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Islander and Medici trade the European open

  • #1,641
  • May 29, 2010 2:48am May 29, 2010 2:48am
I have been fascinated with the frequent occurrence of Fibonacci patterns in Euro-dollar and Euro-yen recently.

The sell at 1.2450 was an example of Larry Pesavento's Three Drives To A Top pattern. This is a rare pattern and Pattern #9 in Pesavento's book Fibonacci Ratios with Pattern Recognition. Highly recommended and available as a free pdf for download. Just search for it using Google.
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  • #1,642
  • May 29, 2010 2:53am May 29, 2010 2:53am
Thanks Medici,

I am always amazed at just how complex Forex is, a never ending search for what are "THEY" using this time.

Thanks for sharing
Money grows on the tree of persistence
  • #1,643
  • May 29, 2010 3:32am May 29, 2010 3:32am
Quoting Islander
GM - just to let those interested know that I will no longer be posting on a regular basis - I'm just finding it too distracting.....
we understand perfectly, Sir.
im 1 of those very thankful -- 5,000+ posts is a LOT of your precious time shared with all of us.
i hope u & medici will continue to post from time to time.

Awesome thread, Sir medici & Islander
  • #1,644
  • May 31, 2010 1:14am May 31, 2010 1:14am
Should Euro-yen head down from current levels, there's a potentially excellent bat pattern entry around 110.50, which also coincides with the flash crash low at 110.60 on 6 May.
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  • #1,645
  • May 31, 2010 2:03am May 31, 2010 2:03am
Quoting medici
Should Euro-yen head down from current levels, there's a potentially excellent bat pattern entry around 110.50, which also coincides with the flash crash low at 110.60 on 6 May.

GM - whilst I'm not trading today, I took the time to pull up a chart on this one and found a clean LH on the 5 min / 1 min right at the top of my Decision Zone just after the FO - its even a clear H & S on these TFs......and my normal 15 min set up puts my Bear T1 at 110.55 .......so as usual, we are on the same page.... all be it with slightly different methodologies......

BTW, that was a nice catch on the Three Drives to a Top..
Trading Levels with WRBs
  • #1,646
  • May 31, 2010 2:14am May 31, 2010 2:14am
Quoting Islander
GM - whilst I'm not trading today, I took the time to pull up a chart on this one and found a clean LH on the 5 min / 1 min right at the top of my Decision Zone just after the FO - its even a clear H & S on these TFs......and my normal 15 min set up puts my Bear T1 at 110.55 .......so as usual, we are on the same page.... all be it with slightly different methodologies......

BTW, that was a nice catch on the Three Drives to a Top..
280 pip 14 day ATR would take down to W M2 in 110.28 area.

I'm also not likely to trade today.

MACD for divergence only.
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  • #1,647
  • May 31, 2010 2:21am May 31, 2010 2:21am
Quoting Islander
GM - whilst I'm not trading today, I took the time to pull up a chart on this one and found a clean LH on the 5 min / 1 min right at the top of my Decision Zone just after the FO - its even a clear H & S on these TFs......and my normal 15 min set up puts my Bear T1 at 110.55 .......so as usual, we are on the same page.... all be it with slightly different methodologies......

BTW, that was a nice catch on the Three Drives to a Top..
GM and thank you. Yes, the rejection of the 61.8% level was a give-away. Euro-yen is the most 'geometric' of currency pairs, and I just love it. So stole some pips on the way down but closed when it didn't break through on re-test of DP. Should it break through later there will be an opportunity to re-enter.
  • #1,648
  • May 31, 2010 4:03am May 31, 2010 4:03am
Look for reversals at intraday Fibonacci levels. But now I think it's time to call it a day...
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  • #1,649
  • May 31, 2010 4:50am May 31, 2010 4:50am
A Butterfly pattern is potentially developing in the Euro. The potential reversal level is around 1.2072.

EDIT- If this level and the Euro-yen level of 110.60 were to be reached at the same time, that would imply a dollar-yen rate of 91.62, so entirely feasible.
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  • #1,650
  • May 31, 2010 5:09am May 31, 2010 5:09am
If the 1.2072 level is hit in the Euro and holds, there's potential for a retracement to 1.3250 before the downward journey continues.
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  • #1,651
  • May 31, 2010 5:31am May 31, 2010 5:31am
Dollar-yen has broken out of a triangle formation. Something that needs to be watched if you are trading Euro-yen.

Should it continue higher, there's a potential Butterfly entry in the 92.50 area.
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  • #1,652
  • May 31, 2010 5:51am May 31, 2010 5:51am
Quoting medici
A Butterfly pattern is potentially developing in the Euro. The potential reversal level is around 1.2072.

EDIT- If this level and the Euro-yen level of 110.60 were to be reached at the same time, that would imply a dollar-yen rate of 91.62, so entirely feasible.
A break above today's high would invalidate the Butterfly, and the Three Hills and A Mountain pattern would be confirmed with a short-term potential to 1.2566 coinciding with the 161.8% extension of the drop from Friday's high.

EDIT: The Three Hills and A Mountain pattern can be found in Suri Duddella's book.
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  • #1,653
  • Edited 10:06am May 31, 2010 8:37am | Edited 10:06am
What a beauty!

EDIT: Pattern completed at 127.2% of XA giving 60 pips. Such a beauty!
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  • #1,654
  • May 31, 2010 11:32am May 31, 2010 11:32am
Potential Butterfly at 1.2243 which is also an old S/R level.
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  • #1,655
  • May 31, 2010 11:56am May 31, 2010 11:56am
Medici
Tks for sharing almost on real time .
Some questions if u don't mind
1.what is the exact trigger for entering the trade around D ?
for example :
- place a sma10 and enter when price closes bellow MA
- wait for price to cross the low of the the possible HH .
2. Regarding the Gartley's possible TP's
- Do u always use one TP = 127% of XA (remember which book mention that TP ?)
- When do you move SL to BE or how do u trail your SL ?
- Have seen other traders that use as TP's
TP1= 62% Ret CD
TP2= 62% Ret AD
TP3= 127% AD
TP4= 162% AD
any comments on that ?
Tks for your teaching
David
Quoting medici
What a beauty!

EDIT: Pattern completed at 127.2% of XA giving 60 pips. Such a beauty!
  • #1,656
  • Edited 3:55pm May 31, 2010 3:39pm | Edited 3:55pm
Quoting david4u
Medici
Tks for sharing almost on real time .
Some questions if u don't mind
1.what is the exact trigger for entering the trade around D ?
for example :
- place a sma10 and enter when price closes bellow MA
- wait for price to cross the low of the the possible HH .
2. Regarding the Gartley's possible TP's
- Do u always use one TP = 127% of XA (remember which book mention that TP ?)
- When do you move SL to BE or how do u trail your SL ?
- Have seen other traders that use as TP's
TP1= 62% Ret CD
TP2= 62% Ret AD
TP3= 127% AD
TP4=...
Hello David,

you are welcome. Happy to be of help. My answers to your questions are:

1. Price action at the identified level. If that sounds cryptic, take a look at the many 1-minute charts posted by Islander on this thread, and you will see what I mean.

2. The TP level depends on the type of five-point harmonic pattern. A classic Gartley, such as the one in the Euro today, would be 127.2% of XA, whereas a butterfly normally would be 161.8% of XA. But this comes with some reservations:

(a) Price may not cross A, so you may want to take partial or all profit at A.

(b) Apart from the classic Gartley, these five point patterns come with a bit of flexibility with regard to the levels, so you would have to do manual analysis of various Fibonacci retracements and extensions as well as their confluence to find the appropriate TP.

(c) Price may continue past the first TP, and then you would have to do your own Fibonacci ratio analysis to come up with likely targets.

So I don't really have a comment on the levels you are mentioning - it's decided case by case. A book that I can recommend on this is Suri Duddella's Trade Chart Patterns Like The Pros.
  • #1,657
  • May 31, 2010 11:43pm May 31, 2010 11:43pm
Quoting medici
Potential Butterfly at 1.2243 which is also an old S/R level.
GM. This was realised overnight with support at 127.2% of yesterday's range. Let's see what Europe makes of it.
  • #1,658
  • Jun 1, 2010 12:01am Jun 1, 2010 12:01am
Bats come out at night, and there's a potential sell in the Euro at 1.2284. Much in line with the patterns described at the beginning of this thread.
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  • #1,659
  • Jun 1, 2010 12:21am Jun 1, 2010 12:21am
Quoting medici
Bats come out at night, and there's a potential sell in the Euro at 1.2284. Much in line with the patterns described at the beginning of this thread.
That worked like a clock. Target at 1.2210.
  • #1,660
  • Jun 1, 2010 12:56am Jun 1, 2010 12:56am
GM - just a quick note that I'm seeing a bearish gartley on this TF with the "sell box" enclosing both the MS1 at 2287 and with the 2300 / DP right at the top......having taken an early buy, I'm watching the PA on my 1 min chart....
Trading Levels with WRBs
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