Fibonacci insights

...this time price bounces off of the 30.9 retracement level - which is a much shallower retracement - and finally being able to make new lows...

new down fib - and again - (same principle as pointed out before in this thread) high retrace with early rejections (ref: V-bottom) price bouncing off the PT D level, and reverses again - the waves continue, wave after wave.

new up fib - with shallow retracement - being able to make new highs and price taking off to the upside handles...

another new up fib - again - showing a deep retracement - (ref: V-Top) thus could mean/be a first sign for a trend reversal if price cannot make it over the REJECTION LEVEL, or 'worse' : price gets 'rejected' at the .50 or the .382 level and makes new swing lows.

great thread dude

as price is able to make a new swing high, with a thereafter 61.8 bounce - trend is therefore 'in tact again'.

price keeps bouncing off shallower and shallower retracement levels - but gets stuck again at the extension level handles - ...the 'Market story' continues....forever: risk management is all there is.

Thank you Sim, I will see what I can dig out on charts to show same examples.

EDIT: added XAU Daily.

Fig. 1 showing an 'up-Fib' which turned into a trend reversal, breaching the 38.2% Fibo projection level (Renew Fib old INVALID level) thus becoming a 'down-Fib' as is shown in Fig. 2 - therefore the Fib tool is now drawn from up (from swing high) to down (to swing low).

Please Note: Depending on your price feed/LP, you may have very different swing high/swing lows:

It doesn't matter, the importance is that you, yourself are trading and are making trading decisions off the one and same chart only - you, yourself are building a framework around the way you are getting the markets presented to you: explore - find - trade.

July, 2010 contract

July, 2010 contract

...it's just hard for me to do both: trade and post; I hope I have covered most of the things in this thread; with regards to Money Management and Trading Psychology, there are plenty of good threads and posts here on FF, and also amazing web sites (ie Dr. Brett, Forexlive etc. etc.)

Use camtasia to record some m1 trades while you speak through your thought processes? It's free and a nifty little program

But:

1. I am a generally quiet type of person.
2. You can appreciate that I must fully and utterly be soaked into the daytrading process - to be in the zone - when I trade I discharge anything that could lead to distraction.
3. I could go on to show some more charts: however, I strongly believe that every trader has to find 'his niche' in the market place - my thought process is absolutely irrelevant, there is no ' one size fits all ' trading style; so, there we go.

Screen time, Screen time - 10,000 hours I have read in a post - yep, that's about right!

...but let me have another think, thanks Sim

Hehe ok, no worries. Best wishes whatever u do

we understand.
it would be awesome if u continue to post when u have the time.
Many thanks & God bless, Adrian!

Hi trader613,

You said in one of your posts you could've named the levels as I, II, III but you wanted some "logic" in it, therefore you named them as you did. But because i'm not very clever, they mean as much to me as if they were I, II, III ...
What is PT? Profit Target? What about PF? There seem to be a relationship between the retrace levels, retrace rejection levels, stop loss levels and PT levels. Am i correct? So what is this relationship between them?
Please shed some light.

Many thanks.

Hi jackdaniel,

I am sorry, my bad and my mistake: I should have been explaining things in more detail; never mind – Let’s do it now!

Actually, let’s start from the beginning:


Some basics first: (boring, please skip)

Fibonacci studies are based on the isolation of a price wave/price swing and to calculate off such a price projection – thus being the case for either directions of the actual swing – below zero of the current swing (called 'extensions' {price continues and extends in that trend direction}), and above hundred of the current swing, (called 'price projections').

In an uptrend the study is being drawn from the swing low to the swing high (named: 'up-fib') and vice versa for a downtrend (named: 'down-Fib').

OK.

Now:

We also know, that whatever level has served as a support before will/can act as a resistance now, and what has served as a resistance, can/will act as a support. Good. Therefore, any Fib level can serve as such a function –

For instance, let’s take an 'up-Fib' for example: as price keeps coming down, it’s 'retracing', any of the levels will/can act as a support; and as price finds support on such a level turns and continues again it’s upward journey in the trend direction, it will have to overcome and 'breach' each previous support level.


The Name Tags:

PF – Abbreviation for Parent Fib. Why PF?

Let me explain:

You can take any price movement in its most minute detail and apply the Fibonacci principle to it. (no, I am not a Fib fanatic – just saying. I also don’t have Pine cones and Nautilus shells in my office glass cabinet! LOL)

Now:

It’s like a puzzle – you have all those price movements/waves, or price swings, all over the place – within the same Time Frame or thus being part of a bigger or smaller Time Frame. Price-movement are/is fractal, (i.e. like a snowflake, crystal etc.).

I wanted to bring out and make it clear that such a concept exists, that, you can have new price movement without violating the previously established price swing.

Thus the name 'Parent' – such an isolated price swing, whereby price has not extended or projected more than the 38.2 per cent over the old/previous price swing, is still/can be still regarded as the 'main Fib' – the 'Parent' or the 'Parent Fib'.

Therefore, any price movement making new fresh highs or lows are to be regarded as '' Early Fibs '', thus becoming '' Parent Fibs '' only, and only if and when price is reaching/breaching over/under 38.2% the previous established price movement/price swing. OK? OK!

That’s as far as the 'PF’s' are concerned.

With regards to the: 'PT', yes, quite right so, it’s stands for: Profit Target.

And 'SL' stands for 'Stop Loss' –


The relationship between the levels:

The more and the deeper price retraces from a swing high/low – the more 'in danger' the current active trend is – therefore, the probability is, that, once price has actually made a deep retracement, price will only go back, or ‘make it back’ to a smaller portion of its swing; price gets '' rejected '' and cannot make it back to the high or low of the actual price swing. That’s the theory.


IMPORTANT NOTE:

As pointed out before: you may want to try and see what works best for you: try using both Zig Zag settings in the indicator: 10 / 2, and, 8 / 2. With the settings 8 / 2, you may have to refresh your charts at times. (this is easiest done by quickly switching back and forth, from and to - a different TF).

My best,

Adrian

...I have attached to post #1 a script/EA (named: te.mq4) which allowes you to customize your own MT4-Titlebar.

...Why not have your favourite Trading Mantra in front of you while you trade? (mine goes like this {see screen capture below}: risk management is all there is left - the market has no memory -)

Please note: this is an EA (expert advisor), it therefore goes into your MT4 'experts' folder - also; you should tick under the > Tools > Options > Expert Advisors, the: > Enable Expert Advisors, Allow live trading and Allow DLL imports- boxes. Further, your customized Title Text will only display in your MT4 Titlebar once a live price-tick will feed into the chart you have attached the te.mq4-EA to, so if you apply this EA on weekends you'll have to wait until your MT4 Broker is opening for Wellington NZ.

My best.

...can have the function to act as dynamic trendlines, being able to show time related buying or selling pressure...