Circular Trendlines

Another view incorporating some Elliot Wave counts. Also notice that we need a strong upward bounce off the pole of the blue circle, which is not happening. This is creating opportunity for the pole of the red circle to push price more downwards. So if the blue circle does not push upwards, the red circle will push downwards.

very beautiful - I wondered if my Mt4 have circle for drawing - btw is it accurate sir ?


Thanks

The whole point is trying to draw the circles to make accurate judgements as to direction,

but at time its very tough, but overall its a great tool,

If you continue using it and fine tunning it you will find better entries with more accurate targets.

However like all other tools it has its limitations

Hello Kambooj

Thanks for the replied,
Where can we find this circle tool in our Mt4 ?


Thanks

Its the fibonacci arc tool modified to draw circles, I have pictorial settings on my very first post on how to do this

As long as we stay above 3500 we are in bullish territory going towards the 3800 zone.

Here is the view...

Hello Kambooj,

That's quite an interesting way of looking at price movements. A little more abstract than using linear methods. Looking at the examples you have posted and you interpretation of movements INSIDE the circle made me make a mathematical connection.

So we know that fib levels are derived from the golden ration 'ф' (fi). But what makes circle even more interesting is 'п' (pi). п is far more significant (and more interesting than ф and occurs in nature much more than ф. Also when you get into circles during early math education, п will be occurring in math for the rest of your math career all the way to PhD level and beyond...

So how is п significant in price movements and circles? Well, think of the unit circle. Starts at 0 and 180 degrees of that is п. So a little modification is needed here since price is moving left to right. In this case the left side of the circle will be 0 and the right side is п. In most cases price enters around the 0 level and it has 2 choices, whether it is uptrend or downtrend. In the uptrend scenario, price moves from 0 to п/2 and makes a touch somewhere along the 0-п/2 arc. So the circle would have an entrance point at 0, touching around the п/4 mark and then touching 1 or 2 times around п/2 then I've noticed it goes down "looking for п". So if we could represent price as a function of time P(t) and take the limit of P(t) as 't' goes to infinity, we would get п (according to the observation). So when price hits the п/2 area it will most likely go down, of course if we have the "right" price action and S/R levels, since there is no 100% certainty in trading. Same goes for a downtrend, just use negative numbers (-п/2, -п...).

Not sure how clear I made this. I just thought if it on the spot when I observed these circles and how price behaves in them. And as you can see, I am quite a big fan of mathematics, so I tried to make the connection . So if anybody agrees/disagrees, finds this interesting/stupid, let me hear your opinion.

Have a nice pipping!

I completely understand what your point is, and as a matter of fact In my profile page, I have a picture of Yin/Yang symbol with 4 arrows.

The concept beside it is that price action has duality of nature. In every high there is a low and in every low there is a high. The arrows that encompass the circle start from your point of "0" that you have mentioned, and they go to Pi/2 and from Pi/2 they go to Pi.

The reason that Pi/2 is very important is because the strength of the resistance/support increases from 0->Pi/2 in any direction, and again it decreases from Pi/2 to Pi. Pi/2 has the strongest resistance and support in any direction.

Thats what I tried to show in the circle with the 4 arrows. Now if you can figure out a formula where you can tell the strength of a circle and assign values to the Pi/2 regions/the whole circle through a mathematical formula, you have made a huge discovery. The reason is that then you can assign number values to each circle based on their radius, perimeter, touch points etc.

These number values will tell you that when you are in between 2 circles going back and forth, how many touches does it take to break either one and which one will break and how severe is the break.

I can tell you that this is probably one of the biggest missing pieces in this concept of "Circular Trendlines" and if somebody can figure it out through a formula they have so much more to write a book about it.

Circles have strength and can be assigned values in accordance to them. Normal straight trendlines dont have "Regions" and thats what makes it more difficult than circles to say how strong a point is.

Outlook remains uncertain right now, just because of price action not moving very much away from the pole region of the red circle

In a previous post:

http://www.forexfactory.com/showthre...46#post5143046

It was mention about the possibility of further down move toward 5500 zone. As long as we dont have a strong bounce upwards that will go to the red straight trendline, we will continue to go downwards. The 5500 zone as shown in the diagram is a strong turning point

Here is the view for today. More upward movement till 3630-3650 zone, recommendation is to buy at the lows of 3500

The EUR has to generate a good size thrust in order to keep itself above 3550. If it does so then 3630 is a given

Here is a different view from M15...

Here is the view, current sentiment is upwards towards 5700 level

We are still in Buy mode, even after the drop to 3480 zone. As long as the pole of the blue circle is holding tight, which in this case it is, and as long as the black curve on the 1 hour chart here:

http://www.forexfactory.com/showthre...52#post5156652

has not been hit, we are going upwards. Every dip down is a buy opportunity.

The perimeter of the red circle at 3580 is the first target followed by 3630-3650 zone.

Since the EUR has broken a important support level as shown by the red curve, but its still within sustainable support zone shown by the black straight line, all short positions will still be on hold.

There is another additional point to consider which is the fact that at 3373 we are exactly at the 78.6 retracemetn level of the entire rise from 3150 to 4200 level.

This will put additional complication on going short at this level, and poses the question of a false break of the red curve.

Since a pole break ususally travels a sustainable distance, and this one has not, again it adds another level of caution to this whole scenario

My own recommendation is to stay out at this level to see whether we will climb back inside the red curve.

If we do, then recommend putting pending orders for going long, otherwise if momentum carries downwards the way its doing now, pending orders for sell below 3370 level are a good choice too.

Thank you for your diligence Kambooj, much appreciated.

Just as a matter of interest, why do you make us e of 78,6 Fib please? Surely it should be 76.4%? Just curious, but as I was trained by one of the great Fibonacci protagonists, I need to know why you have chosen 78,6 and whether I need to change my thinking too.

Thank you for replying.

This pair is facing the same uncertainty as the EUR, its at a critical support where the red curve is located, and there is possibility of a strong bounce upwards, on the flip side of it, if it breaks that level, it will seriously dive down to the support level of the blue curve. The smaller time frames such as M5 are also not giving enough information as to the direction of this pair at the current moment. So all hands off trading this pair as well for now

76.4 is not a true fibonacci number its 2 x 38.2

The true one is 78.6 which is
(1/PHI)^0.5

which is

(1/1.618)^0.5 = 0.786

Although its used a lot, but I use 78.6 and 88.6

(1/1.618)^0.25=0.886

Also 1.618 ^ -1 = 0.618 = 1/1.618

All the true ones are PHI to the power of something ie PHI ^X
They are not multiples
However multiples are used too, and they give good approximations