6E - Trade the conclusion on 1 hour chart

What can I say? I have already said it on the chart. Well, then there are the other timeframes and other indicators that also support this trade, but keeping it simple is the way to go. It's a matter of can you trust the setup and take the move by taking the trade and holding. Yeah, that is definitely the challenge. One thing is true, the technical setup doesn't fail. It is what it is.

The bearish divergence took 3 days to build, and gave accurate clue as to which way it will move before the move actually happened. Check the 4 hour chart and see how it confirms this setup.

6E - 1 hour and 5 min chart together

For this trade, you would have to spot the divergence being setup on 1 hour, and at the same time recognize head and shoulders pattern on 5 min chart, to take the trade at close to the high, and hold it for 5 hours to get the full move being made on this setup, as the price goes up and down making lower high and lower lows. 1.2246 that it hit is -50% fibonacci extension from 1.2759 - 1.2417, which was the initial down move from the previous high.

6E - Rising Wedge and ADX

6E has made 339 tick bounce from 1.2288 in what has been a steadily declining downtrend, but it built a rising wedge, and with negative divergence on 1hour chart, turned back down.  Notice the price level of 1.2627 where it reversed was the previous low, which was support now resistance. On the daily chart, you can see ADX rising to support the steady downtrend before the 339 tick bounce, and when it began to turn down, the price began to rise.  And, yes, I shorted 1.2626, 1 tick below the high.

6E - Divergence on multiple timeframe

Trading divergencies is not easy, even though the chart in hindsight always shows that it works.  Here is a good example of divergences in control. The continued downtrend from 1.3287  fell 643 ticks and made a low print at 1.2644, building a bull wedge to the low and creating multiple divergencies on MACD on multiple timeframe charts.  The bounce made it to 23.6% Fib retracement level, 1.2796, which is a whopping 152 ticks move from the low. This proves that the divergencies can be traded. Although, all trading rules must be applied to take advantage of this trade setup and analysis as always, which include patience and discipline. I believe practice makes it perfect, so keep trying and it can be done. One thing is for sure, market will always provide a new setup, whether you can take advantage of it or not is up to you.

6E - Rising Wedge break on 4hour

4hour chart on left shows the rising wedge built on declining volume finally breaks as the negative divergence gave clue. Notice the trendlines as shown on the daily chart on right provide the resistance at that level. This is a reversal pattern as the 6E is now in downtrend until another majore reversal pattern occurs.

6E - Bull Wedge breakout on 15m

Selling pressure that began at close of market into afterhours built a falling wedge, hit the support and bounced from 38.2% retracement level from the low of 1.3 to previous high of 1.3266 as shown on 1h chart on right. In trading, the opportunity presents itself on the chart that gives you high probability to profit from, if you read the chart for proper technical analysis and execute. The analysis involved here includes the falling wedge pattern, positive divergence on 15m chart and the 38.2% Fib level.

6E - Bear Wedge break on 512tick chart

I have come to realize that keeping things simple can be the key to successful daytrading.  Of course there are a lot of things that need consideration when you're looking at the chart and analyzing, but when it comes to the bottom line, nothing beats keeping it simple. Take a look at this bear wedge on 512 tick chart, and understand how simple it can be to trade with simple setups like this. But I must admit, yes, it is not easy even though it looks easy, because you need to trust this setup, enter the trade and hold on for target - this trading action does require discipline and patience.  I said it was simple, not easy.

6E - Triangle / Falling Wedge

With few tools that are freely available on most charting software, nice setups like these can be found to help putting the odds in your favor. It is interesting that the same pattern is falling wedge on 3200 tick chart, while it is a channel on 15 minute chart.  However, the divergences on MACD is visible on both charts. Notice the Fibonacci levels that are observed on these moves.  The triangle pattern on the 1 hour chart on right shows the negative divergence on the early 2 peaks that begun to build the triangle pattern. So, the entire time it was being traded to build the triangle, which was some 20 hours, the direction it will break to has already been decided. Good to know.

6E - Rising Wedge target hit

Rising wedge that broke yesterday continued to descend another 100+ more ticks and hit the target today. When the chart was posted yesterday, it was at 1.3237.

6E - Rising Wedge break

This rising wedge that took almost a month to build broke today as you can see on the 4hour chart on left. 512tick chart on right shows some fibo levels in play. The topping pattern is a variation of double top with the lower middle as in M with multiple tops on each side. The negative divergence shown on MACD favors this setup. The break did happen with FOMC minutes release. Does that mean that the news caused it? Well, the pattern was being set up for almost a month. It is intriguing to see how that works.

6E - Accumulation

Good example of accumulation in play, with divergence and fibo references. 50% shown on the 4 hour chart on right as support, 6E accumulates entire day session after the fall and pops, and continue to pop into the afterhours trading. Stalls at 78% shown on the 1 hour chart in the middle.  MACD on 3200 tick chart on left shows the positive divergence for the accumulation in progress.

6E - Bull Wedge target hit

Refer to the post from March 16th on the falling wedge analysis, and see that the target has been reached today. There is no hard rule that says the targets hit on all patterns, but this one contributes to the statistics of target being hit. Notice that it retraced and bouncing from 78.6% of prior down move.

6E - High Probability Setup

When several technical tools all point to the same level, it becomes a level that act as strong support/resistance as a high probability setup. Here is an example of such case. On the left 1600 tick chart, where the pivot R1, 38.2% Fibonacci retracement, and channel trendline all converge at the same level, and surely the price bounces from it. Other supportive technical indications are also shown that are the positive divergences and falling wedge, which contributed to the upside move, which was explained in previous post..

6E - Falling Wedge on 4 hour chart

Many things are happening on this chart, but they are all explained. To sum them up, there is 50% retracement and -23.6% extension, then there is the falling wedge pattern from the double top, and the target as the distance measured from upper and lower trendline to be used as the distance from the break of the upper trendline.  Last but not the least is the positive divergence on MACD.  Notice how long it took to form this pattern, and how quickly is the move, and interestingly it was the news that fueled it.  Will it hit the target? We shall find out. Nothing is cast in stone, all technial anlysis is work in progress.

Simply Fibonacci

Been a while since I posted here. My recent personal life has been chaotic, and I won't go into that. Also, it seemed redundant posting same tools that work. But, make no mistake, when you try to trade it, it is not easy. There are multitude of factors seemingly unknown that affects the markets. Keeping it simple is always the best approach, many agree, and here is one that is pure and simple using the fibonacci tool.  It is a classic example of 50% retracement and -23.6% extension target. Watch how the price gyrated in between to achieve this move, and understand that is it not easy to trade even simple strategy like this. What is required is faith and patience, perhaps they are also called discipline.

6E - Fib Study

These charts are just showing how fibonacci study can be used to accurately pinpoint the reversal level. Interesting fact is that 50% is not a fibonacci ratio, which is added to the fibonacci tool, but seems to work quite well.

6E - channel bounce and divergence on daily

what seemed like freefall of 6E hit the channel support trendline on daily chart and bounced. This channel trendline is drawn from the 3 levels as you can see in the chart, and the bounce level was already on the chart just waiting for the price to hit, as positive divergence continue to form.

ES divergency on multiple timeframe

This nice downmove was being setup entire night as you can see the buildup of divergencies on both 5min and 15min. Divergence shown on 5 min is the right half of the divergence shown on 15 min, so it is divergence within divergence on multiple timeframe. on 1 hour chart, you can see that MACD did not show the divergence while TRIX did, so while they both are very similar in most cases, TRIX in general shows more divergencies, based my observation. Fibonacci retracement and extensions are also drawn on the charts to show how they can be great advantage when used properly.

ES with divergencies/pattern/fib extension/trendline

15m chart on the left shows good examples of divergencies on MACD giving good clue as to which way it is going next, both the drop and the pop. Thrown in to help with the analysis are the double top and inverse head and shoulders patterns, fibonacci extensions and the trendline. you can see that this divergence being formed took hours so that you had a lot of time to watch and analyze before making trading decision.

6E - Divergences and Fibs on 4h/Daily/Weekly

6E has been in a long downtrending channel/wedge for several months as it made lower low everytime it tried to bounce continuing to build positive divergence. Daily and 4hour charts show this diverging action, and finally on clear 4hour chart positive divergence and supportive daily chart, made upmove breaking out of the declining resistance trendline. Notice the fib extension and fan lines in play on weekly chart. As the weekly stochastic has just turned up, it is possible this could be a substantial reversal as the market moves in cycles.

ES - Divergences on 1hour/4hour/daily

ES shows divergencies on multiple timeframe charts, so far. Difficult thing about trading divergencies is that its not easy to tell just when it completes the pattern, as the price and indicator can continue to diverge for quite a while.  It is also possible for the divergence pattern not make the big move, but make small move, then consolidate to negate it, going opposite direction. But, I am not too bullish from this setup on the charts. Usually when there is divergence on longer term chart, very obvious divergence on shorter term chart is where it breaks. If this works out, has potential to make pretty big move.

6E Topping pattern and Fan pattern

6E is in downtrend, and the charts show a topping pattern within this downtrend as the indicators show negative divergence and the moving averages showing a fan pattern. 15 minute chart on the right shows steadily declining 200 sma in red line, where the price met with resistance at the 100 sma in light blue line, forms the topping pattern and moves down lower. This shows how moving averages are useful in showing the trend and providing resistance where trend traders can enter the trade in the direction of the trend. Notice on the 5 minute chart on the left that all trendlines are flatlining until it began to break lower, indicating more move is to come to the downside.