Now let's look at a somewhat more complex set of Market Swings with respect to Fibonacci Expansion Analysis and Logical Profit Objectives , as in Chart 11-5 below.

See if you can locate all profit Objectives on Chart 11-5 before turning the page. As usual, there is more here than meets the eye.

Dan correctly perceived that I did not specify whether we were long, short, or out. In this type of configuration, there are Objective Points both up and down, depending upon the labeling of the ABC move.

Hank's labeling of Chart 11-5 was correct but incomplete. I have not included these labels on Dan's solution for clarity, but I did include all expansions. If I were to include both labels on this one chart, one set would have been labeled A, B, C (Hank), the next set would have been labeled A', B', C' (Dan). Both resistance Objective Points and support Objective Points were created from the combined labeling.

As Diligent as Dan was, he was not diligent enough. Do you know what's missing? Think about our definition ofLogical Profit Objectives before turning the page.

RESISTANCE NODES AS LOGICAL PROFIT OBJECTIVES

SUPPORT NODES AS LOGICAL PROFIT OBJECTIVES

Based on our definition of Logical Profit Objectives, the Fibnode retracement areas should be included, unless these Fibnode retracement areas have been taken out by price. Including these Fibnodes gives you five Logical Profit Objective Points, not three, for a given Market Swing.

In Chart 11-5C, there are two independent Fibonacci Resistance series i.e., two Focus Numbers FRl and FR2, each "owning" one Reaction Point. For clarity, only the Fibnodes for the FRl series are shown. If you think the FR2 series is too small to bother with, consider that I have not labeled the 11-5 series of charts with a Time Frame. I have made them small on purpose. If we are looking at a five minute chart, the Nodes created from the FR2 to 1 wave might be safely ignored, but what if this represented a weekly Time Frame?

Chart 11-5D shows a support Node that will act as a Logical Profit Objective for a position on the short side. The .382 Node has been taken out by price and therefore is not shown. The position of the .618 Node is such that the price is on a LPO right now! Which of the LPOs we take, will depend on the context of the trade and the criteria we established for our original entry 2 .

Here are some context issues to consider when we determine which profit objective to take.

•  How overbought or oversold are we?

•  Are we in this trade because of a Directional Indicator or a Trend Indicator?

•  Are the higher Time Frame Trends with or against us?

•  Are we about to get a confirmed or unconfirmed Trend signal in a higher time
frame that will support our trade?

•  For intraday traders, we want to know how close we are to the end of the day!

•  Was thrust apparent on the A B leg?

•  Are we nearing our stress point? Newer traders are often more comfortable
with losses than profits. Ifyou feel undue stress because ofthe level of
profitability, take a close in objective before you act irrationally.