Archive for March, 2009
NEWS: EUR 5:00 AM est CPI Flash Estimate
CAD 8:30 AM est GDP
USD 10:00 AM est CB Consumer Confidence
JPY 7:50 PM est Tankan Manufacturing Index
A UD 8:30 PM est Building Approvals, Retail Sales
EUR/USD continued to sell off after breaking out of the consolidation pattern late last week and found support near the 20 day MA for the final low of the day at the weekly pivot. IF price is to continue to sell off on Tuesday, the next possible support is the 1.3100 level which is also the high from last month. The next possible support is the monthly pivot at 1.3000. IF price retraces from the steep sell off, watch for strong potential resistance beginning at 1.3340 then at 1.3424.
GBP/USD sold off at the beginning of the trading session and Sunday night then found support at the 20 and 50 day MA’s and rallied for the rest of the day. Price could also be ready for a correction to the long side after last week’s strong sell off. If price does rally, watch for possible resistance at the next major fib levels, 1.4365 (light resistance) and 1.4444 (strong possible resistance!) IF price sells off again, 1.4079 is the next long term 62% fib retracement and 1.3963 is a fib target for potential support.
USD/JPY sold and trended down strongly at the opening of the London session then found support at the next major 50% fib retracement at 96.20 and rallied up strongly for the rest of the day. The next major retracement level is the 62% at 95.57 for strong possible support at the monthly pivot at 95.00. If price rallies on Tuesday, watch for price to test the top of the long term trend line for possible resistance at 98.85!
USD/CAD exploded up on Monday, continuing the rally that began mid last week and found the high of the day, currently, at the 20 day MA where price is currently residing. IF price extends the rally, the next potential strong resistance is 1.2730-1.2750, then at 1.2814 (fib target.) If price sells off, use the next current fib retracements from last week’s low and this week’s high for the next support levels. Currently, they are 1.2500 and 1.2456.
USD/CHF broke out of the sideways consolidation pattern during most of last week and continued the rally on Monday on low volatility then found resistance for the highs of the day at the 20 day MA. IF price continues the rally, 1.1658 should be a strong possible resistance cluster and 1.1697 is the next fib target cluster for potential resistance as well. IF price sells off, watch for 1.1400 and 1.1360 for support for potential countertrend opportunities!
Happy trading
Tags: 31, daily, march, plan
Introduction:
The Fibonacci levels are a very powerful tool in trading forex. They can be traded in isolation or in combination with other signals, for example candlestcks, indicators or chart patterns. In this book we wil use confirmation signals for entry and exit points.
Buy setups include bullish engulfing candlestck, morning star, tweezer bottom, double bottom and a break of the high of an inside bar. Sell setups include bearish engulfing candlestck, evening star, tweezer top, double top and a break of the low of an inside bar
The methodology wil be demonstrated using real examples using charts and explanations.
One can apply these methods on any tme frame from 5min charts through to weekly charts.
When puttng Fibonacci levels on the charts, one must look back on each tme frame for significant highs and lows. his may involve looking back days and even weeks. here are traders trading all the different
me frames so Fibonacci lnes drawn on weekly or monthly charts wil affect the market. Convergence of different Fibonacci levels may occur from levels placed on the different tme frame charts. Where convergence occurs, the levels become more significant. It is important to look for convergence with Support and Resistance Levels and Trendlines
Fibonacci Retracements
Retracement trading is safer than breakout trading .he main levels to watch are:
38.2%, 50%, 61.8% and 78.6%. (or 76.4%)
The market wil typically retrace after a strong move before continuing .The market won’t always hit these levels exactly. For example, price may reverse mid way between 50% and 61.8% sometmes. Price can under shoot or over shoot a Fibonacci level .The 61.8% and 76.4% retracements are very popular levels for the market to retrace to. Watch these levels on the different tmescales. It is best to wait for a confirmation signal at or close to point C before entering a trade. The difficult part about trading Fibonacci retracements is knowing which level wil hold.
For a buy, price should rise from a swing low at point A to a swing high at point B and retrace to
point C at a Fibonacci level. A swing low is a C bar turning point .The low of the middle bar is the lowest
point of the swing.
For a sell, price should drop from a swing high at point A to a swing low at point B and retrace up to point C. Look for intra day highs and lows, daily highs and lows, 2 day highs and lows and 3-5day highs and lows etc.
Candlestck patterns are most relable near Fibonacci levels and other support and resistance lnes. Candlestcks are also good for signaling the end of a retracement.
Double tops and double bottoms often appear at Fibonacci levels e.g. 61.8% retracement or the 1.382% extension.
Example of a Sell setup a lot more here short trades
Example of a Buy setup and a lot more >> long tardes
Fibonacci Extensions, Expansions or Projections,
Target point D (Profit Objective) and retracement pont C can be calculated by measuring the number of pips from point A to point B and multplying by the factors below:
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Fibonacci Target
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Formula for points CorD
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38.2%
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(B-A) x 0.382-B = C
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50%
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(B-A) x 0.5 – B = C
|
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61.8%
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(B-A) x 0.618 -B = C
|
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78.6%
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(B-A) x 0.786 – B = C
|
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100%
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(B-A) x A + A=D
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127%
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(B-A) x 1.27+ A=D
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161.8%
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(B-A) x 1.618+ A = D
|
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200%
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(B-A) x B + A = D
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261.8%
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(B-A) x 2.618+ A=D
|
Most charting software has these extensions available so calculations are not needed.
For a retracement, left click on point A, drag the lne to point B, then release the mouse. For an extension (projection), left click on point B, hold, and drag the lne to point A and release.
Commonly, 61.8% retracements go to at least the 161.8% projection. Sometmes the 100%, 200% and 261.8% extensions come into play.
A lot of money has been made using the ABCD (also called 1234) patterns using retracements to enter and extensions to exit. Enter near point C and exit at point D.
The best way to determine whether a move is a pullback (retracement) or not is to determine whether the price is moving in the direction of the main trend. If the price is moving against the main trend watch for reversals at the 38.2%, 50%, 61.8% or 78.6% Fibonacci Lines. Sometmes the price wil consoldate at one or each of the levels before continuing. Hence it is important to wait for a confirmation signal before re-entering in the reverse direction.
The chart below ilustrates this. In the move down from A the GBPUSD consoldated at B the 38.2% retracement. Note there is no reversal signal here and that the GBPUSD then continued retracing until it reached the 61.8% level. Here there is a Morning Star Candlestck Pattern and a Support lne providing a reversal signal at point C and convergence with 61.8% retracement.
Tags: fibo, fibonacci, levels, trading
I put limit buy order on 38.2% of move as You should know it’s fibonacci numeber . IF You follow my blog You should know that i trade with 30 pips SL. So lets analysis this trade. Trend on 4h it’s strong up. See chart below.
So You see nice spike up and then pound is pulling back to 50% or 38.2%. Putting limit buy order on 50% or 38.2% is not that smart becouse it’s preaty big move and You have to use large SL that i’m not interested in. So when i see move around 100 pips than i weited for pullback down and get in on 38.2% of 100 pips move. chart below.
My order had been activated at first circle and at second i manualy got out. So i took 40 pips profit
Tags: buy, gbp, gbpusd, long
Buys
USD/CHF
Lightly buy 1.1330 and aggressively 1.1300
GBP/USD
May reverse tomorrow. Buy breakout of 1.4350 up to 1.4450 where it may stall
USD/CAD
Buy breakout of 1.2450, may stall at 1.2465
AUD/USD
Under .6943 look for shorts down to .6800
Sells
GBP/JPY
Sell 141.75 to 142.06 and 142.75
NZD/USD
Sell .5750
CAD/JPY
Sell 79.66 to 80.00
USD/JPY
Sell 99.00
EUR/USD
Sell 1.3450 and aggressively 1.3500
AUD/JPY
Lightly sell 68.31 and aggressively 68.50 to 68.59
EUR/CAD
Lightly sell 68.31 and aggressively 68.50 to 68.59
EUR/GBP
Sell .9350
NZD/JPY
Sell 56.50
EUR/JPY
Sell 131.74 to 132.27
Tags: 30, levels, march
The Fibonacci series of numbers are
1 , 1 , 2 , 3 , 5 , 8 , 13 , 21 , 34 , 55 , 89 , 144 ,…
The numbers are calculated simply by adding the two previous numbers together.
E.g. 3 + 5 = 8
5 + 8 = 13
8 + 13 =21
etc.
In forex, the Fibonacci ratios are used extensively to calculate targets for exit points and entry points for trades. These Fibonacci levels are relable as a large number of professional traders use them, and when this happens the traders, in mass, drive the prices to these levels.
Let’s look at how the ratios are derived
Take four sequential Fibonacci numbers
Eg 13,21,34,55
By dividing one number with another we get the ratios.
13/21 = 0.618 or 61.8%
34/55 = 0.618 or 61.8%
34/21 = 1.618 or 161.8%
55/34 = 1.618 or 161.8%
21/55 = 0.382 or 38.2%
13/34 = 0.382 or 38.2%
The square root of 0.618 = 0.786
And the square root of 1.618 = 1.27
In Forex trading the key Fibonacci ratios are
0.382 38.2%
0.50 50%
0.618 61.8%
0.786 78.6% (76.4% is used on Metatrader charts 38.2 x 2 = 76.4% and 1- 34/144 = 0.764) (Price often bounces off an exact 76.4% retracement level and 76.4 is being mentioned by various forex brokers)
1.382 138.2%
1.618 161.8%
2.618 261.8%
On my blog You can find a lot of examples that this numbers works very well. Why? It’s simply the biggest traders use this numbers and it couse the moves.
Tags: fibo, fibonacci, fibs, introduction, number, numbers
NEWS: GBP 5:30 AM est Current Account
USD 8:30 AM est Personal Spending / Personal Income
9:55 AM est Revised UoM Consumer Sentiment
EUR/USD rallied again up to the top of a long range consolidating channel and found resistance for the highs of the day then sold back off into the range. IF price remains in the channel on Friday watch for possible support at approx. 1.3420 as the bottom of the channel and near the lows of the week. The next possible support is the next 50% retracement of 1.3332. If price rallies, 1.3651 is near the highs of Wednesday and Thursday and may again offer resistance. The next possible resistance is 1.3738 as the highs of last weeek and current monthly high.
GBP/USD sold off through support and made new weekly lows as price is also in a slight downward channel and appears to have a short bias correction after the recent two week rally. Price is still over the 20 and 50 day MA but if price drops, the next possible support is 1.4350 as the next major 38% retracement and 1.4300 (weekly pivot and whole number / fib target.) If price reverses and rallies, watch for possible resistance at 1.4600 and 1.4644 as the current fib retracement levels from the weekly high/low. IF PRICE makes a new LOWER LOW then 1.4425, then disregard the fib retracement levels and recalculate them with the new low!
USD/JPY found support at the 20 day MA and rallied to make new weekly highs and is currently testing the current monthly highs for resistance. If price continues to rally, the next possible resistance is 99.76 and 100.50* (fib target and fib target cluster.) IF price finds resistnace at the monthly highs and sells off on Friday, 96.92 is Wednesday’s low and 96.21 is near the CURRENT 50% fib retracement and weekly pivot for the next potential support!
USD/CHF has now bounced from the 200 day MA for multiple days in a row and bounced strongly each time. Price has been in a sideways consolidating channel after the huge sell off last week. IF price sells off again, the 200 day MA near the 1.1180 is also a monthly pivot and may again offer support but be cautious for price to possibly break the support due to the amount of times this zone has beentested previously. If price rallies, 1.1400 is the previous monthly low and was strong support and nowshould provide some sort of resistance if the USD/CHF manages to test this level on Friday.
USD/CAD has also been in a sideways channel for the entire week and been generally non volatile so watch for a chance to buy the breakout of 1.2329 and possible sell the breakdown of 1.2275 as these are the close to the top and bottom of the channel and may provide an opportunity to catch the breakout moves. Thursday should also close as an NR4 inside day which usually precedes a large breakout type day with fairly strong trends so keep an eye out!
Happy trading
Tags: 27, daily, march, review
I put sell limit order on GBP/USD on 50% fibs with 30 pips SL and i took 50 pips profit on this trade. I put this limit order becouse pound made a new lower low so first conformation of a new trend or depper pullback. I also mark on the chart below whrere You can search for potencial buy area on fibs extansion witch is also fib cluster zone. I insert into the post hourly chart so You can see more . When You don’t have new lower low i remended to trade on 38.2% or 23.6 %.
Tags: gbpusd, sell, short, trade, trend
NEWS: GBP 5:30 AM est Retail Sales
USD 8:30 AM est ** Unemployment Claims **
NZD 5:45 PM est Trade Balance / GDP
EUR/USD double bottomed at the weekly lows and rallied strongly for the rest of the day after a home sales report was released which resulted in the weak USD. Price is still in a slight downward sloping channel and the high of the day was ultimately at the top of the channel. IF price continues to rally, watch for the daily highs and weekly highs of 1.3650 and 1.3738 as potential resistance. IF price sells off, 1.3430 is the long term 38% fib retracement and near the low of the day on Wednesday, then 1.3335 as the next 50% fib retracement for the next possible support levels.
GBP/USD sold off to last weeks high’s and tested this level now for support near a weekly pivot and 1.4500 whole number. Price is over the 20 and 50 day MA’s but may be ready for a correction to the short side. IF price does sell off, watch for possible support at 1.4420 and 1.4310 as the next major fib levels from last week’s low to this week’s current high. IF price rallies, the next possible resistance is the current weekly high of 1.4778 and the next monthly pivot of 1.4846.
USD/JPY sold off again as price found resistance just above the 20 day MA and a major trend line. If price continues to sell off from this momentum on Thursday, 97.00 and 96.64 are the next fib retracement levels which may act as support. Watch for possible resistance from 98.57 to 99.00 which represents a strong resistance cluster and may present potential countertrend opportunities.
USD/CHF rallied to double top at the weekly highs and sold off sharply on USD news to find support at the 200 day MA again which has held price since middle of last week. IF price manages to sell off below this level, you may attempt to sell the break down but be cautious of false breakouts. IF price rallies, the current weekly highs in the 1.1325 zone may again provide resistance.
USD/CAD also sold off strongly after USD news but managed to rally in the afternoon and double top at the daily highs. Price is still below the 20 and 50 day MA’s but could be ready to rally after finding support at last week’s low on Monday of THIS week. IF price sells off, this level at 1.2193 and last MONTH’S low of 1.2134 may act as strong support! IF price rallies, 1.2436 is a monthly mid-pivot and 1.2471 is the next major 50% retracement which could be resistance!
Tags: 26, march, plan, review
NEWS: AUD 3:30 AM est RBA Gov Stevens Speaks
EUR 5:00 AM est German Ifo Business Climate
GBP 7:00 AM est CBI Realized Sales
USD 8:30 AM est Core Durable Goods Orders
10:00 AM est New Home Sales***
NZD 5:45 PM est Current Account
EUR/USD managed to sell off slightly below the sideways consolidation channel that had contained price since last Thursday. Price is now testing this previous previous support as resistance as price bounced from the bottom of the lower quartile of the channel. This may indicate that price is ready to sell off tomorrow or at least have a short bias especially if price can break down below the monthly pivot. Watch for possible resistance at the weekly high of 1.3738, BUT IF this level is broken, watch for an opportunity for long entries, such as a breakout and sell back to this level to test for support! If price does sell off as expected, 1.3340 is a fib retracement and 50% fib level , then 1.3242 is the next major fib level which may both offer support!
GBP/USD rallied up through resistance and made new 10 day highs and has come back down to the previous resistance and has tested for support several times and held each time so far. IF this level holds and price rallies, 1.4846-1.4886 is a resistance cluster and 1.4984 is last months high for the next higher potential resistance levels. IF price sells back off below 1.4648 then the next possible support is 1.4535 for light support (62% retracement) and 1.4450-1.4418 as strong possible support.
USD/JPY rallied up to the 20 day MA and sold off towards late Tuesday night as price also hit the top of a long term trend line which may reverse price to the short side on Wednesday. If price does sell off 97.00 and 96.64* are fib retracement levels with 96.64 being a fib retracement cluster which could be strong support the 1st time tested as long as the FX multimaps and FX power index are not at their extremes. IF price rallies, 98.71 is the beginning of the next resistance cluster and trade zone for strong potential resistance as price has failed near this level multiple times already.
USD/CAD sold off to double bottom at last week’s lows then rallied for the remainder of the day indicating that price may be ready to rally on Wednesday or for the remainder of the week. IF price rallies, the next possible resistance is 1.2406 and 1.2465 (38% fib retracement, weekly pivot/50% retracement.) IF price sells off, watch for the currently week low to again offer support as price has bounced from this level heavily before BUT IF price drops through this level, be prepared to short the break down as this may trend down extremely heavily as many stops are likely to triggered!!
USD/CHF for the 4th day in a row tested and failed at the 200 day MA as price is now in a sideways consolidating channel after the massive sell off from mid last week. There is a slight long bias so be prepared for price to potentially breakout of the consolidating channel and correct itself after the huge sell off previously mentioned. IF price rallies over 1.1340, this may be a great chance for a long entry by buying the breakout, but be cautious for false breakouts! The next possible resistance is 1.1140-1.1467 and 1.1561* (fib retracement levels and combinations of monthly and weekly pivots.)
Tags: 25, march, review
So today i took nice short with 30 pips SL. I get in on the last fib retracement 23.6%
Why?
For me first sign of changing trend is fib extansion not hit (138.2%)
Nice downside move then retracemnet to 23.6% of move, trendlinebreakout on m1 and jump in.
Market sell 1.4738 SL:1.4768 TP:no + 68 pips gain
M15 chart GBP/USD
below You’ll see how i get in and get out on one minute gbp/usd chart
So i get in on fisrt circle after trendline breakout on 1 minute chart and i put 30 pips SL than i has been waiting my SL get hit or grab some profit. If I use 30 pips Stop loss profit of 70 pips is OK for my.
Tags: gbpusd, sell, short