Currency exchange rates fluctuate in orderly series of price moves from one Small Quarter Point to the next, measured in increments of 25 PIPs, in a systematic effort to complete an entire Large Quarter of PIPs.
What if prices actually break above or below a Large Quarter Point and transition into a new Large Quarter? The Quarters Theory recognizes that Large Quarter Transitions do not guarantee the successful completion of a Large Quarter and that price behavior of currency exchange rates within the actual Large Quarters should be closely analyzed for signs of strength that could lead to the successful completion of a Large Quarter, or signs of weakness and exhaustion that may cause unsuccessful Large Quarter completion and reversals back toward the preceding Large Quarter Point.
In order to monitor the price behavior of currency exchange rates within the range of each Large Quarter, The Quarters Theory establishes three important price levels within each Large Quarter:. These three important price points within each Large Quarter serve as major support and resistance levels that may prevent further price progression and may cause unsuccessful completion of a Large Quarter. Identical to Large Quarter Trades, Inverse Large Quarter Trades also allow changing the stops in certain situations, depending on the advancement of prices into the Large Quarter.
For example, if there is a decisive Large Quarter Transition on the first or second day and prices have already advanced deep into the Large Quarter to the Whole Number preceding the Large Quarter Point targeted, the stop can be moved to a breakeven level at the initial entry price of the trade to protect against any losses, without having to wait until the third day to do so.
Another variation allows reducing the size of the stop in half from or PIPs to 50 or 55 PIPs in cases where there is a decisive Large Quarter Transition on the first or second day that has seen prices advancing beyond the Half Point of a Large Quarter.
The Three-Day Rule of The Quarters Theory should not be bent by allowing more than three days for a Large Quarter completion, and the three-day time stops of the Inverse Large Quarter Trades should be enforced very strictly to prevent or minimize losses and to assure consistent trading results.
Opportunities for Inverse Large Quarter Trades are most likely to occur in a countertrend environment in periods of price corrections following a trend wave, or during consolidations in trendless, range-bound price channels. The individual trend waves and the price corrections following them can be identified using the methodology of The Quarters Theory Trend Waves combined with technical analysis of price patterns, breakouts, technical indicators , and so forth, which may be utilized for confirmation and early warning purposes.
The Fibonacci retracement levels are an important tool when attempting to establish Large Quarter Trades that take advantage of the countertrend price moves during corrections following trend waves. The Fibonacci retracement levels are determined by using the Fibonacci ratios to calculate These measures of retracement percentages are based on previously established price ranges between highs and lows of the trend waves preceding the price correction.
Future support and resistance price levels are determined by calculating the Fibonacci retracements and can be used as potential price targets during corrections following trend waves.
The lower-range percentages of Calculating the lower-range Fibonacci retracement percentages up to If a retracement up to Those who recognize Gaines as one of the finest southern writers of the last forty years will find here an accessible instrument to hear his voices more clearly than ever.
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