Sorry, guys, for delay (just rush hours with my job). I'll try to answer on your questions
Hello everyone!
I want to share an interesting situation on GBP and maybe get an expert opinion from Mr. Morten:
GBP is at Weekly confluence resistance and price returned to close below it. I expect a respect of this area so I am looking for sell signals.
DRPO is one option but, as it was already noticed, I could get it wrong because of my broker OHLC.
Other option is H&S but I might miss the train and not get such retracement up.
Trend turned bearish but not very convincing.
Also, Monthly pivot point is at 50% retracement and it has not been touched this month.
Hourly K area is at Weekly pivot. So, what action to take for entering on short side?
Hi Georgeta,
Very good analysis. In fact, there was perfect DRPO "Sell" on daily TF on GBP right at weekly K-area as you suggested. Even more ther was excellent weekly W&R that was also the second higher top of DRPO pattern. So, you may try to enter short on nearest Fib resistance and trade it as DiNapoli tells - hold position down until market will close above 3x3 on daily or until it will close above 0.618 resistance from the top of DPRPO. BTW, this is some kind of relative confirmation for EUR action...
Sive,
I'm looking your analysis for a long time and would like to thank your efforts.
If you don't mind I would like to add an other potential scenatio for next week.
If you look the chart I attached you'll see a triangle was formed on the way down when market tested 1.32 support. Finally the breakout was down with which left
a fresh daily supply zone @ 1.3380-1.3485. And we shouldn't foget that this zone is also a weekly supply zone.
In this supply we have also the 50% FIBO level of the big move from 1.4245->1.2623.
Also if you look the current upmove from 1.26 we have the FIBO extension of the corrective pullback (1.32->1.30) @ 1.3402, in the same zone.
And finally the target of the current breakout is 1.34 = 1.32+(1.32-1.30).
So, in my view the reversal should happen in the range of 1.3400-1.3434.
What's your view about this scenario?
View attachment 4814
Hi Fx Shark. Well, why not? Although I do not familiar with your terminology, but 1.3360 level is significant from DiNapoli framework as well. I see only single problem, that there is another case exists (that we're now trading) that market already has started down move and will not reach it. Our second scenario is precisely that market could reach it (1.3360) by 3-Drive pattern, and then will start retracement.
Great work Sive.
Pls Kindly help me with the following questions.
1. what is the low & high of the 1st leg of the 3-drive pattern u showed on daily TF and why do you consider that low. My low is 1.2879 &H=1.3232 while the retracement is less than 9-20pips to touch 0.618 retracement.
2. Pls is there a way I can draw 3-drive & butterflies Patterns exactly the way u drew it in the charts using MT4.
3. Can I include additional trading hour like 10M & 8H on my trading platform apart from the default trading hours& minutes provided if YES pls how can I do that. I have tried several times to customize it but all effort prove abortive.
Thanks Sive as usual.
Hi Ochills
1. There is no such level as "starting point of 3-Drive" - to build it - you need just pullbacks of the current swing - read chapter, dedicated to harmonic patterns in our Forex Military School. It will become much clearer for you. In fact your building process starts from the first drive - first pullback. YOu apply extension (as with butterfly) to estimate potential high where second drive (i.e. pullback could start) and so on.
2. I do it manually just by trend lines. There is no software for that, at least I do not have it.
3. No, MT 4 does not have other TF. But, in fact we do not need them for trading. I have to use it sometimes, just to show overall picture and safe the room in the posts - only for education purpose, not practical.
Dear Sive,
thanks a lot for your analysis, it always helpful for newbies like my humble self. pls sir can i know the type of moving average you always use? secondly whats is the meaning of DRPO
Hi Samuelken
MT 4 allows to do that - choose simple 3-period MA and add Shift option for 3 periods.
I've described DRPO many times here - use the search on the site, you'll get it. Or, since this is DiNapoli pattern - read the book. There he describes it in details.
Hello Sive,
As always I thank you for your hard work.
I needed to verify my copy of DJ's book. It states that a double repo failure is marked as soon as the high (or low) is broken on the following wave. Typically resulting in a double top (or bottom) confirmation and position of entry. I have no doubt that you have a closer finger on the pulse of how his research has changed since his book. So I would greatly appreciate you opinion on this. Also I have noticed we are back to the neckline of the weekly head and shoulders pattern. Would a three drive sell with the third drive breaking the neckline, count as a directional pattern or a possible trend retracement? Meaning a head and shoulders failure and the direction is now up?
Thanks
Hi, Rfking2
Well, I didn't hear about changing rules of trading DRPO's. Where have you got this info?
Sometimes appears such things as triplpe repos, but mostly on highly momentum markets, such as US Treasuries and some commodities. They should be missed or traded as LAL's.
DRPO failure point is 0.618 level from the farest point of the trhust till the extreme of confirmation bar.
Concerning H&S pattern, well I also thought about it, but I do not like it very much, since it is too shallow price action to call it as left shoulder. Probably to my mind we do not have any H&S.
Hi Sive!
I dont rely much on my predictor but nevertheless it shows a SG on Friday (my broker has a Sunday bar so the last two bars are for today). If we take in consideration that the Daily trend was bulish, than the SG was on retracement so it has good chances to work. I think this is the time to enter long not short. Thank you!
Hi Pragmatic. You're right if it was SG. But, according to my charts we do not have it. I also tracked this possibility just to catch more confidence for 3-Drive, but there was no SG...
Hi Sive, I do not see from what level you are starting the 3-drive pattern. It does not look like it is from any major support or resistance level. If we begin it from 1.2865 area, then the 1.618 level comes at 1.3458. If we begin at 1.2657, then 1.27 comes at 1.3390 and 1.618 at 1.3598. If 3-drive pattern does not work, then we are left with a possible larger A-B-C-D up to the same 1.3598-1.36 area. Can you clarify the beginning point of your 3-drive pattern scenario for me?
Hi Cosmos,
You're right about potential AB-CD if 3-Drive will fail. Please read my answer slightly higher in this post to Ochills. He is also interested in 3-Drive starting point. I suggest you to read chapter dedicated to Harmonic patterns in our Forex Military School.
The point is that there is no such issue as 3-Drive starting point. This pattern is based on retracements from the swing but not on the swing itself.