Fib Retracement Trading...

[tonymand]

So based on previous data this would be an entry IF you have a clear trade plan. Just basing this on Daedalus' observations we sell at 1.9632, stop at 1.9671 take profit at 1.9554. This also looks reasonable as there is a major support level in the 9550 region but you would want to keep an eye on the 9580 level which also looks reasonably strong and is at the 50% retrace level

[Dahlia]

Daedalus

I’m a newbie and have been following your thread with great interest (and being entertained at various points as well) . I do have a few questions if you don’t mind:

1) How many pairs do you follow? Do you generally stay with the majors, or do you have a list of favorites? (Can you give us this list, if applicable?)
2) With all the pairs mentioned above, how many trades (on average) do you open a day? (Just trying to see how many trading opportunities the system produces)
3) How long does a typical trade last? (30 minutes-ish? An hour? Several hours? Etc…)
4) How big of a bet do you typically take per trade relative to your account size? For example, if you had a $5000 account, how many lots/minilots would you enter per trade?
5) Did I read somewhere that you do have a full time job while trading? If so, how do you find the time to manage your trades? Does your employer allow you to trade at work? Are you entering/exiting trades during non-working hours?
6) I’m sorry if you posted this somewhere else already, but: What is the success rate of the system. I mean, if you took every opportunity you see (given the conditions that you already spelled out), approximately how any trades would result in a win? A loss? An approximate breakeven?
7) Is this the only/primary system you use in your trading?

Thanks in advance! Also, just wanted to say that it never ceases to amaze me the way some people would give so much time and effort to help others, while asking for nothing in return. Karma loves people like you!

Dahlia

[kagein]

Do you guys use trendlines as well as fibs? Or is less, the new more?

gbp/jpy appears to be repecting the channel quite well.

[daedalus]

Originally Posted by Dahlia

Daedalus

I’m a newbie and have been following your thread with great interest (and being entertained at various points as well) . I do have a few questions if you don’t mind:

1) How many pairs do you follow? Do you generally stay with the majors, or do you have a list of favorites? (Can you give us this list, if applicable?)
2) With all the pairs mentioned above, how many trades (on average) do you open a day? (Just trying to see how many trading opportunities the system produces)
3) How long does a typical trade last? (30 minutes-ish? An hour? Several hours? Etc…)
4) How big of a bet do you typically take per trade relative to your account size? For example, if you had a $5000 account, how many lots/minilots would you enter per trade?
5) Did I read somewhere that you do have a full time job while trading? If so, how do you find the time to manage your trades? Does your employer allow you to trade at work? Are you entering/exiting trades during non-working hours?
6) I’m sorry if you posted this somewhere else already, but: What is the success rate of the system. I mean, if you took every opportunity you see (given the conditions that you already spelled out), approximately how any trades would result in a win? A loss? An approximate breakeven?
7) Is this the only/primary system you use in your trading?

Thanks in advance! Also, just wanted to say that it never ceases to amaze me the way some people would give so much time and effort to help others, while asking for nothing in return. Karma loves people like you!

Dahlia

1. USDCAD, EURUSD, EURCHF, USDJPY, GBPUSD, AUDUSD, USDCHF, EURJPY are what I follow daily. Selected for their fairly congruent price patterns and low < 3 pip spreads with my broker.

2. Between 1-4 trades a day. Sometimes none, sometimes more. Trade what the charts give you, sometimes there is more opportunity than others. Don't force it when its not there, and rake it in when it is.

3. 10 minutes to 12 hours on the smaller time frame trades, unless i'm taking a 4 hour/daily setup in which case it could take 2-3 days on the 4 hr, and a week or so on a daily setup.

4. I trade with the ideology of 500.00/per mini. So technically speaking with a 5k account you'd be trading a standard lot. This of course assumes you know what you're doing and are consistently profitable EVERY week. That leverage amount is MY PERSONAL preference, but as discussed prior, is too aggressive for many, and maybe not aggressive enough for others. Refrence the "Adding Size" post and follow up discussion on page 7.

5. I'm actually a full time college student (i'm a senior in my last semester). I take night and online courses so I can trade during the day. However this semester I have to take a Monday/Wednesday morning class at 8:30... It was hell this morning. I might take my laptop with me and trade in class... I think more likely though i'm just not going to trade during that 2 hour period twice a week for the next couple months. No biggie.

6. I typically hit 75-80% win rates (this includes trades that fail at 38% and stop me out for nothing or a small 1-2 pip (spread) loss.) But I must emphasis this is NOT a system - it is a method. I've tried to make it as mechanical "1-2-3-Make Money" as possible, but there is an inherent level of interpretation and subjectivity that is left up to every trader. This works for us, but if you can't handle those types of decisions and situations you may look elsewhere for a more mechanical true "system".

7. Yes. After a small stint trading automated systems in equities, this is THE ONLY METHOD i've ever traded. Its evolved over time into what it is now, but more or less the core has not changed one iota.

Hope that answers your questions!

Originally Posted by kagein

Do you guys use trendlines as well as fibs? Or is less, the new more?

gbp/jpy appears to be repecting the channel quite well.

I don't personally. I have before, they have relevance in the markets, and there is no reason why you can't or shouldn't. Add whatever you feel gives you an extra edge, be it the stochastics, a different MA setting, or confluence from other fib grids (my next post in the works).

At the end of the day they are just one more way to identify a trend that we can use fibs to enter with. Hell, you could scrap the MA's entirely and just use trendlines or channel regressions for your trend identification and I have no doubts you would do just fine!

Cheers!

[daedalus]

I just felt like holding myself accountable here... Here is a live trade I just entered. Price basis is 1.0182 long... Stop at 1.0150.

Well see how it plays out one way or another!

[tonymand]

Originally Posted by kagein

Do you guys use trendlines as well as fibs? Or is less, the new more?

gbp/jpy appears to be repecting the channel quite well.

Yes I agree with Daedalus. I do have them on my chart. GU is also close to the channel bottom. It gives me food for thought if the price stalls there although I give more credence to the supply/demand areas

[tonymand]

Originally Posted by daedalus

I just felt like holding myself accountable here... Here is a live trade I just entered. Price basis is 1.0182 long... Stop at 1.0150.

Well see how it plays out one way or another!

I see that has played out beautifully

[tonymand]

My trade has taken a good deal longer to work out than that by Daedalus. Dont underestimate the importance of being able to place an OCO order and not have the psychological challenge of managing the trade. In my case the trade played out while asleep!

[daedalus]

Originally Posted by tonymand

I see that has played out beautifully

You must be looking at a different chart than me! I'm taking heat right now!

[tonymand]

Sorry mate I got confused with the tick chart. Was looking at the trade immediately before. We are now coming into another retrace area although far too early to be trading this pair