Price Targets

[Nut]

Hi all

I have been working my way through pozzyp's journal and have found it interesting, I asked pozzy what method he used to ascertain price targets. He described how the firm he worked for used a variety of methods but did not detail the methods so I agreed to detail a method I use. This method is still very much a work in progress by myself.

The idea for the method came to me whilst studying cyclic analysis particularly the methods of JM Hurst. To give a brief overview of Hurst he worked as an Aerospace Engineer in the 60's and was one of the first to use computers to study markets. His work and methods are not simple or easy to understand and I am by no means expert in his methods. What I will detail here is not a method used by Hurst it's just an idea that struck me as a result of reading his work.

Should any of you decide to use this method then you do so at your own risk. As we all know tradable instuments go up as well as down.

It would be appreciated if members would give me this weekend to complete the explanation of my method before they add any additional threads, I wish to keep the structure of the expalnation in sequence.

I shall submit a post to indicate when the explanation is complete

Thanks

 

[Nut]

Please look at the attached chart and consider the points marked ABC as a cycle with the cycle lows at points AC and the cycle amplitude to be the points AB. Measure the cycle amplitude as per the white lines on the chart and then move that measurement up to the point C. The blue lines.

This gives you your first price target.

 

[Nut]

If I measure the distance from point A to the first price target then I have a new cyclic amplitude, I move my measuring tool up to point C and now have my second price target as denoted by the yellow line

 

[Nut]

I then repeat this process until I get a reversal. As can be seen from the attached chart the final target is pretty accurate, however at this time I cannot tell you how many times you will need to repeat this process to reach the reversal target. Each individual target is marked by a green line, if you look at the green lines you will see they can act as levels of support during retracements. I will however eventually get to corrections in a little more detail

 

[Nut]

Ok so the previous posts cover the upside so lets look at a correction. See the attached chart and the points designated ABC note that the points difference between AC is only small, this makes no difference to the downside potential of the move. What it does mean is the trader will need to work harder and be more attentive to the trade. The process going down is just the same as the upside. Notice once again the accuracy of the final price target from the points ABC.

 

[Nut]

On the next chart it shows a correction to the upside from the low made by the first correction shown on the previous chart. Note how this correction fails to make a new high or equal the price at point A. This then allows us to expand our initial cycle to the points ABC. However as yet I have not found a way to say that ABC is definately a cycle until point B is broken.The corrections BC and DE will be dealt with in the next post.

Note that eventually another cycle appears CDE and gives a larger difference between C & E to that of A&C. This can also be used to project downwards by taking the amplitude CD and measuring from E.

Should point G be taken out then I have marked the price targets on the chart, the projections from the ABC cycle measured from C are in green and the CDE projections measured from E are in red again note the accuracy when the market does eventually bounce.

 

[Nut]

We now come to the two corrections designated BC and DE in the previous chart. Well here as you can see I have designated them DEFG and HIJK. I have simply measured the cycle amplitudes DE and HI then projected upwards to give potential targets.

Next the nasty correction after HIJK

 

[Nut]

Now we come to the correction marked AB, as can be seen it is not posible to find a suitable cycle to measure from. The only way I have found of dealing with these situations is to turn the chart into a line chart and then measure accordingly see the attached charts.

 

[Nut]

Finally we have the current move which once again does not display a clear cycle on a candlestick chart. So turn it to a line chart and project upwards accordingly. See the charts for my next price target.

The instrument used in all of these posts is the US Dollar Index with a June expiry. The data is from GFT spread betting. All charts are 1 Hr charts and I use a 5min chart to enter/leave the market.

I find that if I try to use this method in a very short time frame chart the workload for me anyway is not viable.

 

[Nut]

So I have now finished my presentation but just to ensure none of you sleep easy see the attached chart of the Dow, where the hell are we going if point XX is ever taken out. I am not saying it will be but sleep with one eye open.

Thanks for your time I hope you will find these posts useful and the method helps you make lots of money.

Regards
Nut

 

[Nut]

Ok lets see if we can hit some targets, EUR/USD. Using the daily chart the white ABC says 1.1449, the red CDE says 1.1405. Sorry had to squash the chart to fit all the detail in.


4Hr Chart last target from white ABC was 1.2162 this has been met. Next target from white ABC is 1.1856.

Remember this data if from GFT SB so may not match the market exactly. You use this info at your own risk

Good luck

Nut

 

[Nut]

So far so good, update to post #11

Have a good weekend

Nut
:clap:

 

[Nut]

Update to charts #11 & #12

Sorry for not updating sooner but I have been testing Smart Live Markets demo account and so have been busy.

It is not possible for me to now update on the shorter term charts so I can only use the 4 Hr chart.

As can be seen from the earlier charts we had two price targets the first was 1.1805. GFTs price hit this target exactly. However Smart Live Markets price did not and only made 1.8760. A discrepancy of 71 pips(not a bad omen I hope, time will tell). The second target is 1.1405 and as yet has not been hit. This is still a possibility the market may just be taking the scenic route. Currently as can be seen on the chart we have two projections the minor abc = 1.2666 and has been hit and we now seem to have a minor correction/consolidation forming. The second is 1.2739 as yet this target has not been satisfied.

If I project the minor abc upwards further I get a confluence of targets about the 1.2739 level distributed 18 pips either side of 1.2739. This area may prove difficult for the market to break through. take care at these levels.

I shall be offline for a while as I am moving home but I shall pick this up again as quickly as possible, good luck
Nut

 

[Nut]

Ok so the price targets indicated in the chart above #13 were hit and exceeded by one further measurement of ABC.

I have marked a formation XYZ to get a downside projection which indicates an initial target of about 1.2666 which was a level of resistance on the way up measured from abc. Also included is a chart with the stochastic indicator and MACD. The stochastic is overbought and has turned down, whilst the MACD is to me pretty neutral at this time. So therefore I think this pair may well consolidate sideways for a time so I now walk away from this pair until the situation clears.

Good Luck
Nut

 

[Nut]

update on chart #14

Well I certainly called that one incorrectly. Why? I did not follow my own method as the price targets mentioned above only become effective if point Y had been broken. That will teach me. However after my mistake I still walk away, I do not chase. looking for the next one.

Cheers
Nut

 

[Nut]

Update on the above post.

As i cannot find anything that tickles my fancy I thought I would continue to follow the EURUSD. Having called it incorrectly above my next upside price target is now 1.3287.

Hope I am right this time.

Cheers
Nut

 

[scose-no-doubt]

I'm personally looking for that to take a whack depending on GDP data tomorrow.

 

[Nut]

Hi souse, thanks for the response, indeed you may be correct and for me it will be interesting to see what happens. If you have read my earlier posts then you know one of my as yet unresolved issues is just how many times can the ABC be extended. My aspiration for this thread is that over time and by tracking thinks closely this mystery may be resolved.

 

[scose-no-doubt]

Sorry I only saw the analysis on your last post.

 

[Nut]

Update to post #16

Ok folks so we are just about at the 1.3287 predicted in #16. Note I have inserted a minor abc which gives a prediction just below 1.3287. If these levels can be breached then I see no reason why 1.3577 is not possible.

The stoch oscillator is once again in overbought territory but the MACD is strongly upwards highlighting the strength of this trend. My gut instinct is that EUR/USD may cough and splutter about 1.3287 but eventually get through but please take care this level.