To plot each channel we use only the Ratio 2 Line. All other
lines are not shown as they are not needed. Select Draw
Type which controls which lines are plotted.
Lines 3 and 4 are the only ones, i.e.,
the Ratio 2 = .786, we will use. Lines 1,
2, and 5 should be off by clicking on
the “none” field. You can adjust lines 3
and 4 colors of your own choice.
The example above is for the
High Time Period, follow the same
routine for the Next Time Period
making sure that only the top and
bottom lines of this channel are showing.
The third channel we plot is
for the Own time period (10 Minutes).
This is our focus bar i.e., the
time period we are actually trading.
The final setup should look similar
to Chart #1. Next is the S&P plan.
S&P 500 9 MINUTE/45 MINUTE/DAILY PLAN
Use the same setup of the channels except the High Time Your chart for the S&P 500 should show all three channels
as per chart #2. It would be best to save these setups in
Systems so you only have to define each setup only once.
Two questions come to mind: First,
what does this all mean, and second,
how do we use it?
These multiple time frames tend to
define “extremes of price moves.” It can
be useful to define potential termination
of price moves. This may help us anticipate
a possible trend reversal in areas
where the three channels meet. In Chart
#1 points A and B are potential buy setups,
while point C is a possible sell setup.
In Chart#2, the S&P, points A and B are
potential buy setups and point C is a possible
sell setup.
In our next issue we will go into how
and why on a trade by trade basis. Our entry
trigger will be the Own Period Dynamic
Trio. Please set it to “wait for the close =
yes.” This allows us to take action (if we
desire) in areas of potential price termination
as defined by our Fibonacci Channels.
Using this exclusive Fibonacci Trader tool
we now have a possible intraday/short term
strategy, which if properly developed may
become a nice trading plan. Look at the
arrows shown in Chart #3. Please practice
this concept and do a back test. By the next
issue you will be ready to plug this into a
plan with rules, money management, etc.
Can you use this concept for Daily Bars?
How about trying Daily/Weekly/Monthly
Dynamic Fibonacci Channels?
I wish you super trading.
Go to Beginning >>> Dynamic Fibonacci Channels
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