Circular Trendlines | Foreign Exchange EA Download- MT4/MT5 Resources

How to predict the market using curves and circles .

Introduction
The information posted here is not taken from a book or text, it is purely my own interpretation of the curve concept that I have been experimenting with for the past two years, which is using curves as resistance and support points on a chart and the price action around those levels.

concept
There are many methods of technical analysis, each with pros and cons, but the ultimate arbiter of the market is price, and price will do whatever it wants, regardless of its mathematical explanation. Markets move based on traders' excitement and fear. These sentiments generate different levels of price and form straight lines and curves that can be used to analyze future trends.

The method is based on the above concepts.

Any movement the market makes will always land on a point, and the point it lands on will be on a path that has been followed by other points in the past.

So if we can find the path, we can find the point, and if we can find the point, we can deduce the path. Once a path/point is found, one must pay attention to the acceleration of the price through that space and the time the movement spends within the specific path to help correctly judge the direction and opportunities for safe trades.

Putting together paths, points, and motion speeds is the focus of this method.

some basic principles
Understanding resistance and support is the most important fact when trying to deduce what the market is doing and where it is headed.

There are 3 different types of support and resistance, but most people are only familiar with 1 or 2. These 3 types are:

1. Support or resistance on a horizontal line
2. Support or resistance on a sloping straight line, which most literature refers to as a trend line.
3. Support or resistance on a curved line. Again, this is a trend line, but it is curved in space and is the main subject of this thread.

There are few rules to follow when analyzing prices along a trendline (whether horizontal, sloping or curved).

1. Price moves from trendline to trendline
2. If price shows stickiness to a trendline, it will break above that trendline 90% of the time.
3. Once a trend line is broken, the price will move to another more important trend line.
4. Price never stays between two trend lines.

basic tools
All charting software has Fibonacci tools to draw Fibonacci arcs, few software have circle drawing tools, but you only need to be able to draw the circumference of the circle, solid circles can cause some confusion. I'll use an example to illustrate how to modify the Fibonacci Arc tool to use it to draw circles. The chart I used can be found here:

http://www.netdania.com/Products/liv...rtStation.aspx

Check out this article for better instructions on how to configure NetDania.com to draw circles:
http://www.forexfactory.com/showthre...81#post4679881

The image below shows how to modify the tool to create a circle.

Also note that you need to look at many points within the time frame. Having a CandleStick chart where you can see each wick of the candle is not helpful. You need to compress the chart to work better.

In the NetDania.com chart this is done via the menu item "View>>Periods" and setting it to 1000.

Draw circles on MetaTrader 4
In Metatrader you cannot draw circles as easily as you can in NetDania charting station. You must modify the Ellipse Tool or Fibonacci Circle Tool in MT4 to draw circles. The image below shows how to modify the Fibonacci Circles tool. Please scroll down to find it.

The main problem in Metatrader 4 is that if you switch timeframes, your circle changes shape and becomes an oval, so it only works on one timeframe and not on others.

Resize window
You need to make sure that for all practical purposes the window in which the circle is drawn is equal in width and height, otherwise the price level calculated when the circle is drawn may be slightly off. If your desktop resolution is 1024x768, then your chart will be wider and you will need to set the window size where the price action occurs to a square size in order to get the correct aspect ratio for the diameter and circumference of the circle you draw.

area of ​​circle
Advantages <br> There are two support points on the circle that the price has trouble breaking or breaking through, the north and south poles shown in the chart.

Activity Points <br> As shown in the chart, price is active most of the time within one of the 4 quadrants of the circle. These quadrants are northwest, northeast, southwest, and southeast. It can operate inside or outside the perimeter of one of the above areas. Prices can be active within the circle (inside the circle) or within the circumference of the circle (outside the circle)

strength
A circle has two strengths

1. External strength

The strength of this type is measured by how many points there are on the circle. If the points are on the inside of the circle, the inside is stronger, and if they are arranged on the outside, the outside is stronger. If a motion breaks such a difficult cycle, it won't easily return to its previous state. For example, if a motion attaches to the outside of a circle and then penetrates the circle and moves to the inside, it will quickly become difficult to get back to the outside. Price must spend a considerable amount of time moving higher or lower (depending on the trend) within the same circle so that it can find another point on the same circle to switch directions.

2. Internal strength

This is not so obvious at first, but the center of the circle, and the entire circle itself as an entity, can be a very strong area on the chart where movement will find a strong response. When price action approaches the center of the circle, huge opposition is found. If you are familiar with Elliott Waves, this type of counterattack typically results in a reversal toward the center of the circle, known as a "corrective move" in Elliott Wave terminology. Then there is also a situation where price action accelerates greatly as it approaches the center of the circle, which occurs in the type of move labeled an "impulse move" in Elliott Wave terminology.

We then come to the entire circle itself, which can be viewed as an entity within a specific area of ​​the chart, an entity that is very energetic and repels and rebounds movement with considerable intensity. In my personal experience, these circles are smaller, but the repelling effect is more powerful. They also appear to radiate an energy, or for lack of a better word themselves, an aura that affects the shape of movement that passes through them. After you've been drawing circles for a while, you'll notice these areas, which can go a long way toward fine-tuning your analysis, but they are the hardest to spot and will reveal themselves more and more over time.

direction
Price always tries to move from the inside to the outside of the circle, and from the outside to the inside. If it can't do this on a strong circle, it will find the path of least resistance, trying the same thing on different circles, until it reaches a circle where it can no longer play the same game, and it will react in the opposite direction. Circles of greater strength will push the price back up and into circles of less strength until it reaches a circle of equal or greater strength, and a reaction occurs. Understanding the strength of a circle is a very important point to consider when finding direction. Which circle is stronger, which circle is weaker, and where is the next stronger circle.

area
This area becomes very important when multiple circles intersect in the same area.

empty space
When there is an empty area between two circles with no other major circles in between, the price will rush through these areas.

center of circle
If motion starts at the perimeter of a circle and moves inward to the center of the circle, 2 things will happen:

1. It will find a strong resistance to penetrate the center, which happens in the case of corrective movements, or

2. As it approaches the center, its acceleration increases and it lands on the other side of the perimeter.

Analytical methods
1. Use the circle tool to draw a circle

2. Move the circle around the chart, trying to align as many points on it as possible. Adjust the diameter to get a good curve.

3. Draw several circles in different areas of the chart.

4. Find out which ones are strong and which ones are weak. Notice how the price bounces off them, and how the price moves toward the center of the circle

5. Pay attention to any white space in between.

6. As the price moves, draw more circles around the move, using 2 or 3 pips or more, and notice how the angle of the drop/rise moves with the bubble. As an object accelerates, the bubbles around the path tend to change angles closer to 90 degrees, and the initial bubbles you draw provide support for subsequent bubbles. When the motion wants to change direction, the bubble will eventually move to an angle of around 20-30 degrees.

7. If you can find 2 points, draw a circle and see if the price moves around it, creating a third point. If it does, then there could be a rally that makes the perimeter of the circle a good place to buy or sell.

8. Notice how a few circles squeeze the price, while other circles create areas of expansion. A price squeeze is what needs to accelerate when it finds an area of ​​expansion.

9. Do the above for all time frames.

10. Circles on higher time frames are more important than circles on lower time frames.

11. Once you have a story to tell using circles, use circles with a lower time frame to find a good entry.

12. When the reaction occurs, see if the reaction is still finding support/resistance on the previous bubble. How does it break them?

Take profit
Bounces from one circle can land on many other circles. Usually the first one should be used as take profit. Depending on the timeframe you trade, the first circle will differ by 10 pips on M1 and 100 pips on M15

stop loss
Usually you need more than 1 circle to find the stop loss. If the movement proceeds in an inner circle pattern, then you need to have an outer circle along a series of points common to the inner circle to find the stop loss. Stop loss will fall within the perimeter of the outer circle. You have to experiment with this to find the right stop loss. You don't want to fall into the trap of having one circle's perimeter break, then land on another circle, and then go in the same direction as the original move.

Things to note
Working with circles is not easy and it takes time to understand what the circles are telling you. If you use indicators with circles, you are likely to get confusing signals, especially if you use multiple indicators. Anything the circles tell you is only relevant to the time frame you're trading. Circles only give you a limit of possible moves and directions, but when the move starts, a lot of other things can happen, so again thinking about the moves you have to reach your goal is not a wise idea, because it can be decided not to go the way you want, to choose a different path, but still manage to reach your idea. If you must use an indicator, use only one, such as RSI. The best indicator you can use is a good pair of eyes.

Other posts to check
About configuring NetDania:

About drawing circles:

Steps to draw a circle (quick guide):

Example explanation of circle drawing method:

On how to use circular trend lines to determine direction:

Regarding the powerful smaller circle (energy circle) where prices are strongly protected:

Regarding drawing circles on indicators such as RSI:

Regarding using circles to measure the relative strength of points on a straight trend line:

An example of multiple circles on a chart pointing to the same overarching theme:

About what to look for when choosing a position (must read more posts after each link)

On how to avoid bad deals and ultimately turn them into good ones:

Tips on drawing circles:

New rules:

Regarding other trend line techniques:

On how to find the intersection of time and price:

Regarding midline analysis and price acceleration:

Good luck and happy trading Kambuji