Ollio's Gold - Supply and Demand | Page 63 | Metals Mine

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Ollio's Gold - Supply and Demand

  • #1,241
  • Dec 6, 2016 5:45am Dec 6, 2016 5:45am
On the FIA chart above, you can see that the 1 Hour, 2 Hour and 4 Hour have completed their Long market cycles and have now returned to Short market cycles.

The 1 Hour, 2 Hour and 4 Hour timeframes are back in sync with the Day timeframe which is in a Short market cycle.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,242
  • Dec 6, 2016 6:21am Dec 6, 2016 6:21am
Attached Image (click to enlarge)
Click to Enlarge Name: Financial Instrument Analyzer - Gold (XAUUSD) 12.6.2016 (Signals on Trading Platform) (1).png Size: 49 KB
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,243
  • Dec 6, 2016 6:25am Dec 6, 2016 6:25am
On the Day timeframe in the chart above, the market has retraced to the Long level @1173.82.

In other words, we have a Short entry @1173.82 with a Stop Loss @1183.17 (or slightly higher).

For the direction of the market to reverse Long, the day must close above 1183.17.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,244
  • Dec 6, 2016 6:35am Dec 6, 2016 6:35am
Alternatively to the entry proposed above, if you consider the risk to be too high, you could choose to attempt an entry using a lower timeframe which is also in a Short market cycle.

For example, you can choose to enter based on the technical levels indicated on the 4 Hour FIA chart (see Post #1,240).

In this case, you would have a Short entry @1175.27 with a Stop Loss @1175.91 (or slightly above).
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,245
  • Dec 6, 2016 6:41am Dec 6, 2016 6:41am
Quoting jackeollio
Alternatively to the entry proposed above, if you consider the risk to be too high, you could choose to enter using a lower timeframe which is also in a Short market cycle.
would it be correct to enter short on H4 @ 1175.27 sl around 1176 targeting H8 demand level at 1154.47?
  • #1,246
  • Dec 6, 2016 6:42am Dec 6, 2016 6:42am
sorry, too late in replying but I see that I would be correct
  • #1,247
  • Dec 6, 2016 6:46am Dec 6, 2016 6:46am
actually, it would probably make more sense to target weekly low @ 1164.81
  • #1,248
  • Dec 6, 2016 6:47am Dec 6, 2016 6:47am
Quoting bubola
{quote} would it be correct to enter short on H4 @ 1175.27 sl around 1176 targeting H8 demand level at 1154.47?
Using the FIA, you trade only the Highs and the Lows on any given timeframe.

Which means that, in the case of a short trade, you enter your Short trade on a High signal and you take your profit on a Low signal.

You do need to consider demand levels, you only have to wait for the FIA to report a Low on the same timeframe you used to enter your short trade.

Conversely, you do the opposite for a Long trade, you enter on a Low signal and take your profit on a High signal on the same timeframe.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,249
  • Dec 6, 2016 6:49am Dec 6, 2016 6:49am
clear, thank you...but how do you calculate your 1:5 risk reward then?
  • #1,250
  • Dec 6, 2016 6:54am Dec 6, 2016 6:54am
Quoting bubola
clear, thank you...but how do you calculate your 1:5 risk reward then?
Excellent question!

You use the technical levels on an opposite signal on a higher timeframe.

For instance, if you get a Low signal on the 4 Hour timeframe, you will enter the market Long.

To establish your RRR you simply need to look for a High signal on a higher timeframe which could be the Day or Week and calculate the distance in Pips to reach that level from your entry.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,251
  • Dec 6, 2016 6:57am Dec 6, 2016 6:57am
Quoting jackeollio
{quote} Excellent question! You use the technical levels on an opposite signal on a higher timeframe. For instance, if you get a Low signal on the 4 Hour timeframe, you will enter the market Long. To establish your RRR you simply need to look for a High signal on a higher timeframe and calculate the distance in Pips to reach that level from your entry.
got it, thanks
  • #1,252
  • Dec 6, 2016 7:04am Dec 6, 2016 7:04am
so if I went short at H4 high, I would have a sl of roughly 15 pips, with the closest tech level being wk low around 100 pips below. am I right? and 1 more question if I may. In case of a sl, do you wait for a close of the candle above/below it, or is it a touch of your sl level?
  • #1,253
  • Dec 6, 2016 7:15am Dec 6, 2016 7:15am
Quoting bubola
so if I went short at H4 high, I would have a sl of roughly 15 pips, with the closest tech level being wk low around 100 pips below. am I right? and 1 more question if I may. In case of a sl, do you wait for a close of the candle above/below it, or is it a touch of your sl level?
For your entry on the 4 Hour High signal, your entry you be as described in Post #1,244 above which means your risk would be 64 pips to which you need to add a buffer. I usually set my Stop Loss 1.00$ above the Short level indicated by the FIA. Such that your risk upon entry is approximately 164 pips.

While, at least theoretically (meaning requires more knowledge of how to read the signal on the Week), the target for your take profit on this trade would be the Short level on the Week. Using this method, your estimated take profit would be @1171.50 for a total of 377 pips.

Therefore, your risk reward on this trade is approx. 1:2.

As for the second part of your question (which is also and excellent question!!!), it really depends on how you manage your account and how much you have leveraged your trade on entry.

I usually tend to use high to very high leverage so I usually prefer to use a tight stop loss.

So I guess the answer to the second part of your question is that it really depends on your trading style and preference.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,254
  • Dec 6, 2016 7:26am Dec 6, 2016 7:26am
Quoting jackeollio
{quote} Using this method, your estimated take profit would be @1171.50 for a total of 377 pips. Therefore, your risk reward on this trade is approx. 1:2.
ok, I see now, I misread the levels on your chart and used the lower line
  • #1,255
  • Dec 6, 2016 7:31am Dec 6, 2016 7:31am
Quoting bubola
{quote} ok, I see now, I misread the levels on your chart and used the lower line
That's ok but remember, the method I have described is a guideline on how to estimate your profit.

In reality, your profit might turn out to be significantly higher (or lower) since you need to wait for a Low signal on the Day (which is the real short market) to take your profit.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,256
  • Dec 6, 2016 7:37am Dec 6, 2016 7:37am
Attached Image (click to enlarge)
Click to Enlarge Name: Financial Instrument Analyzer - Gold (XAUUSD) 12.6.2016 (Signals on Trading Platform) (2).png Size: 21 KB
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,257
  • Dec 6, 2016 7:39am Dec 6, 2016 7:39am
From the last chart posted above, you see that the 4 Hour Short market indicated by the FIA in Post #1,240 above is complete.

We are now in a 4 Hour Long market while the market remains above the Long level @1169.20.

For the market to reverse on the 4 Hour timeframe (i.e. return short), the market must close below 1169.20.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,258
  • Edited 8:02am Dec 6, 2016 7:51am | Edited 8:02am
Using the High signal generated by the FIA on the 4 Hour timeframe in Post #1,240, you would have opened the following trade:

Short @1175.27, Stop Loss @1175.91 (or slightly above)

You then wait for the FIA to generate a Low signal on the same 4 Hour timeframe as in Post #1,256 above.

Once the FIA generates the Low signal, you exit your short trade at or near the Long level indicated by the FIA, in this case 1170.84.

Your risk was approx. 64 pips for a profit of approx. 443 pips. In other words your RR was 1:7.

This example illustrates very well how to properly use the FIA.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
  • #1,259
  • Dec 6, 2016 8:02am Dec 6, 2016 8:02am
and for the sake of argument, had we gone long at H4 low signal, could we use daily high @ 1173.82 to approximate RR?
  • #1,260
  • Dec 6, 2016 8:07am Dec 6, 2016 8:07am
Quoting bubola
and for the sake of argument, had we gone long at H4 low signal, could we use daily high @ 1173.82 to approximare RR?
Theoretically, the answer is yes.

However, practically speaking, this type of entry would be rather risky considering we are very close to the entry for a Short trade on a higher timeframe.

A better strategy would be the following:

(1) wait for the 4 Hour to breach the Long level @1169.20, or


(2) wait for another 4 Hour High signal to reenter the market short.


Whichever occurs first.
Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".
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