Bettleboxs Breakdown of Zlines and MoMos

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loggerjim
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Fibs

Postby loggerjim » Sun Apr 22, 2012 3:32 pm

A friend of mine was asking if I use fib retracement in my trading. Sent him these to explain what I look for. Quick trade from Friday AM on the USD/CHF which I rarely trade.
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usdchf m15.gif
Trend and setup
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usdchf m5 entry and exit.gif
Entry and exit
usdchf m5 entry and exit.gif (26.69 KiB) Viewed 1612 times
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bettlebox
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Postby bettlebox » Mon May 14, 2012 8:08 am

Hi Everyone

I need some help understand this:--- <<any advice would be appreciated>>

Im trying to understand concept of 50% levels. The picture below is an example of what i am thinking.

I am aware that it happens on all timeframes, i used 4hr and 1hr as example. I would grateful if someone with more exprience in this, could tell me if i am correct.

And possibly give me some additional comments or guidelines .

Text Version of Picture:
So in the picture we have 4hr momo up and i have 50% level marked off.

The red 1hr candles retrace,into 4hr MoMo towards the 50% level. I'm looking for price to remain above the 50% of the 4hr MoMo (giving me a bais to upside). As long as price doesn't close below the 4hr 50% level, i am just waiting for momentum to upside for entry.

If 1hr closes below the 50% level of 4hr MoMo, then iam bias to downside and first target is 0% level of the 4hr MoMo.

PAGE 1 of 1


BB
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Postby Pro Trader » Tue May 15, 2012 3:37 pm

bettlebox wrote:Hi Everyone

I need some help understand this:--- <<any advice would be appreciated>>

Im trying to understand concept of 50% levels. The picture below is an example of what i am thinking.

I am aware that it happens on all timeframes, i used 4hr and 1hr as example. I would grateful if someone with more exprience in this, could tell me if i am correct.

And possibly give me some additional comments or guidelines .

Text Version of Picture:
So in the picture we have 4hr momo up and i have 50% level marked off.

The red 1hr candles retrace,into 4hr MoMo towards the 50% level. I'm looking for price to remain above the 50% of the 4hr MoMo (giving me a bais to upside). As long as price doesn't close below the 4hr 50% level, i am just waiting for momentum to upside for entry.

If 1hr closes below the 50% level of 4hr MoMo, then iam bias to downside and first target is 0% level of the 4hr MoMo.

PAGE 1 of 1


BB


Hi BB

I just look for evidence that price is holding in the direction of momo. sometimes price will turn at the 50% and sometimes it will do so at the zline. For me, a H1 close over the H4 50% does not immediately invalidate the trade. It depends on what happens next. If I then see a H1 momo in direction of H4 then I am interested. I just look for H1 one candles to confirm H4 direction. Sometimes it will do this at 50%, sometimes at zline, or sometimes not at all.

Truth be told I am trading slightly differently now. Mainly based on supply and demand and SR levels but still entering with Momo confirmation. I will post some charts when I get the chance.

I hope that helps

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Postby bettlebox » Wed May 16, 2012 12:24 am

Hi Pro

thanks for response, from what explained below, this what im thinking.

Using 50% areas and waiting to see if those area hold or not as to clues to price direction. I m doing live trades and keeping record of whats happening , hoping through this process i will get confirmation im looking for.

I would be interested in seeing your posts on examples.

Thanks
BB



Pro Trader wrote:
bettlebox wrote:Hi Everyone

I need some help understand this:--- <<any advice would be appreciated>>

Im trying to understand concept of 50% levels. The picture below is an example of what i am thinking.

I am aware that it happens on all timeframes, i used 4hr and 1hr as example. I would grateful if someone with more exprience in this, could tell me if i am correct.

And possibly give me some additional comments or guidelines .

Text Version of Picture:
So in the picture we have 4hr momo up and i have 50% level marked off.

The red 1hr candles retrace,into 4hr MoMo towards the 50% level. I'm looking for price to remain above the 50% of the 4hr MoMo (giving me a bais to upside). As long as price doesn't close below the 4hr 50% level, i am just waiting for momentum to upside for entry.

If 1hr closes below the 50% level of 4hr MoMo, then iam bias to downside and first target is 0% level of the 4hr MoMo.

PAGE 1 of 1


BB


Hi BB

I just look for evidence that price is holding in the direction of momo. sometimes price will turn at the 50% and sometimes it will do so at the zline. For me, a H1 close over the H4 50% does not immediately invalidate the trade. It depends on what happens next. If I then see a H1 momo in direction of H4 then I am interested. I just look for H1 one candles to confirm H4 direction. Sometimes it will do this at 50%, sometimes at zline, or sometimes not at all.

Truth be told I am trading slightly differently now. Mainly based on supply and demand and SR levels but still entering with Momo confirmation. I will post some charts when I get the chance.

I hope that helps
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bettlebox
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Postby bettlebox » Thu May 17, 2012 3:29 pm

Ok so i been studying one particular post by Dragon last several days

http://kreslik.com/forums/viewtopic.php?p=41604#41604

In pictures we have a large 1hr MoMo up and then next 1 hour starts to retrace back in to the 1hr momo. note retrace 1hr candle down didnt close anywhere near the 50% level of 1hr momo.

Notice we have 15min momo (marked with 15 min zline). What does all this mean.?

1. there is high probability that price will continue to drop to level of 50% of momo.

2. Where is the best price to open position(this is counter trend to grab some pips)? on the retrace into the red 1hr into 1hr momo.

3. Where is price likely to stop on the retrace? at 15min zline to 50% of 15min momo.

4. How should i time my entry? with a rat trade entry on 5min chart. Notice in the diagrams below ,price fails to close higher than 15min zline, this what you want to see. Price failing to make new highs and then look for ratentry.

Go deeper into this:-
What is actually happening? Well we know with high degree probability dirction of price once inside a previous momo. So the retraces are easy to determine and stop points will be 50% or 15min momos on retrace. for example price is heading down to 50% of previous momo , in hour price is pushing up into previous 1hr for example i know i m on high alert for stop point and continutation to downside.

So if you can determine direction with out momos , ie looking at 4hr and 1hr for retracements you can find really good entries all over the place and scalp some pips while you wait for your good setups.

its all about diection, 1hr momo , retrace and stop points , ideally 15min or 50% level maybe even opening price, and then rat entry at 5min. This happens over and over again. Remember this will fail if you determine higher time frame direction incorrectly.

The premise is, in an upward movement of price, all demand areas will hold and all supply areas will fail. Downward movement all suppy areas will hold and all demand areas will fail .

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BB
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Postby forexjpn » Fri May 18, 2012 3:59 am

Hi BB,
IMHO, you are putting too much weight on the 50% levels.
I myself usually wait for full retracement to Z-line after a MOMO and enter there. However, not all Wide Range Bars act the same way, meaning not all long bars are the 'MOMO's' you are looking for.....the ones that are followed with a clean retrace for entry........some may be mark ups/downs in price which specifically 'prevent' weak hands from entering, because they are scared to enter after such a big move and feel they are being 'ripped off' cause they think 'well just a few seconds ago, I could've gotten in a much better price, so I'll just wait for it to come back down' and it doesn't.........(recommend reading up on VSA to get a better understanding of that)
Hope that helps......I'm still a work in progress myself.

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Postby bettlebox » Fri May 18, 2012 5:48 am

Hi Forexjpn

when 50% level put context below they make perfect sense.

a) MoMo & zline.
b) Dragon /MoMo lines.
c) 50% area (this includes open,close and extremes) on retraces to price movememt and previous mightyzones.
d) rat entries
e) supply and demand principles as laid down by sam
f) use of semaphors and dynamic dots. <----soon to be dropped as im now using them less and less.

Since i been specifially looking for retraces into previous 1hours and 4hr, counter trend. My ability to pick good trades has jumped up.

I am not going to drop 50% levels, cause i can see its underlying principle in price movement. That happens everyday, every timeframe , every market.
Combine this with MoMo you got yourself very nice edge.

I would only stop looking for them if presented with better method.

What does "VSA" mean i m not fimilar with that acronymn??

BB
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Postby forexjpn » Fri May 18, 2012 3:49 pm

Sorry, didn't mean to say that 50% was not significant, I just feel 50% is more of a guideline as MO referred to the 'area' beyond 50% as the Mighty 'Zone', which is not exact.
In my experience, thinking too much about 50% will result in a lot of screen time with no action, due to lack of price behaving in a picture perfect way.
I know looking back at charts you can probably find many cases where it does, on the other hand, I think you will also find that price will often continue in the direction of momentum with minimal or no retrace (as I mentioned in my previous post) and only thinking about MOMO, retraces and 50% will result in no action.
Also, IMHO the significance of Z-lines is not 50%, but 100% retrace and of RAT trades the siginificance is 'extremes' and that price is likely to move 100+ pips from them......
Please understand, these are only my opinions, I could very well be wrong.
I think you are doing a great job here at analyzing everything.
(I hope my post is doesn't sound pushy in any way, as I definitely do not mean to.)

Cheers

PS: VSA stands for Volume Spread Analysis

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Postby bettlebox » Fri May 18, 2012 7:44 pm

Hi forexjpn

its cool. since included 50% these trades i see everyday now.

I took the first 3 trades and called it day. There was 3 more after that. Im seeing same thing for what im seeing there normal 2-6 trades a day per index. The eurusd has be very tight in its range for while now. Hence the jab jab appoarch. Im more than happy to make 40-60 pips aday.
(rat entries are 5min chart)

currently only trade one index.


BB
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Postby Humble » Sat May 19, 2012 12:50 am

In relation to forexjpn's comments on 50% of memo, this chart and discussion maybe of interest.

http://kreslik.com/forums/viewtopic.php?p=62745#62745
Is price closing higher or lower than something? Simple yet powerful question. ..MO

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