
My Technical Perspective & a Bonus (rbbo) - 16/7/16
edlim Posted 16 July in #Breakouts #Confluence #Fibonacci Levels #Range Box #Road-Blocks10/47
Ranking
This article looks at :
+ what's happening from technical perspective only and my expectations for EUR/USD for the near term;
&
+ how range-box breakout (i.e. RBBO method) analysis / trading is applied.
Note: For further details on use of range-box, please refer to my previous article
(at https://www.dukascopy.com/fxcomm/fx-article-contest/?My-Technical-Perspective-On-A&action=read&id=3198).
An example of RBBO method could be seen at the later part of this article.
My view for EUR/USD :
The 3-months chart shows price breaking below the blue-dashed ray line and proceed to consolidate above it for the next 5 bars (since early March 2015) and counting.

Going forward, how price reacts after reaching either of the 2 blue-solid lines drawn on the 1-week chart would be critical.

At this point in time, price has been below the mid-Bollinger for more than 2 bars.
We are also seeing price trending downwards; making lower highs and lower lows.
Price should move towards the blue-solid-horizontal price level. But how price reacts after reaching the blue-dashed line would be critical as it has been a consistent road-block the past few times.
Example of range-box break-out (RBBO) method applied:
We have below (1-day) chart, which shows 2 best, possible short entry positioning.

In a down trend, we would like to see the movement of price making lower highs and lower lows - much clearer when we use the grey range-box (accessed from blue-circled button shown at this chart- under "rectangle").
The first red down arrow showed price rebounding away from the red-dashed trend line, the mid-Bollinger line; as well as the range-box breakout line (which is also the magenta-colored 100% Fibonacci retracement level).
The "Fibonacci retracement" tool could be accessed from the pink-circled button.
Note: For further details on such use of Fibonacci projection, please refer to my previous article
(at https://www.dukascopy.com/fxcomm/fx-article-contest/?My-Technical-Perspective-On-A&action=read&id=3198).
The second down arrow showed price again rebounding away from both the mid-Bollinger line and the
range-box breakout level.
We should seek to have a confluence of such price rejections before any trade positioning as
that would meant more stakeholders are becoming aware of such support/resistance level.
Possible take-profit (TP) levels:
TP 1 at magenta 161.8% Fibonacci level (~120 pips);
TP 2 at the touch of blue-dashed line (~200 pips); and
TP 3 at magenta 200% Fibonacci level (~ 275 pips).
Why not go for the furthest target too at the bottom-most, blue-horizontal-solid line?
If we look at historical reference from the 1-week chart, from mid of 4th quarter of 2015 to
early 2nd quarter of 2016, we could see how price kept returning back to likely break-out levels.
We don't want too many strike-outs (while aiming for a home-run), especially when we're in a ranging
environment on the higher time-frame.
Recommended risk management tips:
+ Risk less than 2% of capital;
+ Keep reward (TP) : risk (stop-loss) at equal to 1 or higher; and
+ Back-test on demo. account until your trading method becomes sustainable.
Hope it helps.
Thanks for dropping by!
Best Regards,
Edwin
------------------------------------------------
Towards sustainability, and beyond
+ what's happening from technical perspective only and my expectations for EUR/USD for the near term;
&
+ how range-box breakout (i.e. RBBO method) analysis / trading is applied.
Note: For further details on use of range-box, please refer to my previous article
(at https://www.dukascopy.com/fxcomm/fx-article-contest/?My-Technical-Perspective-On-A&action=read&id=3198).
An example of RBBO method could be seen at the later part of this article.
My view for EUR/USD :
The 3-months chart shows price breaking below the blue-dashed ray line and proceed to consolidate above it for the next 5 bars (since early March 2015) and counting.

Going forward, how price reacts after reaching either of the 2 blue-solid lines drawn on the 1-week chart would be critical.

At this point in time, price has been below the mid-Bollinger for more than 2 bars.
We are also seeing price trending downwards; making lower highs and lower lows.
Price should move towards the blue-solid-horizontal price level. But how price reacts after reaching the blue-dashed line would be critical as it has been a consistent road-block the past few times.
Example of range-box break-out (RBBO) method applied:
We have below (1-day) chart, which shows 2 best, possible short entry positioning.

In a down trend, we would like to see the movement of price making lower highs and lower lows - much clearer when we use the grey range-box (accessed from blue-circled button shown at this chart- under "rectangle").
The first red down arrow showed price rebounding away from the red-dashed trend line, the mid-Bollinger line; as well as the range-box breakout line (which is also the magenta-colored 100% Fibonacci retracement level).
The "Fibonacci retracement" tool could be accessed from the pink-circled button.
Note: For further details on such use of Fibonacci projection, please refer to my previous article
(at https://www.dukascopy.com/fxcomm/fx-article-contest/?My-Technical-Perspective-On-A&action=read&id=3198).
The second down arrow showed price again rebounding away from both the mid-Bollinger line and the
range-box breakout level.
We should seek to have a confluence of such price rejections before any trade positioning as
that would meant more stakeholders are becoming aware of such support/resistance level.
Possible take-profit (TP) levels:
TP 1 at magenta 161.8% Fibonacci level (~120 pips);
TP 2 at the touch of blue-dashed line (~200 pips); and
TP 3 at magenta 200% Fibonacci level (~ 275 pips).
Why not go for the furthest target too at the bottom-most, blue-horizontal-solid line?
If we look at historical reference from the 1-week chart, from mid of 4th quarter of 2015 to
early 2nd quarter of 2016, we could see how price kept returning back to likely break-out levels.
We don't want too many strike-outs (while aiming for a home-run), especially when we're in a ranging
environment on the higher time-frame.
Recommended risk management tips:
+ Risk less than 2% of capital;
+ Keep reward (TP) : risk (stop-loss) at equal to 1 or higher; and
+ Back-test on demo. account until your trading method becomes sustainable.
Hope it helps.
Thanks for dropping by!
Best Regards,
Edwin
------------------------------------------------
Towards sustainability, and beyond