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EURAUD: Difference in how Tflow® uses Fibonacci Retracement

Taking an overview look on D1

Immediate Resistance clearly visible in D1 of EURAUD

Immediate Resistance clearly visible in D1 of EURAUD

  • 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

Trend is clearly down on H4 of EURAUD

Trend is clearly down on H4 of EURAUD

  • 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 close to lower band of ED channel in H4 charts of EURAUD

Price close to lower band of ED channel in H4 charts of EURAUD

  • 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 ”

Zone of previous Support seen on Higher Time Frame

Zone of previous Support seen on Higher Time Frame

Price is currently below previous Support turning it to Resistance

Price is currently below previous Support turning it to Resistance

  • 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.

 

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One thought on “EURAUD: Difference in how Tflow® uses Fibonacci Retracement”

  1. Chen Wei Keith Hwan says:

    Thanks!

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