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Thank you for sharing the image, indeed, markets will put on scaring propositions most of the time.
I still don't understand the difference between the two indicators and why they print different lines for the same amount of days? The programmer himself can't wanser the question, so I guess it's a trial and error type of circunstance.
The suggested book, Geometry of Markets is quite expensive on amazon, almost 700 USD. Anyone have a pdf version for sharing?
The retrace to the 50% does not work in isolation and can lead to big losses if one is not aware of the market dynamics. You have to know when the 50 is likely to hold and it is just a retrace, and when it is a change of trend. It has to be looked at in the context of the volume profile. Specifically, the weekly/daily profile.
This what I have been using, in my quest to understand the Market Dynamic with the 50% Line. Indeed I use MP to give me the context in the direction of the 50% line retracement.
Altghout, I found that 90% of the time the 38.2% is a for sure retracement. I also use the Taylor Trading Technique to frame the most likely type of day on the TTT 3 day cycle and depending on the type of day (Buy, Sell, Sell Short day) I have a better situational awareness regarding the High to Low movements and vise versa.
I am trying hard to get a sound framework for trading.
Note: I am on the chase of some cheap pdf documents - Geometry of Markets – Volume 1/2, by Bryce Gilmore, the worst that can happen upon reading the documentation - is to conclude, well, another great deal of nonsense!
There is more to this setup...it is missing something else, see if you can figure it out.
The retracement to the 38.2 is called a "front-run." The question I would recommend asking yourself every time there is a retrace is this: How do I know that it is a retrace and not a trend change? One solution is not to predict, but to see a reaction. If it retraces and continues into the same direction, it is likely just a retrace, but often, as the saying goes, "if you see it, it is already too late," which I agree with. A lot of the times, for intraday trading, if you wait for a reaction, it is probably already over, because the bounces off the 50 are often powerful and there is no opportunity to get in.
Keep it simple. I would not use it with the 50/profile, but that is just my opinion.
It is not nonsense, just not tradable, not all of it, some of it is good, but nothing which is not already known. There is no holy grail. I'll check my archives, if I still have it, I'll PM you.
I don't trade CL, so I don't know its "character" and how it trades. I know that it is a little wild, but the setup is the same.
Do a little experiment. Plot weekly levels as one continues plot from the beginning to the end of a week (38.2, 50, 61.8) Plot previous weeks too. Plot nothing else. See if you see a pattern of the price behavior.
There are at least four levels to pay attention to: Weekly, Globex, RTH, and Daily. My setup plots RTH into next day's Globex and stops plotting when RTH opens. So what happens is that if the price stays within the High/Low of the previous day during Globex, there is no difference between Daily and RTH levels. If the price moves outside the prior High/Low, the RTH vs. the Daily levels will be different and it is something to pay attention to.
In addition, the levels can be plotted in two different ways, using just the candle's body (not counting the wicks) or full range. The price will react to the prior levels, so you want to have prior daily/weekly levels plotted.
