It was a nice four day weekend, but now I am back at it. Here are the charts from last week's post - scroll down to read the details on entry and exit.
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Mentoring: The Key to Developing as a Trader
6 days ago
Wednesday, January 20, 2010
Back to work
Posted by Tom C.
It was a nice four day weekend, but now I am back at it. Here are the charts from last week's post - scroll down to read the details on entry and exit.
_______________
It was a nice four day weekend, but now I am back at it. Here are the charts from last week's post - scroll down to read the details on entry and exit.
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2 comments:
Hi Tom,
I see some times you use the morning h/l for your fib lines and other times you use the prior day's h/l to the morning's h/l. How do you know which to use?
Thanks,
James
Hi JT. The classic Fibonacci setup (for me and Trader-X, that is) is from the previous day's low/high to the opening range high/low. That is probably 80% of the setups.
I always watch the morning's range and - in my mind - plot Fibs over it to see where the morning's action is in relation to the early morning move, but I usually defer back to the classic setup as described above. But being aware of the more narrow view, it helps you find hidden resistance/support...even if you aren't drawing the lines on the chart.
In the JCI chart you are inquiring about, if you plot the Fibonacci lines the classic way, you will see that price bounced nicely off the retracement zone (RZ). I just chose to post the more narrow view in this case so you can see there is more than one way to evaluate setups...especially this "u-turn" type setup.
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