Quote:
Originally Posted by BlackPips
i like the way you draw your fib. but, isn't it better to just join a trend and move on, i mean, in a trending market. does your fib method involve a kind of scalping where you enter in the retracement and scram at the end of the correction?
is fib the only trigger you use in entring the market? no s/r lines etc?
do you keep and eye on the news/fundamentals?
actually, i made 20 pips last night from fib...it just coincided with an s/r line i had drawn....really cool.
thanks for the insight, i really am getting something here.  |
You mean join a trend a just hold the position? You could certainly do that, my trade management is certainly not and end all be all. I just try and reduce risk as soon as its prudent to do so and keep my rewards equal to or greater than what i've risked on each trade. All this will offer is a way to enter the market. The management is up to you.
This can be used to scalp. However, like any other method, the smaller the time frame the higher potential for fakeout moves. Frankly, i've traded a 1min and 3 min chart in the S&P for the past year. I like the freedom and laid back time frame the 60 and 240 provide me. Furthermore, they allow me to remove myself from my management and just let the darn thing work or not without me second guessing myself. But like I said, that is all personal preference.
Yes, I only use fibs. S/R lines are good, but frankly as far as i'm concerned less is more. You could combine this with any method on the face of the earth and when you get congruence between the fib grids and the other method i'm sure it would be a very high % win rate. I'm open to ideas and suggestions, but at this point in time, i'm happy with the results i'm producing.
Now for the lesson of the day.
First Attachment: A continuation of last night really. RESPECTING THE CHART PATTERN. I've illustrated this off the 233t(10min) charts this morning in most markets. This should really get across the point of utilizing the grids in trending markets, and not trying to force things without the trend.
Second Attachment: My Typical trade entry and management. Signal fired off at the yellow arrow. Entry is at open price of red arrow candle. Stop loss put 1 tick above the 85% level. Once the 38% level has been hit on the blue arrow candle I move my stop to the 61.8% level which should be fairly close to entry. Essentially reducing your risk down to nothing. If the move has credence and has already bounced off the 61.8% down to the 38% level it should continue without a retest of the 61.8% level. If it does, it probably isn't going to work in the first place and your out with minimal or no loss.
Now on the pink arrow, price has moved down to the swing low. Moves can and do fail to produce new lows, and if they fail they fail at that level. Its typically again where I like to lock in profits by moving my stop down to the 38% level. I'm still shooting for my extension or 2:1 reward targets, but i've locked in profit should i be on the last swing of a trend and it comes back in my face.
The blue and cyan colored arrows are profit target levels defined by the swing. Depending on if and how you've scaled into the position you could cut contracts loose at each level. Your final exit would be a at the 161.8 extension and will be well in excess of 2:1 on the trade.