Rick-
Try this-Pull up a 3 minute MSFT chart. Put your cursor on the 948 high of 83 1/2, click and drag to the low just after the open at 82 1/4. The first test of a fibonacci pivot came on the retracement to the .62 pivot just before 1000. As futures were still heading up, one would hope there was something else to keep a person out of a long trade as it retraced through all the pivots to the intraday low. Had I entered a trade at the .62 pivot, I likely would have stopped out below the .38 pivot.
One could then enter a long trade at 82 1/4 at the support provided by the intraday low. The target for a scalp would be the .38 pivot resistance at 82 3/4. That would probably be it for me until another significant move.
Now look at the breakout to a new intraday high a little after 1300. I would watch the move, and draw new pivots when it found a top. In this case, I would use the top of the move at 1436 of 84 9/16 as the top, and the bottom formed between 1200 and 1251 as the new fibonacci range. I would then keep an eye on the .68 and .5 pivots for confirming signs of a reversal to enter again, with a scalp out at either the old high, or maybe hang on to at least a portion of my position for an exit at the .38 extension. If I were to enter this trade looking for a reversal, any breakdown below the .38 pivot would be my stop. As futures were making a nice move up, this might well have been a trade I would have made.
Of course, all this is easy to see after the fact, not so easy to execute with a L2 screen that looks to be falling off a cliff. Maybe some day I'll be able to ignore the MM's, and trust my charts :-) |
