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Hourly Fibonacci Method (Day Trading)

  • #201
  • Aug 6, 2009 7:22pm Aug 6, 2009 7:22pm
looking for a short trade at the 50% FR
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  • #202
  • Aug 6, 2009 8:34pm Aug 6, 2009 8:34pm
Quoting kien27
looking for a short trade at the 50% FR
Nice one Kien!
  • #203
  • Edited 4:35am Aug 7, 2009 4:10am | Edited 4:35am
Pls NOTE: If there’s one particular day in every month that trending method/pattern traders should be wary of trading most, it has to be the first Fridays of every month when the Non-Farm Payroll (NFP) report is usually released. Early market hours are usually dull; afterward, usually around the news release, we have extreme volatility, which disrupts any recognizable chart patterns; hence, the entire trading day becomes virtually un-tradable. At least, that has been my personal experience.
While I’ll go ahead to give my personal analysis on the EURUSD pair, please, let’s bear in mind that, regardless of any technical analyses, NFP usually rules today.

On the Daily chart (attached), yesterday, after two days of indecision (as shown by previous “dojis”) price broke previous days’ lows (Tuesday and Wednesday’s lows) downward. In addition, the price reversal happened around the upper edge of what I believe is referred to as a rising wedge pattern. To me, these signal the possibility of further price movement downward.

On the H4 chart (attached), price has broken the most recent swing low @ 1.4355 (which we’ve highlighted using the blue broken line) downward. This automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.1.4447 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-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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  • #204
  • Edited 8:14am Aug 7, 2009 7:22am | Edited 8:14am
My thoughts on EURGBP.

Please comments are needed çause i may be right or wrong and like to learn.

Thanks Tunji, managed to close y/days trade in green.

I like my trades to blast off almost immediately if taken on 1hr tf. If they dont, i close as soon as possible.

Thanks to NFP. got to go take some nap before i loose some nerves. lol
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God's Love For You Is Sure Never You Doubt It
  • #205
  • Aug 7, 2009 11:28am Aug 7, 2009 11:28am
Quoting D liberators
My thoughts on EURGBP.

Please comments are needed çause i may be right or wrong and like to learn.

Thanks Tunji, managed to close y/days trade in green.

I like my trades to blast off almost immediately if taken on 1hr tf. If they dont, i close as soon as possible.

Thanks to NFP. got to go take some nap before i loose some nerves. lol
Hi D liberators, your analyses on the H4 and Hourly charts are quite nice and understandable to me; but I need clarification on the Daily chart regarding why you chose the 0.8697 & 0.8399 levels – and not other levels – to determine the invalidation and continuation of downtrend, respectively.
Also on the Daily chart, why do you need upward retracement of at least four candles to disrupt the downtrend?

Please know that my questions are unbiased: I just want to be able to see what you saw. Thanks.
  • #206
  • Aug 7, 2009 12:55pm Aug 7, 2009 12:55pm
I had a limit order setup for Euro that was filled and closed today. I thought I share it with the group. Hopefully it can be informative.
The first line chart shows the channel I was following. I was looking for a close outside the channel. The close occurred yesterday so I looked for pullback and entry at the breakout area. There was an overlapping Fib at the 38.2 retracement of the major move. It is not shown on the chart to avoid clutter. My limit @ 1.4375 was filled earlier today. Before NFP I widened my stop not to get shaken out and before I knew it I was out of the trade.
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  • #207
  • Aug 7, 2009 4:58pm Aug 7, 2009 4:58pm
Quoting rumba68
I had a limit order setup for Euro that was filled and closed today. I thought I share it with the group. Hopefully it can be informative.
The first line chart shows the channel I was following. I was looking for a close outside the channel. The close occurred yesterday so I looked for pullback and entry at the breakout area. There was an overlapping Fib at the 38.2 retracement of the major move. It is not shown on the chart to avoid clutter. My limit @ 1.4375 was filled earlier today. Before NFP I widened my stop not to get shaken out and before...
Mike, nice trade-plan and execution: you sure had guts; and it paid off.

@ All
Have a restful weekend.
  • #208
  • Aug 7, 2009 7:21pm Aug 7, 2009 7:21pm
im just wondering your limit order? was it for a short or long.. looks like short, but when you said you were out of your trade was it a gain or a loss? it wasn't every clear.. looking at your chart it could have been either as the markets went crazy last night heheheh.
  • #209
  • Aug 7, 2009 8:44pm Aug 7, 2009 8:44pm
Quoting kien27
im just wondering your limit order? was it for a short or long.. looks like short, but when you said you were out of your trade was it a gain or a loss? it wasn't every clear.. looking at your chart it could have been either as the markets went crazy last night heheheh.
I thought it was self explanatory with charts and everything else. It was a short trade. My bias was short. I was looking for a short breakout. I got out at 1.217 fib extension. This could've been a bigger gain but I'm not that greedy. I don't usually trade during NFP but I figured it was a reasonably safe trade considering the distance between the price and the swing high at 8:30 AM EST.
  • #210
  • Aug 9, 2009 12:28pm Aug 9, 2009 12:28pm
Quoting Tunji
Hi D liberators, your analyses on the H4 and Hourly charts are quite nice and understandable to me; but I need clarification on the Daily chart regarding why you chose the 0.8697 & 0.8399 levels – and not other levels – to determine the invalidation and continuation of downtrend, respectively.
Also on the Daily chart, why do you need upward retracement of at least four candles to disrupt the downtrend?

Please know that my questions are unbiased: I just want to be able to see what you saw. Thanks....
Sorry Tunji, av been off forum for a while.

I usually prefer my wave length to have at least 4 candles (this is just a personal preference and does not apply to all cases.).

As per my low and high levels, i try to determine the most recent ABCD and go with the wave orientation in that line. A high point/candle will have at least 2 low candles to the left and 2 low candles to the right and as earlier said i look for my wave lenght to contain at least 4 candles.

I dont know if i make sense.
God's Love For You Is Sure Never You Doubt It
  • #211
  • Aug 9, 2009 7:38pm Aug 9, 2009 7:38pm
Quoting D liberators
Sorry Tunji, av been off forum for a while.

I usually prefer my wave length to have at least 4 candles (this is just a personal preference and does not apply to all cases.).

As per my low and high levels, i try to determine the most recent ABCD and go with the wave orientation in that line. A high point/candle will have at least 2 low candles to the left and 2 low candles to the right and as earlier said i look for my wave lenght to contain at least 4 candles.

I dont know if i make sense.
Thanks D liberators; I might not fully understand your analysis, but since it doesn’t contradict the primary trading parameters discussed, it’s certainly an opportunity for me, and, I believe, others that are not acquainted with this type of chart analysis to learn it and decide, individually, if it could be of any benefit.

@ All

I wish us all Godspeed this new week.
  • #212
  • Edited 4:39am Aug 10, 2009 4:27am | Edited 4:39am
On the Weekly chart (attached), a major resistance level – a previous swing low @ 1.7050 (that we’ve highlighted using the blue broken line), which we discussed on the Monthly chart during last week Tuesday analysis, did a very solid job of "stopping the bulls in their tracks." As we could see, price action last week ended in a reversal candle formation (a hammer). A reversal candle forming around a strong resistance level, after a protracted upward price movement, is a strong signal that price might be reversing downward. Although, price left the fib. 38.2% retracement “station” and is yet to reach the next fib. “station” @ fib. 50% ret., other factors are, currently, overwhelmingly in favor of a downward move.

On the Daily chart (attached), the bias for downward price move is strengthened further with a Waving negative MACD Divergence (which we’ve identified using the red dashed lines on the upper and lower windows of the trading platform). A Waving MACD Div. becomes a valid divergence only when MACD crosses below its Signal Line; nevertheless, a Waving –ve MACD Div. informs us of the possibility of an imminent price move downward. The demand or upward trend-line is currently about a hundred pips away from current price position; hence we believe there’s still ample room for price downward move – from a day-trade perspective. While we should be wary of a strong support as price moves further downward toward the upward trend-line, let’s also note that, in case price eventually closed below the trend line, further bearish move – in light of other analysis – is strongly expected.

On the H4 chart (attached), price has broken the most recent swing low @ 1.6649 (which we’ve highlighted using the blue broken line) downward. This automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.6835 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

P.S.:
As I’m about posting this analysis, a Short GBPUSD trade set-up seems to be forming on the Hourly chart with initial Stop Loss @ 1.6719; and Primary Profit Target @ 1.6580. If you’re able to identify a strong confluence of resistance, don’t hesitate to take the trade.
However, please remember to keep your risk per trade low: We MUST NEVER assume we KNOW where price is going next!
Also, always keep in mind any major news releases. Be wary of possible price volatility during these periods.
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  • #213
  • Aug 10, 2009 12:20pm Aug 10, 2009 12:20pm
Hi guys, I think this is a good read on money-management. It’s somewhat a funny article, but its truth is intact: http://www.thegeekknows.com/2009/08/...-call-tom.html
  • #214
  • Edited 4:29am Aug 11, 2009 3:51am | Edited 4:29am
Pls NOTE: On the Weekly chart (please refer to yesterday’s analysis), the reversal candle that formed around a strong resistance level is still doing a good job of sustaining our bias for a downward price move.

On the Daily chart (attached), continuing from where we stopped our analysis yesterday, as envisaged, price travelled down to the demand or upward trend line, which is currently doing a nice job of holding the bears. Although, price seems set to continue its bearish move, the previous day low @ 1.6430 (which we’ve highlighted using the lower blue broken line) is a support level we would like to see price break downward for a stronger SELL signal. The Waving negative MACD Divergence (that we’ve identified using the red dashed lines on the upper and lower windows of the trading platform), which we also discussed yesterday, is still intact. MACD has crossed below its Signal Line. It becomes a valid -ve MACD Div. if it closes below its Signal Line by the end of today. If that happens – with the current situation on the weekly chart – we should be fully prepared for a possible sustained downtrend that might last for days, weeks, or longer.

On the H4 chart (attached), yesterday, price broke, at that time, the most recent swing low @ 1.6649 (which we’ve highlighted using the upper blue broken line) downward. That automatically shifted our bias in favor of a downward price move. To strengthen the argument for a continuing downward move, the H4 chart gives us a clearer view of price action around the demand trend line that we discussed on the Daily chart: as seen on the H4 chart, the demand trend line seems to have turned to a resistance level preventing price reversal upward.
However, as we also noted on the Daily chart, the previous day low – that is also seen on the H4 chart as the most recent swing low @ 1.6430 (which we’ve highlighted using the lower blue broken line) is a support level we would like to see price break downward for a stronger SELL signal. The white horizontal line @ 1.6717 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-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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Attached Image
  • #215
  • Aug 11, 2009 7:25am Aug 11, 2009 7:25am
Quoting biz0101
Thank you for taking the time for these detailed explanations
You're very much welcome Biz.
  • #216
  • Edited 8:08am Aug 12, 2009 6:39am | Edited 8:08am
Based on previous days’ analyses, The GBPUSD presented a Short trade opportunity earlier today. I entered a Short position. While the trade is currently on, I’ll like to give an update on the higher time frames analyses, and also explain the few steps I’ve taken so far in managing the Short trade:

On the Daily chart (attached), price, eventually, broke the support level @ 1.6430 (which we’ve highlighted using the lower blue broken line) downward. Also, we now have a valid negative MACD Divergence (which we’ve identified using the red dashed lines on the upper and lower windows of the trading platform) as MACD closed below its Signal Line yesterday. With these actions, we should expect a possible sustained downtrend that might last for days, weeks, or longer – suitable for longer term traders.

On the H4 chart (attached), price recently broke the most recent swing low @ 1.6430 (which we’ve highlighted using the blue broken line). This break helped to sustain our bias for a downward price movement. The white horizontal line @ 1.6514 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

On the Hourly chart (attached), price formed a tradable pattern of lower highs and lower lows with the most recent Hourly swing high @ 1.6499. Price temporarily bottomed @ 1.6389.
However, I observed a waving +ve MACD Div. (NOTE: not yet valid) that signaled the possibility of an imminent upward price movement. The signal was a warning to manage the trade conservatively.

On the M5 chart (attached), we have a clearer view of the Hourly price action. With strong confluences of resistance levels around the fib. 61.8% ret. level @ 1.6457, and the fib. 78.6% ret. level @ 1.6475. I decided to place a Limit Order between both levels (so as to enjoy a better reward:risk while taking precaution against being too far away from the first potential reversal level).
Price happened to reach the "in-between" level exactly, and reversed favorably (it doesn’t always happen that way). As price triggered the Limit Order and reversed almost instantly, and bearing in mind the Hourly waving +ve MACD Divergence and the BOE Inflation Report about to be released, it was a great opportunity to quickly turn the trade to a NO-LOSS trade: As price moved further downward by over 10 pips, with a bearish reversal candle about to form on the 15min chart (Pls NOTE it’s better to wait till it’s formed), I exited half of my position, and subsequently moved my Stop Loss a couple of pips above the reversal candle, which was less than 10 pips away from my Entry Level.

Currently, as I'm writing this note, I’ve been stopped out with a few pips in profit. I took a very conservative trade.

You could’ve have managed this trade in a completely different way. You could have made more profit, lost, or even still be in the trade as price is yet to move anywhere close to the most recent Hourly swing high which was the initial Stop Loss level.
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  • #217
  • Aug 12, 2009 6:59am Aug 12, 2009 6:59am
There is a setup that I'm watching on Aussie today. There is a confluence of overlapping fibs + W-M1 and broken support around .8280 area. If price manages to move up and get there my stop will be above .8310 area.
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  • #218
  • Aug 12, 2009 7:13am Aug 12, 2009 7:13am
Quoting rumba68
There is a setup that I'm watching on Aussie today. There is a confluence of overlapping fibs + W-M1 and broken support around .8280 area. If price manages to move up and get there my stop will be above .8310 area.
Mike, nice setup. Can you please clarify what W-M1 means? Thanks.
  • #219
  • Edited 8:03am Aug 12, 2009 7:20am | Edited 8:03am
Quoting Tunji
Mike, nice setup. Can you please clarify what W-M1 means? Thanks.
Weekly M1 Pivot level. I mostly look for weekly pivot levels.
  • #220
  • Aug 12, 2009 10:57am Aug 12, 2009 10:57am
I have been following this thread from the beginning. I must commend your efforts for taking time to analyse and give useful hints about the market. It is a difficult thing to do, especially the way you combine it with your own trades. However, I would like to know why you prefer entries from the H1 Time Frame, because sometimes the H4 actually provides similar or better entries. For example, I followed the GBUSD through the H4 and I was also able to get some reasonable pips. Again keep doing this wonderful job.

E ku ise o.
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