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Sniper

Fibonacci trading

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Hi folks

 

this is a trade for 01-25-2006. Notice the initial swing - 45 ticks. As I trade ER2 Anything below 40 ticks is not for me. The market pulled back twice on the .236% level. I took my chances and waited for a second pullback. The market gave me a confirmation on a second pullback to the .236% area and then I draw time cycles, from the initial swing to the pullback.

 

Notice that I enter on the lower low of the candle that is pushing back to the direction of the trend. I don't enter on that candle like most traders do, I need to see that the market has intention to keep going with the trend. After that, the market retaced a little (the next blue candle) and then I place my entry on the lower-low of the preceeding candle.

 

As a rule I gave my entry two cycles life span. But in this particular case I notice a huge selling pressure building up around 10:20 AM. Then the market had another pullback, which is another indication that the market is wanting to keep up with the trend. At 12:00 PM the market had a huge selling pressure. I took my chances and let the trade go all the way (I am doing great on this month so why not take the chance?) I am going to post another chart so you guys check what happened

01-26-2007.thumb.JPG.35a3f3f983917e2eb458e275a29ea6be.JPG

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Very nice and simple strategy sniper! You were the one that mentioned that fibs don't work as well on ticks as one minute charts correct? I'll have to take a look closer at that. From the chart I don't see the 0 and 100% lines were drawn to get 23.6, can you explain this more? Thanks.

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As you see, no reversal after lunch time. The market is going my way so why bother to kill a trade?

 

I killed the time cycles so you can see better where the market headed finally.

 

Fibonacci is not just pullbacks, time plays an important role and must be used to apply the effectively. As you notice, time cycles will put you in another perspective and will give you a lot of confidence once you have an entry.

 

On my experience, when the market builds up a huge buying/selling pressure around 12:00PM is a good confirmation of market trendiness. As I place my stop-loss between .786% and 100% is either make it or bust.

 

Happy trading

5aa70dc1bbad5_01-26-2007II.thumb.JPG.c1d096331ba20e3c9abda794bda7333c.JPG

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Very nice and simple strategy sniper! You were the one that mentioned that fibs don't work as well on ticks as one minute charts correct? I'll have to take a look closer at that. From the chart I don't see the 0 and 100% lines were drawn to get 23.6, can you explain this more? Thanks.

 

is because the patterns formed on the tick chart are different and can fool you especially on pullbacks. Another thing is that time cycles works better on time charts. Take this form experience.

 

This charts doesn't show 1% and 100% labels for some reason.They're the top/bottom blue lines. I am still learning how to use this charts ...sorry

 

Regards

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How does one deal with a range-bound day? I assume time becomes a more important factor right? Is there a stop loss placed? I hope you can stop in the chat room today, I'd like to hear more about it, especially using time cycles. Thanks.

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Are you saying 45 ticks means 4.5 ER2 points right? I was confused thinking you meant .45 of a point.

 

Is this how it looks, the 3rd bar is the bottom of the fib level?

 

FIB-TIME-CYCLE-STRAT-ER2-5MIN.gif

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Torero

 

yes 45 ticks or 4.5 points

 

I'll show you later on how to spot range bound days . I think that's every trader's dream LOL. but yes there's a way. Unfortunately I am heading to a meeting rigth now.

 

I catch up with you later

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Torero

 

Here's an example of today's failed fib. Notice that There's a pullback on the .236% level but the market failed to continue downwards.

 

PD I take in consideration all fib levels. Is not just the level but the price action around it what matters to me the most.

 

I don't look at the market in terms of range-bound but more into waves. You can trade into a range-bound day and as long as your waves are qualified and the market keeps going on the projected direction, either you will make money, or maybe get out with a minor scratch.

 

Here's two charts. One has a failed fib(1/26/2007) and the other has a successful one, both using a pullback on .236 level. Notice how the price action differs one to the other. On the failed fib, notice how the market even retraced back up to .382 area This might fool you into think that is validating the .236 pullback.

 

Also notice on the first wave that sellers are taking over the market and buyers didn't win not even one round. I don't trade these patterns as I know form experience, with this kind of move, someone is going to run out of gas for sure.

5aa70dc1c9f07_badfib.thumb.JPG.eef9ce7d8691a1f27019f0d7ff0117d5.JPG

5aa70dc1d33cc_GoodFib.thumb.JPG.6c8cb38d91333ccf7dfb809fbc931418.JPG

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today 01/26/2006 this is what really happened. Three significant pullbacks, the last one on .618% level. Notice the initial wave had minor corrections(pullbacks) in between. That's my kind of wave and that will save your behind many times if you follow that simple rule. Notice also he market was trying to break the 1% level which many times could pose as a strong support/resistance.

 

In this particular trade, (I didn't take it by the way as I wasn't trading today) you have three elements aligned

 

1) price - action - solid pullbacks to key fib levels

 

2) pattern - a qualified wave (40 ticks or more) with minor corrections in between

 

3)Time - last strong pullback came out at 13:20 pm and the market activity was picking up. Stay away form lunch time and closing time as much as you can.

 

Once you aligned these three simple rules, your confidence on fibs and your trading will greatly improve.

 

I am not using time cycles so you could have a better view .Time cycles is just for that, to compare time vs.entry. That's all. They give you a better view as you're now looking at the market thru "squares" instead of a whole.Help you focus on the price action better and how long your trade should last. That way you won't be "trigger happy" a disease some traders have( I was one of them).

 

for entries, don't "fade" the fibs. It's really dangerous.

 

Some traders take the next candle after the pullback (if the market continues to the established trend) don't do that. Wait for the next one IF it breaks the higher/high/lower low of the las candle and it's going your way.

01-26-2007.thumb.JPG.c68edfa47cae7df46ff7514ffef980f7.JPG

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I agree, I still have a tendency to overtrade, this is why I'm trying to find a time cycle method to keep from exit or entry too early. I'll review again to get a better ideas. There will be questions, no doubt about it.

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