I reponse to a question i have put the following information together...
So, the ab=cd is the basis of most if not all patterns. Lets exclude some of the classic patterns like wedges etc. So for the trader with a keen eye we are able to pick up ab=cd patterns on just about any chart. We also know that the ab=cd pattern is the back bone of the Butterfly, gartley etc...
Now lets assume we have an x to a donw that then moves into a b through rising price. The ab is set. Now we watch price fall to a (simple) higher low than the previous a. Now we have the ab=c.
The part of the ab=cd leg I like to play is the cd leg. Through experience I have learned that there are two really safe entries into a cd leg. One is off divergence and the other is above the area of stochastic consolidation that incorporates the a to b to c and then to the high of b. This area without divergence should be approached with entries above this channel area.
Now we are into a trade on the cd leg and we are asking how high will price rise?
The biggest variable is the time frame one is trading. The larger the chart the longer the potential distance. The larger the chart the more the pull back.
Now we have figured out when and where to get in but how do we know the direction of the trand is valid. Better figure that one out before you start. Entering with the trend- price allways moves futher and the pull backs are usually less substantial.
So here is the setup. lets say I am clued into the bc leg of a daily chart and the move is long. This is my Global Positioning System <GP(S)> I.e. this gives me direction on the big chart. Now knowing how to cycle into a trade with momentum (indicator of your choice- mine is a 10 3 3 stochastic) we identify the setup as a ab=c and enter based on the criteria above. This is very effective for this trader on a 3 minute chart as mutltipe entries are placed(my cluste.) Although there are multiple entries during the cd rise (the cluster of trades) the trade is treated as a single trade. As you can imagine when you see an exit signal all trade should be removed simultaneously. Even if you are late and the last one or two entries go against you your cluster should be QUITE positve.
So this takes some sophistication to implement and manage a trade as such but in reality the whole method is straht forwrd. (ie study)
The following charts were traded this week. The first chart is a 3 minute projection chart, the second is the same chart that meets the projection. The 3rd chart was traded off specific signals as taught by Derrik S. Hobbs in his book, Fibonacci for the Active Trader (Cw 2004)(ISBN 0-9755513-2-9) chapter 9, The Shark Attack. The chart explanation is found on the chart.
Have a great weekend!
Peter
Never miss a thing. Make Yahoo your homepage.
MARKETPLACE
Earn your degree in as few as 2 years - Advance your career with an AS, BS, MS degree - College-Finder.net.
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe
.
__,_._,___
Tidak ada komentar:
Posting Komentar