Fibonacci levels - when to redraw?

[SanMiguel]

Originally Posted by cadarkitek

Yea should. I only use the 38.2, 61.8 and 78.6 retracements along with the 127 and 161.8 extensions. But I'm sure the other levels work.

Another one the GBPJPY 1hr chart.
Now we have 2 areas with swing lows: 1-->2 and 3--4
3--4 gives a target of the brown line TP(3-4) whereas fib 1--2 gives a target much higher TP(1-2).
So, when we use this in conjunction with S&R do you take the conservative line or do you only use the most recent fib? We could have fib lines all over the place, which would kind of defeat the purpose

[cadarkitek]

Originally Posted by SanMiguel

Another one the GBPJPY 1hr chart.
Now we have 2 areas with swing lows: 1-->2 and 3--4
3--4 gives a target of the brown line TP(3-4) whereas fib 1--2 gives a target much higher TP(1-2).
So, when we use this in conjunction with S&R do you take the conservative line or do you only use the most recent fib? We could have fib lines all over the place, which would kind of defeat the purpose

I wouldn't draw fibs at 3-4, the fibs should be drawn from the major highs/lows on a that time frame. Imo. On the chart you post the market has yet to reach the extension for the 1-2 swing, so the fib should remain. We are still within the 1-2 boundary.
Below is a copy of the chart you posted. You will see that the first wave is completed at the 161.8/4 after a 38.2/3 bounce then the market starts retrace. As soon as the market starts retracing you then spread the fibs from the last swing which is 3-4/a-b and look for a bounce at a fib level. Here the bounce was at a 78.6 so we now look for the market to go the 127 extension above b.

[SanMiguel]

Originally Posted by cadarkitek

I wouldn't draw fibs at 3-4, the fibs should be drawn from the major highs/lows on a that time frame. Imo. On the chart you post the market has yet to reach the extension for the 1-2 swing, so the fib should remain. We are still within the 1-2 boundary.
Below is a copy of the chart you posted. You will see that the first wave is completed at the 161.8/4 after a 38.2/3 bounce then the market starts retrace. As soon as the market starts retracing you then spread the fibs from the last swing which is 3-4/a-b and look for a bounce at a fib level. Here the bounce was at a 78.6 so we now look for the market to go the 127 extension above b.

From 1-->2, I have the bounce at 50%?
You say as soon as the market starts retracing draw fibs from 3-->4 but do you mean retracing from 1-->2's 161.8 target?

[cadarkitek]

Originally Posted by SanMiguel

From 1-->2, I have the bounce at 50%?
You say as soon as the market starts retracing draw fibs from 3-->4 but do you mean retracing from 1-->2's 161.8 target?

Correct. The 3-4/a-b is shown on the cart I post.

[SanMiguel]

This the correct place to draw one on EURUSD?
I didn't draw one from point A because it had already reached an extension point, same for point B so moved along to the next swing high/low C-->D

So, because this one retraced to 61.8% we might only target the 38.2extension?

[cadarkitek]

Originally Posted by SanMiguel

This the correct place to draw one on EURUSD?
I didn't draw one from point A because it had already reached an extension point, same for point B so moved along to the next swing high/low C-->D

So, because this one retraced to 61.8% we might only target the 38.2extension?

The retracement for c-d is a 78.6 so the extension target should be the 127 which is already met.

[SanMiguel]

Originally Posted by cadarkitek

The retracement for c-d is a 78.6 so the extension target should be the 127 which is already met.

Ah...ok missed that.
So where would there next fib go? Ideally, you're looking for a retracement from the 127 level but that doesn't seem forthcoming at the moment.
Would we draw another fib at the orange circles below?

So,
- retrace to 38.2 target 61.8 extension
- retrace to 50 or 61.8 gtarget 38.2 extension
- retrace to 78.6, target 27 extension.

Do most traders only use 38,50, and 61?

[cadarkitek]

Originally Posted by SanMiguel

Ah...ok missed that.
So where would there next fib go? Ideally, you're looking for a retracement from the 127 level but that doesn't seem forthcoming at the moment.
Would we draw another fib at the orange circles below?

The next fib would be drawn from the new high down to the previous low where you have the 61.8 mark.
The orange circles are not the major highs, they are highs within the c-d boundary, so you only need the fibs from c-d.

Originally Posted by SanMiguel

So,
- retrace to 38.2 target 61.8 extension
- retrace to 50 or 61.8 gtarget 38.2 extension
- retrace to 78.6, target 27 extension.

Do most traders only use 38,50, and 61?

Personally I've never seen a 38.2 extension. I use retracemnets 38.2, 61.8 and 78.6 with extensions 127 and 161.8.
I couldnt say what levels most traders use but the 38.2, 50, 61.8 and 78.6 are very common amongst traders I'm associated with.

[SanMiguel]

Here (circled in pink)? Not much of a retrace from the top though...

[cadarkitek]

Originally Posted by SanMiguel

Here (circled in pink)? Not much of a retrace from the top though...

Yea there but as you said not much of a retrace o that time frame so you wait until the market turns. As you know nothing in the market is sure so at times the market wont respect the extension levels as in this case.
Also what you can do is draw the fibs from a larger time frame than the one you trade from, then pick trades from smaller time frames and target the extension from the larger TF.