Rick LaPoint is the founder of the company "PartTimeTrader.Com", a popular lecturer and creator of the unique Fibonacci Calculator "FibCalc". His methods and market surveys are topics of discussion in news tabloid and chat rooms around the world.
One of the most discomposing of day trading can be linked to GEPom. On the one hand, most of the day often had to direct traffic at GEO itself, leaving not so much traffic for the remainder of the day. But there is a relatively simple method for determining the top or base of the day, based on the so-called "50% of the first phenomenon, which often occurs at the intra-day charts.
Regulation is easy to remember.
1. GEO should happen after the turn. Market-based instruments, which is moving upwards, reaching a maximum unfolded and retreats, or perhaps initially slightly consolidated sideways movement. Then, the next morning he was doing GEO downwards. This is the maximum point, we begin our calculations.
2. Measurement GEPa not necessarily performed by the points on the opening and closing. Since most graphics programs have built-Fibonacci lines, use this tool to hold 50% of th line by exactly half the distance between the upper bound of the minimum and the maximum lower limit GEPa. They usually occur in the last half an hour the previous day and the first half hour a new day. The graph below, note how in the last half hour was shown to a minimum, and then the market has made a couple of bars up front closure. The next day was show up after a few bars from the opening. We have not measured GEO between opening and closing - instead, we are interested in directly purified GEO. Now pay attention, as the foundation of the day was very close to our line at 0% before the price back up unfolded. "50% of the first phenomenon has given us the minimum daily goal in the first half hour of trade.
3. 50%-th line may be in the beginning, middle or end of GEPa. If you think that the schedule was slightly higher than ordinary, then you may be right. Here we see the GEO with ascending impulse. Please note that 50% second line was placed at the beginning of GEPa, but not in the middle. Placing 50% of the first line in the center GEPa would give us the wrong goal for the afternoon peak.
In the next example, we see that the correct placement of 50% of the first line was actually at the end of GEPa. The graph the price moves down, so do not confuse it with the schedule above. Also note that I am averaging a maximum of the first half hour, choosing the first two maxima of bars, which are the same, and ignored every third bar. In the end, reading charts - a combination of art and science, with a fraction of the magic numbers!
The question that you may specify - we know exactly where to place 50% of th line, where we first see the GEO? The answer is simple - we do not know. Here we see my first attempt to define the objectives of the daily maximum of 50% by placing the first line in the center GEPa. It looked quite accurate in the first half of the day, and I expect that the price starts to lateral movement or fall back from that level. But suddenly occurred even after relatively large movement at this level.
As soon as I saw that the price continues to climb, I transferred its 50%-th line at the end of GEPa. At this time the goal of daily maximum was almost perfect. My standard approach assumes that the method is the central location 50% of the first line right, until proven otherwise, simply because this scenario is slightly more common. But I am always looking for signs that this is the wrong choice, and I never see any difficulties in order to adjust my lines accordingly.
Now consider an interesting variant. What if we have two consecutive GEPa? When I saw this one morning, I remembered that 50% of the first phenomenon is the base point, so I do not think this will work for the second GEPa. But you can see naked eye, that is, one way or another, worked. If we use the maximum of the mid-day (9 to mark the time axis) as our main point, and place our 50%-th line in the center of this latest GEPa, we get the correct aim day minimum (note 12).
But that's not all. Please note that the center of the middle of the day is the right spot 50% of the phenomenon "for the 3-day movement. Using the step "50% of the phenomenon further, we see that this can also work at the time of consolidation. Pay attention to the GEO. The standard method of point GEPa worked very well in defining the objectives of the following day (a set of black lines). On the third day I noticed that most of the day was held at the Flat, so I placed my 50%-th line in the heart of this movement that clearly indicated the fourth day (set of blue lines).
As with any graphical models, "50% of the first phenomenon does not work in all cases, so it is necessary to bear this in mind and respect the rules of risk management, by placing the appropriate stop-order. But as soon as you start to pay attention to this model, I think you'll be struck by how often it occurs in different markets and how effectively it can work.
based on www.hardrightedge.com
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