British Pound bar counts

One of the more simple ways to find cycles is by counting bars. Simply go back on a chart and start counting the bars from peaks to valleys on the big moves. Also count the bars on the rectracements. Count the bars on the minor moves. Count the bars peak to peak and valley to valley. More often than not, the same numbers will show up. The chart below shows where I counted the major moves on the GBP/USD pair. Notice which numbers come up consistently.

So now that I've got a number for the big move, I concentrate on the smaller moves. The smaller moves tend to follow the Fibonacci sequence. 1,3,5,8,13,21,34, 55,89,144 etc. So from a top or a bottom, I'll watch for what happens at 3 bars, then 5 bars, then 8 bars. Because these are Fibonacci numbers, there will be recurring patterns. IE the 8th bar from the 5th bar is 13 bars but also 21 bars from bar 1. Knowing that, it's easy to simply count the bars into the future and watch for signs of a turn and also come up with a long term direction to trade and a long term target. (Long term being relative to the chart size.)

The daily chart below shows the major counts and then minor counts of the current move I'm trading. There are also arrows that show my manual entries based on "time". The limit and stop entries for add on positions aren't shown. Those are based on price and not time. Mostly simple support/resistence breaks. A future post will go into the various support/resistence methods I use.

For the most part, I try and stick to a specific direction. Occasionally something shows up that I can't pass up trading which is why I'm long right now. Treading very carefully, though.



One of the things that bothers me is that most cycle and time books and materials are long on charts and concepts but usually say nothing about actual trading. For example, the Brad Cowan 4D Market Geometry books do not say one word about trading. Pretty hard to believe. So that leaves the reader to figure how to actually trade the concepts. Pretty patterns on the left and the past don't do much for the right side of the chart and the future. So I'll try and focus on the right where it matters.