|
This seemingly simple question requires a
rather complex answer. S90/Crossover
extreme levels (ELs) are outer Fibonacci levels found within
trading ranges that
were former level one and two S90/Crossovers, which are also
found within multiple
time compressions of a trading range that have historical
significance as overlapping
Fibonacci points in the market. These levels are measured
horizontally, vertically, diagonally,
and with inverted reciprocal confirmations. Extreme levels have
always been
present, as have the laws of nature that Leonardo Fibonacci
found in the early 1700s.
The extreme levels represent expected support and resistance
levels that are extensions
from trading ranges that have historical significance. The
extremes have outer layers of
support and resistance that are seasonal, which are conclusive
from studies that I have
completed over the past few years. These extreme levels change
as market conditions
change on an almost daily basis.
If that sounds a bit confusing, don’t worry. There is a simpler
way to consider ELs.
What really matters is that out of the millions of potential
resistances, supports, or other
levels that are present within trading ranges, you really just
want to know which one
will produce a sudden reversal or will best act as a target. You
would at least expect to
find an area of a newly developing trading range where a bend or
reversal in the market
may occur. If I were a beginning trader, I would say, “Don’t
tell me about it, just show
me!” That’s exactly what a charting package should offer: levels
displayed and updated
automatically each day to reveal potential targets and reversal
entry points.
Here it is: Extremes appear, at this time, only on certain
charts found within the
industry. One of the companies that offer the extreme signals to
the trading public
has given permission to publish illustrations from the charts
within this book.
Technologies, LLC (which originally began as a sole proprietor
company under another
name and with no income) developed the charting software and
white-labeled for resale
the charts known as SmartCharts. DGB now has white-labeled the
charting product
to two forex companies: Concorde Forex Group, Inc. (CFG) (www.cfgtrading.com)
and
Forex Producers Group, LLC (FP) (www.forexproducers.com). Both
of these companies
offer the SmartCharts along with a free look before a
subscription. I am sure there will
be other companies offering the product soon. SmartCharts
currently obtain data from
almost 500 banks in order to feed a large amount of data into
the charts in microsecond
increments to create a real-time data feed experience. A massive
amount of data is required
to have an accurate reading for the extreme levels within the
market. Other new
charting services will most likely soon have the levels
appearing on their chart applications
as awareness of the accuracy of the extreme levels makes its way
into the world of
the forex.
To take advantage of this program, simply look at the charts
each morning after the London open.
|
 |
The levels appear, automatically, between 3 A.M.
and 7 A.M. eastern standard
time (EST) on the charting service. If the market reaches these
levels, then a possible
entry may appear by most traditional technical systems, as well
as with proprietary
tools available on the market. Regardless of the type of alert
system you’re using, you
must confirm and justify the signal before considering making an
entry. Every entry must
be confirmed.
The
upper extreme was posted approximately three hours before the
strike occurred. The
charts from this particular charting service, have horizontal
lines that appear and refresh as updated trading ranges, which
are projected about every 24 hours.
If you move to a larger time
compression (such as an hour chart or higher), then you can view
the lower projected
levels much more easily.
The advance notice given to traders was
about three hours. Extreme
levels are considered by many to be an area in the market that
will create a potential
reversal. There are off-market levels that will bend the market
as well, should the extreme
levels become breached. There are reasons that extremes will be
breached, and
traders should trade the extreme levels with relatively tight
stops of between 5 to 21 pips,
based on whether a resistance or support appears in conjunction
with the extreme level.
I encourage this caution of placing a tight protective stop,
just in case the level is not
Extreme Levels of a Trading Range
honored for a reversal entry. The goal, obviously, is to
minimize your risk and maximize
your gain.
After the open of the London
session, the GBP fell to the
bottom inside wall. When the New York session opened later, the
market breached the
bottom inside and fell to the bottom extreme level of the
trading range. This combination
moved from the top inside wall to the bottom extreme level,
providing a 200-pip move
during a 24-hour period.
Figure 6.4 shows a strong S90/Crossover visible on the four-hour
chart, down to the
five-minute chart. The S90/Crossover came down
and landed exactly on top
of the bottom inside wall. Having an extreme level or an inner
channel wall overlap an
S90/Crossover increases the odds for the market to return to
that level. On this particular
day, the market fell exactly to the S90/Crossover, which just
happened to be a duplicate
of the bottom inside wall for an extreme projection. This type
of duplication is a great target
to trade toward, and often additional confirmations are present
for a reversal bounce
trade entry, which may just add more pips to the margin. With
the levels being hit exactly
as displayed in this book (which also happens over and over
again every month on
all currency combinations), I believe this type of methodology
has something to offer to
every trader.
In previous sections of this book, S90Crossovers have been
discussed, along with
how they work with extreme levels. Although we have defined and
explained the
S90/Crossovers in previous chapters, let’s review using a
different approach. Let’s ask
the question again: What are these S90/Crossovers? |
