Here are the days this November only when this pattern occured (the retracement to 61.8% level within the first 30 min bar) and could have been profitably exploited with 2.5 pt stop-losses and at least 6 pts of profit: 11/18, 11/11, 11/07, 11/06, 11/05. That's 5 out of the last 12 trading days, the frequency higher than 30%! The reward to risk ratio is better than 2:1 and in some individual cases even better.
Well, I did not know that it was such a foreign concept on this board. I once tried to do it though, but somehow did not succeed. Anyway, because my time today is limited, I will not elaborate on it right now, but I believe that if you know what Fibonnacci retracements (FR) are you will have no problem uderstanding what I mean. If you have a charting software that draws FR, check out the dates I mentioned and you will see what I meant. That's really simple.
I do know what Fibs are, but I'm afraid I don't see what you're talking about. If you don't have the time, tho, I won't pursue it. --Db
Take a look at the chart I posted and read the explanation. It's along the lines of what you seem to be thinking. Anyway, It's something I do often to find the entry point. I just don't think of it in those terms. That's one of the advantages of subdividing into smaller chunks like 15 mins as I did or 5 mins or whatever rather than using the actual 30 mins bars religiously. As to the % times of a deep retracement. I can't check right now, but I'll get back to you when I have some idea. I won't be going back much before october though.... Natalie
Great, I think checking through October would be enough to get a better idea how well it works. Where is the chart? Any problems with that? I had some too, that's why I am asking. Using smaller bars is a necessity, of course. I use 3 min bars, along with bigger ones (7-8 min) to see the structure of the first 30 min bar and the next 30 min bar. That gives you a better idea where the best entry set-up will possibly be.
Somewhere on page 22. The explanation of what I did that day is a few posts later or page 23 perhaps... I'll check back through my data and come back to you. Natalie
OK Natalie, sorry, but did not check this thread out for many days, so I am responding only now. I recommend both Sperandeo's books, but there is some overlap between them so you may want to choose one or the other. Check them out from your local library, or from Amazon.com. I also recommend 'Sniper Trading' by George Angell, it has some good ideas, specifically tailored towards SP trading. Hope this helps. wally_
If you mean 11/11/02, then yes, you could have traded it successfully on a pullback (61.8% FR), along with many other days where this pattern occured (see my other post with such days in November listed).
I saw your chart. I would short by the green trendline on the upswing if it reached 61.8% FR and if I had some reasons to believe that the swing is weakening (for instance, a stochastics divergence in a smaller time frame). That would give me some extra points if it went my way, but it would that day as you see. Of course, I don't know if I had reasons to do it, I don't have any data for this time, so cannot see a subtler stucture that would inform me what to do.