fib. expansion and retrace in forex

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S,
after some studying I ve done I ve found out that everything has to do with the money line and the trend. At least this is what I can find in most of your charts.

So what I concluded so far is that you mostly trade DB below money line (on a downtrend) and DT above money line (on an uptrend) .
As an exception to that is the roll n puke pattern.

What is not so clear to me is what happens when money line crosses a DT/DB. Sometimes money line works at support/resistance or range (when price is there) but not always.

What is clear to me is that soon or later price will return to money line. That is why you need to be careful with timing on when to enter a trade since you may first hit SL and after that price return to ML.

About SL i think that i need at least 2 range bars SL below the end of the fib (0.0 or 100.0 depends on the MT4 settings).

Of course everything I ve said above could be totally wrong. I m still backtesting. I hope I m in the correct path.

Thanks

Athan
 
Quote from shopster:

T,

continuing on.......

a new short at a diverged .86 retrace DT to the 1.62 exit

short was in the moneyline zone.

histo diverged.

also......
you now have a DB from the 5.7 extension previous low trade, to the left .

at 1.62 long diverge is starting to show.

running out of gas .

s
More...

this post is on page 35. was that a divergence? if so i really can't spot it since both price and macd bars are clearly trending down.

I attach the chart.
 

Attachments

A,

it is a one legger shop classic.

a .86 fib retrace (.14) on the second leg

histo bars are lower on the second leg up

even it it dt'd the histo is diverged.

...................................................

markets do not always dt or db.........one leggers are in this thread

all pairs do this..........a .86 fib retrace is classic.

this chart has a double fib on it ........why..........:)

s
 

Attachments

A,

the left side is a one legger........to the 729

then it retraces back to where.......?

.86 on the first move with a db diverged, then back to the moneyline.

hits the wall dt
db bottom
a hidden " upchuck " setup........:)

dt first db next trade to the north side.......

cross the money
retest it

fib out the upchuck box

back to the 2.0 fib and a retest of the high .

learn to read the market and become a student of the game to get to this level.

cheers,

s
 

Attachments

Quote from shopster:

A,

the left side is a one legger........to the 729

then it retraces back to where.......?

.86 on the first move with a db diverged, then back to the moneyline.

hits the wall dt
db bottom
a hidden " upchuck " setup........:)

dt first db next trade to the north side.......

cross the money
retest it

fib out the upchuck box

back to the 2.0 fib and a retest of the high .

learn to read the market and become a student of the game to get to this level.

cheers,

s
More...

S,
thanks so much for your posts and your time. There are so useful and enlightening.

Sorry for my previous question and chart on divergence! Its too late and i m tired. I spent most of my day studying you charts and divergence and backtesting. So that was a really silly question to ask!

Your last post was really really really great. Helps a lot. Why do you describe the Pivot as 729?

I hope tomorrow to get some better results concerning "reading the market".
 
Quote from shopster:

A,

it is a one legger shop classic.

a .86 fib retrace (.14) on the second leg

histo bars are lower on the second leg up

even it it dt'd the histo is diverged.

...................................................

markets do not always dt or db.........one leggers are in this thread

all pairs do this..........a .86 fib retrace is classic.

this chart has a double fib on it ........why..........:)

s
More...

well the answer is on your 1st post and actually is almost on all of your charts. In some charts you only draw directly the 2nd fib (retrace fib).

"fib expansion is very powerful when drawn from a .86 retrace or a full DT or DB that has diverged on the second leg setup."
 
ok here today trades i took.

first trade
------------
trend is up.
price crossed money line and rebounced there.
that was a .86 fib lvl

indis are showing bull hidden DB divergence (at least according to what i ve read).

I went long but price didnt go further than 138.2
it keeps coming back to money line and finding support.
drops back at .86.

so i m not sure if i should ve took this trade.

I really don't like to be totally uncertain for the result of a trade.
I m saying this because while i still waiting for this trade i took the following 2nd trade.


second trade
----------------
DT divergence.
got in and out on the yellow arrows.

2nd leg crossed zero line on the top so i went short there.

took all the pips down to the purple ema.

should i ve waited longer to enter?
should i ve exited earlier at 162 or 200 for safety?
i was just lucky and nothing else?


i made few $ but i m really confused...



 
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