XAU and Fibonacci Numbers

This online stock trader was gone a few days for the 4th, and missed the excellent move in AEM, and the warrants AEMLW. I did catch the rule of 4 breakout in the XAU on Friday though. The chart speaks for itself!

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XAU 148 is the next area of resistance. Now I want to mention something that is interesting about the daily XAU chart. Let’s start counting candlesticks beginning with the first pivot low. You have 5 bars until resistance at the first pivot high. Next, there’s 8 bars to the second pivot low. If you keep counting you’ll see that there’s 13 bars (ending with a red wide range bar). Then a reversal, and 5 candlesticks leads XAU back to resistance at point 2. 5 bars back down leads us to the 4th pivot low. It’s not an exact science, so there’s an extra candlestick at the third pivot high. 5 bars bring the XAU back down to the 5th pivot low, and 5 back up to resistance. Ok. So here’s a trick to look for on any time frame. The sequence of Fibonacci numbers is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, etc. We’re really only concerned about 3, 5, 8, and 13 when trading. Notice how the sequence of candlesticks up and down, between support and resistance, correlates with the Fibonacci numbers. Stocks will generally stay in 3 – 5 bar swings. You will have periods when they’ll move to extremes of 8, or 13 bars though. That’s when it’s time to look for reversals. It’s amazing how this often works, and a trading tactic to keep in mind.

Based on the sequences that were playing out, it was a fairly decent bet, that the last move up from support was going to last 5 bars.

Trading Setup With Sony Trinitron Multiple Monitors

A reader, Jake emailed me, and noticed I still use CRTs in my multiple monitors trading system. He asked why I haven’t upgraded to the delicious Flat Panel LCDs, commonly seen on current trading platforms with 3, 4, 5, or more, multiple monitors. I gotta say, if it ain’t broke… don’t try and fix it. After the years I’ve been trading, these Dell Sony Trinitrons have been the easiest monitors on my eyes. The 3 monitors on my right are controlled by a separate video card each. The 2 monitors on my left, a separate video card for each monitor also. This was the easiest way to setup the multiple monitor system at the time I did it. Now they have those nifty multiple monitor stands where each lcd is set in different configurations in the stand. Sure. They look sweet. A pair of dual Apple computer cinema displays would look rockin in a multi monitor setup, but this still works. I have thought about some 21″ monitors though. These are 19 inches. The extra screen real estate would be handy.

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It’s about time I upgraded my towers though. Having the proper trading tools and equipment is crucial. I’ve noticed my computers are starting to show their age.  Any suggestions?