How to Make Money Trading on Your Own Time Wiley Trading_2

The Magic of Lazy Days Lines 51 (CHF A0-FX - SWISS FRANC,30) Dynamic,0:00-24:00 1.1300 1.1142 1.1100 1.1000 1.0900 1.0800 1.0700 01/04 01/05 01/06 FIGURE 5.4 30-Minute Intraday Chart of the USD/CHF © eSignal, 2008. (DNR A0-FX - EURO,D) Dynamic,0:00-24:00 1.5000 1.4000 1.3527 1.3000 11 18 25 01 08 15 22 29 06 13 20 27 03 10 17 24 01 08 15 22 29 05 Sep Oct Nov Dec 2009 FIGURE 5.5 Daily Chart of the EUR/USD also Known as the “Fiber” © eSignal, 2008. 52 FIGURE 5.6 FOREX ON FIVE HOURS A WEEK The Fibonacci Percentages I Use Shown on eSignal Let me also share the precise levels with you here so you have a re-source for the settings I use on my Fibo levels. Just remember that Fi-bonacci Levels are either loved or loathed. It’s a subjective tool which does require a certain amount of experience and practice to use but once you “get it” you’ll not want to trade without it. The levels I use are listed in Figure 5.6. Not all platforms will give you thismuchcustomizationoveryourFibolevels.Ithinkit’simportanttohave these levels on your charts when there is a viable “last major move” from which to draw them from. You’ll seldom find yourself in a situation where you are consistently using the higher extension levels (2.618, 4.25, 6.85) and if you do, you’re using last major moves that are too small. Now if you choose to use Lazy Days Lines, you will find that there will be useful overlap between the Fibonacci levels and the LDLs. It’s easier to use LDLs but I don’t want them to divert your pursuit of improving your Fibonacci Retracement/Extension drawing skills. In Figures 5.7 and 5.8 you will see the direct correlation between Lazy Days Lines and Fibonacci levels. The Magic of Lazy Days Lines 53 FIGURE 5.7 The Dow Jones Industrial Average with Lazy Days and Fibo Levels © eSignal, 2008. FIGURE 5.8 The U.S. Dollar Index with Lazy Days and Fibo Levels © eSignal, 2008. 54 FOREX ON FIVE HOURS A WEEK REAL-LIFE LAZY DAYS LINES Start with the market cycle. I am looking at the cable on the 180 and 240 minute time frame. This is how “triage” begins...Initially I am comparing the quality of the market cycle (see Figures 5.9 and 5.10). FIGURE 5.9 An Example of a Three O’clock Wave Angle on the 180 Minute GBP/USD © eSignal, 2008. FIGURE 5.10 The 240 Minute GBP/USD. Compare the Wave Angle to the 180 Minute Chart © eSignal, 2008. The Magic of Lazy Days Lines 55 FIGURE 5.11 Look at the Line Drawn Extending the Middle Line of the Wave to Indicate the Angle © eSignal, 2008. The 180 minute chart has a slightly flatter, more three o’clock Wave. Perfect for a momo set-up. The term “momo” is short for momentum trad-ing. Momo or momentum trading is the style of entry used when trading a narrow, rangebound market. This market cycle is accumulation and is identified by a three o’clock Wave. The 240 is transitional. The 180 wins this one with the flatter Wave. Now it’s time to find some support and resistance to play a breakout or breakdown through. See Figure 5.11. The uptrend line is drawn manually and this would be the support I will be watching for a breakdown. The other two lines (light blue and light purple) are the 144EMA and 89EMA respectively. I simply extend out the direction of the moving average to create a Lazy Days Line. From here, set-up a momentum trade. Use the MACD Histogram to confirm the break (it’s currently below the zero line right now). COMPREHENSION + CONFIRMATION = CONFIDENCE I am talking about putting the three Cs to work as it applies to the Fibonacci-based moving averages. I think in the past couple of pages I have sufficiently explained the exponential moving averages settings and why I chose Fibonacci numbers for the settings. ... - tailieumienphi.vn