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The confidence of a TARGET trader

 
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vesskrastev

The confidence of a TARGET trader

I moved relatively fast from scratch to Gold 1 - it took 6 months, but for 2 of them I was basically inactive. Thanks to the Beeline I learned so much, but if I have to summarize it, basically I learned a good way to find an Entry point for a trade. My problem was finding the appropriate Exit point. That problem was solved when I encountered the TARGET trading. It is based on the knowledge that 76% of the traffic on Forex is controlled by the top 15 institutional players (the Big Boys). Each one of their traders trades only one currency, and is a great specialists in that area - they know everything about that pair. That trader operates with 20,000 standard lots. It takes 35 million dollars to move the EURUSD for a half of a PIP during the New York session, and we know that they initiate moves of tens or even hundreds of PIPS. These institutional traders are after yours and my money - daily 400 billion dollars come to Forex from retail traders (their way of saying traders like you and me). 90% of the retail traders loose their money - that is why we strive to learn and to be among the other 10%.

The only way to be a successful trader is to figure out what the Big Boys are doing and to do the same (in the crypto space the Big Boys are called whales). The Big Boys (these same top 15 institutional players) create the structure of the market. When you look at a 4 hours chart, you can see how everything looks a lot more reasonable and organized. That is so because the Big Boys trade on the 4 hour charts and they enter and exit the market on the 60 min charts. Everything below 1 hour chart does not exist for them. They trade without stops and without days off - includung Saturdays ans Sundays. One Big Boy cannot accomplish his task alone and they need the cooperation of the rest. They cannot communicate openly with one another (the result will be a prison time) and therefore their language is the candles on the charts. There are two main pillars in that language - Fibonacci's ratios and Elliot Waves. Another major part in the language are the former Support/Resistance levels. Obeying the Fibs, the Elliot waves, and the support/resistance, is necessary in order for them to communicate their intentions to the other Big Boys. Of courrse, Big Boys fight with other Big Boys - one needs to move the currency cross higher, while the other needs it lower, and vice versa. But they are not in a hurry, form temporary alliances, and at the end accomplish their goals. A Big Boy cannot enter a trade with a target less than 55 PIPs. As opposed to them we can trade for 34 PIPS, or even 21 PIPs (smaller Fib numbers). The targets of the Big Boys are prices which correspond to Fib levels, or the side lines of the trends, boxes, etc. The former Support/Resistance levels are very important - they are the obstacles on the way to the targets. The first time when price reaches former Support/Resistance, it bounces off that barrier. After that price comes back and goes through it. After the barrier is removed in such a way, then a big open space appears until the next Fib level - and they love it, they poor money into it and we see how price quickly covers 55, or 89, or even 143 PIPS.

Deciphering that complicated chart language allowes us to understand the intentions of the Big Boys and to syinchronize ourselves with their actions. Playing along with the Big Boys is the only way to be successful on a long term. It does take a long time to master that art, and I am at the very beginning of that road. I found about Target trading in the beginning of Gold 1 and intentionally held myself on Gold 1 (the last simulated level) in order to learn more before I started trading real money. Now that wait is over. Attached is a screenshot with the result of my trading yesterday. Wish me good Luck!        

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Thu, 03/01/2018 - 9:48am
 
FrankS

Thanks, Greg. I assume there are Bank Traders in every timezone. Any idea what the BBTs (Whales) choose as their starting point when they calculate the infamous 55 pip min target? Friday Close, Monday Open, Monday Close or??? Moreover, how long is their plan good for? Week? Month or ??

For the record, the Fib Scale in TOS charts is working well for me so far; I chose Monday close for Eur/Jpy for this week until I find a better ref start point IF there is one. Aside from all the fib levels, the f55, f13 and the f0 levels especially provide a key price/zone structure. I notice the close of the previous day bar often aligns with the Fib lines for me. Coincidence? Time will tell. but these levels provide me with that confidence noted at the beginning. Like anger with the dark side of the force, the price scale gives me focus! LOL.

By the way, I agree with your H8 choice as it is 1/3 of the trading day and coincides with the three global trading zones. I also look at H1 with LWSMA8 just so I keep that H8 connection in front of me, but the scale is exactly the same for all Eur/Jpy timeframe, including a range bar chart.

All in all, the "Target Trader" concept is proving to be a rational/orderly structure as well as logical, at least for me. It reminds me of the projection structure derived from options volatility that I use for my stocks and futures trading.

 
vesskrastev

Thank God for Serious Questions!

Hi FrankS! Please excuse my delay in answering.

The BBs trade on the H4 chart - that means that they strategize, plot, etc. on H4. For Entry and Exit (for exit - that is when for some reason they cannot get to their preplanned target) they use H1. They do not go below H1. When the structure of the pair changes completely - for example they broke out of a box, and that box is no longer valid, or from a box they changed to trending, etc. - they go temporarily to daily chart in order to esteblish the big picture. Still, they trade on H4 and enter on H1.

Timing is important because of the time patterns, BUT NOT because of the use of the fibs. For example the new daily ATR becomes available at the close of the NY session (5 pm EST) - the daily ATR is a statistically proven target (not absolut, of course - there are no 100% repeatable things in Forex). Think about the daily ATR in terms of the average amount of money that the BBs can spend per day. Some days they will spend less, some days more, but on the the long run they hit that average spending per day and the average pips move per day for that pair will be close to the daily ATR. At times of major reversals the daily ATR goes lower (it takes a long time for the currency to switch directions), when trending the daily ATR grows. There is also a Weekly ATR, which becomes available at the close of the week. Also there is a clear time pattern of the activity of the pairs. European pairs jump into activity at London Open (actually quite often that happens 1 hour earlier - at the open of Frankfurt, but that 1 hour is the time of the tricks - the Germans are the only ones open at that time, and they can do whatever they want. Usually during their "own" hour they move the currencies in the opposite way of what is the plan for the day - that allows them to get better starting positions for the London open (usually does not mean always). Because of the trickery of the Germans we have a rule not to start new trades during that one hour - to manage trades -yes, but not to start new ones. Of course, the Asian pairs go active during the Asin session, then the overlapping between London and NY is the most active time for European/USA pairs.

Fibs are applied at pivots (not at time moments). When you apply fibs to the pivots, the fibs give you the next targets of the pair. Scott has a video, which is on YouTube (and I posted it on my tread, about a year ago) - the video simply says: "I enter on retracements, and exit on extensions." Basically the same thing is what Jason says (another video from about a year ago). The important thing to remember is - you do not measure retracements and extensions in fibs (except when you count your pips) - you measure them in fibs. There is a clear pattern, and it may vary slightly from pair to pair - if the currency retraced to fib X, then when the currency continues its original move, it will go to extension Y. The bigger the amount of the retracement, before the pair assumes it s original (impulse) move - the bigger is the target of the following move (and the target will be another fib value, or the walls of the trend/channel, or the bottoms/tops of the box). Your job is to fugure out for your pair - if it retraces to one specific fib (that means the end of the retracement, the final pivot), then to what extension fib does it go normally. Once you figure that out, you can count on that - your pair will keep doing that again and again. The fibs will be the same, but the absolute amounts of the movements will be different - smaller impulse move will mean a smaller response move (and biger impulse will mean a bigger response), BUT THE RATIO OF THEM IS THE SAME - and that ratio is the Fib.

Support/Resitance levels are previous pivots - and the pivots are nothing else, but the targets of previous price moves - they are the fibs of previous price movements. That is very easy to be checked out. All of that said, the Fibonacci tools of Alveo are not good. The only good part is the regular Fibonacci retracement - the levels from 0.00% to 100% retracement - that is avsolutely correct. On that same tool Alveo incorporates the extension levels also, thus giving you a 2 clicks retracement AND extension. The idea is great, BUT the extension of the original impulse move should continue in the same direction as the impulse move - they should extend the impuse move. When you apply the Alveo retracement tool, the extension level extend the retracement - they move in direction OPPOSITE of the original impulse move, therefore they do not extend the move, they extend the retracement of the move. The extension values of the combined Retracement/Extension should go on the opposite side of the 0.00%, in Alve they go below 100%. I send an email to the developers about that, but there were no changes made to the tool. Regarding the Extension tool itself - the one that requires 3 clicks - I cannot figure out how it works. There is something to be said about the exact values of the fibs that the BBs use - and they are slightly different - but that post has to end somewhere, the BB;s fib valeus will be discussed in another post.

Your idea about a pip scale, based on Fibonacci's numbers, is incredible. The zero of the scale SHOULD be applied to a pivot (reversal point). That scale is in absolute numbers, and of course will look the same on any time frame. The smaller numbers - 3, 5, 8, 11 - and their effect on the candles (the chart) will be harder to observe. Even 21 pips from the pivot may not always give you consistant targets - of course, that depends on your intended Take Profit amount. Try with bigger starting numbers (the FIRST numbers/lines to be applied - 34, 55, etc. - starting from a pivot. Let me know what results did you get.

You have an incredible talent to ask the right questions. Price action has many, many parts, but at the end it boils down to the following: You ONLY enter at the end of a Retracement/Pull Back (PullBack is the ocasional substantially bigger Retracement). Your targets should be the Extension values (fibs) of that same price move. You should ALWAYS scale in, using the Scout model. The reason for entering a trade is a positive Reward/Risk ratio. Proper Margin management should be applied.

By the way, if you enter into a trade after a retracement, equal or bigger than 0.383 (38.2%), then for any standard extension value (your target) the Reward/Risk is bigger than 1 - it is mathematically proven.

 
FrankS

Thanks for your response! Great stuff! I am in the process of readjusting ALL my charts in TOS to reflect Target Trading. I like it for two reasons: it gives me structure and it is based on the Big Boy method, at least as I think I understand them. Garnering new data/info about them all the time now.

For the record, I have chosen to focus on a single pair, for now, the EUR/JPY. I have set the FibScale as Pips based on your suggestion of the latest major pivot. So, I opted for the major low of the past month. Strange how the closes this past week have settled at major Fib/Pip levels. That is far from just a coincidence. but I will keep an eye open for the sake of continuous scrutiny/validation.

 
vesskrastev

Frank, it is not strange at all! That is how it works. They make it to happen this way - this is their way to "telegraph" their intentions to the other institutional traders. And the others - the follow up - know that, and they enter (or exit) on these same fibs, thus making the pivots/fibs relationship even more convincing. When the pivots start "sticking" to your fibs, that is when you got it right - you apply the fibs the right way. If the pivots do not comply with your fibs, you are doing something wrong.

Try to have the first level on your FibScale at 55 pips. Then the second would be at 89 (next fib number), the third - at 144, etc. The reason for that - the BB's would not make a move if they don't have a 55 pips field in front of them - field free of barriers (obstacles). We are entering the summer period and the daily ATRs would go smaller and smaller (some of them are very small to start with). If the Daily ATR of the pair is 39 pips (that is how much it is for AN now), that does not mean that the BBs cannot make a move. That means that they have to retreat at least 16 pips, before they can start the move - 39+16=55.

Your decision to concentrate on EJ is great. Get used to the way of trading price action with one good pair - concentrating on the methodology, and not on the way many, many pairs behave. By doing that you will also learn the "personality" of EJ. Later on you may add other pairs to that, but the right thing is to start with one pair (or two - not with many). EJ is a good pair, and it is active most of the time - the first 2 to 2.5 hours of every session (the Asian session because of the JPY and the London and NY sessions because of EUR). When EJ goes down, it does it by "drawing" bear flags - one after another. I have posted earliear, and there links to videos about how to trade bear flags - learn that and practice it, it will give you a lot of pips.

For being at Silver 2 you have a great understanding of the matter (I was a lot slower than that). Successful trading to you!

Vess

 
FrankS

Vess, you may not realize it but you've just acted far more as a mentor here with me than anyone at Apiary; and your knowledge sharing is not lost on me. Thus I wholeheartedly appreciate the depth of your insights as a great help! Thank you!

 
vesskrastev

Thank you for the good words Frank! It is a pleasure to discuss important things, and not just to be trying to prove alphabetical truths. Price action is an addictive thing - it gets interesting, and involving, and there are many layers there - still, you have to start with the basics. I pretty much outlined them in the previous couple of posts.

Now, in the summer period, there will be almost no trending pairs. I understand trending the way BBs do - it is on a 240 min chart (H4); min 600-700 pips vertical move; the walls of the trend should be ancored on a Support and on a Resistance (these pivots are not formed by 3 candles, but by 5 hourly candles - the way Tom DeMark defines it - one central pivot, with 2 candles on each side of it, correspondingly lower or higher than the central pivot); the angle of the trend should be close to 45 degrees, but not higher than 45; the rules of the Elliott waves count should be followed; and the heartline (the middle line of the trend, the trend equivalent of the equilibrium line of the boxes) should be proven by price - price should hit the heartline and stop, bounce off it, and sometimes cross it to go to the other half of the trend.

When the pair is trending, swing and positional traders enter the mix, and price moves go to higher fibs. When the trend is over, the swing and position traders (the mid and long term traders) get out, and we have again a box after another box. When price is in a box, all that matters are the fibs, and MACD - they give you an indication about the future moves of price.

GA may be entering a trend down (5th wave), after it completes the 4th wave up (which should be very soon). GJ seems to be on the way up after a long trend down. Also EG is completenig a reversal, so it should start moving down - of course, in the case of EG we don't talk about classical trends, but about good size channels.

 
vesskrastev

Quite often I have to stop in the middle - customers coming to my car, etc. That is unsettling, but, on the other hand, it gives me the opportunity to cover more things in the next installment.

In the case of trends Previous Support/Resistance levels are very important - that is because the swing and position traders pay great attention to them (and these traders spend a lot of money, does affecting greatly the movements of price). In the case of simple boxes, there are no swing and position traders, and all that matters are Fibs and MACD. When approaching the equilibrium line of the box, or the top or bottom of the box, it is MACD that gives you an indication whether price will continue in the same direction (thus crossing the equilibrium, or breaking out of the box), or will reverse and stay inside the previous confinments. MACD is the only indicator that shows you the future, all the rest show you what has already happened (these indicators are helpful for gathering information, but they will not tell you, for example, that price is just about to turn on a dime and to fly away because a major fib will be hit in a moment). MACD is right at least 90% of the time, the thing is that it does not tell you WHEN the expected reversal will happen (in the case of divergence). That is why we have a saying: "Divergence on MACD means - The End is near, but is not yet here!" That means that even with divergence price may still make one more move in the previous direction, bit after that it will DEFINITELY reverse.

In the case of price moving inside a box, the most simple, and the most applicable for the summer case, Fibs are the most important thing. There are 2 types of fibs - simple retracement fibs (2 clickcs necessary to apply them), and the extension fibs (3 clicks necessary to apply them). These 2 types of fibs show you different parts of the picture. The extension fibs, applied at the beginning of the move (the major reversal point, where price changes direction and starts the current move), show you the long term plans of the BBs (attachment 1). These long term plans may (or may not) be fullfilled - some experience is necessary in deciding where and how to apply the extension fibs. Also the first initial moves after the reversal are very important - the best case is when you have a few small moves following each other (instead of one big move).

The simple 2 clicks retracement fibs are more useful for shorter term planning (attachment 2). Whether using the retracement (2 clicks) or the extension (3 clicks) fibs, the idea is the same. You wait until the current impulse move is completed. Then you apply the fibs to that same move - that would give you the fibs of the retracement. You WAIT until the retracement is over and pay attention - at which retracement fib did it end? The retracement fibs would also give you the extension fibs for the original impulse move. When price starts moving again in the direction of the original impulse move, IF it enters the zone of extension (if it clears the end of the impulse move), then it would go to a certain extension fib - that means that you have a projection for where price would end its future move.

Which exactly fib? That depends on a few things, the most important of which is - how far did price retreat during the retracement? The higher retracement fib did it hit, the furthet it would go during the expansion phase. Think of it like a sling. The more you pull the rubber back (the higher retracement fib price hits during the retracement phase) the further the stone would go when you release the sling (the further will price move during the extension phase). Your job is to figure out what your pair does normally (it would be quite consistent), and to play according to it. It is a great help to know the target of the price movement, BUT it is far from everything. Knowing the target does not tell you WHEN the target will be hit (how long would it take), and does not tell you HOW price would get there (meaning what moves, patterns, etc. would price draw on the way to the target).

The standard retracement fib is 0.500 (50%), which is NOT a Fibonacci ratio, but since it is used all the time by the BBs, this value is present in all the Fibonacci's tools. When the impulse move was unsustainable (meaning moving at an angle close to vertical), then the usual retracement after that is only to the 0.382 fib (38.2%). The reason for that is simple - the vertical move had already attracted a lot of attention and a smaller discount (think of the retracement as a discount - the BB would not sell at the end of a downward move, they wait until price moves up, thus giving them a discount, a better entry price - of course, the same applies for moves up) is necessary in order to attarct the BBs to enter again. The further price retreats during the retracement, the furthe would it go during the expansion, the important thing is make sure that price DID NOT go into a reversal - meaning it did not retraced more than 100% of the impulse move.

On attachment 1 you see the Extension tool applied (3 clicks tool), which gives you the long term targets. You can see how price "knows" the fib values and "sticks" to them. The 3 clicks tool is used mainly for reversal trades, and you need to prove that price actually is entering a reversal. If you prove that (it requires more writing to describe the details), the BB's promise to you to hit 1.618 extension (that is why I named the trade The Banker's Promise), almost guarantee that 2.618 would be hit (it requires some experience), and give you also an Outside Target - the 4.236 fib, which is hit quite often, BUT that would normally take a lot of time. The 4.236 target would be hit in the case of big ATR pairs with relatively "normal" starting moves, not big starting moves (the first moves after the reversal), or it may be hit even for low ATR pairs, but in the case when the initial moves after the reversal were really small.

On attachment 2 you see the Retracement tool (2 clicks) appled to the smaller moves of price, the ones inside the big move. With black I marked the impulse moves, and gave different color to the fibs, so that they would be easier distinguishable. If you zoom, you can see how far did price retreat, and how far did it go after that during the expansion move. Both attachments show you a really nice and orderly move of EG, so that it would be easier to garsp the idea. For different pairs it would look slightly different, but still the main idea is the same - you WAIT until the retracement is over, and then you enter with a target one of the extension fibs.

The 2 clicks tool (standard retracement) is used for continuation trades, while the 3 clicks tool (the Extension tool) is used mainly for reversals, although it could be used also for continuation trades. By applying both of them to different Time Frames, you may get different "magnification" - they work on all time frames, but the best results you can get on the TF's of the BB's - H4 and H1.

After all of that said, the Alveo Fibonacci's tools are not good enough to be used for the above described purposes. The only proper way they function, is for the retracement of the impulse move. The extension fibs they give are not proper. If you want to experiment with what was written above, probably the best thing is to get different charts, which seems to be a common idea among the funded traders. Also for the way to do the 3 clicks, see the Jason videos which I am posting below (I am fortunate to be able to do that without any thinking, because the ProAct Fibonacci tools are perfect).

https://www.youtube.com/watch?v=dsomgrotZUg

https://www.youtube.com/watch?v=uY0MKUKkkKg

P.S. It is already a huge post, but I just want to give you 2 more links regarding the retracement and extension tools and their use. These 2 videos are not exactly the one where Scott says: "I enter on aretracement, using as a target an extension fib", but still they give a lot of info regarding all that I posted. I hope they will be interesting for you.

https://www.youtube.com/watch?v=woP91UvZZVE

https://www.youtube.com/watch?v=r7XbbyavaKs

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Rookie

Great Vess, speaking of the box have you been introduced to the HV Box yet?
I think it is right up your trading alley.

 
vesskrastev

Hi Ed! No, I have no idea what the HV Box mean.

 
Rookie

The HV box is taught by bu Jeff Crystal in his group and in the CATT classes. I will do my best to do it justice however it will be a short version...

I have attached a simple spreadsheet made by Josef and shared with our group. The columns in Yellow can be changed and note there is both a Bear and Bill column. The idea here is that for the time frame your trading to define the price action in order to place more efficient targets and stops. When constructing the box a trader needs to avoid anomalies such as news and other outliers.

You can use as many bars as you like and that comes from time slicing experience for the best time to enter or exit a trade in order to get the time cycle more accurate.
You could also construct a box by using the ATR (my AKA Average True Lier).
As you usually know the trend but you can never be 100% sure because we do not control the price you make both the bull and bear box.

So that's the basics. There is a little more in the fine-tuning and placing a box within the box for the highest probability and gets into quadrants which many folks would use fibos for their guesswork.

In the attached example, I used a simple visual method.

EURUSD Box.PNG
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vesskrastev

Thanks Ed. I will take a look at it.

 
Rookie

YW BTW Jeff has an MT4 unsupported automated version.

 
vesskrastev

How Does the Alveo Fibonacci Extension Tool Works

The link below goes to a short video from Support that shows how the Alveo Extension tool works. In a nutshell - you click on the tool, then you click on what would be your Click 2 and drag it to Click 3. Then you release the mouse, and a short "mouse tail" would appear attached to the Click 2. Then you drag this "mouse tail" to what should have been your Click 1. The tool would display the fibs properly.

I have to take my words back - the extension tool works properly, and the retracement part of the Retracement tool also works properly. The only part that does not work properly, is the extension part of the Retracement tool. As I mentioned before, the way it is now, the extension fibs extend NOT the impulse move ( they SHOULD extend the impulse move), but extend the retracement fibs - the retracement fibs end at 100% retracement, and the extension moves that further. In that case the extension fibs become fibs for the reversal of the impulse move, and not for its extension.

I have to contact support again about that. I also have a suggestion about how they can fix this problem.

https://apiaryfund.zoom.us/recording/share/7lQ4bLI24Hx8I5s648bBY7KmFZKBb...

 
FrankS

That is precisely why I only use Alveo for placing orders. I rely on my TOS charts.

 
beckpart

best of luck

 
vesskrastev

GA at Crossroad

I mentioned before that GA may be turning down for a good run. The reason for that? On attachment 1 you can see how GA completed a huge 3rd wave down, and was working on a 4th corectional wave. The natural thing was to expect that when price hits the trend wall, Wave 4 would be over, and Wave 5 in direction down would be started.

On attachment 2 you can see how GA is in a rising wedge on a daily chart. That trend that we had, was the move from the top wall to the lower wall of the rising wedge. At the moment price is at the lower wall, actually it moved slightly below it. What is that move below the lower wall? Is it another head fake, and price would move again within the rising wedge - there seems to be enough space for one more Up and Down bounce? Or is it the break form the rising wedge, for a decisive move down?

When Price did get to the trend wall, it was sending mixed signals (attachment 3) - the end of an ABC (continuation sign, with a following move down - the black lines), or a bullish Darva's box - the white lines? Last night MACD was still not very much inconclusive - we had a 0 line break in direction down on 60 min (good!), but MACD on 240 was just treading water around 0, with no volume at all.

This morning things changed. On attachment 4 you can see a clear divergence on 60 min (a triple divergence - that is when you have 3 "humps" - a really strong sign). That should mean that GA will change direction and continue down on a 5th wave, and will break from the daily rising wedge - at least that is what the chart is telling us now, and it seems quite likely (not like a day, or 2 days ago).

I wrote all of that in order to prove that all we need to know comes from the charts - and MACD, ans a couple of MAs. The picture the charts are describing, keeps changing, and we have to stay on top of it. The BBs love to send mixed signals - like the one on attachment 3. They could mean one thing, or another - the key to find the right answer is the context, and also patience - wait until the picture clears, and gives a definite signal.

We have to be able to see both sides of the same picture - not just one, probably the more obvious. Examples of that? Look at attachments 5 and 6. Is it a horse, or a frog? Is it a young girl, or an old woman? Today it may be one of them, and tomorrow it may be the other. We should be able to see both images inside that same picture, and to figure out which one is applicable now (the BBs are betting that we would only see one of the images... or may be not even one).

Screenshot (268).png Screenshot (267).png Screenshot (266).png Screenshot (269).png Horse or a Frog.png Yong Girl or an Old Woman.png
 
vesskrastev

GJ - finally ready to move down?

The 1.000 fibs of both of the price moves, originating at the bottom of Wave 4, coincide - the moves are marked by the bright blue lines of the attachment. Price bounced off of them already for a 4th time. So far price cannot move past 1.000, which normally would mean - we had an ABC, and now the move down should continue.

On the other hand, the 1.000 fibs and the bottom of the channel, form an ascending wedge, a sign that price is preparing to break in direction Up - marked by the dark blue lines. So far MACD, for the last 3 humps, was showing a divergence - histogram going slightly down, while price moving up, or horizontally. Now we have a "0" lline break up, but it is yet inconclusive (no second hump to confirm it), and may as well quickly turn down. Price did start moving down, so far with momentum, and if it breaks the lower wall of the channel, we may have the beginning of Wave 5 down.

It is interesting to see what will happen. To me it seems more likely that we may expect finally the beginning of Wave 5 down.

P.S. Again, we have the case - frog or a horse? Ascending wedge, or multiple tops? Each one of these choices leads to a different outcome. Our job is to figure out which one is more likely, which one fits the context better, and, most importantly, to WAIT until the chart shows us which one would materialize.

Screenshot (274).png
 
vesskrastev

GCHF - ready to move Up?

On attachment 1 you can see how price very willingly confirmed all the major Extension fibs (Banker's Promise trade, or BP) - 0.618; 1.000; 1.618; 2.618; 4.236.4.236 marks the end of a big move. It could be "jumped over" if even a bigger move is unfolding. In our case price already moved down from the top about 840 pips, so I don't expect a "jump over". All the indicators are showing green color, indicating a move up.

On attachment 2 you can see an undeniable divergence on 240 min, and on attachment 3 you can see a "0" line break on 60 min. All of that tells me that from now on we are a buyer on GCHF.

Screenshot (275).png Screenshot (276).png Screenshot (277).png
 
vesskrastev

USDX, EU, and ATRs Today

USDX is totally undecissive (uncommited) - attachment 1. It is within a symmetrical wedge, kind of trying to break out, but having second thoughts just a moment later. There is a very good confluence between the regular Retracement fibs, and the Extension fibs - I have underlined these confluences in black. Price is basically exactly at the 1.000 retracement of the previous big move, and at the 2.618 extension of the move down, which started on 4/25/19, and was later restarted basically from the same level on 5/23/19. From that point either a move towards the top of the box should start, or a move towards the 4.236 fib down at the bottom of the box.

MACD of USDX is equally undecisive (attachment 2) - price and the histogram are horizontal, no volume, T3 is dead centered in the middle of the flag that is being drawn. I have the feeling that this is just a horizontal move, because of the lack of decision which direction USDX should take.

Dollar index treading water mens that probably all the majors will have a hard time making a good size move (they need a clear message from USDX, which they do not get). EU is stucked at the top of the channel in a horizontal move (attachment 3), all the indicators point in different directions. On attachment 4 the histogram of MACD is horizontal, with a very little volume, showing a small move, which mirrors the small move of USDX. I don't know how that relates to scalping (probably not too well - scalpers need price to move too), but for price action the only clear signal is that now is the time to wait.

On atatchment 5 you see the daily and weekly ATRs.

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vesskrastev

Beautiful Charts!!!

GN is the wildest currency, I think everyone agrees with that. Trading consistently (and successfully) GN is my final goal. Also for a long time I wanted to develop a way to tarde reversals. I am not there yet, but I am getting close. A huge part of achieving these goals are the beautiful charts I am using for planning the trades.

The attachments show the example of the crazy moves GN did between 10/2/2018 and 11/16/2018. First price went up about 850 pips for 8 days, reaching the top on 10/10/2018, and then went down for 1,850 pips for 35 days. During the next 25 days GN moved down additional 500 pips, for a total move down of about 2,350 pips.

The 850 pips move up was spectacular, but now I will concentrate on the move down. Attachment 1 shows the first stage of the move down. How did the chart assist in understanding the GN moves? First lets look at the move up. Price was consistently above the green MA (underscored by a black line). Then price came down to meet that green MA, and bounced off of it multiple times, without going below it (circled in black). Then price was finally trampolined by the green MA on the way up, to reach the top of 2.0462. After a top, price would go down - it did, and this time it pierced the green MA (before that it did not go below it, it just kept bouncing off of it). So price pierced the green MA and went down to T3 (the thin bright blue line). T3 is amazing, it has proprietary settings (the charts are locked, nobody knows what these settings are - except Jerry and Scott, of course). So price bounced off of T3 and went up. On the second move down price pierced T3 also, giving assurance that the move down is real and sustainable.

By the way, the signal that the move Up was replaced by a move Down, came before that. Between the 2 black color circles, marking the bounces off of the green MA, and of T3, there is another smaller one, a little bit higher. It marks the moment when the green MA changed color and became red, telling us - from now on we are sellers. It stayed red all the way to that black square, where briefly it changed to green, only to almost immediately reverse back to red, and stayed that way all the way down to the end of the 1,850 pips move down (the 4.236 extension fib).

You can see the following moves of price. It went down, and twice came back for Pull Backs, to "meet" the red MA, and bounce off of it. On the following 2 Pull Backs price pierced the red MA, but bounced off of T3.

Here in play come the Fibonacci's tools, and more specifically my Banker's Promise (BP) Reversal trade - the horizontal white lines. I have marked with arrows how price very willingly acknowledges all the major fibs - 0.618; 1.000; 1.270; 1.618; 2.618; and finally 4.236. Reaching the 4.236 extension of the first move down of price (after the reversal), marked the end of the first stage of the price move down. After that price went up for the second randevu with T3, bounced off of it, and on the second try pierced it. When you look inside that black square, you can see how, despite of piercing T3, price remained below the red MA (underscored with a black line). That was a signal that the move down of GN was continuing.

When the BP Reversal Trade was applied to the first initial move of price after the reversal, it gave us the map to 4.236 (1.9320) - attachment 1. Since the chart was giving signals that price would continue its move down, it was necessary to extend the range, or the coverage of the BP trade. That is done by appying it to a bigger initial move. On attachment 2 you can see how the BP trade was applied to the next, bigger move of price - starting from the reversal, and going to the next pivot - marked by the diagonal "L". The arrows mark the major fibs of the second BP trade - you can see how some of them coincide with the fibs of the first trade, and others stand alone - and price confirms these stand alone fibs also. The second BP trade gave us the map to its 4.236, which was 1.8607. If you pay attention, you will see how similarly price behaves in the different stages of its move - the move down from 1.9209 to 1.8607 (from 2.618 of the second trade to 4.236 of the second trade) is basically identical (except that it is bigger in size) to the the corresponding move of trade 1 - from 1.9711 to 1.9320 (from 2.618 of the first trade to 4.236 of the first trade). That shows you a part of the "personality" of GN, and of the BB's - they like to repeat what works well.

If you apply the same analyses to the last 500 pips of the move, you will see that it works well also. All of that was on 240 min chart (H4). It gives you the "helikopter view" from above - you can see everything, but the small details would escape you. Each one of these price moves to one of the MA's and back consists of a hundred or two hundred pips, and it has to be handled properly (it is GN you are dealing with!), but for that there are other Fibonacci's tools.

The point I was trying to make, is very simple. Even the huge price moves of the craziest pair, when using the proper tools, become understandable, and predictable, and managable. Why - because all of that is done by the BB's - they design it, and they make it happen. All the Fibonacci's tools are indispensable, because that is what the BBs are using - that and the "graphical" language of the charts.

Still, all the knowledge would not replace the tools that my charts are giving me, the ease of work with them - I think only my imagination is the limit on what I can do with them. I really love my charts.

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Rookie

Today they all mostly did well after the CPI news!

 
vesskrastev

The GBP pairs may do some crazy moves very soon

One of our traders, she is British, just informed us that this afternoon ( I assume afternoon in London, which means very soon in USA time) the British Parliament will hold an emergency vote to block the Prime Minister move for a No Deal Brexit. All of that may cause big, big spikes.

 
vesskrastev

GBP down - the warning from above

Brexit related... MPs reject attempt to block no deal brexit
GBP - Efforts by the Opposition in UK Parliament to block the option of a NO-DEAL-BREXIT - has FAILED - so a N0-DEAL-BREXIT is still an option - GBP Weakens

 
burton

market makers are lovin brexit...it's a cash cow.

 
FXGold54

Yes, Yes it is :)

 
vesskrastev

@ beckpart, @ Rookie, @burtom, and @ Allengoldatty

Thank you for the comments.

@ Allengoldatty

Allen, what do you think about the use of Fibonacci's that I described above?

 
vesskrastev

Is USDX technically traded? Are the currencies technically traded? Is everything on Forex random?

I have posted on that before, and I apologize for doing that again (it will be the last time), but the illustration was just too perfect to pass it by.

On the attachment you can see a 240 min chart of USDX, with 3 sets of fibs on it - 2 sets of Extension fibs (3 clicks), and 1 set of Retracement fibs (2 clicks). The index is currently calculated by factoring in the exchange rates of six major world currencies, which include the euro, Japanese yen, Canadian dollar, British pound, Swedish krona and Swiss franc. Each one of them has its own agenda, and look at the chart - USDX is very happy to follow the map that all of these fibs drew for it. And it is an index, nor even a single currency pair!

I understand that the Fibonacci's numbers and ratios are, so to speak, a "force of the nature" - the spiral of the hurrican follows them, the flies fly in a Fibonacci's pattern, the cigarette's smoke moves through the air, creating Fibonacci's patterns, the shells of the marine inhabitants show Fibonacci's patterns, etc. Still, in the case of Forex we have something more.

On the attachment we have 3 sets of fibs - many lines, applied at 3 different times, 2 sets measuring reversal moves, and one measuring a continuation move. Why do they match so perfectly? If it was ONLY a natural tendency (and there is no question - THERE IS a natural tendency for the traders to follow the Fibonacci's patterns) then the moves would finish in some small area, area with a certain width (even a very narrow area), but not exactly on the same line. I have not posted so many cases when price did a huge jump after a news event - crazy move, in the case of the GBP pairs up to hundreds of pips, retreated very fast, leaving a long wick after itself - and that wick hit a certain fib up to the pip!

There is no way for all of that to be caused ONLY by natural tendencies. We see the results of "shooting at targets" - and the shooters were very good at what they were doing, they spent a lot of time and efforts in the preparation and the execution of these price moves, and, most importantly, huge amounts of money in order to accomplish that. Having been convinced in that, the next step is to figure out the fibs they are using, the patterns of jumping from fib to fib, and to try to anticipate, and to CALCULATE the next move.

If an index "jumps" on the Fibonacci's "leather" one step at a time, how much more would that apply to the individual currencies! Learning how to decode the moves of the BBs is not easy, but if you can do that, than your trading will become a lot more successful, and a lot more pieceful. Of cource, after figuring out the next target (very important), you still have to figure out HOW will they get there.

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burton

vesskrastev, don't apologize for sharing what you see, it's exciting to read when someone shares something that inspires them in such a way...

- "the illustration was just too perfect to pass it by."

 
shawntatonyhm

I trade intermiatte and long range trading got confident in the system and has learn a lot from Apiary Fund, looking for the Eur/Usd
to break out and had North.

 
burton

shawntatonyhm, in the eurusd, there was a 100+ pip break out last week...maybe i don't understand what you mean by break out?

 
vesskrastev

The Last Piece of the Big Picture

To me successful trading (at least price action trading) consists of 3 main componenets: 1. Figuring out WHERE the BBs want to go - what are their targets - which I call the Big Picture. 2. Figuring out HOW do they do that - price patterns, time patterns, etc. - I call that the Close Up Picture. 3. Money management

So far I posted about all the main elements of the Big picture, but one. The last one is the fib values (ratios) that the Big Boys use.

Babypips says about Fibonacci levels - https://www.babypips.com/learn/forex/summary-of-fibonacci
"The key Fibonacci retracement levels to keep an eye on are: 23.6%, 38.2%, 50.0%, 61.8%, and 76.4%. The levels that seem to hold the most weight are the 38.2%, 50.0%, and 61.8% levels."

50%, or 0.500 is not a Fibonacci ratio, but is included in all the Fibonacci tools, because 50% is the standard discount, which all the BBs expect, in order to join the trade, after it has been running for a while. 38.2% and 61.8% hold the most weight. 61.8% expresses the Golden Ratio: Preceding Fibonacci Number divided by the Following Fibonacci Number. 38.2% equals a Fibonacci Number divided by the Second Following Number. 38.2% and 61.8% are symmetrical - they are at exactly the same distance from the 50% line. Mathematically this is expressed in the following way: 38.2% = 100% - 61.8% (or 0.382=1 - 0.618).

BBs do not use the 23.6% and 76.4% (by the way, 23.6% and 76.4% are also symmetrical in regard to 50%). For some reason the BBs like only the Golden Ratio and Square Roots of the Golden Ratio. Square Root of 0.681 = 0.786 (or 78.6%) - so the BBs use 78.6%. They do not use 76.4%. The symmentrical image of 78.6% is 21.4%, which they do use (they do not use 23.6%). Square Root of 0.786=0.886, which is used in some advanced patterns.

Regarding the Fibonacci Extension values Babypips says: "Similar to the retracement levels, the key Fibonacci extension levels are: 38.2%, 50.0%, 61.8%, as well as the 100%, 138.2% and 161.8% extensions." Alveo's Fibonacci's Extension tool has the following values: 138.2%; 161.8%; 200%; 238.2% and 261.8%. The BBs do use 161.8% (1.618 ratio) 261.8% (2.618 ratio). They do not use 138.2% and 238.2%. Instead they use 127% (1.270 ratio). 1.270 equals roughly to a Square Root of 1.618. They also use the ratio of 4.236.

To summarize all of that - the BBs use the following Fibonacci Retracement ratios: 0.214; 0.382; 0.5; 0.618; 0.786, and 1.000. For Extension ratios they use: 1.000; 1.270; 1.618; 2.618, and 4.236.

 
FrankS

What is the priority of the Big Boys with regard to the Turn Points where they apply the ratios? Is it Monthly? Weekly? Daily? Hourly? I can see the Long Term being Monthly, but for those trading smaller timeframes, I have to assume there is an optimum for each chart being traded, meaning the H4, H1, M15, M5, for example, relative to the Big Boy plans?

BTW, great information to feed and learn on!

 
burton

frank, study the h4 peaks...you will find that once they hit their peak, there is a great deal of chop...

- they are liquidating, trapping, and triggering pendings
- this is happening because, at the peak, they are all-in, their equity is one sided, as in, they are either heavy longs, or heavy shorts...at the peaks, into the peakks they are liquidating, collecting cash, evaluating the market behavior, looking for areas of pooling money, and starting to work the opposite side.

one of the most obvious signs will be how they work the spread.

once they have liquidated their heavy position, they will quickly move away from the current price zone...this will create separation, and cause traders with open positions to hesitate, there will be some pulses moving back in favor of the trapped traders...those will trap the traders who are late to the party, all while holding the currently trapped traders in place, how?

by never really pushing high enough for the trapped trader to get out, the only way out at this point is for them to take a loss.

at the peaks you will find monster ups, and downs, and it can last for days...retail traders don't, typically, think in terms of days, so they blindly follow the false moves, only to have the price reverse.

at the peaks they really don't need new buyers, or sellers, because of the liquidity provided by stops, and pendings.

it's a brilliant process...big pins will occur, with wide spreads, as they push the ask and hold the bid, or as they push the bid and hold the ask.

the historical chart will never really show this story in a way that makes sense in hindsight.

keep in mind, all indicators, and retail trader rules "DO NOT APPLY TO MARKET MAKERS", their only focus is liquidity...

- where's the money? ...how do we move the price to that point? ...and then, take all the money they can.

crosses, in my opinion, are the most dangerous, as they are once removed from the underlying majors, meaning they are synthetic, not real, as in a derivative. what does that mean?

- it means the market makers can aggressively move the crosses without fear of economic consequence, while holding the majors in place.

the aggressive moves will easily force, over leveraged, traders out of the market with margin calls...which means, the market maker has done their job.

if you, as a trader, have ever been trapped by an aggressive move, you can appreciate what is happening.

one last thing...

- the severity of the peak move will determine how long they have to work that area...keep in mind, the traders caught in the peak are devastated, emotionally, and financially. those traders will not be inclined to jump back in, at least not immediately. so the seduction, and the enticement begins.

 
FrankS

That focus on liquidity then helps explain why I do not see any volume indicators allowed for us, especially volume profile. Correct me if wrong.

 
burton

interesting question frank, i really couldn't say, or maybe i'm not understanding your question.

 
FrankS

Burton: If volume data is availed, then a volume profile is feasible via an indicator whereby one can see literally the price level at which volume is concentrated. If not availed to retail traders, then that aspect of trading leaves us blind in regard to volume-price concentrations. So, Vess' statement that the BBoys are all about liquidity and the areas where that is availed leaves me to think we have a disadvantage relative to trading vehicles like futures. That likely explains why brokers do not allow Forex trading for IRA accounts, which is part of the reason that I am here.

 
burton

frank, as i understand it, the volume in futures is real...it has a central clearing. forex does not because it is a distributed market.

- they really do get to hide many aspects of their trading
- also, there are the dark markets, i'm pretty sure the forex markets do have dark markets

 
FrankS

Correct. If any Forex funds are flowing at all after Friday close through Sunday even, then that window is not an open global market; meaning, it's dark or at least private. Then again, dark pools occur even with the existence of central clearing houses.

 
vesskrastev

@ FrankS and @ Burton

Thank you for your activiity. For a second day today I am on a mini vacation at Mammoth Cave, KY. The internet here is spotty, to say the least - thta is the reason for my late reply.

From my point of view both of you are partly right, and partly not, Frank, in regards to Fibonacci use, Time Frames, and pivots. Fibonacci's retracements and extensions work on all Time Frames. The way Target traders use the Fibs, is on H4 and H1 - to strategize. and on 10 Min - to enter or exit. Why? The Big Boys trade on H4, and they enter and exit on H1. We don't have their resources - in terms of how big Stop Losses can we maintain on our trades. That is why we look for the big picture - the "helikopter view" - on H4, and then we look what we call the Real Estate Of The Day (REOTD) on H1. With other words - we plan our trades on H4 and H1 - the Big Boys only use these 2 Time Frames, and we need to know what do they see.From the info on H4 we decode the big picture, the long term plans of the Big Boys, from H1 we determine their plans fot today. After that we use the 10 min chart (5 min charts statistically have the highest prcentage of false BreakOuts, and 15 min charts are too slow - 10 min is the perfect Time Frame for day traders. By the way, 10 min charts are available on MT5, but not on MT4 - at least I have been told so).

On which Turn points do the Big Boys apply the fibs? The use H4 and H1, therefore they apply the fibs on pivots (turn points) of H4 and H1. Daily pivot will automatically be a pivot on H4, and on H1, but as a Daily pivot it will have a lot bigger wait. Now, if I understand your question properly, besides the question on which TF to use the fibs, there was a second part - after you determined the TF, on which pivots (turning points) of that chart (that TF) to apply the fibs? The answer - at the end of EVERY retracement, or EVERY PullBack. Your job is to figure out - if your pair retraces to a Fib X (0.382, or 0.5. or 0.618, ot 0.786), then what would be the extension level that price would achieve? The general, and right, answer, is - the bigger the retracement, the bigger the extension reached would be. Your job is to find out STATISTICALLY what that number would be.

Burton, among other things BBs are being paid to fill the retail traders orders - that is, so to speak, a part of their professional duties. If, when they fill your order, price continue moving in the direction that you expected, that means that you successfully decoded their intentions. If, after filling your order, price retreats, and leaves you upside down, that means that you missed something, and your planning was wrong. Don't get me wrong, they will love to take the money of the retail traders, but that is not the top of their priorities.

A trend, or a trending move, consists of multiple times when the BBs poured money. When they reached their target, and they start reversing, they DO NOT do it at once. The reason for that? Let's say that the trending move was up. The BBs DID NOT spend all of their money on one move, one buy. Why? That would have lifted the price of the pair too much, and made it not very profitable for them, also would have discouraged other professional, but smaller rank, traders, to join - and the BBs first priority is to get the Follow Up ( the 500 smaller banks, hedge funds, etc.) to join them. So the BBs pour money, then they retrace, bringing price down, and enticing the followers to join. Then they pour money again, and retrace again. They accumulate positions, and raise price, but gradually. The same thing happens on the top, when they start reversing. If they try to sell everything at once, during the process of the sell price would have fallen too much, and a big part of their positions would be sold at disadvantage - and also the Follow Up would stop selling - price dropped too much, too suddenly. So, exactly the way they went up gradually, they also reverse gradually - they sell, then they retreat, then they sell again, they they retreat again. A banker once told Scott that the reversal after a long term trend (the ones, lasting more than 700 - 800 pips) may take a whole month. These consecutive moves down, and up, may fool a lot of retail traders, and the BBs are only happy to get in a little bit extra money, but their main objective is to successfully sell all of their buys at the best possible price. The retail traders, who found their last trades losing, made a mistake in their assesment of the situation, and they are paying for that. The longer they remain convinced that the move up continues, and they are only observing temporary retracements, the bigger their losses would be. That is why the most important piece in the assesment, the one we start with, is getting the Structure of the pair. Also, trading reversals, although the most lucrative, is also the most dangerous - it requires a lot of experience.

Regarding trading majors, or crosses (what we call exotics), I have posted earlier. The majors are hostages of the dollar index, and I prefer to not trade them. The exotics are also affected by big changes of the dollar index, but to a lesser extend.

The last question, the way I understand it, concerns volume indicators. Volume is easily measured, and available, for everything that is traded on the Stock Exchange. Volume, by definition, is not directly measurable on Forex, because of the decentralized nature of Forex. There are volume indicators available, but they are all approximations, with a different degrees of precision, and NONE of them is a direct and precise measurements. ProAct has a volume indicator - it is not displayed graphically, neither in a digital form - it is just an indication of a volume present, or not present. Indication for volume present comes if at the time of the last candle more money came in, than during the preceding 6 candles. I know that an interplay of 24 indicators determins the appearance of the volume indicator (we have, I think, an incredible programmer, who is also the author of the charts), and also I know that the volume indicator works flowlessly, but also we are warned that the only time we should pay attention to it is during the time of its corresponding session. If it becomes active at the time out of that particular session, we should not pay attention to it.

 
ejulav

interesting

 
burton

"among other things BBs are being paid to fill the retail traders orders" ...vesskrastev, is that true in the forex markets? ...i know some of the equity exchange do incentivize the high frequency traders (htf), and, as i understand it, they are rewarded for the volume of activity.

"If, after filling your order, price retreats, and leaves you upside down, that means that you missed something" ...so true, although, it could be something as simple as timing...as the bb has something to workout, before moving.

"after a long term trend (the ones, lasting more than 700 - 800 pips) may take a whole month." ...yes, exactly, how many retail traders do you know that move that slow...i really do enjoy doing historical chart work, and i am often amazed by how long it takes for the development of major peak (turning point)...equally amazed by how fast they move away from a peak, once they are done.

great share with regard to the volume...i will keep that in mind.

 
trebands

Thanks for a clear and cryptic discription of the BB activities and it makes perfect sense. I di dnot realize that they were not talking to each other. I suppose that would apply to the interbank exchange vs intrabank communication. I had heard that the BB also have prefessional psychologist at the traders disposal since the recognition has become more main stream for handling stress.

In my experience I have tried many options and have basically conclued with a system that is very close to many ops described. For me it took many trial and error sessions. However, my system I use and gets better. Recognizing Support and Resistance zones, I use the 20 Moving Averages as dynamic trend lines on all time frames. However, Price Action and Candle Patterns are first, along with Support, Resistance Zones and Levels.

Thanks for all of the good and clear explanations and a great learing vehicle since we ususlly do not hear much of how the BB banks influence the various currency pairs and als explain why during some news announcements that the price can move in the opposite direct to the generally expected rise or fall based on the report. Then later after the price is driven in the opposite direction maybe a few hours or even for the day. The reverse as expected for the news is gained.

Thanks again and this and all of the comments were very helpful in devising trade plan strategies.

 
vesskrastev

Hi Burton!

BBs are paid for filling orders - any orders, at any time - by collecting the spread. That is what I meant. They may decide not to fill certain orders at certain times, because it goes against their intentions, but that does not change the fact that they are paid to fill orders.

The turns in the direction could be divided into 3 types - depending on the amplitude of the turn, of how severe the turn is. These types are: retracement, pull back, and reversal. Retracements and Pull Backs are continuation features - price will retreat, in order to entice more participation from the Follow Up (and also to allow the BBs to run the same distance more than once, thus accumulating positions), but after the end of the retracement or the pull back, price will continue in the same direction - the direction of the trending move.

In the case of reversals price is changing direction long term, not just locally, and the exact beginning of a reversal is notoriously hard to pinpoint. Why? - I posted above, the BBs will do a few (not only one) moves up and down, until they liquidate all of the positions that they accumulated in the preceding trend (or trending move). These moves could be up to 100 pips, or even 150 pips in one dirction (in the case of high volatility pairs), followed by an opposite direction move with just about the same amplitude. It is quite easy to get confused in this case - is it a continuation, or is it finally the beginning of the reversal? Since many moves up and down follow each other, with good amount of pips in them, a lot of traders trade these moves. The problem appears when the BBs finally make a decisive reversal move, and the retail traders still cosider that to be just a continuation move ( a retracement, or a pull back) - that usually ends with a big loss, I have done that many times.

 
burton

thanks for the clarification regarding the spread.

 
FrankS

OK, so the Big Boys use H4 for major planning. I would have thought that would be a sub-plan. With that much money in their coffers, I would have expected Day, Week and Monthly charts for turn points. Shall I assume that all retracement levels placed by them come from the H1 as it is post of the H4 plan and higher, but still integral to the longer-term planned target?

 
burton

frank, they do move slowly...they can spend weeks building a position, and then tear it down in a matter of days.

if you're really interested in levels, study the h4, find the consolidation zone, and then identify the trend zones...if marked up properly, you will begin to gain a sense of the market makers general behavor.

 
FrankS

Thanks, Burton. I have modified a few versions of H4 so I can see deeper into this research. I have set up a Fib-based Pip scale from those turning points, as Vess suggested a while back. (I use mt TOS charts for that) The problem I have now with H4 is deciphering which H4 point has the greater weight as I attempt entries on lower timeframes. I can assume a major pivot for starters for the best-in-breed H4 pivot, but time will tell if that is consistent. So far it looks promising. However, the H1 with that Fib-based pip scale from H4 seems to provide that additional sub-level viewing clarity that I desperately need.

Grandkids baseball finals and tournaments are keeping me away this week, but still worth it. Will be back full-time next week.

 
vesskrastev

@ Burton

I completely agree with you, Burton. In the world of price action there is no hurry. The Big Boys trade on the H4 chart, and they enter and exit on H1. In order for them to draw a pattern (any pattern) they need at least a few candles - that means at least a few hours (they never see anything below H1). After they have done the preparations for the move they were planning, the action is swift - price can do 20, 30, 40, or even 50 or more than 50 pips in 1 hour - in the case of the GBP/Asian crosses. In order for us to catch that move, we should be glued to the computer screens forever, and if you missed the very beginning of the move and you are jumping in late, then you are scalping, because you have no time to figure everything out. The way to catch the big moves is to spend a lot of time in the PAST of the chart, to figure out what do they normally do in situation like the current one, to figure our the current structure of prce, the eventual triggers for that anticipated move, and also its target. In other words, you have to start thinking like the BBs, and to anticipate their moves. Once your planning is complete, you start waiting for that anticipated move, and when you recognize the beginning of it, you spring into action. There is a lot better way to place your trades - you place Entry Orders. They will be triggered automatically if price reaches them, and you place these Entry Orders startegically - so that them being triggered precludes the possibility of price going the opposite way. Your risk goes a lot lower - the Entry Order either will be triggered, and be successful (to a different extend, but still successful), or will not be triggered (if you were wrong in your planning). Win, or No Loss - that seems lie a good trade off, but requires a lot of work and experience.

Burton, I am sure that a lot of what I posted is not new to you, but your post allows me to discuss some details, that could be useful to the rest of the bees. And anyone can immediately see how much more organized and understandable the H4 chart (the BBs chart) looks.

 
burton

vesskrastev, i hear you, share away...for me it just reinforces, and reminds me of what i'm up against in the market.

i'm one of those odd ball traders that actually appreciates verbose detail, repetition of thought, and a steady stream of discourse, with an occasional debate, or two.

this is all about learning, refining, applying, and repeating.

thank you for taking the time to share.

 
vesskrastev

@ FrankS

Frank, the BBs use the H4 for ALL of their planning, and they enter and exit on H1. We do consult now and then the Daily TF, in order to figure out the really big picture, like when the BBs are switching long term trends, or breaking out of box, but we do not trade the Daily, and they don't. They have plenty of money, but those money are never invested in a lump sum - that is why the ATR works - the ATR simply gives you an idea of how much money (pips) they spend on average EVERY single day. Position traders, like Warren Buffett, and others of similar caliber, trade the Daily charts, but the Forex investment bankers need more immediate results. Greg Michalowski from Forelive (attachment 1) was a Big Boy for 12 years (Forex trading banker), and for 3 years Scott travelled with him (Scott is mentioned by name in Greg's book). On attachment 2 you can see one of his charts - there is nothing there, but 2 Moving Averages, 2 sets of fibs, and couple of lines - Support/Resistance, and Slope Support.

If you think, there is a definite weekly pattern of price - the MidWeek Reversal, the move after it, the eventual second reversal, etc. - and we can trade that pattern, but that does not mean that we have to go to a Weekly chart in order to do that. Every Weekly pivot is automatically a Daily pivot also - when you move down to the Daily chart; and every Daily pivot is also an H4 pivot; and every H4 pivot is also an H1 pivot.

I think you are trying to figure out on which pivot to apply the fibs. The short and simple answer is - apply them to any distinguished move - depending on the size of the move you can get targets of different importance. You can start with any move (any pivot), but to me the most reasonable place to start is a Reversal point (attachment 2). If you apply the 3 clicks Extension tool to the first retracement (the white lines) you will get the "longer" term targets - all the way to 4.236 Extension. You can apply the 3 clicks tool to the next bigger move - I call these moves inclusive, because they start from the same point, and just go to different lengths, thus the bigger move includes the smaller one - in our case the following 3 clicks fibs are in green color. The fibs of the bigger move "extend the map". Of course, you have to make sure that the move DOES continue (and would not stop almost immediately) - help in that comes from the moving averages, and especially from the green MA, which is MA 60. It is obvious that if price remains on the same side of MA60, the move continues.

The targets of the 3 clicks tool get to be separated by bigger and bigger distances, and knowing them allows you to keep your trades going on. On a smaller, more like daily scale, very important become the targets of the 2 clicks tool (the retracement tool). On attachments 3 to 7 you can see the 2 clicks tool (retracement fibs), applied to consecutive small moves, all of these moves in the trending direction. You can see how price retreated to a certain retracement fib, and after that moved forward, cleared the 000 point ( the beginning of the retracement) and continued into the area of extension, ending into a certain extension fib. The average retracement fib, the one that the BBs expect to be hit, is 0.500 (50%). In the case of unsustainable moves 0.382 would do (38.2%). In the case of stronger retracements price may reach 0.618 (61.8%), 0.786 (78.6%), or may even go beyond the 0.786. The rule is simple - the stronger the retracement, the stronger the bounce (the extension) that price will reach. Some Pull Backs (the PullBacks are very strong retracements) may even go beyond 100% retracement, thus creating a LOCAL reversal, but after the end of the PB price would continue in the previous, trending direction. In that case it becomes very important to be able to make the right decision - is that just a PB (pullback), or is it the beginning of a bigger reversal. Help in making the right decision would come from the MA60, MA240, and MACD.

Different pairs favor different retracement fibs (they will retrace to any fib, but most often they will go to one of them), and after that, as a rule, they will go to a certain extension fib. Our job is to figure out - if price retraced to a fib X, then what extension fib will it reach during the expansion phase? Again, different pairs ususally differ, and even the same pair may behave diferently from time to time. The important thing is to remember - the pair WILL NOT retrace just to an accidental price, but to a certain retracement fib, and also the pair WILL NOT extend just to an accidental price, but to a certain extension fib (these fibs may come even from a preceding big move of price - just another way to say that price will acknowledge previous Support/Resistance levels). If the BBs cannot compete their planned move on the first try, they will be successful on the second try.

In price action we do the planning not in pips, but in fibs. In a while you would know that you can reliably expect price to reach a certain fib, BUT - you never know how long would it take, and how many meanders would price do in between the starting and the ending fib. The job of the price action trader is to go back in time in the charts and to figure out what his pair statistically does, and after that the statistics will work in your favor, and not against you.

After posting again quite a lot of words, the answer to yout question: "To which pivots should I apply the fibs?" is simple - basically to any pivot. Any retracement is meaningful, and carries information about the following future expansion move (providing that the big move is not over). The small moves after a confirmed reversal are very important - applying the 3 clicks tool to them gives you the long term map. After you know the "big map" then you apply the 2 clicks tool to the smaller moves, and each small move gives you information abot the following future moves. In a while you cannot even think about placing a new trade without playing in advance with the fibs of the preceding moves.

Screenshot (337).png Banker's chart.png Screenshot (336).png Screenshot (331).png Screenshot (332).png Screenshot (333).png Screenshot (335).png
 
FrankS

Vess: Lots of detail, but I love it! Still studying your charts, but I now have another issue.

I am thrown a bit by the present statements about fibs as ratios being preferred as opposed to pips as fib numbers that we talked about in the recent past. I thought that was preferred and led the pack in terms of targets.

For the record, I am clear on the pivot points now. However, the moment you use fib ratios as opposed to absolute pips based on fib numbers, you then need two pivot points or one pivot vs. a select MA. So, which has the greater priority or preference, absolute pips as fib numbers or as fib ratios? As you know, I already base my grid on pips using fib numbers, like 55 pips as targets, etc. Perhaps I am confusing targets with support/resistance levels.

Hopefully, I explained the issue in clear terms. I can reword if necessary. Please clarify.

[BTW, oldest grandson's team won the baseball tournament this weekend! All-Star game on Tuesday for younger grandson.]

 
FrankS

After studying a separate FxLive chart (GBP/JPY) on the site, I can see he chooses the latest major pivot above the H1 MA100 and the latest major H1 pivot below the MA100, with stress on the word, latest. I do not see any Fib projection on any impulse swing, but I do see a Fib retracement grid (black horiz lines) between those major pivots. I do not understand the source of his dashed red lines, though; perhaps past S/R? Or some fib level above and below the 50% retrace level?

I realize everyone may morph this via their own tweaks and into a personal style, but the fact this guy was a BB as you stated, it has my attention.

 
jackietranrn

great posts

 
twbrown

I was bumping along fairly well thru Gold 1 when I first read this thread. Gold 2 and now finishing Gold 3 have been dramatically different after looking for BB targets. It gave me a great deal of help determining the top level direction. I'm still working out the daily direct/retracements but this information is transformative to my trading.

Lot's of work to go. Thanks a bunch

 
FrankS

Here's a did you know: For Eur/Jpy, the market turned down just now exactly 55 pips above last Thurs high, a major turn point on H4 chart. Like - WOW!

 
vesskrastev

@ twbrown and @jackietranrn

Thank you. It gets really interesting and exciting when the different pieces start fitting together, forming a convincing picture.

@ FrankS

Frank, congratulations on the success of your oldest grandson and good luck to the younger one tomorrow! Regarding the banker's chart, the dotted lines are former Support/Resistance levels.

Now, about the important question - what should have a higher priority, the absolute Fibonacci numbers, or the Fibonacci ratios? We all want to have simple and clear answers - and Forex never gives that to us. Scott loves to say: "If everything in Forex would happen always the same way, always would follow 100% predictable patterns, then there would be no one to take away your garbege, because your garbage man would be trading Forex." Both the absolute Fib numbers, and the Fib ratios, are wonderful tools. Each one of them works on its own, but when you combine them, the result is a lot better.

On attachment 1 you can see a few sets of fibs, both retracement, and extension fibs, applied to the current EURUSD chart. The while inverted "L" on the lower left corner marks the Extension tool applied to the first retracement after the reversal (or, as I call it, the BP trade - BP stands for Banker's Promise). I have circled in black how 2.618 and 4.236 extension fibs mark exactly pivots of the unfolding move of price - if you zoom in and look more carefully, you will see that the 1.000 and 0.618 extension fibs also hit pivots.

The first part of the white "L", the rising part, I have marked also with a black line, and have applied to it the regular, retracement fibs (the retracement fibs are "2 clicks" fibs, and the Extension fibs are "3 clicks" fibs). That small set of retracement fibs (small, because it is applied to a small price move) I have circled in a black oval. You can see how the -0.270 and the -1.270 fibs hit pivots too. On the left side of the chart you can see a set of fibs - they come from the previous big move down -- see that in details on attachment 2. When we apply the retracement fibs to the preceding move, we get the "map" of the current move, which retraces the preceding move. Now you can see why I placed these long black ovals - the 0.500 retracement of the preceding move is basically identical with the 2.618 ext. fib of the current move, and the 0.214 retracement fib of the preceding move matches the 4.236 ext. fib of the current move. When you have such a powerful confluence, and you know about it from the earliest stages of the unfolding price move, it gives you the confidence to expect price to hit these targets, and to stay in the trades until price does hit them.

So far I talked about fibs - Fibonacci's ratios. On attachment 1 we have also 2 different sets of absolute Fibonacci's numbers. You can see the black horizontal lines, marking the pip's levels, equal to Fibonacci's numbers. It is obvious that R2 and R3 hit pivots. Also on the upper right corner you can see another case of absolute pips numbers, applied to the chart - it is the Daily ATR of EU. Currently it is 69 pips. The black vertical lines mark the New York Close - this is the time when the new ATR becomes available. In our case price went slightly more than the ATR - but we don't have to forget that the ATR is just the average, and some days price does less, and some days it does more. Anyway, if you knew about that, and also had the confidence to stay in the trade, you were going to have one successful long trade of lets say 70 pips, and hopefully a few more - each one for a decreasing number of pips. The ATR is a statistical number - price statistically will do that (or close to that), but you have to determine in which direction will it move. For the GBP pairs there is another absolute number of fibs to be applied - this is the distance price would go from London Open, until the next big pivot. GJ and GA would quite often do 89 pips from London Open, and EG would very often do 55 pips.

Both the absolute Fibonacci numbers, and the Fibonacci ratios, are very powerful tools to use, but the best thing is to combine them. Also, regarding the ratios only (ratios = fibs), both the extension (3 clicks) and the retracement (2 clicks) should be used. Each one of the above mentioned tools helps you to clarify what the BBs might be trying to achieve, giving you different pieces of the puzzle. There are other things to add to the picture - channels, slop supports, patterns, Close And Reverse (CAR), wicks (the way the BBs create and use them), time of the day (of the week), MACD, etc. The BBs use a graphical language. Each part of that language is possible to be understood, the problem is that there are a lot of these parts. Here comes the most important thing - in order to be a successful price action trader, one has to spend a lot of time in the past, researching the way the BBs reacted in similar situations. When you spent enough time, they become predictable, not 100% predictable, but probably 80% predictable, and if 80% of your trades are succesful (they are for at least 55 pips), then you would be a very happy trader.

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FrankS

Thanks, Vess. Always helps! Much appreciated.

Regarding "wicks (the way the BBs create and use them)", I think that's definitely a need-to-know element. Where can I find more info on BB vs. wicks? An old trader I knew used to call elements like that part of a CIT(change in trend). At times I see them as pauses in trend. Sometimes those types of turning points are short-lived but sometimes the start of a new trend or a significant retracement. It would be interesting to see the viewpoint from the BB perspective.

 
vesskrastev

How is EU moving?

I became curious and decided to check on a bigger scale the movements of EU - not just one move, but the way one big move translates into the following. On attachment 1 you can see (on H4 - 240 min TF, otherwise I could not fit it into one screenshot) - it covers the time from 3/18/2019 until now. 2 sets of Extension fibs were applied (marked with black lines) - one at the beginning of the first move down, and another at the beginning of the second move up. In black are circled the places where a fib hit a pivot.

On attachment 2 you can see only the second move in bigger detail, covering the time from 5/29/2019 until now. 2 sets of extension fibs were applied (outlined by the white lines) and one set of retracement fibs (outlined by the black line). Again the places where a fib hit a pivot were circled in small black circles, and in an elongated black oval (kind of an oval, it is not that easy to draw with the mouse) is circled the perfect confluence of 3 separate fibs, which hit the current top.

Attachment 3 covers the time from 6/17 until now, which is roughly the second half of the move up. Again 2 sets of extension fibs were applied, and one set of retracement fibs, the pivots hit by a fib were circled, and the confluence of the fibs at the top was included in an oval. There were more confluences, but I became lazy to mark all of them. As less time is covered in the screenshot, we can see the chart in bigger detail.

Attachment 4 covers the last quarter of the move up - starting from 6/19. This time 2 sets of retracement fibs were applied, and one set of extension fibs. The bigger set of retr. fibs covers the last move up, and the smaller set of retr. fibs + the ext. fibs cover the move down from the current top. Again the pivots, hit by a fib, and the confluences, were marked. Price already pierced the 1.000 ext fib, went all the way to 1.618 ext. fib, and retreated. Now it is moving down again and is at 1.000 again. 1.000 is a very important ext fib. If price bounces off of 1.000, and never crosses it decisively, then we just observed an A-B-C (a continuation pattern). If price, after bouncing off of 1.000, comes back, crosses it, and continues, then we have a reversal - it starts as a local reversal and may continue growing, depending on the then current structure. After crossing 1.000 second time, price WILL hit 1.618 (this is the promise of the Big Boys), and quite possibly will hid 2.168. Hitting 4.236 depends on the size of the move before the fitst retracement. Of course, the extension tool (3 clicks) may be applied to the following bigger move, and will give you another set of fibs - 1.000; 1.618; 2.618; and 4.236. Some experience is necessary, but it is easy to get it.

In our case price already hit 1.618, true - by a long wick, but it is returning to the same area. USDX was moving down, with a divergence. Now it moved up, with convergence. If the move up of USDX continues, then EU will continue down. Seeing that many confluences, and especially the last one - the last fib of the ext (4.236), combined with the last fib of the retr. (-1.270), resting next to the lower wall of that newly born, not yet proven, but still a channel - it seems to me that price quite likely will get there. That will probably not happen tomorrow, since the 69 pips of the daily ATR of EU today (after 5 pm EST) stretches to 1.1300. It should be a 2 days move, unless suddenly EU becomes very very active. Time will show.

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FrankS

While contemplating one of my charts on TOS (Eur/Jpy) where I showed the previous daily close position as a horizontal line for reference, I wondered whether the big boys or medium boys of the banker squad ever used or considered a similar daily strategy based on the same fib-based pip scale that they use on H4. Are turning points more significant than key closes? Perhaps, perhaps not. Then again, maybe it doesn't matter if this scale is fractal in nature, which I tend to think it may be.

In this case, I was using an M10 (not possible on Alveo, btw) with the center (zero or origin) of the fib-based pip projections placed on the prev day's close value. It then occurred to me that this may provide a decent setup for alternate viewing or primary viewing of short-term charts below H4 and H1, as the changes in close-to-close seldom wander beyond 20-55 pips anyway. This made me suggest to myself about subdividing the 55 pip scale for a finer scale or simply settle on fib-based pip expansions as originally learned here.

Well, as it turned out, there is merit in that approach as I found many turning points of the day occurring at or near the fib-based pip projections. Point: the number of occurrences suggests it was not a fluke, as I found similar occurrences when I first tested the scale on H4 a number of weeks ago. Of course, one day does not make a trend so an extensive backtest needs to be done, but if it worked from a higher timeframe, then the law of fractals just may apply here even if placed on EOD close. Simply sharing food for thought. Will keep y'all posted.

 
vesskrastev

Frank, I still owe you an answer about the wicks. Regarding turning points and key closes. All key closes are turning points, but not all turning points are significant closes. Let's put it this way - the turning points are steps on the way to key closes, and some of these turning points do become key closes, but not all of them.

Regarding the changes from close to close. If you mean the daily closes, than these changes are the Daily ATR. A lot of ATR's are in the group of the 55 pips, and since we do have days with close to 0 total daily movement, compensated for by days with movement higher than the ATR (ATR starts with Average!), than, of course, there are smaller than 55 pips distances from close to close.

For a long time I have been planning to post on how price generally moves (I started on that, but did not finish). It is a very interesting, and very useful topic. I should post on that soon.

 
FrankS

Vess, the way I see it, the Forex daily close at 5 pm EST is a key close simply because it is not just the closing price of the US market but where all markets are closed until the Sydney market opens followed one hour later by Japan. The dead zone is noted by the sudden increase in spread values. It's like communicating with a market inside a space satellite on the dark side of the moon.

Simple minded viewpoint? Perhaps, but to say it is not significant relative to open market time would also be naive on my part.

The next key close for me would be the Friday close, whereby ALL markets shut down until Sunday even in the US as Sydney opens. It is these dry-time areas that I believe the markets may not trade but are still planning periods and far from going to sleep. So, with that in mind, I can see readjustment of targets likely occurring so as to better meet any longer-term targets, and where I have been researching the placement of my pip grid. The same type of adjustment process occurs in the futures and options markets every Friday as well as every quarter (think triple and quadruple witching). Regardless of the market, it's man-made readjustment time.

BTW, I am reading a book, "Attacking Currency Trends" by Greg Michalowski whereby he advocates a mission statement, along with a sample trading-plan development process using the SMA100 and 200 for M5, H1, and D1. Strange how he does not include H4 per se. One area that he does highlight as important is "remembered lines." In our case, fib retracements and projections, S/R lines, and 55 pip levels would fit into that category. Moreover, he labels them as "unambiguous;" meaning, they would have no bias. Only price closes above or below them would define bias as bullish and bearish conditions. Just more thoughts!

 
burton

"The dead zone is noted by the sudden increase in spread values" ...low volume, primary reason for spreads widening.

 
vesskrastev

Frank and Burton,

So far everything that I posted regarding Fibonacci's numbers and ratios, was applied to price. When the structure of the pair is clear, and the fibs are applied properly, we can reasonably well expect where price would stop, and where it would end it's run. The saying was: "But you never know how long would it take!"

I think I can reasonably well predict how long would it take. The Fibonacci's techniques could be applied to time movements also, not only to price movements. This is covered in the literature. Lets start with the most simple - applying your fibs based fixed scale to time, not to price. On attachments 1 and 2 you can see that done on a 60 min GJ chart. The 0 line is at a price pivot, and the following vertical yellow lines are placed on a Fibonacci's scale - 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233... All of these time fibs are at a price pivot, or very close to a pivot.

On attachment 3 you can see the time fibs applied to a 240 min chart of GJ, and on attachment 4 you can see the same chart zoomed out, so that the 144 and 233 fibs could be seen. Again all of the time fibs hit price pivots, or are very close to them.

On attachment 5 you see both the time and the price fixed fibs applied at the same time. It is amazing that the price fibs get hit exactly on the time fibs - such a perfect confluence is hard to find! And on attachment 6 you can see the 5 waves of a trend, with the fixed time fibs scale applied at the start of the trend. All the 5 waves start and end on a time fib! WOW!!!

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burton

vesskrastev, very nice, very informative share. =)

 
vesskrastev

Next on Time Fibs

The previous post covered applying the fixed scale of Fibonacci's numbers towards the timing of a price move. The best moment to apply it is at the beginning of a sizable reversal.

This post will deal with how to use the timing of a particular price move in order to predict when price may be changing direction in the future - therefore we will be dealing with relative time moves (relative to the timing of that particular preceding time move).

Theoretically price should change direction at any time fib, but the publicly available information says (and in the real world confirms) that when price hits a time fib, it may change direction, or stall. The time fib could mark a significant high or low, or a minor one. Also the time fibs are not as reliable as the price fibs - about 30% of the big changes happen not on time fibs.

Different sets of time fibs are used by varying sources. What are the possible values for time fibs (any fibs)? All of the real ones come, one way or another, from the golden mean - 1.618, or 0.618. 1.270 is a square root of 1.618 (actually 1.272 is the square root, but both values - 1.270 and 1.272 are used). 1.000 is the difference between 1.618 and 0.618. How about 2.618 and 4.236? Here is the most interesting thing - 1.618 X 1.618 = 2.618. Then 2.618 X 1.618 = 4.236 - that is how we get the price extension fibs (1.618, 2.618, 4.236).

I started experimenting with what time fibs are best to use. Attachment 1 shows you a good example. Then I decided that instead of cherry picking (and therefore be uncertain) I should start applying all of the fibs - all means starting from the first extension 1.270 and ending with the last - 4.236. The set of "all" of the fibs is - 1.270; 1.618; 2.000; 2.270; 2.618; 3.000; 3.618; 4.000, and 4.236.

The literature says that the starting move (the impulse move, the one that is projected into the future) could be between two tops, or two bottoms, or between a top and a bottom. In my experience all of that works, but using two bottoms in an uptrend gives you worse results than using two tops (see attachments 2 and 3 - attachment 2 uses 2 bottoms in an uptrend, and attachment 3 uses 2 tops in the same area of that uptrend - the projection of the 2 tops works better than the projection of the 2 bottoms). Because of that I would recommend to stick with tops for an uptrend, and bottoms for a downtrend. So far I think that using a top and a bottom is OK, but in what sequence? - that should come from practice, which is the ultimate judge, and with time may change some of the previous statements also.

Attachments 4 and 5 show you different examples. Some of the fibs hit a change in direction, some hit a "stall," some changes of direction are big, and some not that much - exactly as the publicly available knowledge says. It is obvious that a lot depends on experience - for example in attachment 5 a lot may change depending on where you would place the starting point - in this case it is open for personal interpretation. Also, of course, a lot probably depends on the pair you are using. I have just entered into this field and have very little experience, it is continuous practice that will show the final solutions.

I have more examples, some of them a lot better, but the point was to show how it works, and what results could be expected. To get the fibs, you count the candles between the beginning and the end of the "impulse" move, and then multiply that number by the value of the time fib. Very often the result would be not a whole number, for example 23,6. In that case I would place a vertical line through the 24th candle, but since the time fibs are less reliable than the price fibs, the price pivot could come at either one of these candles, or even slightly away from them (or sometimes may not come at all, because price entered a stall - a narrow accumulation field).

Based on what I have seen so far, price can form a pivot on all of the fibs, mentioned above - 1.270; 1.618; 2.000; 2.270; 2.618; 3.000; 3.618; 4.000, and 4.236. Of course, nobody would use 9 fibs on a regular basis, especially if you apply the fibs manually by counting, multiplying and marking. The most relaible ones to me are: 1.270; 1.618; 2.000; 2.618; 3.618; and 4.236. If that number of fibs (6) is still big, and especially if you don't follow the movements of prce for a longer period of time, you might skip 4.236, or may be even 3.618. The first 4 are mandatory - 1.270; 1.618; 2.000, and 2.618. I myself would always check on 3.618 also.

Something which would make the ProAct charts users happy, is that Jerry is already working on the "absolute" time fibs tool, and after that he will start working on the 2 clicks time retracement tool as soon as I send him my results. In the close future, if that proves worthy, he may also add a 3 clicks time retracement tool (I have to play with how well price will oblige to a 3 clicks time projections, and what fibs would work best). It will be so much nicer to get the computer to place all of these time fibs in a split second, instead of manually doing it yourself.

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burton

okay, i'm going to have to make some time, so i can go through this, with great focus...i've never been a fib trader, still, you have my curiosity peaked...time to learn something new...vesskrastev, thank you for taking the time.

 
vesskrastev

You are welcome Burton!

The Fibonacci numbers are everywhere in the nature and in the human society, the natural tendency of traders is to move towards them. In the case of Forex trading we have a lot more than just a natural tendency. The BBs intentionally DRIVE price towards these recognisable values, and they are the Kings of deception - they can make these completely calculated moves to look absolutely random. If you really get into the details, every small change of direction starts and ends on the fibs of some of the preceding moves. They plan the outcome of a very big move from the very beginning - the first very small moves carry coded in them the final target. 4.236 is not the final extension - there is a bigger following one - 6.854, and I have perfect examples of how a big move of the same currency ends when BOTH price AND time reach that super extended 6.854 fib. And the 6.8654 ratio comes from the very first small move. After that small initial move everything unfolds step by step, you just have to know how to decode it.

The "standard" fibs describe how price moves up and down, on the vertical axis Y. Time fibs describe at what moments in time price reaches the local maximums/minimums. Of course, time fibs are less reliable than the price fibs, but they are reliable enough. In trading timing is everything, and the Time Fibs are your best helper, of course, after you know your targets. Later on I will experiment with time fibs on really small time frames, but for the moment I am concerned with the 60 min and 240 min charts.

 
FrankS

LOL. Vess, that somewhat agrees and challenges the old W.D. Gann statement that "time is more important than price."

 
Rookie

Frank the is a very debatable point,
as in RE location, location, location
then add sentiment plus momentum = trend

 
vesskrastev

USDX, EU, and ATRs

Attachment 1 shows that USDX is still structured for a move up, but MACD on attachment 2 shows a clear divergence, which suggests that USD will move down in the near future. I think that there is an expectation that the result of the FOMC tomorrow would be a cut of the rates, or at least a hint for a future rate cut, and that reflects on MACD.

If USDX is expected to start moving down, then at that same time EU should start moving up. On attachment 3 we can see how today EU moved slightly up, and currently is in a symmetrical wedge. Attachment 4 shows the MACD of EU - it is obvious that when EU was moving down, MACD was moving up - a clear divergence. For the moment it seems that we may have the beginning of a convergence up, but that is far from sure - we would know for sure only after the "0" line of MACD is decisively broken through in direction up. Everybody waits to see what will be the result of FOMC tomorrow.

Attachment 5 gives you the current ATRs.

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AttachmentSize
Weekly and Daily ATR 1.xlsx 25.72 KB
 
dave.b

Vess thank you so much for your sharing I am really enjoying the conversation with Frank,Burton and Rookie. Much appreciated and much to learn .

 
vesskrastev

USDX, EU, and ATRs today

On attachment 1 you can see how the oscillators for USDX are all flat, while the Heiken Ashi mini charts on the bottom show the beginning of a move up. On attachment 2 you can see how MACD shows a clear divergence, and we already had a break in direction up of the "0" line of the histogram. That suggests that for the moment USDX (and the USD $) would move up.

Dollar up means EU going down. On attachment 3 you can see how the long term Heiken Ashi charts, and the 240 min oscillator, all suggest a move down, while the short term point to a short term retracement - to me that means that for the moment EU will move down (that is, until USDX changes again and starts moving down). Attachment 4 shows the MACD of EU, which shows a clear divergence and also shows a break in direction down of the "0" line - clear sign that EU will move down.

The ATRs are attached in the XCELL file.

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AttachmentSize
Weekly and Daily ATR 1.xlsx 26.15 KB
 
vesskrastev

Cascade on GA + Probable Reason for the Big Moves Last Night

Last night GA plunged down for a total of 164 pips - attachment 1. The reason for that - it showed a great example of a cascade - starting on July 11th (attachment 1).

Additional reason for that hard move down (GA daily ATR currently is 107) - Fed. Chairman Powell and FOMC Member Evans both speak this afternoon - at 13:00 and 15:30. Probably a lot of other currency pairs paid attention to this and were in a hurry to complete their planned moves before the speeches would happen - it is obvious that the activity last night was a lot higher than normal for this time of the year.

Screenshot (46).png
 
ctolva

I have just moved into Gold 1 and based alot of my trades on the Banker's close system. I am very much interested in learning the Target system and using the FIB
Alot of great content in these postings.

 
bull4229

vesskrastev,

Wow! I think I've learned more on this post than any other I've encountered! Thank you so much for your wealth of knowledge and perpetual feedback! I don't think I've seen anyone else so active in responding and thorough in giving information. You truly are an asset to the hive. Thank you!

Also, happy belated birthday!

 
artiekau

I have read the comments from the last month on this tread, very informative, Vess, you commented about Scott use to be one of the BB, is he behind the the PaTrader charts? I had demo their charts for a month but was more than I could afford at that time, Do you use them to trade and do you find them cost effective?

Thanks again for your input, it has been very helpful. will have to go back and read again

 
vesskrastev

@ dave.b and @ ctolva

Thank you for the good words.

@ bull4229

Thank you! Your comment is the nicest thing anyone has ever said about my tread. And thank you about remembering my Apiary birthday - I just turned 2, I am still a baby bee. Wish I could say the same about my real age.. (I am almost 60).

@ artiekau

Thank you. By the way, Scott was never a BB, but he travelled for 3 years with a BB. Before the Frank-Dodd act caused the exodus of the American broker-dealers, Scott was an adviser to the second largest one of them. He is an adviser now too (I never paid attention to whom), and every morning he posts his recommendations - online for everybody interested, on the free side of the ProAct website, and also emails them to every registered Target trader.

Regarding the charts. All my planning is done on the "green" charts, on Alveo I just execute the trades. Are they cost effective? It is an interesting question. So far I cannot recover the cost of the charts - I pay for both of them, ProAct and Apiary. For a funded trader the Apiary charts are only $65. Still, there are quite a few newly funded traders, who are not profitable yet. Are the Apiary charts cost effective for them? The Apiary charts come together with the Beeline and the incredible Apiary business model. I think they are cost effective for everybody.

The ProAct charts show you on one screen, with one glance, up to 7 different and customizable Time Frames of the pair that you are trading - you cannot get that on MT4, or anywhere else. (attachment 1). Each one of these 7 different TFs could expand to cover the whole screen. If you pay attention, you will see that attachment 1 displays USDX - exactly the same way as any other pair, and having a chart of USDX is a huge thing, especially if you trade EURUSD. Arrows point to the thin line MA, which changes color - green when price is moving up, and red, when price starts moving down - works like magic !

You can see on the chart a thin brigh blue line - it is the T3 MA. It has proprietary settings, which make it very hard for price to pierce it. Price keeps hitting it and bouncing, may be slightly penetrating it, but returning back, and when finally it breaches it decisively, it is for a big run. When you spot that event (price moving from the one side ot T3 to the other), just stay with the move, until price moves on the other side of T3 again.

On attachment 2 you can see what it means in the case of EU. Price moved vertically 200 pips, and stayed all ot that time on the same side of T3. 200 pips move for EU, in a summer time, is a huge thing - and T3 allows you to capture it completely! Now, couple of times price slightly "poke" T3, but did not move on the other side. Wouldn't it be nice to know when price is just "poking" T3 and when price is piercing T3 and is moving on the other side? Actually, we do know. T3 is the equivalent of the "0" line of the histogram of MACD - if the bars of the histogram pierce the "0" line, then exactly at the same moment price will pierce T3 and move on the other side of T3. If the bars of the histogram hit the "0" line and bounce, then price may "poke" the T3, but will not pierce it. For that is necessary that T3 and MACD are on the same TF (on attachment 1 they are not).

There are many other wonderful things about the charts - you can zoom in or out horizontally and vertically, you can move the candles horizontally and vertically - pretty much your imagination is the limit on what you can do with the charts. The charts keep in memory the last 2,500 candles of each TF, and going back in the past and researching the "personality" of your pair is a breeze. Then we have the Studies - attachment 3. I only use one of the options of the Common Studies, in order to calculate the Weekly ATRs, but each one of the remaining Study Types has the same , if not a bigger number of options.

To summarize - I haven't yet come to the point to recover the cost of my charts, but to me they are totally cost effective.

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Wallid

your gotta believe in your self and your analysis

 
davidbrowning1111

Hello All
I just found this post and I think that the information here is important to every person wanting to trade this market.
Thanks for posting all the information. It will take me some time to understand this but I am going to start to apply this style of trading to my one. Thanks for sharing.

David B

 
FrankS

For certain, Alveo is not user-friendly for Target Trading, especially if you want to build a 55 pip grid system or any stationary grid system for that matter. I have to use TOS for that. Nonetheless, the concept surely brings a level of awareness about larger movements which may occur when you are trading a short-term chart.

 
Rookie

Frank that grid system is a very interesting concept. While the white space 4H trading is what first got me interested. I would like to combine a VAR as exampled at mataf.net in best trading time slices to establish trading blocks.

However, my automated math abilities are woefully short of this task. I may attempt this manually.

Frank, could this be done in TOS?

Vess, can this be done on your platform?

 
danielemazzolini

It really makes a lot of sense and makes you think on a bigger scale while trading. I really helps thank you

 
John Adams

Very interesting thread. Thanks for sharing!

 
FrankS

I have no idea, Rookie, if it can be applied within TOS or even how to apply VaR especially in a day-trade situation. I thought that was specifically made for portfolios not a single entity trade, but I may be wrong. I tend to value a good backtesting system of technical price-dynamic setups far more, but that's just me.

Right now my best only backtesting method and system is trading and then reading my equity curve. LOL.

BTW, a tweak on my profit curve might get me to Gold 1 next time out; or two!!

And regarding a 55 pip grid, I use TOS for that as it's easy to program. Even I can do it.

 
Rookie

Thx Frank

 
vesskrastev

@ Wallid, @ davidbrauning1111, @ danielemazzolini, and @ John Adams

Thank you. Yes, you gotta believe in yourself (even when you lose - as Edison once said " "You do not fail, you just found one more way that does not work!" And it really makes a lot of sense when you look at the market through the lens of a bigger Time Frame.

@ Frank and @ Rookie

I apologize for the stupid question - what is TOS? I've seen also TOC, and have no idea what these abbreviations mean. ProAct has a "fixed grid system" - we call it HSI (Historical Statistical Indicator). You can see it on the attachment. You pick up a major pivot and specify - Buy or Sell, and the indicator applies the fixed grid system. HSI is a part of every chart.

Screenshot (136).png
 
Rookie

TOS commonly referred to as Think or Swim aka https://www.tdameritrade.com/tools-and-platforms/thinkorswim/features.page

A VAR is a way of measuring risk. AKA Value at Risk. https://www.mataf.net/en/forex/tools/value-at-risk

My thought was instead of creating the most optimum momentum HV box, to create the most optimum risk Box.

 
madtech

The amount of information on this thread will take several days to explore but I have walked away with at least 4 or 5 action items. Thanks to everyone.

 
vesskrastev

Time Fibs Confluences In Some Special Cases

I have planned to post that for a while and could not find the time to do it. It is a continuation of the posts regarding Time Fibs from July 2nd and July 5th.

The attachment shows you a very interesting case. The first price move is marked as a-b (with a bright blue color) - it is the move of price in direction down (between a top and a bottom). The second price move is marked as A-B in a black color (the black horozontal line, marking it, by mistake continued a little bit longer - was supposed to end at the yellow vertical line, at the end of the price move up). The second move, A-B, is between 2 tops. The length of the smaller move is exactly 0.618 of the length of the bigger move - that is, the Time length (we measure Time with Time Fibs).

The Time Fibs of the bigger move (A-B, between 2 tops) are marked by yellow vertical lines, and the Time Fibs of the smaller move (a-b, between a top and a bottom) are marked with bright blue vertical lines. It just happened that ab = 0.618 X AB. From that point on you can see multiple perfect Time Fibs confluences - 1.000 of AB = 1.618 of ab; 1.270 of AB = 2.000 of ab; 1.618 of AB = 2.618 of ab, etc. The confluences are shown in in organized view on the bottom of the attachment.

I have the feeling that we may see 2 consecutive moves of price, having time lengths forming the Golden Ratio of 0.618, quite often. If we find one of these occurences, we will automatically get the Time Fibs confluences, shown in black circled area at the bottom of the screenshot. There was a screenshot with the first price move 5 candles long, and the second one - 13 candles, but I cannot find it. If 2 consecutive price moves have lengths in candles, measured in Fibonacci numbers, there WILL be some really good Time Fib confluences.

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FrankS

I have never found confluences to be exact in terms of exact price or date, but definitely as a heads-up signal that the probability of a CIT (Chg In Trend) is higher than normal or when the price is closer to the mean. Lately, I find such confluences even with BBands as with an H1 vs. H4 on an M1 or M5 chart.

 
FrankS

Vess and Rookie: Is there anyone here who can code Alveo to make a fixed grid indicator for Alveo, with inputs as to the start point and the spread of the grid? Right now I have to use my own custom version in TOS (ThinkOrSwim) with TD Ameritrade, the same platform that I use for stocks, options, and futures. An Alveo indicator would allow me to use one system again for Forex.

 
cseholdings

Nice. We have developed Target Trading Strategy and not lost any trading day in last 2+ years..... Here are some of the targets with 55+ TP for this week.....GBPJPY Buy135.70,, EURJPY Buy..121.80,, AUDUSD Sell TP .6980...NZDUSD Sell.TP.6650...USDCHF Buy..TP...9880

 
Rookie

@cseholdings, two years and not one trading day loss, that is supper, what is the expectancy of your strategy?
Do you keep the trades on one of the public web tracking sites?

 
vesskrastev

@ FrankS

Frank, the way I see it, confluences in terms of price form a resistance zone. Price has a hard time passing through it. Not impossible, just hard. It may take multiple hits into that confluence (resistance zone) until price overcomes it, ot price may give up and retreat. In terms of Time fibs (confluences), they indicate times, when price may change direction, times when there is a very high probability that price may changee direction. It says nothing about the significance of the turn, it may be almost an imperceptible turn, or it may be the beginning of a huge trend. Also the Time fibs (confluences) do not catch all of price turns. Still, time fibs (confluences) are an extremely powerful tool, in my opinion. Price fibs show us where price may go (coupled with structure analysys), time fibs tell us when this may happen. It is not 100% sure, but in Forex nothing is 100% sure. We deal with statistics and probabilities, and any Fibonacci's tool is the best help in that.

I don't know anyone who can code in Alveo. I have a question, though. Why do you need to incorporate spread into the grid? You were talking, if I am not wrong, about 55 pips runs, or similar. In that case spread is insignificant. If your Take Profit is 5 to 8 to may be 10 pips - yes, sprad is important, but if you shoot for 34, or 55 pips, or more, than you may not account for spread, just do not start the trade at Asian Open, when the spread is about 20 pips.

@ cseholdings

Hi, it seems that we are using the same charts.

GBPJPY Buy 135.70. On attachment 1 you see that there is a clear convergence up for GJ on 240 min chart. The 0.500 retracement of the previous big move down of price, and the 1.000 extension of the first clear retracement after the reversal, are in perfect agreement - 135.71 and 135.65. Aftre price hits the target - 135.70, there should be a strong retracement

EJ Buy 121.80. Attachment 2 shows you the same setup - convergence for a move up, the 0.382 retracement of the previous big move of price, and the 2.618 extension of the first BP (3 clicks tool, applied to the first retracement after the reversal), are also in a very good agreement - 121.76 and 121.79. After price goes through the resistance zone (the confluence of both fibs), we will have a strong buy, BUT before that there will be also probably a strong retracement.

AU Sell TP 0.6980. Attachment 3 shows you once again the same set up. There is a convergence for a move down for AU, and at 0.6974 we have a confluence of tho fibs - the 0.382 retracement of the previous big move of price, and the 1.618 extension fib of the first BP (3 clicks extension, applied to the first retracement after the reversal).

NU Sell TP 0.6650. Attachment 4 shows you - at 0.6652 we have a triple confluence - 0.382 retracement fib of the previous big move of price, and 0.500 retracement fib of the move up ( the shorter white line), and 0.618 retracemet fib of the combined move up (the longer white line).

USDCHF Buy TP 0.9880. Attachment 5 shows a clear divergence - price goes down, and MACD goes up, followed by a "0" line break in direction up. The 1.618 extension fib of the first BP, is 0.9874. In the case of AU Sell we had the same BP fib - 1.618. After price decisivly clears the 1.000 extension fib (it only becomes a reversal AFTER price crosses the 1.000 of the first retracement - until then it is just an ABC, a continuation pattern), it will guaranteed hit the 1.618.

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legionx7

Thank you for the wisdom sir :).

 
FrankS

Vess, I had no intention on placing a grid of the spread, but a grid of the 55 pip steps (and other fib steps) and perhaps its sq root values as sub increments. I wrote my own program in TOS where I plug in the start value, but as usual, Alveo cannot easily avail such a simple task without a major science degree in programming for a language that even fewer techies speak. It would just be convenient to have such a grid in Alveo, one chart, one place. And being the independent bloke that I am, I would prefer not to have to bug other folks to make or adjust even simple indicators. And right now I do not have the time to learn another language.

As an edit, I added a copy of a 55 Pip Grid in TOS for an example (that is IF my upload worked OK).

Chart-USD-JPY 55Pip Grid.JPG
 
jadriatico

I have a question, since the big boys watch the 4 hr and the 1 hr charts and focus more of bigger wins scalping seems like a way to be able to peel off pips without getting tied up in the manipulation of the market by the big boys, correct? So making 20-40 pips per contract or less can be done without getting caught up in volatility . So this helps with short term strategies and getting stopped out with major swings.

 
dthatch

Thank you for sharing. As I am just entering gold 1 I do not believe at this moment I am looking for the big boys! I am sure they exist but with the smaller targets and even scalping, I feel that I can "play" between the lines. I will continue to follow this and thanks again and best of luck!

 
vesskrastev

@ FrankS

Frank, now I understand what you meant by a fixed 55 pips grid. It may help now and then, but generally the BBs do not hop 55 pips, and then they hop another 55, etc. They will not move unless there is a 55 pips field in front of them, uninterrupted by barriers. But once they find that, they will jump into action, when the 55 pips target is reached, they will close their trades - either all or most of them (in the case of smaller ATR pairs), or just some of them (in the case of bigger ATR pairs). BBs closing trades, even only partially closing, will cause price to jump back significantly, and they will use that ocasion to enter new trades and to gun for the next, bigger Fibonacci target - 89 pips from the beginning of the original move. Upon hitting the 89 pips target, they will close trades again (that is what is done when the target is reached!) which will cause another jump back of price. At the end of that jump back (retracement, or a pull back are other words to call it), If the ATR of the pair and the time of day allow that, they will start shooting for the next. bigger Fibonacci target - 144 pis from the beginning of the original move. Sooner or later the whole move will end, but it will not consist only o
of 55 pips moves. That is what they do - their targets are Fibonacci numbers, starting with 55 (there is a little bit more there, but generally this is true), and upon hitting the targets, they close their trades, which causes price to jump back, and if possible, at the end of that bounce, they start gunning for the next, bigger Fibonacci target.

@ jadriatico

Hi, there is no way to escape the volatility. There are techniques to managre the volatility, to make sure that it will not kill your trades, but it is impossible to avoid it. If you trade in synk with the BBs (meaning you identified their target and the beginning of their move) you can count on them finishing their job, hitting their targets - if not on the first attempt, then on the second. If you go for targets of 20 or 40 pips, then you trade with the retail traders, and anything can happen there. Actually by doing that you have a higher risk of being stopped out by major swings, sipmply because you did not identify the targets of the BBs, and hitting these targets (or major news events) is what causes the big swings.There is more to say about that, but I have to pick up a customer, will come back to the isssue.

@ jadriatico and @ dhatch

Shooting for smaller amount of pips is completely reasonable - whether 5 to 8 pips, or for a bigger number - there are many, many successful scalpers. Scalping involves indicators, and the decision to get into a trade is based on their use. The problem with that is simple - the indicators do not know the future - at best they will tell you what just happened. They do not know that, for example, there is a major barrier 3 pips further down, or that the trend wall is 5 pips ahead, etc. These barriers usually are targets (at least intermittent targets), and when price starts getting close to them, price action intensifies. The indicators pick up that and give you a signal to enter. You do enter, just to find out that almost immediately price hits a wall, and quickly retreats. Price action does not know the future neither, but if properly used may reasonably predict where these barriers are located and to give you heads up.

When you try to "play" between the lines, especially during a time when the candles seem to get wild, you run a very serious risk of hitting these invisible for the indicators barriers. By the way, a barrier is considered fulfilled if price gets within 30 pips from it. Of course, the barrier better be hit with a precise hit, but if for whetever reason the BBs are unwilling (or unable) to get closer, 30 pips distance from the barrier would suffice.

@ FrankS (again)

Frank, look at the attachment. The ATR of the pairs (lets look at the 180 days values, since they are a lot closer to the normal for the pairs - currently, due to the summer, the ATRs are extremely low) may be divided into a few groups - the group of 55 pips, the group of 89 pips, the group of 110 (110 = 2 X 55 - with these you could eventually use 2 consecutive 55 pips blocks), and the group of 144 - currently almost non existant, but if you look back in the ATRs that I was posting, you will see that GN, GA, and GJ , and quite often EN and EA were parts of this group. What I was trying to say is that by applying a fixed grid with only 55 pips distance, you will probably not get a very good match with the actual pivots of price.

Frank, I tried before to suggest to the Apiary developers to do the 2 clicks retracement tool properly - currently the extension levels extend the Retracement, not the Impulse move. My attempt was unsuccessful. If you want to, you may contact them at workorder@apiaryfund.com.

ATR.png
 
bipin819

Most important is how to find Targets , we have developed a Target Trading system, we are in profits for 2+ years consistently.....

 
Rookie

bipin show us

Better Yet start your own thread and put regular details in, with maybe an image or three.

 
FrankS

Vess, I understand your presentation. :)
For the record, I also have a grid that expands at the Fib number rate/scale such as 21, 34, 55, 89, 144, etc. The chief issue with that expansion is making sure you selected the same major pivot that the Big Boys (and Girls) used. If you are off, the expansive scale can also become way off when compared to a fixed rate of expansion. So, that is why I developed both in TOS.

So, that obviously leads us to discuss what is the best major pivot. What rationale is used? The annual, quarterly, monthly or wekkly? I have found success in /ES futures, for example, paying attention to the Friday close. So, while many traders pay attention to the MA50 and MA200, other points of interest do exist. I suspect that may follow suit for Forex.

Great discussion, BTW!

 
FrankS

If the Big boys truly use the H4 as a de facto base-timeframe for all planning, then it makes sense to me that any MA on a shorter timeframe that reflects 4 hours in minutes reflects that value and therefore a good reference. It is for that reason that I can see using an SMA 240 on an M1 and an SMA48 on an M5, for example. Still that alone does not reflect the micro-levels or the expansions which we know exist.

So here are a few questions:
1) Would Fib Number expansions in pips, up and down about any H4 equivalent MA have any future value? Or must it always have an origin at a major high or low?
2) Since Alveo cannot accommodate fixed or expansion grid in pips, would a BBand type expansion with standard deviations suffice as a logical alternative, keeping in mind the Fib pip expansions as points of reference?

 
vesskrastev

How Can We Extend the Range of a Fibonacci's Tool

In the case of a 3 clicks tool, after a certain amount of retracement (the standard expected retracement is 0.500, but it may be a smaller, or a bigger amount), an Extension of the original Impulse move starts - price starts moving once again in the direction of the Impulse move. Once price hits 100% Extension (that means that the length of the Extension move is now equal to the length of the Impulse move), we have fulfilled the size of the first range of Extension. How do we get a new range of values for the tool, how do we measure the Extension Fibs for moves bigger than 100% extension?

In the Internet it says that to get a new range for a Fib tool, you multiply the top of the previous range by the Golden Ratio - you multiply it by 1.618. The fib values of the 3 clicks Extension tool are: 1.618; 2.618; 4.236. Simple check shows that the Internet rule is right - 1.000 X 1.618 = 1.618 (the first fib). 1.618 X 1.618 = 2.618 (the second fib). 2.618 X 1.618 = 4.236(the third fib). Perfect, the rule is valid.

I apply the 3 clicks tool to the proven beginning of a reversal. If the first combined move, Impulse Move + Retracement, is a small one, and if price clears the 1.000 extension of that combined move, than fibs 1.618 and 2.618 will definitely be hit, and price will form pivots there. 4.236 fib is the fib for an extended move, and in the case of a small first combined move basically always is hit. Price may continue past the 4.236 fib also. If the first combined move is relatively big (the first pivot of price in the new direction did not come quickly) then 4.236 may not be hit.

Going back to the case of a small first combined move - if price exceeded the 4.236 fib I would have applied the 3 clicks tool to the next bigger combined move - Click 1 again at the beginning of the reversal, but Click 2 now at the second pivot of price. Applying the 3 click tool to a bigger move extends the range of the predicted future "map" of price movements. There were a few cases, not that many, when after the beginning of the reversal price formed a small initial combined move AND continued strongly past the 4.236 Extension Fib. Instead of applying the 3 clicks tool to a bigger combined move, I thought - what if I still use the same initial combined move, but just extend once again the range of the move? Applying the Internet rule: 4.236 X 1.618 = 6.853848 - lets say equals 6.854.

Can I find an example of price hitting a 6.854 Extension fib? Attachment 1 shows you exactly that case - we had a small first combined move of price, followed by a really big total move of price. There is no tool with a 6.854 extension billed into it, so I calculated what the value of the 6.854 should be - you can see that at the upper left corner. The final top of price was within just a few pips from the 6.854 pip - that is after a combined move of about 830 pips!!! This is a direct hit, nothing accidental! To me that is a direct confirmation that the BBs know about that fib, and if the conditions allow, they would use it!

After that I decided to check if the 6.854 fib would work in the case of Time Fibs. Attachment 2 is the same one that I showed you on July 20th. Attachment 3 shows you the same area of price, but with a few more Time Fibs applied. Then on attachment 4 you see the end of that move (I could not show all of that on one screenshot without losing details - the zoom out was too big).

Look at attachment 4!!! The intersection of 1.618 Price Extension Fib with the 4.236 Time Extension Fib (the confluence of both, circled in black), is only 2 hourly candles away from the big pivot; the intersection of the 4.236 Price Extension Fib and the 6.618 Time Extension Fib hits exactly that really small candle, and the final bottom of the price run is hit basically exactly at the time of the Time Extension fib 6.854.

Such a perfect illustration!!! Major Price Fibs are hit EXACTLY at the time of major Time Fibs, and the end of the price run happens on the final, super extended 6.854 Time Fib. A situation like that cannot happen accidentally. It was designed, and actually almost perfectly implemented by the BB's. Price Fibs confirm the validity of Time Fibs, and both together confirm the existance of the super extended fib of 6.854! If that cannot convince you that the BB's completely manipulate the market, I don't know what else can convince you.

Price Extension 6.854.png Screenshot (445).png Screenshot (450).png 6.854 Extension And Time Fibs.png
 
FrankS

See the attached chart which shows a composite view of a fixed 55 Pip Grid vs. a Fib Expansion (1,2,3 point method). Point: a fixed scale is a good reference based on a Fib value or count as opposed to random values on the side of the chart.

For the record, I have witnessed a similar system for Nasdaq futures be used successfully without any other indicators. However, in this case for Forex, the Fib Expansion which is dependent on an expansion leg followed by a contraction (pullback) often coincides its projection levels with a fixed 55 Pip Grid. Note the confluence? The 55 Pip grid avails some sub-levels, especially as well as the Fib expansions widen.

Just sharing some research that fits the theme discussed here.

Chart-USD-JPY 55Pip v Fib Expan.JPG
 
vesskrastev

@ cseholdings and @ bipin819

Hi, I am very curious to compare our systems (mine is not yet fully completed). Would you mind sharing some details?

Thank you!

@ FrankS

Frank, the Fibonacci fixed grid (as you call it) is meant to measure the progress and development of a big price move, that is why the logical place to apply it is at the beginning of a big reversal - whenever that reversal happens. That may be at the beginning of the next Elliott wave in a trend (usually wave 3 or wave 5), at the point of reversal of directions within a big box, etc. You can always figure out when a big reversal had started - for that, of course, you need some time to pass since the beginning. Applying it somewhere inside the already unfolding move does not make sense to me - the lines (fibs) would not match the distance in pips from the beginning of the move.

Applying that Fibonacci fixed grid definitely has "future value" - just draw these horizontal lines starting from a major pivot, and you will see for yourself. On what time frame? - they are absolute numbers, and will show off the same way on any chart, independently of the TF. How well your MAs would agree with them? - that obviously depends to some extend to the period of the MAs. On my charts, whether this is a 1 min chart, or 10 min, or 60 min, 240 min, etc. the same MAs are displayed - 30 min, 60 min, 240 min, and in the case of T3 I don't know it's period (it is locked).

Will BBs replace the work done by the Fibonacci grid? I don't see how they can do that. The second type of charts in ProAct (we call them 6 ACES) do use BBs, and the bands help, but in a different way, they provide very important info, but they do not replace the Fibonacci's fixed grid. By the way, the use of that grid is completely optional, but it does provide very precise and very easily visible information.

 
Rookie

Vess thanks for the ATR sheet above that's very useful to trend and target traders.

 
FrankS

Vess, we are on the same page in our use of MAs across various timeframes. And, yes, I agree the BBand is a different animal, but my take on it centers on the value of standard deviations from a mean.

In my opinion, the D1 and H4 are the ideal TF to set up either a fixed grid or a Fib extension, as the values still carry over onto the lower TF charts.

Again, a great discussion here and I fully appreciate your inputs and your willingness to share your knowledge!

 
vesskrastev

Does the Dollar Index Matter for Trading the Majors And Should We Follow It

Yesterday between 5 am and 8 am EST USDX made a big whipsaw - attachment 1. Did that affect the Majors? Judge for yourself - the attachments show the immediate reaction of the majors to what USDX did. Trading the Majors without paying attention to the USDX does not make any sense (in my opinion).

Screenshot (184).png Screenshot (185).png Screenshot (186).png Screenshot (187).png Screenshot (188).png Screenshot (189).png
 
Norma Jenner

Hi Vesskrastev

Just an FYI regarding Alveo tools, not yours.... one can use the regular fib retracement for extensions very easily without dealing w 3-click tool.

You always have to do the pull from left to right.
If want want extensions above a point, put cursor on the point and pull down to the right. Extensions will be above start point

If you want extensions below that point A, you still have to pull from left to right, but you have to create the starting place B, anywhere that is left of A and below A. I usually first put in a horizontal line at some S/R to use as a reference and place my start of pull B on that line AND to left of point A just a little

 
vesskrastev

@ Norma Jenner

Thank you Norma! I always try to replicate on Alveo whatever I do on the ProAct charts. Now Alveo is closed and I will try your recommendations on Sunday afternoon - I am sure that they will work very well.

Regarding the use of the 2 clicks tool and the 3 clicks tool - each one of them has its purpose, they do different things. The 2 clicks tool, besides the retracement values, gives you the extensions of the Impulse leg, starting form the very end of the Impulse leg. The 3 clicks tool gives you the retracements and the extensions of the Impulse leg, BUT starts not from the end of the Impulse leg - it starts from the end of the Retracement leg, the one which is between click 2 and click 3.

The retracement and the extension values of the 2 clicks tool are based on the info from a single leg - the Impulse leg. The retracement and the extension values of the 3 clicks tool are based on the info from 2 legs - the Impulse leg and the retracement leg. Both tools give you very useful informatio - I particularly use the 2 clicks tool in the case of continuation moves of price, and the 3 clicks tool in the case of reversal moves of price.

Daily And Weekly ATRs

I received emails, requesting that the file with the ATRs should be posted regularly, and preferably on Saturday morning, so that the bees could use the info for planninf during the weekend. This week I am ready earlier than usual - the file is attached below.

AttachmentSize
Weekly and Daily ATR 1.xlsx 27.43 KB
 
beilbysc

Wow, this whole 8 pages of discussion is so cool

 
Rookie

Vess, on the ATR image just above, what is the definition of the 7 Day vs the Week.

 
vesskrastev

@ beilbysc

Thank you! The whole think is an exploration into day trading - I am trying to share what have I learned so far. There are more things to come, but they have not yet crystalized fully.

@ Rookie

Ed, the day starts at 5 pm EST and ends at 5 pm EST the following day. The week starts at 5 pm EST on Sunday, and ends on 5 pm EST on Friday. When I have in the file a few different settings for the Weekly ATR, it is still the Expected ATR from Sunday 5 pm until Friday 5 pm, but this ATR changes,slightly, because it reflects the changes during the last couple of days - at least this is my understanding, I have to ask Jerry about that. I don't beleive that, for example, the Weekly ATR taken on Wednesday, gives you the expected ATR from Wed to Wed, I think that it still gives you the expected ATR from Sun open to Fri close, but it is a more current calculation of that.

There are 2 things to add to this. On attachment 1 you can see that the general direction of price during the week was down - it travelled 84 pips from the top to the bottom - you can get that from the weekly candle after the end of the week. Top to bottom, that is High to Low - this is the Actual Weekly ATR, and it includes the wicks of the weekly candle. If you look the definitions of ATR on internet, they are from High to Low, and it is usually the wicks that hit the High and the Low. Lets say that we determined from structure that this week price may go down. We would take the Weekly ATR from the app, and apply it in direction down, starting from the Week Open (5 pm EST on Sunday). Very often price would do a counter move, will move up until it reaches a local top. At that moment we would erase the old mark (value) of the Weekly ATR, and would apply from the local top the new, current value of the Weekly ATR - it will be a good guidance to where the bottom for the week would be.

It may be that actually this week price was moving up, and not down, as we originally thought. Then again, we need to find the weekly bottom, and to apply from it the current Weekly ATR in direction up - it will give us the probable value of the weekly top.Of course, geopolitical events, news, etc. may affect price and it may end up at different value - after all, it is an Average, not an Absolut. The important thing to remember is that the ATR (whether Daily or Weekly) gives us the expected distance between the Bottom and the Top, the High and the Low.

The difference between the Open and Close is a totally different animal. Price may start the week, lets say at 1.1250, than go up to 1.1300, then go down to 1.1200, and move up to 1.1250 again and end the week there. We would have an Actual weekly ATR of 100, but the total price move for the week would be zero - in the weekly candle High - Low=100 pips, but Open-Close =0. It would be the perfect example of a Trading Week - when the week ends at a level, very close to the opening level (even though during the week price went up and down). The other type of a week, the Trending Week, price will end at quite adifferent place than the beginning of the week - the body of the Weekly candle (which is the Open minus Close) will have a substantial size. In the Trending week the Actual ATR (High minus Low) will still be bigger than the Open to Close move (very seldom the ATR may be equal to the Open to Close, meaning that there were no wicks this week, or day).

The Weekly ATR gives us no indication whatsoever would that be a Trending wek, or a Trading week. The last couple of days I collected the Weekly Open to Close for 10 of the 20 pairs, included in my regular file. Below the Actual Weekly ATR for the week, now there are 2 more rows - the first one is with the absolute value of the Open to Close, the second row is that same number with a sign - it is minus for a move Up (in this case the Close is bigger than the Open), and a plus for a Down move. The first XCELL file attached shows the combined file - ATRs and Candle Size (Open to Close - I have to find a good name for that). The second file is e condensed version - you have just the week number (week 1 started on 1/12/19), the Actual Weekly ATR, and the Open to Close Move for the week. I should shortly include the remaining 10 pairs into the file. The new info should be very interesting, I had no time yet to take a look at it.

Screenshot (193).png
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Weekly ATR and Weekly Move Open to Close.xlsx 42.5 KB
Weekly Actual ATR and Total Move.xlsx 16.97 KB
 
Rookie

Vess, thank you for the extended reply to my question. Impressive work. The ATR issue you described above is exactly why I don't use ATR's at this time. But using a set NY close works well and with days/weeks/months of this stat should provide a very good trend line as to the direction of pairs, direction, momentum, and volatility.

I like that approach. Have you located a web site that can provide the daily close data in a list format?

 
vesskrastev

Ed, actually the ATR works quite well on daily basis. Statistically price should do that, and we want the statistics on our side. I started amassing that file because I wanted to find out how the MidWeek reversal worked. Then it turned towards Weekly ATR, and thank God Jerry joined into that. ProAct teaches that we should avoid trading on Fridays (except in some very special cases), because despite of the good volatility, the BBs are geared towards closing their trades and their actions are quite unpredictable. I think that the fact of having a good trading volume on Fridays should be used somehow (although really the actions of the BBs are a lot harder predictable on Fridays), and that is how I came to the idea to add into my statistics the Weekly Open to Close value (the size of the body of the weekly candle, without the wicks). Again, the idea is that if that is a Trending week, the BBs will drive price in the direction of the prevailing weekly move (trying to achieve the Weekly ATR, if that has not already happened), and if that is a Trading week, they will try to drive price towards the Weekly Open value. Bigger size of the data available should help to make an educated guess about that, and I will continue to gather data.

I don't have a web site that can provide that data, all of that I do myself. You gave me a good idea, may be that info is available online. If you find out where we can get it, please let me know.

P.S. On attachment 1 there is a perfect illustration on the validity of Daily ATR. You can see that the 14 days ATR for GJ is 80 pips (this is the one we use - it is recommended by the creator of ATR). At 6:10 am price hit the Daily ATR with a precise hit. On attachment 1 you can see also that the 90 days ATR for GJ is 98, and the 180 days ATR for GJ is 123 - that means that GJ is capable of going further than the 14 days ATR of 80. The recommended action in this case (price hitting the Daily ATR while still in session) is to switch to a tight Trailing Stop and to allow price to eventually move further. On attachment 2 you can see how price started building a Flag Pole, indicating that the next move should be down again.

Screenshot (197).png Screenshot (198).png
 
Rookie

thx Vess this is good stuff, still not understanding where the "weekly" comes from as opposed to the 7 days.

Interesting that Jeff Crystal started covering this today for the week in his CATT class.

So far the best ATR based charts I have found is at https://www.mataf.net/en/forex/tools/volatility

 
vesskrastev

@ Rookie

Ed, seems like I did not understand your question about 7 days ATR and Weekly ATR. Were you asking about the numbers in the first column of the app (7 days) and the last column of the app (Weekly)? Probably that was your question. The answer to that is very simple. The first 4 columns give you the Daily ATR - averaged for 7 days, for 14 days, for 90 days, and for 180 days. The last column is a new thing, and it is different - it gives you the Weekly ATR.

The first column - 7 days - is not a Weekly ATR. The last Column IS a weekly ATR, it is the only column for weekly ATR. The daily ATR helps you to plan the targets for the day, the weekly ATR helps you to plan the targets wor the week (at the Friday NY close). The Daily ATR is highly reliable - in the case when we have a Trending day. The Daily ATR (all 4 values of it - 7 days, 14 days, 90 days, and 180 days) is based on data for already more than 3 years. The Weekly ATR is based on data from the last 6 months. If you look carefully in the expanded file, there are 2 rows for Weekly ATR - one of them is marked J + current date (this is the 14 days number from the app), and the other is marked Charts + date - these are the numbers that I have been providing for the purpose of calibrating the app. It is Jerry who does everything related to the app, I am just providing him with additional data. There is a way to calculate these Weekly ATRs using a part of the software of the charts, and I know how to do that (by paying attention to what Pablo said once). That software was not coded by Jerry, it was received as a big file from other source, so Jerry cannot just get in and just get the results. I am acting like a partial secretary, providing some necessary data - just in relation to the Weekly ATR.

 
Rookie

Vess, once again thanks for your reply and time in clearing that up for me. This really good work in progress.

 
shepimak

The Targeted trading strategy is a thumps up for me as I believe one should plan their exit before entry. From my previous trading habit I discovered that I was building a lot of anxiety in closing winning trades and always taking profits too early.

 
elvin30ca

very nice and clean...looking forward to G1.

 
vesskrastev

@ shepimak and @ elvin30ca

Thanks for joining the discussion. Shepimak, below is something interesting about getting the proper target for these, unfortunately seldom found, really good long price moves.

The Wonderful T3 and the Super Extended Price Fib of 6.854

On July 18th I wrote about T3 and posted a screenshot of T3, allowing us to trade a 200 pips run of EU. Then on July 24th I wrote about extending the range of the Extension 3 clicks tool, and about the proposed new super-extended fib of 6.854. Today I spend a few hours looking at what exactly the GBP pairs did during the last week, and found something very interesting.

Attachment 1 shows you GU - you can see that since price moved below T3 on July 25th, it stayed below all the way to July 31st. Also the price run ended EXACTLY when price hit the 6.854 pip. Attachment 2 shows you that GJ did exactly the same - long run down, being all of the time below T3, and ending the run at the 6.854 fib. Attachment 3 shows you the GCHF move during the same "Brexit" week - GCHF did exactly the same - stayed all of the time below T3 and ended the run on the 6.854 fib.

GU, GJ, and GCHF, are all GBP pairs, they were all affected by Brexit - it seems natural that they should have behaved similarly. On attachments 4 and 5 you can see EU on a 10 min charts - both attachments display a long run of EU, staying all of the time on the same side of T3, and ending on the 6.854 fib.

On all 5 attachments you can see how after hitting 6.854 fib, price draws what I call the End Figure. The beginning of that End Figure is at a point, maximum distanced from T3, and once the figure starts being drawn, price moves in a generally horizontal direction, until price crosses T3, and the "0" line of MACD is crossed also, which marks the end of the run. Looking more carefully into these attachments, one can see that after hitting the 4.236 fib, price quite often starts drawing the End Figure, but does not complete it, and after taking a small breather, continues towards 6.854.

Attachment 6 shows you a 485 pips run for GCHF, where T3 frames the move exactly the same way, and the move ends on the 6.854 fib. The last example is on attachment 7, where UCHF displays the same behavior. After all of these examples it is obvious that 6.854 is a fib, regularly used by the BBs in the case of big sustained moves. Also the interplay between T3, the "0" line of MACD, the 6.854 (or 4.236 fib in the case of smaller moves), and the End Figure, helps us to plan for the end of the price move and to decide when that end has been reached.

Screenshot (256).png Screenshot (262).png Screenshot (263).png Screenshot (259).png Screenshot (261).png Screenshot (264).png Screenshot (265).png
 
vesskrastev

Weekly ATRs (from the last week) and Daily ATRs (from today)

The file is below. I know, some of you requested that it should be posted before the weekend, but I had the impression that the BBs trading after the Friday close could affect the Actual weekly ATR, and that is why this tme I waited basically until the new week's open at 5 pm EST.

Image 1.png
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Weekly and Daily ATR.xlsx 78.83 KB
 
Rookie

Your a deep diver Vess, thanks for the share.

The question, How to apply.
Let's say your entering into a weekly chart trade,
would you use the weekly column not the 7 DAY column for you target??

 
vesskrastev

Ed, you NEVER use the 7 day value. It is just for a reference. 7 day is the DAILY ATR (for 1 day). When we plan for the day, we use the 14 day - it is the Daily ATR, averaged for the last 14 days. The other Daily ATRs (7 day, 90 days, 180 days) we use just as references - for example lately your pair has been in a consolidation, and the Daily ATR has gone down. Now that same pair enters into a new trend - that means that the Daily ATR jumps immediatelly. So far we don't have enough data on the new trend in order to calculate the new Daily ATR, BUT we can take a look into the 90 days or the 180 days ATR - the pair definitely can do today what was the average for the last 90 days, or 180 days.

When you plan for the week, you use the Weekly ATR - there is only one Weekly ATR, it is the new addition to the app and to the file. 7 days is NOT a Weekly ATR - it is a Daily ATR. When you plan for the week, you use the Weekly ATR. The Weekly ATR changes throughout the week - that is why I always try to have at least 2 values for the Weekly ATR, preferably 3. For example the last week the USD fundies (FOMC and Non Farm) caused big swings, and the Actual Weekly ATR was far away from the previously calculated values - that is the most natural thing, and it should be expected.

I used to try to have the Friday values calculated, but now I try to have the Thursday's done - this way, after having some more data, and most importantly, after adding to the data the Open to Close (the size of the Body of the Weekly candle, without the wicks) it should be possible to decide if this was a Trending Week (and of Friday price will TRY to fulfill the Weekly ATR), or it was a Trading Week (and of Friday price will try to move towards the Open value - to have the body of the weekly candle move towards zero).

By mistake I posted the expanded version of the file - from now on I will post the condensed one.

 
mcolby2

I agree - we must be aware of the whales strategies or we will end up being their lunch

 
vesskrastev

@ mcolby2

Definitely, better us be their pilot fishes, than their pray.

 
FrankS

I read a great comment this morning within the context of an article regarding what we can and cannot control as traders. It is from an alternate site which fits into this thread from the aspect of the reality surrounding Big Boy (Big Bank) orders. It posted as follows:

"Banks have big books to fill, they do not place their orders at random, they must go in where there is the volume to take the other side of their trades."

I just thought it was worth sharing in that Bank orders are not intended as personally against us; it's just business.

 
vesskrastev

Yes Frank, for them it is just a business. It is us that take it personally, the Bankers just follow their rules. The good thing about that is: since they have to follow their rules (and they do follow the rules), these rules could be determined by exploration and prolonged experience, and once figured out, we could use their rules to our advantage.

 
vesskrastev

USDX and EU

For 2 weeks USDX was climbing - hit the super extended fib of 6.854 (true, very high fib, but applied to a relatively small initial movement), turned on a dime exactly on the fib, and for the next 2 days plunged down and lost 2/3 of what it gained during the preceding 2 weeks. By the way, the fall down stopped on a fib - 1.618. Now, for the last 3 days, USDX stayed in a limbo, and the USD pairs also (except USDCAD, but that pair moved because of CAD, not because of USD) - attachment 1.

Initially seemed that USDX was drawing an ascending wedge (sign that the next move would be up), but lately it draws a symmetrical wedge (attachment 2), which can break out in either direction. On attachment 3 we see USDX on a 240 min chart. USDX is in a sym. wedge (again), moving seemingly up - it is in an up trend, and the 240 min Heiken-Ashi chart and from the 240 min oscillator suggest a move up (the black circle in the lower right corner of the attachment). On the other hand the only indication for momentum, the red arrows, circled in black, points down. Again indecision.

Lets check MACD. On attachment 1, on the bottom, you can see that MACD has no opinion at all - it wiggles up and down the "0" line with basically no amplitude at all. MACD cannot help us neither.

Last resort - what does the price of gold and silver does? Attachment 4 shows us that the price of silver is definitely climbing, therefore the price of the dollar (USDX) should be declining. Finally something definite.

The dollar supposedly going down - that means EU should be going up.On attachment 5 we can see that EU was in a sym. wedge also (quite understandable), and seems like it may be breaking out of the wedge by drawing a Break, Hook, and Go. Break and Hook are done, Go - not yet. The problem here is that EU price was supposed to break in direction up (considering that the dollar is eventually moving down). Instaed of that EU price is moving down. Another problem is that when price breaks out of a real sym. wedge, it does it through an explosive move, drawing one or two huge candles, and not a BHG. When price does not explode from a sym. wedge, that means that actually we were not looking at a sym. wedge, but at a channel in the making.

So many words, and the outcome is simple - so far we cannot say with any certainty what USDX and EU (and the other USD pairs) would do. Time to wait. Time will show.

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vesskrastev

Comparison Between the Behavior of My Pairs - GA and GN

I was trying to find out a way to get on the same screen the charts of a few pairs at the same time, so that I could compare the way their movements relate to each other. I am sure that there is a way to do that, but since I am not a computer geek, I found a way to go around this technical difficulty. The pairs that I am interested are - EU, GU, GJ, EJ, EG, EA, GA, EN, GN, GCHF, and also USDX.

Comparing the Daily charts of these pairs made the best sense to me - it allows me to see slightly more than a year at a glance. Going to Weekly charts would have lost a lot of the details that I was interested in, moving down to H4 (240 min) would have given me a 6 times smaller lenght of time to compare. Between July 14th 2018 and July 21st 2018 all of the pairs had a pivot, the only exception was GN, the pivot of which came on July 1st 2018. Considering that I took screenshots of the Daily charts of all of these pairs, including USDX, starting from June 13th 2018. There is a vertical line, going through June 14th on all of the charts, with a computer mark of the date. All of them have the same time resolution - in other words, starting from the vertical lines on June 14th, the candles of all of them match each other timewise, they are from the same date.

Of course, immediately some very good matches came up. GA and GN behave just about the same way - their charts show that they move at the same time, their curves display the same character, the only difference is in the amplitude of the movements. About the same match exists between EA and EN, and also between GU, GJ, and GCHF. Surprisingly there is some obvious, but not that strong resemblance between EJ and EU, and even more surprising - some slight resemblance exists between USDX and EG. I am generally not interested inthe USD pairs, otherways, I think, multiple resemblances would have emerged between the USDX and the USD pairs.

The best way to see what I was talking about, is to see these charts next to each other. That is why, in order to keep them on the same row, I would have to do 5 different postings - the Apiary website automatically places 3 attachments on the same row, and if I try to attach more of them on the same post, the matching pairs would fall on different rows.

Here is the first couple - GA and GN.

GA.png GN.png
 
Rookie

Vess, perhaps with your skills this chart would help in the correlations or not and the percentage of deviation and variance which is, of course, the reason for doing this research. https://www.mataf.net/en/forex/tools/correlation

Seriously that's what bot people do, look for the minutest variance and hit it.

 
vesskrastev

Next installment of charts comparisson

This time I can post 2 groups of charts - GU, GJ, GCHF and EA,EN. Having 3 pairs in the first group allows me to do that. Also with these pairs the good matches are over - the remaining ones show less and less resemblance.

GU.png GJ.png GCHF.png EA.png EN.png
 
dudeschini01

Wow what a mind boggling post!!! I sometimes get a bit of a complex when I see the breadth of knowledge that most seem to have in regards to trading. I took a look at ProAct trading a while back but with limited resources ( time & money) was also worried about going off on a tangent and decided to dig deeper into Apiary with it's vast drove of information.
For better or worst, I have been trading in almost complete isolation with the exception of our forum. One thing that I am extremely curious about is perspective. I realize the terms normal and average are oxymoron's in the forex universe, but, can I ask without getting too personal and prying, what kind of results do most traders generate???
I also learnt while reading this post something really cool from Rookie about a screenshot of his trading results showing his monthly, weekly and daily pips when you click Pips Today!
Now if someone says mind your own business and take a jump into the deep end of a pool, I can respect that, but just very curious.
I also would like to applaud all those who make contributions to this forum and wish I was not the wurst one finger typer in town.

 
vesskrastev

@ dudeschini01

Hi! You don't need to get any complexes, it is all about doing the work! A lot of work is necessary to be done in order to become a successful trader. Scott keeps saying - Forex is not black and white, it is gray. There are more than 50 Shades of Gray in it, pun intended, and you need to do a lot of work and to gain a lot of experience in order to be a succesful trader.

I am a hard worker, but also I am a cheater in my heart. My first encounter with Forex trading was 2 years and 2 months ago. For more than a year after I started, all that I was looking for, was to find a shortcut, something that will allow me to bypass the heavy lifting. In the process of doing so I managed to develop a lot of psychological problems, and it is really hard to get rid of them. Finally around Febryary this year I decided - there is no way to skip the work, so lets get serious about that. Since then there were some good results in developing my knowledge, but in regards to getting my trading psychology on the right track - there is still a lot to be desired.

Regarding the results of the ProAct traders. On the Mon to Thur New York Room sessions the traders report their results. They report wins, and they report losses. I don't know how many traders participate on a daily basis, but I know that at least 10 of them are widely successful. By the way, another attempt of mine to cheat - I started taking screenshots of some of the big wins, and below are attached some of them. I decided to go back to these days and to figure out what gave these traders the confidence to start these trades, to stay in them, and to successfully complete them. On these screenshots you will see many times the names of Beena, Terry Taylor, Stormy, Chris H, Robin, Jamie, etc. Beena is the Queen of the GBP pairs, she gets incredible results. By the way, lately she travels the world, and while doing so she trades a bit. Terry said that it took him more than 10 years of trading, and losing more than $100,000 of his own money before he got to that point - see his 2400 pips night on one of the screenshots. Beena had a night with more than that, but at that time I was not yet taking screenshots. You can see multiple trades - actually we say one trade with a lot of entries - but Beena, and some of the others, do more than that, they trade the pair's move in both directions.

On the ProAct website, below About Us, one of the options is "Testimonials". Over there you can see the testimonials of Chris H, Beena, and a lot of others. These restmonials are impossible to fake, take a look of your own.

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Rookie

Vess as a usual great and informative post. I agree on looking back and reviews success. I said a few weeks ago in another thread that I get tired of doing the plot trades on my losers so I started focusing on doing plot trades on the winners. IE putting positives in the head and not reinforcing the negative experiences.

Overall attempting to change the focus from what goes in satays in concept.

While I do not have definitive results yet it seems to be going in the right direction.

 
vesskrastev

Ed, focus on the positive - I agree, but also - find the reason for the losses, so that you would not repeat them.

Below are the last 4 screenshots of charts (pairs) comparison. The empty screenshot on the right are just so that the 2 charts, being compared to each other, would stay on the same row. EJ and EU show some resemblance, a lot less than the pairs above, obviously because EUR is a part of both of them. On the bottom you can see that there is also some resemblance between EG and USDX, something which surprises me, and which I cannot explain. I would not place a lot of weight on that slight resemblance, but it is definitely an interesting fact to comment on.

EJ.png EU.png Screenshot (397).png EG.png USDX.png
 
Rookie

ID the error yes quickly make a correction quickly but move on quickly I am suggesting that more time be spent focusing on the positive, identifying what was right and moving on the repeat the success and the knowledge of what was previously wrong in the background. As imperfect humans, we will never know all the wrong moves but focusing on all the good moves then the look back on negatives becomes negligible and diminishes as we focus on the positive thus removing any roadblocks.

In looking at the correlated or lack thereof factors between EG and XDY lets review what we do know.
EUR currency id not exactly healthy, GBP has a few political issues, and despite President, Trumps to devalue, the dollar some folks in the world do not want it devalued.

The pair itself is week EUR and a mostly healthy Pound with problems.
Resorting to Barchart Technical Opinion STRONG BUY
The Barchart Technical Opinion rating is a 100% Buy and ranks in the Top 1% of all short term signal directions.
Longer-term, the trend strength is in the Top 1%. Long term indicators fully support a continuation of the trend.
The market is in highly overbought territory. Beware of a trend reversal.

To illustrate that point I have attached the ERU and GBP index's daily chart, clearly showing the trading pattern that you eluded to above. I. E. the strength of the economy to repay its debt obligations, Bond rates are a great reflection of the overall sentiment. EUR-Germany is going sub-zero with the US is selling it has a tremendous debt to roll over shortly and GBP seems to be weathering the storm for now as the saying goes follow the money or rather the money goes to the higher and secure sovereign interest rate.

If you comp the DXY to the EXY or DAX etc their are some interesting movements that can be followed in their respective trading sessions.

BTW I will trade the EG but only when it is more or less at it's mean and then I trade it outward with the trend. I used to trade in on both legs but this is outward is much more reliable.

mataf ERU-GBP daily indexes.PNG
 
vesskrastev

Thanks Ed, I see that you like the fundamenthal approach to trading. It is a fully legitimate way to trade. I wish you good luck in that. I myself preffer the technical analyses. In light of that, the screenshot below shows my USDX chart and the current ATRs (I have to figure out a way to make the ATR chart smaller).

Screenshot (398).png
 
Rookie

It is very legible the way it is, but to change the size of an image the easy way, open it in paint then go up top to resize, change the percentage and save.

I use fundamental for the basic trend direction, as it is transferred into the sentiment action (reflected in what I call the sentimental technical indicators) I.E. Buyers and Sellers creating volume. ERGO sentiment + volume = trend.

Great week to you Vess.
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after thinking.
Forex is a hedge against debt, well how exactly does a hedge really work and what is the hedge intended to do. Not all the fancy pants stuff but a real hedging strategy. In this series of podcasts Mark Douglas How to think like a professional trader 3 of 4, https://www.youtube.com/watch?v=6i4xPdCQ-L8, the late Mr. Douglas provides an excellent example using the various players in a corn market. I find the underlying correlation to commodities and money supply being a commodity being one of them very significant to the Forex market. The COT report(s) report this very well. Ok, so when the market makers force the price one way or another Proact teaches to wait and rightly so when we see the appropriate white spaces take the trade but in essence what occurred? The market maker forced the price because they wanted someone to cover their position because they are hedging a much more significant bet.
The bottom line for me anyway isn't all the spreadsheet and mathematical formulas unless you're exploiting small variances with bot trading but the sentiment that makes the momentum.
That's why we traders, as opposed to long term equities, investing. ok, me done.

 
hildapye51

Hi Vess, I like the concept of Target Trading for SL. Very often I ask myself "How far is this move going?" because I place lines at important price supports and resistances, as in when price comes to a double or triple zero. I know them as quarter lines. I am usually right and it (Support or Resistance) becomes a turning point in the market.
It never dawned on me that it could or should be a valid place for a SL. Thanks so much for sharing. Liked your whole article about the "BIG BOYS"
Happy trading everyone

 
vesskrastev

Hi Hilda!

After identifying the beginning of a price move we all face the same question - how far is it going? Fibs, Support/Resistance levels help, but they, so to speak, give us the possible stops down the way. By themselves alone they cannot tell us which stop would be the last. I myself love to play with my 3 clicks and 2 clicks Fibonacci tools. I apply them allover the beginning of that price move (there are some rules about that), and look for confluences. When I see 2 or 3, and sometimes 4 independent fibes (meaning they originated from different segments of the price move) hit the same price level (they may be off couple of pips) that is for me almost a guarantee that price will reach to that point. It may take a long time if these confluences extend far in the future, but price will get there. The reason for that is simple - the BB's plan these things ahead, and they methodically implement them - it is amazing how very small moves may carry information for far ahead. Of course, there are other ways to supplement your estimate for the end of this price move, but for me the fib confluences are the most important.

USDX Finally Made A Move

After a week and a half of hesitation USDX finally made a move - it moved up (attachment 1). It is close to the top of a box, and soon the direction of the move may change. The most important thing, of course, is that there is a move, and not just an oscillation around a fixed horizontal line. On attachment 2 is seen how EU immediately followed - it is moving down. There is a strong convergence, supporting that move. Price bounced strongly off the 1.000 and 1.618 extension fibes - it should! There are obvious and very good confluences for a few sets of fibs. If price crosses decisively 1.618 on the way down, the next stops should be 1.1055 and 1.1026.

P.S. Just saw a perfect illustration for the confluences of fibs. It is from today's chart of EA. The candles are not what I want to show (although it is obvious how price bounced off of the top resistance zone). All of these fibs come from different moves, timewise close to the current one. All of these moves were very carefully knitted, so that they would point to the future, and on the surface everything seems absolutely random - you can see on your own, the candles are from this morning EA chart - from 8am to 11 am CST. Great job, Big Boys!

Screenshot (431).png Screenshot (434).png Screenshot (436).png
 
vesskrastev

Moving Eventually Towards Swing Trading

I had made my mind long time ago - it is the London session that I want to trade, and the GBP pairs mainly, especially the GBP/Asian pairs. The problem with that is my business schedule - the first 3 hours of the London session are the time when I am getting ready for work and actually am working - this is usually the busiest time for me. I cannot chamge my schedule, and can hardly actively manage trades during that time - basically I cannot. I found that the same way I decided to move from scalping to day trading, now I am inclining towards swing trading. That does not preclude day trading, just stresses mainly upon swing trades.

The advantages for that, in my case, are obvious - longer time for planning during the off hours, no need for constant monitoring. There is a perfect solution for complete management of multiple trades - starting them automatically, exiting them, moving stops, etc. - a lot more than we can normally use, but it works with MT4 (and MT5), and Alveo is not compatible. The name of the program is Synergy, and I did buy it just before the life time licences got replaced by a monthly fee. Somr time in the future I will start playing with Synergy and my simulated MT4 account, and may be even with some real money - still, this is in the future, and is not applicable now.

EA seems to be moving down for a while, and I started a swing trade on it. The screenshot shows the results after the first day. I started the trade with the wrong foot, as usually not being very careful, and let it go against me to about negative 1.25%. As opposed to other times, this time I held, and the proper assesment of the long term move (I was helped greatly in that) allowed me to stay and to see about 24 hours later the trade to get to +1.44%. It is just beginning, and I don't have experince in dealing with that, but certainly I hope that it will continue the same way.

Screenshot (426).png
 
Rookie

By golly Vess, I think you got the hang of it!! Way to go!

 
vesskrastev

Not yet, Ed, but I think I am on the way. A lot of more work to be done.

 
Rookie

Some Mark Douglas insight from hi How To Trade Like A Professional series.

MD on patterns.PNG MD on Math and momentum.PNG
 
vesskrastev

Ed, I just added one more attachment to the first post from today. It deals with math (think fibs) and a "dynamic event that's in a perpetual motion." Look how price bounced off of that first resistance zone - which is formed by math only! Price will, most likely, do the same on the other zones. And it is not because math is magical and indispencible, it is because the Big Boys make it happen this way. They use math to communicate their intentions. To me it makes a good sense to learn their language, I definitely want to know what are they talking about among themselves.

 
vesskrastev

Why Price Mobes The Way It Does

Yesterday I posted a screenshot about the resistance zones, laying ahead of the current price value for EA. At that time price had already hit the first resistance zone and promptly got deflected off of it. There were 3 more resistance zones, laying ahead. By this morning price already reached the second and the third resistance zones. As predicted, it gladly obliged and got reflected off of them. I am attaching the old screenshot, and the new one - next to each other, for easier comparison.

Why is this happening? Is it because somehow the milions of retail traders and some of the smaller institutional investors "feel" the way price should be moving, and by their actions they determine the outcome? Some of them may, and they are the lucky and the successful ones, because they bought and sold at the right times. Still, 78% of the traffic on Forex is controlled by the top 15 Big Boys, and the top 6 themselves control 63%. They are the ones initiating the moves, and their task is to entice us to follow them. Why? Forex is a zero sum game - the winners win what the losers lost. They need us to get involved, so that at the end they may collect what we lost - 90% of the retail traders lose. All of the numbers above come from statistics, they are real.

The Big Boys have a target in their mind when they initiate the move. Every turn of price is calculated - applying the fibs shows you what the future holds. Sometimes they may get a little bit off, but they quicly correct it. Sometimes they get surprised by unexpected geopolitical events, but they quickly adjust their game. If the unexpected geopolitical event (or a news event, producing results substantially different from the projections) moves price in their direction, they use it as a catalyst. If it goes against them, in a matter of a day or rwo they forcefully bring price back to where they wanted it. It costs huge money to do that -ONLY the Big Boys can do that. During the NY session it takes $35 millon to move price 1/2 of a pip. The big Boys reverse moves of 80, 90, 100 or even couple of hundreds of pips, when that spike of price goes against their intentions.

Now the important point. It comes from attachment 3. Attachment 1 shows you the projected resistance zones, attachment 2 shows you their fulfillment, and attachment 3 shows you how the resistance zones originated. There are many lines on attachment 3, and I have sometimes even more on my charts, just temporary, after that I erase them. All of these lines were produced from the latest movements of price, determined by the reversals of price - something the Big Boys did. The 3 clicks extension tool was applied 4 times (the L type black lines) and one time the 2 clicks tool was applied - the staright black line.

There are reasons why these specific price moves were fibbed, and more of them could be fibbed for finer distinctions, but that is not the point. The point is that the Big Boys INTENTIONALLY DRIVE price, and every price move is calculated in such a way that it carries information about their future intentions. Through the charts they speak to each other, using a graphical and mathematical language. Once they form the major structure (that is what they do in the beginning of each week and each month) they let us make our small impact (that applies to the 500 to 800 midsize institutions, only they can make concentrated moves, retail traders like us cannot produce any measurable impact on the movements of price because we are spread allover). If as result price moves the way the BB's expect, they are fine, if not - they correct it. It is impossible to fight them - somebody said that even for a single midsize institutional player trying to change the way price is moving is like shouting against a tornado and expecting it to change course.

All of the above is just me repeating what Scott teaches the ProAct traders. I did it because it is all true and I thought that I had an occasion to prove it with the screenshots. For the Big Boys it is just business like usual. On a daily basis 20 million retail traders spend about $400 billion, and 90% of them lose. That means that the Big Boys probably collect something in the area of $360 billion. That is a huge business, and the BBs are very serious about doing it. They are strict and methodical, and they follow their rules. That allows us the opportunity to study and to try to figure out and learn these rules. If we are successful in that, then we may play alongside the Big Boys - do whatever they do at the time they do it. That is the intention of the day trading and swing and long term trading. You cannot fight them, then why not join them? It is a bad idea to shout against a tornado.

Screenshot (436).png Screenshot (446).png Screenshot (447).png
 
ttrtot

great videos that have been shared

 
vesskrastev

@ ttrtot

Thank you. You should love the video attached here - it is done by a master, who perfectly well knows Fibonacci's.

@ FrankS

Frank, you were asking earlier about Measured Move. If I am not wrong, they talk about Mesured Move in this video.

https://www.youtube.com/watch?v=OATguek59wI