•  After the initial penetration of the 3X3 on close, look for an intraday Fibonacci
(support) retracement level, at a significant Fibnode, to enter the market in the Direction
of the original thrust. This level should occur within one to three periods of the initial
Confirmed break of the 3X3. I recommend daily, weekly, and monthly periods, although
this strategy will also have merit on intraday charts. The retracement Fibnodes which are
the basis of your entry as well as your stop, should be calculated from the hourly (and
higher) Time Frame charts, if you use the periods I suggest.

•  Once the trade is entered, set your stop loss beyond a deeper Fibonacci retracement
level, and your profit objective a bit before the 618 retracement '*' of the entire contra
move, i.e. the move that is opposite the original thrust.

Let's take a look at the monthly gold Chart 6-14, as an example of our buy and sell points.

Before you have a coronary over the prospect of that $200 stop, let me point out that this is a theoretical example. It could be made practical, however, if we used the monthly Direction for weekly-based mutual fund switching or even daily based Fib entry. Context! Context! Context! Plan your trades as you would any other important financial endeavor. I'd give you more examples, but we haven't covered how to arrive at the Fibonacci entry and stop levels yet, so the exercise would have limited relevance.

Before we leave this topic, however, let's look at our friend Microsoft, Chart 6-15. time we'll view it in a monthly Time Frame.

Notice how the monthly MACD Confirmed the ongoing monthly up trend, while the Stochastic gave us a great buying opportunity, once the profit objective shown in Chart 6- 6 was reached.

Note the consistency between the Bread and Butter monthly buy and the MACD shown above. What is not shown is a daily Double RePo Look-alike on the buy side that occurred at the same time! This is what highprobability trading is all about!

There's no inconsistency in being a seller on a weekly Double RePo, as discussed earlier, closing the trade at the Logical Profit Objective shown in Chart 6-6, and then being a buyer based on a monthly Bread and Butter signal. If this seems inconsistent to you, you don't fully understand price vs. time charts or Time Frames. A review of the Trend discussion in CHAPTER2 may help.