EURAUD: Difference in how Tflow® uses Fibonacci Retracement
Taking an overview look on D1
- Price is below the immediate resistance of previous D1 boxes high and lows. (Each D1 box represents 1 month)
With a bias formed, we look for trend in the H4 charts
- Week to Week, H4 boxes has been showing a strong down. Represented by previous 2 weeks of bearish expansions.
- Currently we can see a 1234 pattern with pt4 retraced to a resistance as well as confluence with a Fib-R level drawn from the start of the flow to point 1.
- Note: Fib-R drawn from the start of the flow to pt 1 is meant to determine if pt4 is at any Fib-R level to confluence with and previous Boxes High/Low to create a strong level (support/resistance) for pt4.
So, what now?
- Price has done a WR of point 2 and has done a re-test of point 2 as well.
- Since price has triggered, we can draw a Fib-R from pt1 to pt4 as a form of reassurance, taking note of F3 & F6.
- If price can close below F6, it would mean that there is a higher probability for price to head to point 1
- If price retraces back up beyond F3, it would mean this trade is not doing well and trade management should be exercised.
- F6 can also be used as a modified trigger as in most cases, a close below F6 will also mean a close below the 13TL.
Updated by Jerome (4 Apr 2014)
In response to a concern that there is “D1 boxes S to be cleared from 1.48506 – 1.48032 ”
- On the higher timeframe. we can also see a closer zone of previous immediate support.
- On H4 charts, we can see that currently price has cleared below this immediate support zone.