[TheNegotiator]

To me activity based and structural references are everything. They are the what, the why, the where and the when of the markets and how they move. There are many different ways to define these references, but the underlying goal imo remains the same. To identify paper which ultimately can drive the market from point to point.

Here are some simple examples for anyone who may be interested, to deliberate. Please remember that trading doesn't have to be complicated. It needs to be worked at, to be clear and not to be forced.

Look at a big price move when for example either a big eco release such as NFP comes out or an speaker says something unexpected and market moving. Attached is the move from yesterday. I don't btw use fibonacci ret/ext to trade, but I do like to use them for structural confirmation. When I get such a clear line up with price areas I'd be looking at anyway, it tells me that this is something I need to be looking at. For example, a drop back into the move and below the last pullback highlighted in the chart late on, would imo opinion be very negative for all those bsd's who piled in. I would think that at least a good proportion of the move would be tested in this scenario.

Another really important structural reference which many people look at is the initial balance. This is the first hour of trading in any market (primary session). Now the reason for this is supposedly most paper looks to do it's business in this time. There is indeed much of this type of activity although I believe there are better ways to define it nowadays. However, it's still extremely useful. I've attached another chart to illustrate this. This reference again can be used in terms of activity and strucure. For example, there are times when the IB provides excellent entry or exit points directly. But also, it can be a great activity reference. If say the market breaks only a small amount on one side of the IB and then reverses back into it, often the opposite end is revisited.

As I said before, there are many different things which traders do use for references in their trading, but you have to have something which works for you. Do have yours?

[clmacdougall]

Hello and thanks for your post. Could you please explain how you use the fib ratios in your structuring of the market. I've recently ordered a couple of books on the subject as I've become interested in using them myself. Thanks in advance.

[TheNegotiator]

I don't use them to structure the market, I look for important moves or balances and reference in fibonacci levels to see if they lock in with my volume profiles. I also use the extensions as a reference of strength on breaking the initial balance. I'd just say that whilst fibonnaci levels can be great, I wouldn't use them on their own necessarily.

[wrbtrader]

Originally Posted by TheNegotiator »

To me activity based and structural references are everything. They are the what, the why, the where and the when of the markets and how they move. There are many different ways to define these references, but the underlying goal imo remains the same. To identify paper which ultimately can drive the market from point to point...

Here are some simple examples for anyone who may be interested, to deliberate. Please remember that trading doesn't have to be complicated. It needs to be worked at, to be clear and to not be forced.

Look at a big price move when for example either a big eco release such as NFP comes out or an speaker says something unexpected and market moving. Attached is the move from yesterday. I don't btw use fibonacci ret/ext to trade, but I do like to use them for structural confirmation. When I get such a clear line up with price areas I'd be looking at anyway, it tells me that this is something I need to be looking at. For example, a drop back into the move and below the last pullback highlighted in the chart late on, would imo opinion be very negative for all those bsd's who piled in. I would think that at least a good proportion of the move would be tested in this scenario.

Another really important structural reference which many people look at is the initial balance. This is the first hour of trading in any market (primary session). Now the reason for this is supposedly most paper looks to do it's business in this time. There is indeed much of this type of activity although I believe there are better ways to define it nowadays. However, it's still extremely useful. I've attached another chart to illustrate this. This reference again can be used in terms of activity and strucure. For example, there are times when the IB provides excellent entry or exit points directly. But also, it can be a great activity reference. If say the market breaks only a small amount on one side of the IB and then reverses back into it, often the opposite end is revisited.

As I said before, there are many different things which traders do use for references in their trading, but you have to have something which works for you. Do have yours?

For the past 15 years I've referred to this as "market context" after many initial talks with institutional traders that are close personal friends. I've also discussed a few in-depth examples of market context here at TL in the Japanese Candlestick threads when someone didn't understand the importance of such prior to the appearance of candlestick patterns or any other type of trade signal.

Simply, strongly agree with you and its a shame that most retail traders don't agree with such. Thus, if we don't understand the market context or as you referred to it as structural references...we should remain on the sidelines.

[mitsubishi]

Thanks for posting that neg.I dont think i've seen a chart like that except maybe darvis boxes.Forgive me for scrawling on your chart but is there a box missing ...... maybe i haven't fully grasped it

[mitsubishi]

Originally Posted by clmacdougall »

Hello and thanks for your post. Could you please explain how you use the fib ratios in your structuring of the market. I've recently ordered a couple of books on the subject as I've become interested in using them myself. Thanks in advance.

I dont get the calculator out or fill up my charts with lines.The easiest way i have found is to take the fib series and ask myself where are we now from the previous high/low or todays high/low or weekly high low?
Fib series 1 3 5 8 13 21 34 55 89 144 233...

Recent example
Sept 20th 1220.3 (week high) low this week ...1074.7

1220.3 - 144 = 1076.3...near enough

Sept 30th 1131.3 (week low)

1131.3 - 55 = 1076.3 ... further confirmation

1076.3 + 89 = 1165.3...that was yesterdays high (1165.5)

todays high so far 1171

1171.4 - 21 = 1150.4...todays low so far 1150.2... since it is in real time, ie today not closed yet,we dont know if that is the low.But you pays your money you takes your choice.
But when people say fibs don't work,what they actually mean is they can't make them work.If fibs are to be part of your setup you'll make them work.
There was no charge for '' the 2 minute fib manager''
Let me know if you wanna copy of '' the 2 minute sq root manager''

[TheNegotiator]

Hi mitsubishi,

No there are no missing "boxes". In fact there are no boxes at all. The lines are the initial balance lines from the first 60mins of each session. Just the high and the low. They are stepped to link to each other which may have misled you slightly.

[mitsubishi]

Ah, thanks for the clarification.