ICCE. Bemac's Fib. Reverse Engineered

Hi Bemac, I have been observing divergence along with this method to see if it could help me get a better entry and avoid fake-outs. I've suffered several fake-outs with the channel breaking one way just enough to get me in and then reversing and going the other way. Eh, such is life, I make it back and then some on the other end (usually), but if I could feel more confident about a channel breach, all the better right?

So anywho, I've been watching divergence with several oscillators and settled on the basic momentum one to spot divergence or even differing price versus momentum levels. PLEASE let me know if I've gotten way off tangent from the original purpose of this thread and I will post no more on this subject, only the fib channels (and accept my appologies).

Here are two charts, the first is a 15m from today showing the momentum oscillator on the bottom (I made it big for this explanation), and the second chart is the exact same chart except instead of candlesticks it is the simple line chart. I find it easier to spot anomalies with just the line chart when comparing to the momentum (I took this trade BTW):





The area I circled shows the price moving higher while the momentum continues lower. I am interested in your thoughts...I've just started watching this in conjunction so this might mean nothing at all in relation to the channel breakout, and this is sort of a bad example since it didn't do a fake-out long, but if it had I wouldn't have taken it because the momentum was showing down.

Mike

Do you use 28 as a default or did you research for that number?

Seriously, this might assist.

I got that number from a trader named Jacob Bernstein, he has written several books about trading, and one most recently about trading in the crazy markets we are in right now. 28 was the number he found to be the most accurate in regard to momentum and price.

OK. Mixed emotions here... Jake Bernstien has been selling his wares for more than a decade...or two.. Is that Jacob? I don't know. What I do know is that I no longer concern myself with the thoughts of Jake...

Hrm, I dunno, this is the latest book by Jacob Bernstein, it is titled "The ultimate day trader : how to achieve consistent day trading profits in stocks, forex and commodities", ISBN 9781605500089. I found it at my local library.

I hope it isn't the same guy you are thinking of!

Edit: I have a feeling it is the same Jake you are talking about since there seems to be only one prominent Jake/Jacob Bernstein relating to trading information. The basic strategies he talked about seemed legit, I personally didn't feel any of them fit with my trading style other than the momentum divergence pieces.

What do you think of this channel forming on the daily for the EURUSD? It seems valid so far but the daily timeframe spooks me a bit in regard to SL numbers.



Mike

I hear you. We have to be constantly alert But, Sometimes we have to run with our previous decisions.

Of course there is a time to change our viewpoint but I'm not sure this is it.
Here's my EUR/USD Daily that I am working off of.


Note that we are back within the 38 to 62 'Comfort Zone' {my description of Global Comfort} & banging on the 38.

I don't think it unreasonable to achieve the Bottom of the Channel let alone the 50, Top or 62%.

Just my current opinion.
If I were Trading off the Current Daily Channel that you are observing, I would be Standing Aside & waiting for confirmation of a Break.

Good luck though & PLEASE, Don't Trade What I Say; Trade What You Know.

BMc

Thanks for the insight, I tend to find channels developing and neglect channels that have already formed in the past but are still relevant. I am on the sidelines on the daily and will continue to observe.

Looks like we Both Win but I am still chasing my Targets.

Well done xtensive. Hope you grabbed some cargo.

Intake, compress, ignite...take profit.

I still think this channel is relevant, the break out up might have been a fake or maybe it needed to retest the channel a few more times but I'm having fun with this on the daily!

It broke the channel on 11-25 for well over 100 pips and nice PA. dropped back into the channel the next day and tested the bottom of the channel the day after that. Broke again on the 30th, closed outside the top so I figured it was a safe bet for the next day which it was (it did dip into the channel again but ultimately closed up). Now we've gone back and might test the bottom again. Anyone else watching the daily?

Mike

EDIT: The low for today bounced right off the bottom of the channel @ 1.4821 ... wow!

Hi Bemac,

I'm having a lot of fun on the daily chart with this, the break up looked like a fake out (at least for now) but the advantage of the daily is even on a fake out you can haul in a bunch of cargo

It slipped back in the channel and confirmed (to me at least) that the bottom was still valid with the touch on Dec 4th. I have hauled in a whole truckload of pips since the bottom breech, not sure if it has the balls to touch the 38.20 @ 1.4504 before it traces back into the channel but I'm playing it either way. Hope you are doing well!

Mike

Not sure if anyone is following this thread anymore but I thought I'd post the result of the last chart...it completed the pattern! Just barely touched the 38.20% line, amazing.



Mike

Hi Mike, I checked out your chart & it looks like you are really getting the gist of this.

I, personally, am basically done trading until Jan 18th '10 or so & therefore not as active around here as per usual but please don't let that discourage you from posting your thoughts.

Like most FF Old Timers, I can't go too long without checking in. I'll be around.

Meanwhile: Here's something else for you to consider.
USDCAD Daily


Good will amongst men. (and Women)
BMc

Without many comments, only one:

Thanks Bill

Nice one Cob; How much of that one did you catch.

btw. That Posted Image is a candidate for comparitive Scalp Vs Term Trading. By that I mean Real Trading. I know that Scalping Pulses will always accumulate more cargo; but; Only if you are correct All the Time.

Time to call in the math gurus.
From Cobs Posted Chart (we may need the Box Parameters) What is the difference in Pips Earned between:
One Term Short Trade...
&
Scalping All the Fuctuations (sp)
Remember to consider Spread.

Thanks Bill, I hope you enjoy your time off. I think you are wise to stay out of the markets this time of year, they are pretty crazy! This is my first December of trading so I am observing and I think I am officially out until January as well. Happy holidays!

Mike

Hello Bill, Hello guys,

I found it pretty interesting(specially nowadays) and wanted to share it with you.Hopngg to hear some coments.

Thank You all,Have a wonderful Christmas and a successful New Year!!

Red.

Hi Rod Awe 're best tae you an' yours in the comin year. (I haven't forgotten...) couldn't post this one fast enough for you guys to observe the Scalp. (that's all I will consider at this time of year.)
Better get back to the chart 'cause it may be time to exit.
If you can catch their drift (the Big Boys that is) It's a fun ride.

OK Out with +40P.
The only reason I caught this one is that I was taking the XMass time off from Trading to gather some info to post here when it happened right before my eyes.
Bounce off of a Diagonal & back through the 38%, Back into my Channel from the Bottom (looking for the Top?)
I measured the length of time I expected to be In The Trade in relationship to How Much Time it took to Show The Trade.

Slash & Dash or Cut & Run. Cargo is Target.

Back to study & Prep for the New Year.

May all your aspiritions come to you.

Lang mae yer Lum Reek.
BMc