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Using WM/Reuters Benchmark Rates in trading

  • #121
  • Feb 12, 2015 1:56pm Feb 12, 2015 1:56pm
Quoting GreatNorth
Update on the 1Minute Chart (I'm using 1Minute so you can see that all the bounces today have occurred at 85.4/14.6 and 38.2/68.1 From this chart after hitting the 1.14097 Fib this morning it retraced exactly down to the 61.8 and rebounded. This is for the EURUSD. {image}

Hi GN,

Thanks for showing your way of using/drawing fib lines. Helps me a lot.
I have been drawing fib lines on the EU chart from the initial value you mention in post 1.
Interesting to see how price behaves at those levels.

Still have a few questions if you don't mind.

When you draw a fib level in a fib level, you always draw the lower fib levels between two higher fib levels? Draw new serie of lower fib levels between i.e. a 38.2 and an 61.8 level, is that the correct way?

Just noticed in this last EU chart you draw the fib levels the other way, any reason for that?

Wondering if price will bounce at that 85.4 level. (also happens to be my H5 Camarilla pivot level of today........)
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  • #122
  • Feb 12, 2015 2:00pm Feb 12, 2015 2:00pm
Quoting msiamd
{quote} Hi GN, Thanks for showing your way of using/drawing fib lines. Helps me a lot. I have been drawing fib lines on the EU chart from the initial value you mention in post 1. Interesting to see how price behaves at those levels. Still have a few questions if you don't mind. When you draw a fib level in a fib level, you always draw the lower fib levels between two higher fib levels? Draw new serie of lower fib levels between i.e. a 38.2 and an 61.8 level, is that the correct way? Just noticed in this last EU chart you draw the fib levels the...
It's a mirror really in the sense that 100-85.4=14.6 and 100-14.6=85.4 So it doesn't really matter what order you choose 0 and 100. Even 68.2/38.2 and 23.6/74.6 are mirrors. I hope that makes sense.

This time of day is low volume, so I don't usually trade now. I think it will hover around this level for a little while.
  • #123
  • Feb 12, 2015 2:03pm Feb 12, 2015 2:03pm
Quoting GreatNorth
{quote} I don't think this thread is beneficial to your trading style. Thanks for your posts though. Have a great day. :-)
I think you are right. Not so much about thread title.

Good trading though.
  • #124
  • Feb 12, 2015 2:25pm Feb 12, 2015 2:25pm
GreatNorth, is this chart two fib levels deep?



Quoting GreatNorth
Update on the 1Minute Chart (I'm using 1Minute so you can see that all the bounces today have occurred at 85.4/14.6 and 38.2/68.1 From this chart after hitting the 1.14097 Fib this morning it retraced exactly down to the 61.8 and rebounded. This is for the EURUSD. {image}
  • #125
  • Feb 12, 2015 2:30pm Feb 12, 2015 2:30pm
Great North from where do you draw your charts 1,15-1,34?? EURUSD
  • #126
  • Feb 12, 2015 3:39pm Feb 12, 2015 3:39pm
Quoting SunTrader
{quote} I think you are right. Not so much about thread title. Good trading though.
Agreed. Of the professional traders I have met, no one places trades in any manner that is remotely similar to this thread.

And for "Good trading", I do not see any trading. I see lines randomly place on charts with no entries, no exits, nothing.
Small disciplines repeated with consistency lead to great achievements.
  • #127
  • Feb 12, 2015 3:57pm Feb 12, 2015 3:57pm
Hi GreatNorth

Your statement: 2. Fibonacci levels are 0, 14.6, 23.6, 38.2, 61.8, 76.4, 85.4 and 100 (There is NO 50%)

Questions and observations, as I understand them, are submitted respectfully and not meant to question the validity of the method. More a curiosity
For full dis-closer I like and use FIBs in my Supply/Demand trading....(with a specific set of rules to determine where the Zero and 100 points are as they relate to S/D Levels). I find your starting points interesting piece to the puzzle.

61.8 percent
This level is found by dividing a number in the
Fibonacci sequence by the number immediately following it in the
sequence (55 ÷ 89 = 61.8%).

38.2 percent
This level is found by dividing a number in the
Fibonacci sequence by the second number following it in the
sequence (34 ÷ 89 = 38.2%).

23.6 percent
This level is found by dividing a number in the
Fibonacci sequence by the third number following it in the sequence
(21 ÷ 89 = 23.6%).

**The second set of levels are not calculated using numbers within the Fibonacci sequence, they are based on a derivative of the Fibonacci levels above:

14.6 percent
This level is determined by finding the distance from
38.2 percent and 23.6 percent (38.2%- 23.6% = 14.6%)

50 percent
This level is determined by finding the middle between
61.8 percent and 38.2 percent ((61.8% + 38.2%) ÷ 2 = 50%).

76.4 percent
This level is determined by adding 61.8 percent to 14.6 percent (61.8% + 14.6% = 76.4%).


As we can see the 14.6%, 50%, and 76.4% would all be considered a derivative as they are calculated based on a division of the percentage % levels and not the sequence.

We see the 23.6%, 38.2%, and 61.8% levels are a calculation of division as well but, are derived from the actual FIB number and not its percentage.

My question is why not the 50% as one could argue the 14.6% and 76.4% have a derivative calculation of the percentage? Could it be that a 50% retracement is just way to obvious !!


In the end all are distance calculations...

Good trading to all

TSD
  • #128
  • Feb 12, 2015 4:19pm Feb 12, 2015 4:19pm
I'm testing this method adding intralevels fibo ( between 2 main levels ) and seem very effective... Only doubt is what other reference you use for know if that possible swing level ( 14,38,61,76 ) can reverse price. PA only?
Try don't lose pants never...
  • #129
  • Feb 12, 2015 5:09pm Feb 12, 2015 5:09pm
Quoting TraderinSD
Hi GreatNorth Your statement: 2. Fibonacci levels are 0, 14.6, 23.6, 38.2, 61.8, 76.4, 85.4 and 100 (There is NO 50%) Questions and observations, as I understand them, are submitted respectfully and not meant to question the validity of the method. More a curiosity For full dis-closer I like and use FIBs in my Supply/Demand trading....(with a specific set of rules to determine where the Zero and 100 points are as they relate to S/D Levels). I find your starting points interesting piece to the puzzle. 61.8 percent This level is found by dividing...
Hi,

I'm glad this is helping fill in part of the puzzle.

As for the calculations I calculate the levels as per the method below, which allows for the 76.4 and 14.6 levels.

61.8 is derived by dividing any number in the sequence by the number that immediately follows it.
38.2 ratio is found by dividing any number in the sequence by the number that is found two places to the right.
23.6 ratio is found by dividing any number in the sequence by the number that is three places to the right.
14.6 ratio is found by dividing any number in the sequence by the number that is four places to the right.

.618 = ((1+Square root of 5)/2)^-1
.382 =((1+Square root of 5)/2)^-2
.236 = ((1+Square root of 5)/2)^-3
.146 = ((1+Square root of 5)/2)^-4

This method does not allow for the 50% level and in my trading experience the price action doesn't respond to those levels. You can see whether the 50% level works for you.

I am including a daily chart to show how price behaves at 38.2 and 61.8, but not at 50.


http://en.wikipedia.org/wiki/Fibonacci_retracement
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  • #130
  • Feb 12, 2015 5:10pm Feb 12, 2015 5:10pm
Quoting braintheboss
I'm testing this method adding intralevels fibo ( between 2 main levels ) and seem very effective... Only doubt is what other reference you use for know if that possible swing level ( 14,38,61,76 ) can reverse price. PA only?
Yeah, just from PA and from studying the charts.
  • #131
  • Feb 12, 2015 5:30pm Feb 12, 2015 5:30pm
Update on USDJPY 1Minute Chart

You can see how the both charts shows 38.2 acting as resistance, then it finds support at 14.6 and them moves all the way up to 85.4 before retracing back down to 38.2 where it bounced and where we are.
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  • #132
  • Feb 12, 2015 5:35pm Feb 12, 2015 5:35pm
Quoting forexdave1
GreatNorth, is this chart two fib levels deep? {quote}
Yes, those are.
  • #133
  • Feb 12, 2015 5:44pm Feb 12, 2015 5:44pm
Quoting GreatNorth
{quote} Update on the AUDUSD 5M chart and 1M Chart from this morning. Without these levels you would not know that there is 38.2% Fib at .77736. The days price hit that level, overshot by 4 or 5 pips and is retracing on the 14.6 Level. Easy! {image} {image}
Update on the AUDUSD Chart

This is a 5M chart. Without the WM/Reuters Benchmarks as Fibs you would be trading blind and not know that .77257 is a strong R and as you can see Price has touched that level and gone up +25 or so pips.

This is when the London, Europe, and North American markets are closed. When volume is low. Surprisingly, PA still is very tradeable in non peak trading hours.
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  • #134
  • Feb 12, 2015 6:07pm Feb 12, 2015 6:07pm
Quoting GreatNorth
{quote} Update on the AUDUSD Chart This is a 5M chart. Without the WM/Reuters Benchmarks as Fibs you would be trading blind and not know that .77257 is a strong R and as you can see Price has touched that level and gone up +25 or so pips. This is when the London, Europe, and North American markets are closed. When volume is low. Surprisingly, PA still is very tradeable in non peak trading hours. {image}
Update on the 1 Minute chart for the recent upmove in the last 20 minutes.

Price moved straight up to the 85.4 level right to the pip and retraced!!

It's now paused at 61.8.

WM/Reuter Benchmarks are clearly used for trading as you can see with the AUDUSD Price Action.
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  • #135
  • Feb 12, 2015 6:11pm Feb 12, 2015 6:11pm
Quoting GreatNorth
Update on USDJPY 1Minute Chart You can see how the both charts shows 38.2 acting as resistance, then it finds support at 14.6 and them moves all the way up to 85.4 before retracing back down to 38.2 where it bounced and where we are. {image} {image}

Updated chart.

Price is consolidating at 14.6% level!
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  • #136
  • Feb 12, 2015 6:48pm Feb 12, 2015 6:48pm
Quoting GreatNorth
{quote} Updated chart. Price is consolidating at 14.6% level! {image}
What is the 100 and 0 levels for this chart.Thanks
  • #137
  • Feb 12, 2015 8:39pm Feb 12, 2015 8:39pm
Thanks, GN ... . Never thought of using .146 and .854.

Any thoughts on whether certain currencies are more amenable to these levels? My gut feeling is that Yen crosses tend to be more sensitive to numerical levels (particularly psychological ones), but haven't really looked at that in detail ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #138
  • Feb 12, 2015 8:51pm Feb 12, 2015 8:51pm
Quoting ZebraSquirl
Thanks, GN ... . Never thought of using .146 and .854. Any thoughts on whether certain currencies are more amenable to these levels? My gut feeling is that Yen crosses tend to be more sensitive to numerical levels (particularly psychological ones), but haven't really looked at that in detail ... .
I also notice that Trading Station doesn't have .146 and .854 as options ... .

Anyone know of an MT4 indicator at which you can custom set custom Fib levels?
Fireworks are fun ... as long as you don't blow your fingers off.
  • #139
  • Feb 12, 2015 9:35pm Feb 12, 2015 9:35pm
Quoting ZebraSquirl
{quote} I also notice that Trading Station doesn't have .146 and .854 as options ... . Anyone know of an MT4 indicator at which you can custom set custom Fib levels?

The fibonacci tools that come with MT4....
  • #140
  • Feb 13, 2015 12:22am Feb 13, 2015 12:22am
I like this thread. Fibs are awesome when you need to see levels in which to eye as areas of opportunity or targets. Past price levels are very important too. AquilineFX is the only person to mention what all these charts lack, and that's consideration of Econ News and sentiment. Not one opinion proves or disproves a level due to news release pop. Before trading FX for profit your first observation should be the days calendar of events. Then look at your price levels and find opportunitys and targets. Oh and BTW there are many other things like trend and etc... But exploiting the news and sentiment is the easiest way to paying yourself weekly. Zoom your charts out, specialize in three pairs, you'll get on top of this in no time.
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