Fib Retracement Trading...

[daedalus]

Originally Posted by kagein

Do the indicators react differently when your using tick charts? Looking at the tick charts i get more overbought/oversold areas.

Yes, you're going to get different indicator signals on the tick charts, but its all relative to the time and price patterns. I personally feel that the tick charts give a much more accurate representation of actual price action than I time chart ever can.

[Trade It]

Hey daedalus, which pairs do you trade during the asain session?

[Trade It]

Originally Posted by Sweet Pip

Just wondering if anyone's tried using the ADX indicator with the fibs. I too have not been finding a solid "point of entry" because as daedalus commented, everything is going up,down,up,down instead of up up and away so to speak!

So it seems there's a lot of ranging going on and it seems logical that the ADX will help identify the "trend within the range"...if there is such a thing? I haven't had any time to find if there is a correlation yet since I just read up on the ADX but if anyone else has a chance or knowledge, then it would be interesting to find out.

Thanks

Could you explain this. I have never used the ADX, but I know others that use the ADX with fibs. so there has to be something there.

[Sweet Pip]

Originally Posted by Trade It

Could you explain this. I have never used the ADX, but I know others that use the ADX with fibs. so there has to be something there.

Everyone should like the ADX being that J Welles Wilder developed it!

Still haven't had much chance to look into it yet as I'd hoped to, but I wondered if it might give more of a clue as to whether :

1) a fibo pullback (retrace) might be a deep one (strong trend), or a shallow one (weak trend), or

2) if we are in a range and should start using range indicators instead of fibs, or just stay out for the time being.

If one hasn't gone and looked it up yet, here's a partial definition of what this indicator does as taken from Stockcharts.com and you can also look it up in MT4's help for more info on it:

J. Welles Wilder developed the Average Directional Index (ADX) to evaluate the strength of a current trend, be it up or down. It's important to determine whether the market is trending or trading (moving sideways), because certain indicators give more useful results depending on the market doing one or the other.

The ADX is derived from two other indicators, also developed by Wilder, called the Positive Directional Indicator (sometimes written +DI) and the Negative Directional Indicator (-DI).

It gave me an eye opener when trying to understand why sometimes the stochs went into overbought/oversold territories, and the price kept on going up/dn for awhile...it could be due to the ADX value being higher along with the corresponding DI value.

I also found a website called ADX-cellence devoted just to this indicator...course you have to pay to find out how they use it . Cute website though with some catchy titles

[kagein]

Is there a good way of telling which grid price action is respecting?

[Trade It]

I keep the bigger timeframe in mind. But it doesn't always go the way I want it to either. Wish I could tell you for sure. Not sure if there is a way to tell exactly.

If you find out let me know.

Good trading to you!

[kagein]

You see i was thinking if a pair is trending and hits a major S/R line and reverses chances are it will respect the higher time grid

[daedalus]

Heres a shallow pullback I took yesterday, held overnight, and covered this morning for +76 pips at the -10% level. If you are having trouble with the shallow pullbacks here are two tips:

1) MOCK TRADE THEM UNTIL YOU ARE COMFORTABLE WITH THEM!!!
2) They work better on moves that blow away very quickly AND make new highs/lows... Like anything else, look for the chart pattern first and foremost, and then apply the grids. Higher highs and lower lows are key to this method!

Cheers!

[Trade It]

Well today was a good day! A positive 59 pips! Still liking this system. Looking forward to more days with it to gain more experience.

[kagein]

I had a good eur/usd trade today, had i been looking at my time chart the stochastic wouldn't have told me the pair was oversold. The tick chart however was showing oversold levels on the pull back. Why the difference?