips.the other took me out - so all in all -2 pips . The way the ball bounces and the markets we are contending with now. Tex
You’re out already?!! But here on my chart (attached), price hasn’t travelled up to your adjusted Stop Loss.
Well, trading platforms differ. That was a lovely trade you took – with nice trade-management. I love your H4 analysis too.

Although, I just realized that the swing high you used to draw your fib slightly missed the first lower candle on its left side (the first “lower” candle on the left was actually about 1-pip higher); but, all the same, it was great trade!
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  • #118
  • Jul 28, 2009 9:47pm Jul 28, 2009 9:47pm
Hi Tunji, Thanks for the compliment. Your are exactly right 1 pip higher on stop loss and would have still been in. Anyway there will be more trades .I just don't won't to risk too much with these markets like they are. I was expecting this to run to at least down to the 94.00 (61.8 level of the 4hr) or so level but we can't predict. Also we have been stuck at 61.8 level of the last swing on the daily so that gave me some probability if it did break the 7/27 daily candle we could go lower - we did but it didn't move as i expected. Keep up the good work Tunji i do like your analysis . Tex
  • #119
  • Edited 10:28pm Jul 28, 2009 10:15pm | Edited 10:28pm
Quoting tex123
Hi Tunji, Thanks for the compliment. Your are exactly right 1 pip higher on stop loss and would have still been in. Anyway there will be more trades .I just don't won't to risk too much with these markets like they are. I was expecting this to run to at least down to the 94.00 (61.8 level of the 4hr) or so level but we can't predict. Also we have been stuck at 61.8 level of the last swing on the daily so that gave me some probability if it did break the 7/27 daily candle we could go lower - we did but it didn't move as i expected. Keep up the good...
Thanks for your kind words Tex; and you’re doing great too.

On a lighter note, I could notice your 118th post is the 118th post on this thread.
  • #120
  • Jul 28, 2009 10:38pm Jul 28, 2009 10:38pm
Tunji,you are simply God sent to me!I'll go thru every letter posted in this thread.I hope to learn a lot from here.God bless you real good!
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