Now, as price begins to retrace down from D, would we pull our fib from A-D OR from B-D to determine better odds of an OTE retrace to get long from?
The simple answer is to determine where do most confluences form?
Sure, pulling a fib from A-D will give us an OTE. But so will pulling a fib from B-D.
In this example, pulling a fib from B-D may provide the better set of confluences to locate OTE entry point for a long because:
Fib from B-D gives OTE at a prior high (now support) WITH reflection pattern from measured swing between C-D.
So, although you could argue, “why didn’t you pull the fib from A-D?” We can, through this simple example, see why there were better confluences aligned pulling the fib from B-D (as opposed to A-D) to get long on an OTE retrace, as shown by Point E below:
150 pip retracement so far… nobody wanted to believe me nice boost of confidence though. even if this already was the whole retracement and it’s only going up from now. 150 pips is enough for a nice gain
That is a very good question and one deserving of a detailed explaination. Many times I quickly go into a chart’s price structure and fail to fully explain why I elect a particular price low or high and it is mainly unintentional on my part… and this was the case this past market review… referencing the Aussi Low I used for example purposes.
I recorded a LiveStream Recording to answer, hopefully, your inquiry and please let me know if this was adequate for your concern.
[B]Thanks for your continued interest and GLGT![/B] :57:
Please click here for the Livestream presentation on this subject: [B]Download Video[/B]
Thanks for your great explanations. That makes good sense. I assume ICT wouldn’t enter a trade purely on guessing an OTE point with no other indications, such as a previous S/R.
One other point. In some of his videos, he uses a ‘sweet spot’ on his fibs (70.5% retracement). But then on other times, he uses the OTE 79%. Why do some videos use the sweet spot, and some don’t? In his main videos he uses OTE at 79% but recewntly i’ve starting seeing this ‘sweet spot’. So which level is it that we should be ideally using as a best entry?
edit…
Just noticed I got a reply from the man himself on the AU question. Awesome, thanks ICT I will check out the livestream.
ICT, that livestream response to the below question was awesome! It really pulled plenty of the stuff together. I’m constantly amazed how the tools work! Now just the everlasting struggle for me to see it as clearly when the right side of the screen is dark and uncharted waters. Thanks as always though.
Martin, I’m uploading again with two versions. With the “.txt”, change the extension to “.xls”. With the “.zip” file, unzip it first, then try opening it with Excel. Should work, good luck.
My first post here on BP but have been lurking for awhile now. Michael, just a quick thanks to you and for all that you do. I am amazed at the amount of knowledge that you have and also what you give to us every day!
On to my question. I’m trying to get a better understanding of the US dollar index. My broker, GFT, have what is called the “US Dollar Basket”. Is this the same thing? The definition on the GFT website is “***[I]The makeup of the USD/BKT at GFT offers clients the ability to trade streaming rates against a weighted average basket of major currencies EUR (57.6%), JPY (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%) and CHF (3.6%). Financing Charges are traded by instrument and change daily; they may not reflect a direct weighted average calculation of the underlying currencies daily Financing Charges.[/I]”
The Blue line is cable and Green is fiber.
Cable made HH’s whereas fiber din’t and formed as a resistance level. Is this a vlid divergence to say EU was bearish ?
I guess it is. I personally dont like it but it is SMT. I would have liked to see the the fiber reach a little higher for me. On the short term though look at the very end cable made a higher high and fiber did not hmmm I like that one.
Also dont forget to toss in the USDX to help spot SMT to be confirmed through the USDX. Even if you are not good at spotting inverse divergence (like me) the MT4 plattform overlay indicator has an mirror mode feature that will help out there.
Still not sure whether we’re headed higher or reversal imminent but this Type 2 divergence is interesting. Would suggest we’re contracting getting ready for another push higher.
nice boost of confidence though. even if this already was the whole retracement and it’s only going up from now. 150 pips is enough for a nice gain 
