ForexSpirit

Some thoughts and tidbits from this week’s reading and ponderings:

New reading material includes ‘LEFT Brain Trading’ by Lewis Evans and Olga Sheean, and ‘Entries & Exits’ by Alexander Elder.

The mindset portion of ‘LEFT Brain Trading’ includes an interesting way of how to approach uncovering mental blank spots and weaknesses: to look at and examine my relationships, with my wife, collegues, business partners, and through that examination identify what is missing from those relationships that I would like to have there.  I have tried to begin this examination process and nothing springs out at me at this time.  I’m not sure if this is a reassuring sign or if I’m just not very good at examining my relationships like this.  Going forward I’m going to try and get a full list of possible relationship attributes that I can think about and see if I feel that they are missing from my relationships.  I will also get Melissa involved and see it she can help me out.

After reading the introduction and first chapter/trader in ‘Entries & Exits’, one point sprang out at me.  That was the importance of focus: of focusing on one market.  This point was also brought up in Richard McCall’s CD series.  Even though Richard doesn’t explain his exact trading method, he does say that it involves focusing exclusively on the e-mini S&P and only trading the first hour of the day.  Most likely he trades off one minute bars.  He advocates focusing your time and attention in a laser direct way, over a short time span so that your focus and energy level do not wane.

This is probably why I have trouble trying to trade both forex and the e-mini at the same time.  My focus and intuition is much more refined on EUR-USD.  I do not have as good a ‘feel’ for the e-mini as I could like (yet) and so I think it makes sense just to keep it as a background market.  One that I keep an eye on, and try to become more comfortable with it over time.

When it comes to focusing with regard to time, I think I’m taking a good approach.  The most practical one given the nature of the forex market.  I give it most attention around fundamental news releases; those things that drive the underlying story of the market.

Analysis wise, I have tested applying the Absolute Fibonacci lines from ‘LEFT Brain Trading’ to the EUR-USD chart.  I used the recommended start value of 1.200 given in the book (for a 1000 Fibo between 1.2 and 1.3), along with one of my own devising, a 10000 Fibo between I and 2.

Recent activity looks like this for the original value:

I’m not really convinced of how well price is capped using these levels on the daily chart.

The original Abolute Fibonacci calculations looks much more convincing on the two hour chart.

Here’s how it looks using my attempted value:

I prefer this daily view that uses my 1 to 2 start levels.  Top level of the fib range is 1.382.

The modified Absolute Fibonacci on the two hour chart isn’t too bad, but I think I just prefer the original values.  Close though.

To my beginers Absolute Fibonacci eyes, my version of the lines looks best on the daily views, while at the hourly level, the original settings look to contain prices level best.

I’m going to keep an eye on these levels, to see if they mesh into being useable as support and resistance levels.  Will they end up joining the toolkit of D-levels?  Only time will tell.