iamsovereign replies to: A little bit of give back


{quote} Thank you for the offer — If you could just address my main question on how to determine the datum as Nut calls it– or how to pick the high low with proper criteria…… the details of setting up the fibo — without this — you have nothing thanks in advance

Let me try.

Firstly, you take the possible reversal that it’s about to appear ( I mean the last pivot, just formed, and you don’t know yet if it’s a reversal or just a pullback ). I took GY M5, last pivot high for today. Knowing that until that pivot the trend was up, you will measure a possible down move. How will you start to measure ? Using fibo retracement tool, with only 0.618. Where will you put the tool ends ? You take the most extreme up candle, including any wick of the following one, if that wick surpass the high of that extreme up candle ( fake break up ). I figured this in “Case 2”. If there is no wick surpassing that extreme up candle you take only the candle, like in “Case 1”. And you put the retracement tool in the way that 0.618 will be down ( it can be down or up in relation to the middle of the tool – 0.5 ), like it is explained in post 126, because you analyze a possible down move. You obtained the blue 0.618 line. It’s the initial datum.

Now, you take the fibo expansion tool, and this one needs three points to establish. Put the first point at the extreme top, the second and third point to that 0.618 indicated by the retracement tool ( this is the first datum, as Nut said ). You will have expansion 1. Now on the expansion tool please set only 0.618 and 0.382 ( at least for the beginning ). After you positioned expansion 1, you will have a new datum, which is 0.618 of expansion 1 ( that violet line just below the blue line ). When price goes down below the 0.618 of expansion 1, please repeat: put expansion 2, with first point at the extreme top ( this doesn’t change ), second and third point to 0.618 of expansion 1. And you will obtain 0.618 of expansion 2 ( another new datum, in Nut’s language ). And so on, until an up reversal, when you begin the same process but upward.

This what I understood from what Nut described in this thread. Hope it helps.

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