Using Daily Charts For Clues To Intraday Trades - Alan Oliver
Hello everyone,
In this weeks review we look at USDCHF daily chart.
Many traders I know who trade in Forex appear to be relatively short term traders.? They buy and hold for a target of pips, some 10, 20 or perhaps a little more, but a lot do hold for reasonably short time frames. It then seems strange to many that when suggesting they review a longer term chart it seems contrary to their ultimate goal.
On today??™s daily chart, you will soon see the benefit of maintaining a longer term chart even for the traders of shorter time frames.
Starting from the major low in February 2005 marked A to the major high in November marked B, we can use the Fibonacci retracement tool to highlight price areas of support and resistance in the future. These lines are automatically drawn on the chart for us and we can see them clearly on the chart.
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As short term traders, we could watch the minor charts for any signals of reversals as the market draws closer to one of the lines. Notice the value of this approach at the points marked C through G.
If you look carefully, in the last week we can see that the market again retested the 61.8% level at 1.2582. It actually went as high as 1.2620 before an exhaustion signal, it only closed above the 61.8% line once on the hourly chart and the very next bar was an inside reversal bar. So far it has traded as low as 1.2350, or some 230 pips lower than the Fibonacci top level. If you check this out on your own charts, I am sure you will see the benefit of Fibonacci on longer term charts.
Best wishes as always,
Alan Oliver.
Alan Oliver is a full time trader and educator, author of the best selling book ???Trading with the Gods???. He is on record as predicting and trading the September 11 2001 market crash and explains the trade fully in his book. His website www.tradingwithgods.com contains more information on the book and his trading manual Trading DNA is considered one of the best of its kind in unraveling the mystery of Fibonacci and Gann. The manual is very easy to follow and understand with many graphics and examples, and is fully supported with weekly articles and reviews and direct contact with the author.
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Alan Oliver
Trading with Gods
www.tradingwithgods.com
This article is provided freely for your information to demonstrate tools and tactics in the market. This general information is not specific to your financial position and no guidance? is intended. You should seek the assistance of a licensed professional before making decisions based on the information in this article.