Re: Ts
Hi Putuval
First of all looking at those 2 charts I was not sure if you were using Fib Retracement and I thought you must be using some other Fibonacci feature that must be available on the S/F. However I wanted to be sure hence the questions.
Anyway, now that I see it is a Fib retracement, I must say that you have used it incorrectly.
Fib Retracement (retraces a portion of the previous move) is used to identify/anticipate a possible target for retracement after you are sure it has hit a bottom or made a top (or – temporary bottom or top).
The method of plotting is (for example in a down trend) the first point would be a Peak and 2nd point would be trough/bottom from which point you will identify a possible retracement target.
Fib Extension is used when, say, prices are trending then it retraces a part of the move and then continues in the original direction. In this case the tool is used to anticipate to what extent the price may fall/rise beyond the recent bottom/peak.
The method of plotting is (for example in a down trend) the first point would be a Peak, the 2nd point would be trough and the 3rd point would be the recent retraced peak from which point you will identify a possible extension target. You will need 3 parameters to plot in this case.
Example on charts would be – you can use Fib Extension in 1st Tata Steel chart (since the price is still trending downwards) and Retracement on the 2nd (since it shows a possible bottom)
Hope this helps and hope you understood my explanation. You can Google for further information.
P.S: If it is of any help than I can post chart examples for the same.
Thanks Gandhar for answering Point 3.
For others, Fibonacci levels are never the same every day. So unless the levels are broken, we respect the Fibonacci levels that I had drawn. If the levels are broken, then the currently Fibonacci levels are thrown out and a new set is drawn when we find the price getting stabilized.
In addition, I can only chalk out the trend based on my knowledge. Perhaps you are right, that I might not be considering all the factors of Fibonacci series, if any. I am still learning.
Moreover, these are my views, not prediction that the price will move as per my views. If at all, the price moves as per my views, my Fibonacci levels may help the traders to plan their entry or exit. On the contrary, if the price goes against my views, these views goes into the dustbin. I have provided the stoploss for JP in this post, http://www.traderji.com/futures/67625-diary-315-trader-24.html#post851074 and for TS, it is the Fibo Level, 254.
For others, Fibonacci levels are never the same every day. So unless the levels are broken, we respect the Fibonacci levels that I had drawn. If the levels are broken, then the currently Fibonacci levels are thrown out and a new set is drawn when we find the price getting stabilized.
- In the case of TS, there was a turn around indicated by a pattern, bullish engulfing pattern.
- If you notice JPA, the trend is shown flat with price oscillating between 29 and 34. But it broke the swing high in 30 minutes, indicating that a break out has happened in the short term. If you check my previous post you can see the levels I have pointed out. This factor can be treated as a turn around.
In addition, I can only chalk out the trend based on my knowledge. Perhaps you are right, that I might not be considering all the factors of Fibonacci series, if any. I am still learning
.Moreover, these are my views, not prediction that the price will move as per my views. If at all, the price moves as per my views, my Fibonacci levels may help the traders to plan their entry or exit. On the contrary, if the price goes against my views, these views goes into the dustbin. I have provided the stoploss for JP in this post, http://www.traderji.com/futures/67625-diary-315-trader-24.html#post851074 and for TS, it is the Fibo Level, 254.
Hi Putuval
First of all looking at those 2 charts I was not sure if you were using Fib Retracement and I thought you must be using some other Fibonacci feature that must be available on the S/F. However I wanted to be sure hence the questions.
Anyway, now that I see it is a Fib retracement, I must say that you have used it incorrectly.
Fib Retracement (retraces a portion of the previous move) is used to identify/anticipate a possible target for retracement after you are sure it has hit a bottom or made a top (or – temporary bottom or top).
The method of plotting is (for example in a down trend) the first point would be a Peak and 2nd point would be trough/bottom from which point you will identify a possible retracement target.
Fib Extension is used when, say, prices are trending then it retraces a part of the move and then continues in the original direction. In this case the tool is used to anticipate to what extent the price may fall/rise beyond the recent bottom/peak.
The method of plotting is (for example in a down trend) the first point would be a Peak, the 2nd point would be trough and the 3rd point would be the recent retraced peak from which point you will identify a possible extension target. You will need 3 parameters to plot in this case.
Example on charts would be – you can use Fib Extension in 1st Tata Steel chart (since the price is still trending downwards) and Retracement on the 2nd (since it shows a possible bottom)
Hope this helps and hope you understood my explanation. You can Google for further information.
P.S: If it is of any help than I can post chart examples for the same.
