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| ES 2007 Archive | |
We also feature:
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| Note how the entry to this was not triggered until prices moved below the VPC line. Although this was a losing trade, at least it was ameliorated by the VPC as a filter. And, as is often the case, even in a losing trade the prices will usually rebound enough to produce a b/e stop. |
New charts show entry and exit prices of trades.
Here you can see the Keltner was used as a break-even stop.
As always, we do not recommend one method of stops over any other.
Note
also Fibonacci Wave 3 Exit...
| This last trade also illustrates an excellent example of the classic 5 Wave sequence using Fibonacci growth targets to determine the location of Waves 3 and 5 after the initial Seed Wave has been determined. The beauty of the Universal method is that the market profile Virgin Point of Control (VPC) allows us to get into the trade at the very beginning of the Seed Wave. This combination of proven methods is ideal. You can read more about Seed Waves in my book, New Frontiers in Fibonacci Trading, and of course read more about the Universal method in the last chapter of that book and here on the web site. |
The power of the Universal method :-)
short signal approaching @ vpc
Here is the exit if you did not get out earlier at the Keltner or b/e:
| This chart shows the strength and weakness of
Fibonacci. Fibonacci cannot predict whether prices will go up to the W3
level of 1.382~1.618, or whether they will extend up to the W5 level of
2.36~2.618. But it can predict what will happen if prices
reach those levels. This chart shows the first 'pause' at the W3
level, then final exhaustion at W5. However to get in to the trade
in the first place, Fibonacci is not a good predictor because you have
to wait for the 123 reversal to confirm. Universal can help
instead because we are reasonably sure that prices will reverse when the
market hits a Virgin Point of Control (VPC) using the market profile
chart. Why? Because that is by far the most significant support
point. Why? Because that is the point at which the market spent the most
amount of time on a previous day. Now, when the market does
reverse at a VPC, we have no idea whether it will reverse into a Seed
Wave. Downward pressure may still over-rule. But in that case, typically
we will still get a long trade and be out when prices hit the Keltner
band. The reason we hold partial after hitting that exit target is
precisely because we may be in the midst of a 1-2-3 reversal, as
occurred here. Note these remarks, and the charts shown below, all came in real time. This is not an "after the event" analysis. You can see our comments at each step of the trade. |
As you can see, the Keltner acts as a natural stop...
| Here is an excellent example of using the principle of the Seed Wave in trading these volatile markets. The Seed Wave is the first wave in a reversal. In this example, it is a reversal from a downtrend to an uptrend. The reversal is determined when you have a low, then a high, then a higher low (the pink arrow). At that point, you have a Seed wave that you can measure. Then, if prices subsequently extend beyond the top of that Seed Wave, you can use the known Fibonacci ratios (1.382, 1.618) to target the top of the subsequent Wave 3. We call it Wave 3 because Wave 1 is the Seed (blue), Wave 2 is the next downward wave (pink), and Wave 3 is the subsequent one (blue). For more on this subject, read the book (click on the book at your left, or click here: http://enthios.com/BookstorePage.htm ) |
Disregard the previous long signal
ES is in breakout mode; scalping only. Possibly trades down to the VPC.
Conclusion to yesterday's trade: Keltner acted as a break-even stop on the
second trade and as a standard stop loss on the first trade.
| This shows the Fibonacci seed wave target of 1527~1524 on the third wave. |
Notice the market has gapped down...
Watch stochastic still oversold...
This is not a true short signal because it was triggered at 8:00 then
finished
when it hit the Keltner at 9:15.
| As you can see, the market moved far above the VPC of 1511.50 and is at new highs, so the only trade will be a gap fill back down to 1511.50 then the long back up. If your short term indicators show shorts, you could also trade down into the VPC |
(If you did not make the short at 8:30, you can take any signal after 9:30
as long as the 8:30 trade has not completed by touching the lower Keltner.)
short signal @ vpc
exit signal @ stochastic reversal
Keltner exit signal reached
1509.75 VPC is invalidated because market will open right on that
line...
Keltner exit signal reached
Short trade signal @ voc
short signal approaching @ vpc
Today's NTR (Natural Trading Range) is shown below.
Fibonacci Seed Wave 3 target
long signal approaching @ vpc
Note this is a correction on the previously reported VPC...
Regression trend channel for the S&P Emini
Note here the first trade exited just below b//e and the second trade
exited at a nice profit at the Keltner
| A Fibonacci context to the market profile VPC (Virgin Point of Control) trade setup: The periwinkle colored line shows the key Fibonacci retracement levels of 0.618 and 0.786 from the previous range high-low. The pink line shows the Fibonacci targets on the 123 reversal, which I call the Seed Wave. A Seed Wave is the first wave in a reversal and its size can be used, with Fibonacci growth ratios, to determine the size of the subsequent wave(s). Here you can see a convergence of three major points: The Fibonacci retracement line of 1400.75, the Seed Wave W3 target of 1441.18 and, in the next chart down the VPC of 1439.75. |
Enthios Natural Trading Range
Fibonacci Seed Wave 3 and 5 targets:
For this with a stopless position in resulting from the previous signal, this
would be an add-on trade.
For more trades, please refer to our blog archives:
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