The reason I've selected these points is that they are relative to the local move itself rather than the sharp drop in price previously
We're now trading at the 0.236 key level
I've thrown on the Fixed Range Volume Profile tool that is available for free on @tradingview
You just pull this from A to B of where you want to explore volume.
The red and white bars give you the value area of a move. This is where 70% of the volume has traded in this area.
You're also given a Point of Control as well with the tool, which is where the most volume occured within this 70% selected area.
The Value Area is shown in the white rectangle in the above tweet.
The Point of Control gives good resistance and support generally.
Now what we've done is effed off the FRVP (red and white bars) and have now lined up a parallel channel to trade to
You place the channel at the most suitable areas given the market structure presented to you.
It's flexible in interpretation.
You usually long the bottom of a channel and then short the top, taking profits entirely or partially at the mid point
It's all about confluence baby, so let's throw some more fibs down.
We find price trading at the 0.705 of the overall move here as well as being at the bottom of a channel, and at the 0.236 level of the HTF fibs we had on before (not shown for clarity)
But... what else was residing at the bottom of the channel?
Eff me dead, it's a naked point of control that's now been claimed by price action.
See how we're building a picture now?
Nearly there.
Let's also throw on the VPVR and see what this is showing.
Point of control and similar Value Area (well, let's be honest, we didn't zoom out much further, so didn't expect it to be too different)
So for me, this is a long confirmed.
Entry?
- Bottom of channel
Exit?
- Point of Control / Top of Channel
Take Profits?
- Mid channel / Top of Channel
One more thing:
When pulling fibs from swing high to low, we also find some resisting confluence at our level of 0.705
This will work until is doesn't.
Ie channel bashing is great until your short fails or your long does, but if you catch a few trades along the way, then it shouldn't matter if you're risking 1% at a time right?
Risk management is key.
Thanks for reading.
🤝🍻
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A little snippet into a current trade of mine right now - $DOT
A mini day trade thread:
- First open the chart and assess the Price Action
- What we see is some previous market structure broken per the rectangle
- We've also now had 4 taps of support here
Now we set up our HTF fibs as shown, and then also check the volume
- Note that there was a large amount of volume to support the larger move, with much lower volume now where price is trading
- We've hit the 0.618 fib of a higher time frame &clearly seen some rejection
- Based on the move, we should now build a narrative
- History has doesn't repeat itself, but it does rhyme
We can call this move a bear flag at the moment, and the key thing is to recognize how price reacts as the 0.382 fib level of a bear flag
- Note the ellipses shown here for reference
Now to check out some Volume Profile:
We're at the VaH of the VPVR - in a parallel channel we usually short at the tops of these, so there would have been a lot of selling interest here, coupled with the 0.618 hit of the overall HTF
When carrying out TA, you've got to build confluence. Here is how I would build this $BTC trade:
1st Pic - VPVR tool on TV shows we are at Value Area High of the recent price action
Second image introduces a parallel channel to the mix
We usually short at the highs of the channel, and long at the lows, taking profit or closing trades at the mid line (this works until it doesn't - you will end up losing a trade doing this in each channel)
Third image introduces HTF fibs into the mix
Note how well these levels are respected when pulled from the swing low of the move to the swing high
Sick of getting stopped out, taking a shitty entry, or generally feel like you gettin your arse whooped in trading?
If so, you’re in luck my friends - I’ve knocked up this whizz bang, you beaut thread for you:
✍️📒
Agenda
- Setting Up Fibonacci (Fibs)
- Long & Short Tool
- Position Size Calc
- How to Use Fibs
- Position Entries Based on Fibs
- Fib Targets
- The Importance of the 0.28 Level & Profit Taking
Fibonacci
I’m primarily a Fibonacci trader. I use them for every single trade I take. The value they offer is the best there is in my opinion as a primary tool for assessing a trade (you still need confluence to enter a trade though!)
Here are the settings I use.