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  • #5,441
  • Edited 10:34am Jan 15, 2010 10:28am | Edited 10:34am
Quoting bartstop
I just wanted to point out that we are approaching the 50 line on this retracement. Might be turn-around time soon.


Note: I have redrawn my faulty trendline.



Bartstop




Hmmmmm................


EDIT: When you look at the Hourly chart, you can really see the up trend running out of steam. I guess my new trendline is valid (3 contacts). It's a long ways down, we'll see how long it lasts.
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  • #5,442
  • Jan 15, 2010 11:25am Jan 15, 2010 11:25am
Quoting Misterdaz
Attachment
I thought I read somewhere on this thread that whenever price retraces past the 61.8 inner fib that it's a early sign that the market is reversing from it's previous trend. Is this true or am I dreaming.
  • #5,443
  • Jan 15, 2010 11:47am Jan 15, 2010 11:47am
Will the uptrend now be a downtrend? Well lets wait and see if the 100% line gets broken.
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  • #5,444
  • Jan 15, 2010 12:01pm Jan 15, 2010 12:01pm
In a nutshell I would say yes Checkz. Traditional fib trading say for long positions would have you buying at a 38 retrace with a stop just under the 61. I'm generalising here but a break of the 61 woud be a good reversal signal.

A certain gent here would turn his fib around if price closed thru it.

I'm sure Compass would have some learned views on this as well.

MD.
Keep smiling
  • #5,445
  • Jan 15, 2010 12:01pm Jan 15, 2010 12:01pm
Reading the charts.

It is widely known that the longer term the chart, the more respected the price behaviour on these charts. The Monthly is accepted by many as the King of all time frames and as such to be observed above all timeframes.

Observe the GBPUSD charts, I have shown below :

Monthly and weekly. What can you tell about where future price is likely to head.

Based on what the candles are telling you at the major support / resistance levels (Fib lines) , post your thoughts and we can discuss it together.
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  • #5,446
  • Jan 15, 2010 12:03pm Jan 15, 2010 12:03pm
Quoting Misterdaz
In a nutshell I would say yes Checkz. Traditional fib trading say for long positions would have you buying at a 38 retrace with a stop just under the 61. I'm generalising here but a break of the 61 woud be a good reversal signal.

A certain gent here would turn his fib around if price closed thru it.

I'm sure Compass would have some learned views on this as well.

MD.
Close Md, the 50 Fib is considered a popular retrace with a stop just below the 61.8.

If we pass 61.8 you are both right - a sign of weakness in the uptrend and a reversal is on the cards.
  • #5,447
  • Edited 2:06pm Jan 15, 2010 1:54pm | Edited 2:06pm
Quoting FX Compass
Reading the charts.

It is widely known that the longer term the chart, the more respected the price behaviour on these charts. The Monthly is accepted by many as the King of all time frames and as such to be observed above all timeframes.

Observe the GBPUSD charts, I have shown below :

Monthly and weekly. What can you tell about where future price is likely to head.

Based on what the candles are telling you at the major support / resistance levels (Fib lines) , post your thoughts and we can discuss it together.
With the closing of this weeks bull candle, and the fact that 38.2 has been tested (but not pierced) on the blue fib, it seems we will be going north for atleast a few weeks. Plus we have pierced the 50 line on the white fib twice. It is possible that we bounce off that 50 line again. But, for atleast the next few weeks, we should be bullish.

How does that sound Compass?

Bartstop
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  • #5,448
  • Jan 15, 2010 2:27pm Jan 15, 2010 2:27pm
Quoting bartstop
With the closing of this weeks bull candle, and the fact that 38.2 has been tested (but not pierced) on the blue fib, it seems we will be going north for atleast a few weeks. Plus we have pierced the 50 line on the white fib twice. It is possible that we bounce off that 50 line again. But, for atleast the next few weeks, we should be bullish.

How does that sound Compass?

Bartstop
Accurate, but more importantly, what can you tell me about how price has behaved above the arrows in Post 5445 ?

This is the key to reading future price direction - how the candles tell the story around the Fib levels.
  • #5,449
  • Jan 15, 2010 2:42pm Jan 15, 2010 2:42pm
Quoting FX Compass
Accurate, but more importantly, what can you tell me about how price has behaved above the arrows in Post 5445 ?

This is the key to reading future price direction - how the candles tell the story around the Fib levels.
I'm not sure what you're hinting at but I do notice that the bodies of the candles are respecting that fib line.

Is that what you are pointing out?
  • #5,450
  • Jan 15, 2010 2:49pm Jan 15, 2010 2:49pm
Quoting bartstop
I'm not sure what you're hinting at but I do notice that the bodies of the candles are respecting that fib line.

Is that what you are pointing out?

A little more to it Bartstop,

look at the arrow to the right.

Have the candles at the low shown strength or weakness in the uptrend compared to the previous low and the arrow on the left.

Have they formed a higher low realtive to the Fib line from the previous low ?
  • #5,451
  • Jan 15, 2010 3:14pm Jan 15, 2010 3:14pm
Quoting FX Compass
A little more to it Bartstop,

look at the arrow to the right.

Have the candles at the low shown strength or weakness in the uptrend compared to the previous low and the arrow on the left.

Have they formed a higher low realtive to the Fib line from the previous low ?
PA around the left arrow seems to be jumping around and not really respecting that line. At the right arrow, two bodies and a wick are respecting that line. That means the line has become stronger. Correct?
  • #5,452
  • Jan 15, 2010 3:25pm Jan 15, 2010 3:25pm
Quoting bartstop
PA around the left arrow seems to be jumping around and not really respecting that line. At the right arrow, two bodies and a wick are respecting that line. That means the line has become stronger. Correct?
Correct, and if you think of it in terms of buyers and sellers in the market, the buyers have strengthened their position / whilst the sellers have weakened on the second arrow.

In other words we are running out of sellers so the price is higher on the second low as it moves up to search for more sellers at a higher price.

Now what happens when we run out of sellers at that level ?

Price moves up further. So we are seeing the early stages of another up move on this pair.
  • #5,453
  • Jan 15, 2010 3:39pm Jan 15, 2010 3:39pm
I am gradually seeing the light at the end of the tunnel...

Thank you FX Compass and ScottyB - I am sorry but I have to name both of you in 1 post....

So when will you decipher THIS to US, who are just clapping with their hands and not rattling with their jewellry ? :

Inserted Video
Be like water.
  • #5,454
  • Edited 4:39pm Jan 15, 2010 4:20pm | Edited 4:39pm
Quoting FX Compass
Correct, and if you think of it in terms of buyers and sellers in the market, the buyers have strengthened their position / whilst the sellers have weakened on the second arrow.
Help me to understand why the line we are talking about is more important than the 50 line on the white fibo that I posted. Couldn't a person argue that we are running out of buyers and the sellers have strengthened their positions there? Doesn't that seem just as significant?

Does the tall bull candle just to the right of your left arrow play in to this? It seems to me that a bear candle closing under this line triggered some big buy orders and drove the price up fairly fast. Is that an accurate analysis?
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  • #5,455
  • Jan 15, 2010 5:06pm Jan 15, 2010 5:06pm
Quoting bartstop
Help me to understand why the line we are talking about is more important than the 50 line on the white fibo that I posted. Couldn't a person argue that we are running out of buyers and the sellers have strengthened their positions there? Doesn't that seem just as significant?

Does the tall bull candle just to the right of your left arrow play in to this? It seems to me that a bear candle closing under this line triggered some big buy orders and drove the price up fairly fast. Is that an accurate analysis?

You are moving along Bartstop.

Ignore the Fib retracement level for a moment.
Treat the Fib line as nothing more than a support level.

Your comment -

"Does the tall bull candle just to the right of your left arrow play in to this? It seems to me that a bear candle closing under this line triggered some big buy orders and drove the price up fairly fast."

Yes, Yes, Yes !

This is exactly what we need to see to have price tell us the story.
Couple this with the higher low on the right arrow and it clearly shows us the Bulls have currently got control over this pair.

What then is your higher probability long term trade ?

Paying attention to how the candles form at the Fib lines is the most crucial part to determining correct entry points.
  • #5,456
  • Jan 15, 2010 5:11pm Jan 15, 2010 5:11pm
Quoting FX Compass
Close Md, the 50 Fib is considered a popular retrace with a stop just below the 61.8.

If we pass 61.8 you are both right - a sign of weakness in the uptrend and a reversal is on the cards.
Hi Compass. Depends what you have read mate.

MD.
Keep smiling
  • #5,457
  • Jan 15, 2010 5:22pm Jan 15, 2010 5:22pm
Evening gents. First of all from the trading methods I have studied in the past and books I have read, 38 would be an aggresive entry point, the 50 is not as key a level as the 61.8 or 38.2 in my mind. I am not here to argue though, my wife fills that roll.

I have spent the past 2 days fighting a computer virus that some w#anker sent me, I am not best pleased!!

While I wait for my virus scanner to finish it's scan (currently at 7 virus's) I will review the posts since you put up those charts Compass.

If I ever catch one of these hacker guys I'l fuc............
Keep smiling
  • #5,458
  • Jan 15, 2010 5:40pm Jan 15, 2010 5:40pm
Basicly, there are more buyers than sellers @ 1.5950. Probably Hedge funds, Soveriegn Wealth funds, Institutional players, the big boys anyway. I don't see the order flow in my little bank so I am no better off than any of you guys.

If it wasn't for BarTstop I would have said that price is hinting to the long side.

Same for the monthly, if you draw the fib there, but, why not here though? This says to me, in the long term I have a long wait before I can get me some cheap bucks!

Attached Image
Keep smiling
  • #5,459
  • Jan 15, 2010 5:41pm Jan 15, 2010 5:41pm
Quoting FX Compass
You are moving along Bartstop.

Ignore the Fib retracement level for a moment.
Treat the Fib line as nothing more than a support level.

Your comment -

"Does the tall bull candle just to the right of your left arrow play in to this? It seems to me that a bear candle closing under this line triggered some big buy orders and drove the price up fairly fast."

Yes, Yes, Yes !

This is exactly what we need to see to have price tell us the story.
Couple this with the higher low on the right arrow and it clearly shows us the Bulls have currently...
I'm still trying to grasp this concept. I need to understand the difference between the two lines for future analysis.

The fib that you drew isn't really a valid fib? A horizontal line is all you really needed to make your point. Right?

To differentiate between the two lines:

The 50% fib line is a resistance that "naturally" occurs after any large movement. Even if buyers are in control, more than likely we will see strong resistance there. It could have just as easily been 38 or 61. It is just part of the cycle.

The line that you drew isn't a fib level, it is an "equilibrium point" where buyers and sellers are almost evenly paired, both are trying to tip the scale in their direction. Kind of like the seesaw (teeter-totter) analogy that Bobukus used in his thread. By analyzing the PA at this point, we can see who is gaining strength and ultimately which way price will move.

Am I on the right track?


Bartstop
  • #5,460
  • Jan 15, 2010 6:10pm Jan 15, 2010 6:10pm
Quoting Misterdaz
Basicly, there are more buyers than sellers @ 1.5950. Probably Hedge funds, Soveriegn Wealth funds, Institutional players, the big boys anyway. I don't see the order flow in my little bank so I am no better off than any of you guys.

If it wasn't for BarTstop I would have said that price is hinting to the long side.

Same for the monthly, if you draw the fib there, but, why not here though? This says to me, in the long term I have a long wait before I can get me some cheap bucks!

Attachment
Look at the way the white 138 matched up perfectly with the red 50 and the blue trendline. When I saw that there was no way I was going long. Plus the rallies were getting shorter and shorter.


Bartstop
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