Thexder's journey to(ward?) freedom

A good support at 61.8 of this swing and now a long break from it. If it can break the highs of two days ago it should make it up near 0400

Now it's battling the highs and the target near 0400 is in sight.
I can't decide what color to use for the fib tool so I'll look back over the posts later and see what I like.

I don't know if I'm going to follow this swing monitoring consistently, and I haven't switched away from anything else I'm doing, it's just a blast from the past and just another way of doing the same thing. I'm really observing support and resistance but using the fib tool to clearly mark highs and lows and project an extension. In many of those worthless textbooks where they show a triangle or something and a break out, they project the height of it as a target. Using 100% of the fib extension is basically the same thing here.

While I'm showing lovely pictures I'll try to explain something about why I draw fibs where I do, which may change if I change my perspective but for what I'm currently doing, two days ago was that big up move. I'm trying to find reversal points, not necessarily from large moves like that but any clear move in a given direction even if that move was a pull back from a large move, that correction is a move and I'll look to reverse from IT, back in the original strong move, or simply find a reversal from that initial big move when it first retraces, whatever happens and gives me an entry.

So two days ago was the surge up and it's bound to reverse somewhere. Yesterday combined with a few hours from Friday there was a start of a reversal down which eventually would have formed a small low somewhere. That low showed up early Sunday when bars started moving back upward, leaving a low point.

So I pulled a fib from the top of Friday to the bottom of that reversal low early Sunday and called that a swing move that may mark a reversal from the up move, thus I'm looking for a short break. And if that short break should come I'd arbitrarily do as the text books say and target the height of the setup for 100% extension. That target was reached yesterday as the bars broke short and moved far enough.

So then anything could have happened. If it kept going forever short, I don't really care about lost opportunity. I can take a million break evens with the hope of catching a single 300 pip move, so what, I could have had 10 million pips in small bites.

So now that we had the retracement downward yesterday, I would consider that a "down move" and now I'm holding out for a setup that I can trade again as a reversal, so this time upward. It's easier to see in retrospect that the low of yesterday is also the low of a reversal I currently have the fib on as a starting point. From the low yesterday it moved up and started idling down again, so at that point I don't know what's going to happen, it might not be a complete low if it breaks shorter, but it only made it back 61.8% of the way and headed up (now) for a break of the swing high, which is where I have the fib now, yesterday's low to a possible swing high, only just confirmed as a true high when the break out happened an hour ago. I had a pending long order if that break out should occur and confirm the swing fib setup, otherwise if it went short or sideways too long I'd cancel and call it idle rather than down move, so nothing to reverse from and nothing to trade.

So now that it broke long I'm aiming for the 100% target near 0400 and after that, I'll look to see if I see a distinct up move that I can anticipate a reversal from or just sit aside until something clear forms that I can reverse from.

It's come within 2 of the target so that's close enough for practical purposes. I'm out of the long trade now and going to sit back.

This chart shows the two latest reversals I took, the first short reversing from the surge up, then the long I just took reversing up from the down move. Taking small bites I pulled in around 90 in 24 hours.

This would be the next one to watch. Yesterday made a high, pulled back somewhat, couldn't go higher and respected 61.8% retracement as a barrier when trying to make a new high, now it is just breaking short and that coincides with the round 0400 number so it could hold if it gets enough below there. It could also just be a false dip below the round number for stop hunting so who knows until it happens but this is what I'm observing. The 100% extension is just below another pullback low from the ride up yesterday so 100% may not be fully reached immediately. It's just a guideline to shoot for 100%.

Out of trade successfully

Aloha Thexder,

Good to see you posting some more. On your last post, the short, what if any PA were you considering on taking the short or was it simply the rejection of the 61.8 touch and reversal?

Jaz

Just the rejection and reversal which I'm lumping into a title of s/r trading. For now it's a leap of faith from some testing on that pair but I don't know how it works in the long term or with other pairs. I tried blindly applying it to Usd/Cad and ran into problems but that lead to some new observations of that pair and how it moves. So maybe what I'm doing is learning to perform astrology which will be different on each chart and different over time on a given chart. As long as I think I have figured out either something constant and universal or custom and adaptable, I'll be content. Time will tell I guess. The only constant right now is looking for reversals based on s/r observations.

My current reversal target. This time 38.2 was holding and then broke long so I'm hoping for a good one since the overall trend has been strongly up and so reversals that lead to continuation upwards should be easy plays. But it's a leap of faith still at this point as mentioned.

Coincidence or not, this one made the target also. So like the other trades this was taken as a reversal anticipation. Yesterday started out sideways and moved down from there in a few minor swing waves so as each new low wave point formed and bars retreated upward, I observed to see what happened when the up move of that wave started retreating back down...not knowing if that would be the official trading wave, I tentatively drew the fib from that low to high and watched the pullback moving down from there. In today's setup the pullback downward went 38.2% down and stayed there several hours. Still may not end up being the right wave to trade but until proven otherwise I would have a pending long trade queued up. If the retrace went too far down it would cancel the setup but it went long so I took the entry and targeted 100% extension. I need to do more research though, I may just be having a lucky week.

Don't know if this makes things confusing or clearer because it's like finding shapes in clouds but from a zoomed out perspective here's the last 4 trade setups I took as reversals from what I perceived to be a decided up or down move that could be reversed from. I have a 4 legged W or M for each one so the first leg is just showing that there was a move occurring that I'd be looking to reverse from. The second leg is one of the minor swing waves starting to retreat and may or may not mean anything, then the 3rd leg is the retracement of the potential swing wave, again doesn't mean anything yet, if price keeps going too far in this leg it will cancel that swing and the original first leg move is still in play and the process starts again when the next price retracement starts to form another minor swing. But if it gets to the 4th leg meaning the 3rd leg only went back around 61.8% max and didn't break the pattern, that's when a pending order would get triggered with the 100% target objective.

And from there, the next setup would be sought when the next decidedly distinct move has occurred that could be reversed from, so if things just look too sideways, there is no setup yet.

And by just glancing at that chart of the last 4 days, the net move has been upward and depending on how it's looked at, we could say the net pip up move is around 100 from dec 14, so if we bought and held we'd be up 100. But looking at all the fixed 100% exit targets, each small trade in both directions netted 30 to 50 each which is more than the single net 100 move. That's why I don't care so much about trying to set to break even and ride out a trade, it is most likely not going to give any advantage, and also again depending how this chart is observed, we could even say if we bought and held for that +100 net up move, we might have been stopped out at break even and had a net of zero instead of around +150 from four small fixed trades.

So I consider it to be support/resistance trading by using the minor swings as s/r spring boards and I need to do more work on it to confirm if I should be doing something different to increase robustness or whatever else. As I mentioned USD/CAD doesn't respond this ideally using the same wave breakouts, but it does seem to follow more pure S/R if you look at it, you can see when it does move and then halt and go sideways and then move again, it does bounce and hold from S/R, just don't know how to master that yet on that pair. This is currently what works for USD/CHF so for now it's where I'm at when I'm doing this type of trading. It helps pass time while waiting for price action daily setups.

After the up move from yesterday this chart shows how I picked out the shapes in the clouds to look for a reversal down. The orange shows how I followed waves and saw one that was not further broken to the upside on a retracement upward and it did break short, then it retraced up a lot but still not enough to break the wave (lower highs) so the trade was safe and then it blasted down to target, shown by the lighter color lines drawn after trade entry.

At this point it's already made a definite down move where a reversal up could be sought, and it's in a good place to reverse up, bouncing off resistance and a round 0400 number and having just fallen so sharply, some amount of recoil is expected, just a question of if that shows up as a tradeable wave or a random garbled motion.

Riding this since Friday. Didn't make the fixed target of 100% and almost went for a stop twice. Now it's riding just above initial entry and has been just sideways ever since it began Friday so I am just set for break even now and am going to let it ride for better or worse.

There it is. Running with a trailing stop now so I might get some small plus result or it may keep going, who knows.

This was the next setup I took. It barely broke above the sideways range and started to bounce down, giving a possible swing reversal point as marked. The retracement back up from the drawn fib low didn't make a new high so this became a possible short reversal setup. It did drag out sideways longer than preferred but it was a triangle formation that in itself broke out strongly to the down side (within the fib) and then consolidated in a small hourly inside bar before again breaking short to continue a confirmed down move, breaking out of the fib zone and triggering the short. Easily reached the 100% target. Although the fib swing itself had gone stale as a setup, the triangle short break and then re-break after consolidation with the I.B. inside the fib gave the setup new life with confidence in the short direction again.

This is the current tentative setup being watched. An obvious down move has now occurred and a reversal upward is sought. It has formed a low which has been confirmed by the small up move, and that up move has formed the small swing wave now that subsequent bars have retraced down again from there, leaving the high behind. If this should break long without violating the bottom of the marked range, a 100% target would line up with a realistically achievable resistance zone.

Here's the current situation from daily perspective. Just had the sideways range for several days and have now broken short. There could be a bigger down move coming if the bottom of the recent range now holds as resistance from the past few days but if it does want to go short, it could bounce off of any of the highs that were also recently broken out of. Anything could happen but the hourly support and resistance waves will hopefully guide the true path.

Looking back at the last chart from Dec 23 the tentative long setup never completed and things continued downward. By the end of Dec 24 there was a small move upward (in retrospect as seen on Dec 26) with a high peak left behind as a result of the gap down.

So I took the last swing high on Dec 24 as a possible place where a long breakout might occur, or otherwise I could look at it as the end of a small move upward and then take the low from the Dec 26 gap down as the other end of a swing wave that could break short. Either a long or short would have worked for me from that boundary and it ended up going short. Even though the main movement had been down leading up to the Dec 24/26 setup swing wave, I was able to look at that small leg up at the end of Dec 24 as an up move to count for significance (compared to the larger down momentum) because it bounced off the resistance clearly formed at the end of Dec 23 leading into Dec 24, so the up move had gone as far as it could and was possibly ready to bounce back down to continue the overall down momentum. But as stated, a long break from there would have suited me well because breaking that resistance would have been something to get in on (the daily chart had a bullish pin that would have been traded above there too). It's all perspective and in this setup I had reason to go either way by evaluating what the bars are telling me with support and resistance. The fib is a drawing tool as I've said before and mostly to conveniently show the trading boundary and textbook 100% extension target "the height of the setup projected beyond breakout"

Been holding and monitoring for a day with no real threat of a stop out, sticking to 61.8% and 38.2% retracements and now it's going for the 100% target. It might not make it but it's far enough for me to start looking for an exit on my own if it doesn't reach the goal soon enough.

Hi Thexder,

Lurking on your thread again. Please check your PM s

Here's what I'm in now. Daily chart had a pin giving a short bias and on hourly the momentum had been up for the past day making constantly higher highs and lows, so when the final high was confirmed by a lower high finally showing up, an hourly wave short breakout became tradeable. It's blasted down and has gone far enough toward target and recent lows to convince me to set a trailing stop so I can go to bed but still capture a further down move if it comes.