If you're watching the Dow, you'll notice that it was able to recover from its key 61.8 Fib of the medium term bull wave and has finished sharply higher. Think that the Dow is headed higher? Trade the EURJPY to the long side, as the correlation is at multi-year heights through recent trade.
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The S&P 500 is near the key 61.8% Fib of the 1370-1576 move, and it will be really important to watch whether stocks can hold the line. This is, as previously discussed, a salient factor when considering JPY trades, as the yen trades inversely to global risky asset classes.
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One thing you might like to try is using more than one outstanding pivot for your swing highs in a downtrend, swing lows in an uptrend. That way you can see where different levels cluster together to reinforce the support or resistance. .618 from one swing overlapping .786 from another is stronger than either one alone, in my experience.
Mark
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The most important ratio in Fibo analysis is 61.8 and 161.8. Everything else is a derivative of those numbers. When you get a confluence of a 61.8 retrace and a 161.8 extension - probability is high that the level in question will serve as either resistance or support. In this case, EURJPY resistance is estimated at 163.92/164.21.
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Where do you draw the line?
One of the most common questions regrading Fibs is - where do you draw the line. Here is a good example of the confusion that often reigns. Chart one of EURJPY shows the Fibs on the large move over the past week. As you can see we haven't even come close to retrace zones yet.
Chart 2 is basically off the last 24 hour action and there you had some nice failure signals near the 161.00 level. So Fibs like beauty are in the eye of the beholder. Feel free to chime in with your take on the issue.
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Interesting price action in the NZDUSD. The currency's bounce has stalled at the 61.8% fib of 0.7818-0.7433 and headed lower. Risks seem to be weighed towards, at the minimum, a test of 0.7580.
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2 Charts of "Cheat Sheets" to help guide you through recognizing a Gartley Pattern
http://www.mjbraun.net/FT/Webinar1/Sheet1.PNG
http://www.mjbraun.net/FT/Webinar1/Sheet2.PNG
Fibonacci ratios applied correctly to both the price and time axis on your charts will show you when and where to expect a reversal in your intraday stock index trading: http://www.mjbraun.net/images/er-bounce.gif Where to take maximum profits on that beautiful Forex entry: http://www.mjbraun.net/images/eur60min2steptargets.gif And even whether to hold that longer term stock investment for new highs, or take profits and get out now! http://www.mjbraun.net/images/vphm.gif
These trades and targets were traded live and shared with clients in chat rooms and via email, not in hindsight.
On to the next page for more chart examples and FREE videos!
If you're interested in Forex, you'll want to watch this Fibonacci Forex Introductory Webinar recorded live: Click here for streaming video
(More videos available below)
Here's the chart of one of the trades we discussed live in the video; see how it turned out!
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It can be that straightforward.Fibonacci clustering provides support, resistance and targets.Clearly defined CCI triggers and trade management show you which levels are likely to hold, and which are more likely to break - allowing you to ride the trade to targets with confidence!
Here's a trade Mark took on the mini Russell recently, with annotation provided for students of this methodology:
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A short video recorded recently showing more about how you can use these CCI triggers and trade management,with Fibonacci for support and resistance, for trading stock index futures intraday:
Click HERE for streaming video And a longer video reviewing trades for a day in both Forex and mini Russell, with Carolyn Boroden discussing symmetry for the day as well: CB & MarkB -Chart Review A couple of extra videos here - if you're using Fibonacci Trader and would like to set up your charts to look like mine: Fibonacci Trader Chart Setup My video on the Gartley Pattern. I really suggest that you watch this.The section with Perry Madich's commentary on Fibonacci Trader features is interesting too, but has a couple of technical problems on Perry's end.Watch it though, even if only for the 2-step/Gartley info. Printable cheat sheets are included so you can recognize and set up this Fibonacci Pattern for yourself: Gartley Webinar Here's a recent video reviewing the rules of symmetry and the triggers we use while trading intraday stock index futures: Symmetry-Triggers Now you have a special opportunity to learn how to apply these techniques yourself!
05-16-08YM (mini Dow) 45 minute chart with primary target in bold above
http://www.mjbraun.net/images/YM45min05-16-08.png© 2006 - 2007 Mark Braun - All Rights ReservedU.S. Government Required Disclaimer - Commodity Futures Trading Commission. Futures and options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
EUR/CHF using Fibs to catch an early move
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One of the great things about Fibonacci RETRACEMENTS is the mere fact that you don’t have to pick the bottom in order to get a good risk to reward on a particular trade. You have the luxury of WAITING for PRICE to tell you that a move is starting. Then, it is just a matter of time, after the move up, for it to RETRACE or PULLBACK to a Fibonacci number where you are ready to enter.
If you miss the Fib number entry at .382, .618 or .786 (thank you Larry Pesavento), you can always get in on the break above the previous high for confirmation.
You always have the option of jumping in as soon as PRICE hits support, but you will endure the eventual pull back (and the growing negative in your P/L).
If you are an Elliott Waver fan like I am, what I am talking about is getting in on the wave 2 pullback or getting in above a break above the wave 1 high with a stop below wave 1 just under support. For those of you that don’t have a clue what I am talking about, there are 5 waves in the direction of the trend, being in a trade at wave 2 is a good thing.
To the matter at hand, EUR/CHF is completing its correction toward a 2 year rising channel lower trend line. Driven by carry trade interest rate differentials and a robust Eurozone economy, this trend is well established as indicated by the Daily Chart (see below). Yes, the finance ministers are complaining that higher EURO exchange rate is making exports more expensive and slowing growth. But let us remember that the ECB’s (European Central Bank) mission is to insure price stability not to promote growth.
On the other hand, the U.S. central bank’s mission is to both foster growth and price stability. That is why the US is cutting rates. With inflation rearing its ugly head in the Eurozone and the only reason that the ECB did not raise rates was to insure there was plenty of liquidity during the subprime shocks, any reduction of further shocks will allow the ECB to continue to raise rates to combat inflation.
What we are are looking to do is to wait for a bounce at the rising trend line and look for a Fibonacci retrace that will provide a favorable risk to reward entry.
Place EUR/CHF on your watch list and post your questions. This will be one we can follow together as it unfolds.
Our target will be the top of the channel around the 1.6900 area. We can hone our entry with a 4 hour chart. Stay tuned…..Gregory
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EURJPY Showing .618 Bounce
Hourly EUR/JPY showing life bouncing nearly 100 pips from a little below the .618 at 160.40 area to 161.80 at the time of this writing.
This level was challenged on 11/15 that took us for a 200 pip ride north to the 162.80 area as warnings of Japanese Intervention and increasing risk appetite helped buoy the currency pair skyward.
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GBPJPY 60 min 2 step
In progress, just has to beat the symmetry support (100 % projection of the intervening high to low swing) to play out to targets.
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EUR/CHF The Bounce Part II
We'll here we go. As I said in the previous post, we had the EUR/CHF on our radar and were waiting for our bounce.
That bounce happened and now you can see the pull back we had to the 50%retrace of the initial move as anticipated
I have illustrated this on a 4 hour Line chart, yes ladies and gentlemen, a Line chart. This screens out all of the distraction so we can focus on Fibonacci at work.
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Notice another big up move with possible BUY ZONES at Fibonacci Support Levels give us yet another chance to get involved in this trade.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9672&stc=1&d=1196379048
Here are the long term DAILY chart including our channel and 4 hour chart comparisons.
The Daily is due for a retrace which we haven't seen of any significance.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9716&stc=1&d=1196717973 http://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9717&stc=1&d=1196718045
We got our retrace down to the 38.2% level. Bullish rejection pattern formed on 4 hour chart as Sellers ran out of energy, Buyers seem to have taken control.
Notice the number of long wicked candles and small bodied candles at a fibonacci level.
The bull engulfing candle ends the "battle" and the bulls are back in the drivers seat.
A break above the 1.6590 area would confirm the upmove.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9799&stc=1&d=1196981975
EUR/CHF has consolidated into a pennant formation within a larger triangle. A break above the red lower trendline with a close above the previous Doji high would spark further gains to the extension target.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9836&stc=1&d=1197245603
With the coordinated Central Bank action to inject liquidity in the banking system caused the Yen and CHF to sell off as risk appetite for carry trades resumed.
EURCHF formed a Shooting Star candle on the daily chart which was bearish. But today's price action confirmed the follow-through bounce form the 62% fibonacci level.
Find out how to recognize and take advantage of moves like these in our 8-Day Intensive Power Course: http://www.fxcm.com/power-course-promo.jspAttached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9935&stc=1&d=1197493586
After reaching a historic all-time low of .9056, the USD/CAD had rallied 1191 pips to 1.0247. On December 17th, this counter trend move ran out of gas and broke a steep trend to rejoin the daily down trend.
A bounce from the low of 1.0011, give us another chance to enter on the short side near the 61.8% retracement of 1.0144.
Fibonacci gives us a way of getting involved after a market move has occurred. This gives us a better risk reward and reduces the stress that a trader has to endure as Price retraces a break.
To learn more about trading with Fibonacci retracements in an interactive environment, enroll in the next upcoming Intensive FX Powercourse at:
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Using hourly chart, I sold above 229, looking for to test 228.00 and 226.50, just some pips below 38.2 and 61.8% of 224.76-230.34. The pair was clearly rejected at 50% of retracement (227.55). All positions were closed out at 228.00. Good intra-day trade!Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=9949&stc=1&d=1197599696
AUD/USD is a textbook example of price action interacting with Fibonacci levels. the .8540 area saw multiple failed attempts by the bears to push prices lower. A bullish engulfing candle is the exclamation point signaling an end to the month long price decline.Attached Imageshttp://www.learncurrencytrading.com/fxforum/attachment.php?attachmentid=10152&stc=1&d=1198724978