A site someone recommended to me was www.dacharts.com. I talk to ZT on a chat who seemed very knowledgable, also someone said he was a long time regular. I have a chart posted that I dont' fully understand what the play is. ES is in an uptrend, and seems to be hitting the bottom channel of the uptrend. Is the play to go long here? Could someone explain? Also, What are the values .618, .785, 1.0. How are those calcuated?
ES is in an uptrend and the odds are always with the higher degree trend. The only nuance is that we are at a weekly resistant zone, completed a 5 wave move and also coming off a double top. The trend is your friend until its about to end. So in a sense, yes you could go long. But if you are a seasoned trader you look at this as a place where you want to step aside because the odds and probabilities are not as great. You could also take the trade, but with reduced size. Those values are fibonacci ratio's. 99% of the trading population uses them the wrong way. When you learn to use them like the 1% they are one of the most powerful tools in TA.
All right that makes sense. I now see things that are an argument for going up, others for an argument for going down
You are going to find that there will always usually be an argument for the direction. That is why there is a market and why it moves with mass psychology. Its a matter of ranking the arguments against the trade which creates an odds and probabilties situation and use that accordingly to create a plan. Put in the work and you will be rewarded.
apex, now when you say that it has 5 waves. Is the fact that it is staying on the same price level and doing the 5 waves is this bullish or bearish here?
Not quite sure what you mean by that statement. What I am getting at is that the bull run is typically exhausted after 3 impulse waves to the upside and has to retreat before resuming its move up. As long as we are under that projected 5 wave move it is going to create downward pressure on the market. Basically its a case of dumb money getting long and smart money selling into it.
Please post charts illustrating the 'wrong way' fibos are used and the same charts illustrating the '1% way' of using fibos.