fib levels

[lori]

we've watched the markets break thru some significant fib levels (support) lately and now its coming back some, the last few days. since those levels broke, will the market use those levels as support again? or its safe to delete those lines and start over drawing new support levels?

[Hussam]

we've watched the markets break thru some significant fib levels (support) lately and now its coming back some, the last few days. since those levels broke, will the market use those levels as support again? or its safe to delete those lines and start over drawing new support levels?

Hi Lori,

If the price level /action did not go beyond the highest and lowest points you used to draw the retracement, I treat them as still valid. However. if the price action does go beyond the highest OR the lowest point, then we should draw a new one based on a new high & low points.
Best of luck.
Hussam.

[FibMaster]

we've watched the markets break thru some significant fib levels (support) lately and now its coming back some, the last few days. since those levels broke, will the market use those levels as support again? or its safe to delete those lines and start over drawing new support levels?

That's a great question. In general if a FibLevel is tested several times, the market is demonstrating that the level is strong and still holding.

So if support breaks, and then price recovers back above Fibonacci support, that support level is strong. The longer a Fibonacci level holds, the stronger it is.

If a FibLevel is broken, and the market moves to a lower Fiblevel, and then does not recover back to the original FibLevel, then that FibLevel is negated.

[johntsai]

Hi Neal,

I have question about timeframe combination.

why you use 5 with 30 instead of 15/30?
how about 15/hour? or 30/4h?

what is your guide line to use the timeframe combination?

[FibMaster]

Hi Neal,

I have question about timeframe combination.

why you use 5 with 30 instead of 15/30?
how about 15/hour? or 30/4h?

what is your guide line to use the timeframe combination?

Hello John,

The selection of time-frame is a personal choice, and also depends on market conditions. My choice varies based on the particular trade setup and my evaluation of the trend etc.

For example my stock investments I usually use much longer time-frame charts. Intra-day trades use a variety lower time-frames.

[rabin]

Hello,

The Chat Session Was Wonderful And Productive.
Please Keep This Up.

Thanks Again


Rabin

[FibMaster]

I'm pleased that you enjoyed it Rabin. It was a pleasure to have you there.

I've scheduled some more Wednesday live trading chat/webinar <b>workshops</b> on my website, see here;
FibMarkets.com (http://www.fibmarkets.com/profitpoint_workshop/index.html)

[ndavies64]

Neal,

I've just been going through your excellent seminars and one thing wasn't clear to me. When you're constructing indicators for, say, the S&P, do you use overnight data or just the day session? Or do you just take the available data for the contract you're trading?

Thanks, Nigel

[Llamedos]

Hi Neal

Regarding this question of the difference between broken and penetrated Fib levels, am I correct in my interpretation of your views that, even if the price action penetrates and closes past a .382 (but is subsequently turned by the .618), the .382 becomes valid again once the market action has rallied past it having reversed its direction at the .618?

And if this is the case, would that be why you advocated using the SK level as shown in this chart http://www.traderzine.com/forums/attachment.php?attachmentid=160&d=1226686526 on the thread ‘3 Nov 08 EURUSD Trade - looking for best entry point’ as a good place to hide your stop loss behind in spite of the fact that the market had previously penetrated it?

Equally what are your thoughts on Hussam’s practice of keeping the Fib levels in play until the points used to draw the levels are breached. It certainly would be a comprehensive indication that new levels have to be drawn (if point ‘B’ is passed) and that the trend may have changed direction if it is point ‘A’ as, in an up trend, this would have created a new lower low and lower high. Although I do seem to recall that you said on one of your training videos that you considered the trend to have changed after the .618 is broken.

[FibMaster]

Neal,

I've just been going through your excellent seminars and one thing wasn't clear to me. When you're constructing indicators for, say, the S&P, do you use overnight data or just the day session? Or do you just take the available data for the contract you're trading?

Thanks, Nigel

Hi Nigel,

For stocks, futures, and indexes I prefer to use only active hours, not after-hours. The low-volume hours can cause unreliable price action due to lack of liquidity and abnormal conditions.

[FibMaster]

Hi Neal

Regarding this question of the difference between broken and penetrated Fib levels, am I correct in my interpretation of your views that, even if the price action penetrates and closes past a .382 (but is subsequently turned by the .618), the .382 becomes valid again once the market action has rallied past it having reversed its direction at the .618?

And if this is the case, would that be why you advocated using the SK level as shown in this chart http://www.traderzine.com/forums/attachment.php?attachmentid=160&d=1226686526 on the thread ‘3 Nov 08 EURUSD Trade - looking for best entry point’ as a good place to hide your stop loss behind in spite of the fact that the market had previously penetrated it?

Equally what are your thoughts on Hussam’s practice of keeping the Fib levels in play until the points used to draw the levels are breached. It certainly would be a comprehensive indication that new levels have to be drawn (if point ‘B’ is passed) and that the trend may have changed direction if it is point ‘A’ as, in an up trend, this would have created a new lower low and lower high. Although I do seem to recall that you said on one of your training videos that you considered the trend to have changed after the .618 is broken.

Yes Llamados, I do still keep that .382 in play, in the case where price returns back to that level.

In that file you posted, the SK level was exceeded but then price reversed back below it. So the SK level was still in play.

After some time, I do delete any studies where the price action has exceeded the .618 and has left it behind.

[Bert]

Neal, I posted this question in another thread not sure if this is right place either. anyway a question on TRSI from last week...
Neal, I had a hard time today reading TRSI. I tried to
> short this eurjpy rally all day and got creamed. At what point is trend
> considered strong? In the TRSI seminar you mentioned that when it gets
> above 60, but what time frame? and which TRSI line? the silver line or
> the blue line or all three?

[FibMaster]

Hi Bert,

It is better to click on the "New Thread" button to post a question on a new topic. I have answered your question in the "FOREX Trading" forum, where you posted it in the "FibMAster Forex Chat" thread.

[ndavies64]

For stocks, futures, and indexes I prefer to use only active hours, not after-hours. The low-volume hours can cause unreliable price action due to lack of liquidity and abnormal conditions.

Hi Neal,

Does this mean that you might also be leery of fib level penetrations if they occur when volume is thin during the day session, for example towards the end of December or around other holidays?

Thanks, Nigel

[FibMaster]

Hi Neal,

Does this mean that you might also be leery of fib level penetrations if they occur when volume is thin during the day session, for example towards the end of December or around other holidays?

Thanks, Nigel

Yes exactly. Actually, you should be leery of trading during those times. Much greater chance that your stop will be hit too. With low liquidity, there can be some wild gyrations. Adjust your trading accordingly, or better yet - take some time off.