Pure & simple Abonacci system

First off, all kudos and respect goes to 'Bobi' of Abonacci fame, who is a genius and legend in my eyes, much (if not most) of this system is derived from his studies and observations. I won't go into it here, but you can read about his work here.

Second, hats of to ubenders - who appears to have put 2 and 2 together and made 4 (which is quite a feat in this business). He may well have discovered a missing link for those of us who have been trading the Abonacci way.

So some rules (as it seems most threads need them).
1. Be respectful

That's about it - but I might add to that if it seems necessary.

So to the system. First let me say this is a work in progress, but based on proven and profitable systems. One reason for the thread is to refine it. BUT that does not mean refining by throwing every indicator you can imagine at it - the beauty of this system is the simplicity. It is more refining through observation we're looking for.

Charts
We only need two indicators
1. Abonacci indicator
2. Murrey Math (MM) indicator

Nothing else is needed. Really. No REALLY.

Chart setup (this is the most complicated bit, but once done everything is set)
1. Open a chart (timeframe doesn't really matter but I go for 1h or 4hr)
2. Apply template below.
3. Open Murrey Math indcator and change to the following. 'P' to '256' and 'MMPeriod' to '1440'

4. Open Abonacci Template

For pairs with price format x.xxxxx 'Length' 122 (1h TF trading) or 244 (4h TF trading) or 488 (Daily TF trading)

For pairs with price format xx.xxxx or xxx.xxx (usually yen pairs) change 'Length' to 156 (30m/1h TF trading) or 312 (4h TF trading) or 625 (Daily TF trading) and

5. Copy one of the Murrey Math levels (preferably the Support/Resistance Pivot Point level (blue)) into the 'Baseline box'

6. Your abonacci 100% levels should now line up with the MM levels.


Trading
Option 1.
Long Trade - Price comes from 76.4% level rises above 0%/100% into the phase above. Enter long when price breaks the 23.6%. Take Profit is the 76.4% level.
Short Trade - Price comes from 23.6% level drops Below 0%/100% into the phase below. Enter short when price breaks the 76.4%. Take Profit is the 23.6% level.

You may want to move SL to BE and/or take a 1/3 off when price reaches 50%, and/or take another 1/3 off when price reaches 61.8% (long)/23.6% (short)

You will see that what we are aiming to do is take a slice out of the action when price is moving between levels.

Stop Loss
I suggest either
10 pips below (longs) or above (shorts) the 100% level
or
close and reverse your position at the 76.4% level in the phase below (longs), 23.6% level (shorts).

As with all systems, there will be losses. So the importance of finding the right money management to fit your trading style and risk tolerance cannot be over emphasised.

Examples


Option 2
Coming soon

Sizes and baselines for pairs (bolded numbers are a 1:1 fit. ie 1 phase of abonacci fits the exact distance between 2 Murrey Math levels)
GBP/USD

Size - 122, 244 or 488

Baseline - 1.5625

GBP/JPY

Size - 156, 312 or 625

Baseline - 150

GBP/AUD

Size - 122, 244 or 488

Baseline 1.95313

EUR/USD

Size - 122, 244 or 488

Baseline - 1.31836

EUR/AUD

Size - 122, 244 or 488

Baseline - 1.36719

USD/CHF

Size - 122, 244 or 488

Baseline - 0.92773

USD/JPY

Size - 156, 312 or 625

Baseline - 87.5

EUR/JPY

Size - 156, 312 or 625

Baseline - 125

AUD/NZD

Size - 122, 244 or 488

Baseline - 0.97656

USD/CAD

Size - 122, 244 or 488

Baseline - 1.02539

AUD/USD

Size - 122, 244 or 488

Baseline - 0.97656

AUD/JPY

Size - 156, 312 or 625

Baseline - 87.5

EUR/GBP

Size - 122, 244 or 488

Baseline - 0.83008

NZD/USD

Size - 122, 244 or 488

Baseline - 0.83008

GBP/CHF

Size - 122, 244 or 488

Baseline - 1.46484

NZD/JPY

Size - 156, 312 or 625

Baseline - 87.5

EUR/CAD

Size - 122, 244 or 488

Baseline - 1.36719

XAU/USD

Size - 3125, 6250

Baseline - 1500.00

Another approach worth exploring is calculating using a bigger size template (doesn’t matter how big as long as it matches the MM levels) and then build multiple entries (equity millipede) for swing trading.

As the thread develops (hopefully), I will add links or text from posts where members contribute refinements and developments.

Really good work Hollowhead - you know I will follow with great interest. I think Ubender was very observent in letting us know about the similarities in the two systems and how they might be integrated. Two Brits working together - we are in for a treat.

Distant. The Ab Manuel and the Murray Math both go in Indicators and the Pure and Simple in Templates. After you put the template on your chart then drag the Ab Manual on to it and fill in the two fields. Two other charts you can use are GBAU with 122 and 1.83105 and USJP with 156 and 104.688 (I think. They seemed to work okay for me).
Bob

Very interesting, I like fibs very much, but haven't used in this way with mm levels before.
Will look at developing here.
Cheers

GBPAUD with 488 phase and 1.7578 baseline.

Thanks for dropping by - it'll be good to have your input.

interesting thinking..............................................................................

So, this means multiplications of 122 work - that's the same as other x.xxxxx pairs. Is this a universal truth based on MM math?

So if you want to trade more intraday (1hr), you could use 122 or if you are looking for longer term (4h) you would use 488. I guess you could scalp using size 61.

Sorry folks, I should have qualified my baseline and length. Those numbers were for a one hour chart.

For XXX.XXX pairs I think multiplications of 625 work and seem to be consistent. 156, 312 and 625 create nice phases to trade.

Yes the size of the intervals or phases depend on the period you set the indicator to, I prefer to use a minimum of 122 pip interval for this type of trading but each to their own and whatever works for you. USDJPY has a 312 pip interval with the indicator set to 256 days.

It looks like we should post four lots of info when taking about numbers. First chart period, second "P" value for Murray Maths, third base line and fourth size. Otherwise our charts won't line up.

Thanks bobha, user error on my part. lol

Sounds like a good idea.

I think a variation on the Abonacci T4F rules is worth testing

What I'll look at is
First establish trend - if long
then enter at cross of 23.6% target 76.4%.
If it reverses and cross below the 0%/100%, then close (if you haven't already moved stop to BE) and short targeting the 50% of the lower phase.

I think will give a near 1:2 RR on the initial trade with fractionally less on the reversal - but it may help if price is becoming choppy.

The numbers for the trade could be

1st Trade - Enter at 23.6%
TP 64 pips
SL 32 Pips
(possible move to BE when 32 pips in profit)

Reverse trade
Go short at 0% -5 pips
TP - 55 pips
SL - 32 pips

Entered Long on AJ - TP at 76.4% line. SL 5 pips below 100%

Thanks for sharing hollowhead !

Took that one on demo this morning: GA 122 pips. Short at 76.4%.



May be useful to look at daily ATR before entering. GA has broke a new zone, but ATR is reached.

Nice one Fbird - thanks for sharing.

Hi hollowhead, great post. Love the strategy! Sound and simple! Want to make sure I get this right. The intervals are the ranges between the fib numbers (38.2, 50, 61.8, 76.4) I assume. The phase is the total range from high to low, correct? Do you only use yearly levels or do you also use daily and weekly levels for phase totals and use the same exact strategy on the shorter time frames? Last question, not sure where the murry math comes into play. Using just the basic concept seems fine without any added tools. Maybe you can give me some clearification on that.

Great job!