Fib Retracement Trading...

[Sweet Pip]

Uhm...isn't the grid supposed to go from 100% top to 0% bottom when it's drawn in a down trend?...or am I in for a forehead slapper

[hypnos63]

looks like an uptrend/ swing high to me starting from the jan 29 0630 gmt candle. where's daedulus?

[kagein]

if you look at the 1 hour chart, you'll see that it was just a retracement, hence we were still in a down trend, i'm trying to understand your last question a bit more but im somewhat lost, what do you mean that there was know way of knowing where the top was?

since i started trading this method i can say that there have been very few times i have entered just after a top. most times i take some heat before the trade moves my way. the key is not to have tight stops.

anyway some clarification with what you meant?

[hypnos63]

Originally Posted by kagein

if you look at the 1 hour chart, you'll see that it was just a retracement, hence we were still in a down trend, i'm trying to understand your last question a bit more but im somewhat lost, what do you mean that there was know way of knowing where the top was?

since i started trading this method i can say that there have been very few times i have entered just after a top. most times i take some heat before the trade moves my way. the key is not to have tight stops.

anyway some clarification with what you meant?

thanks kagein.

so the 1 hr chart is where we need to be for fib retracement trading? not the 15min or 30 min? because it would be a quite likely that the 4hr trend would supercede the 1hr, and so on and we would never be able to enter a trade?

my original question is how does a trader know when the swing/trend has reached its highest value/high point/top, so that he can get ready to short it with the 23.6% or 38.2 % fib as targets ?

[hypnos63]

also kagein, when you say the 1 hrs chart was in 'down trend; you mean the 1 hour candle 1300-1400 GMT?

because the 62 ema was above the 78 ema and t exact 1300-1400 gmt candle jan 29 was bulll candle.

so how do we ssure ourselves that the trend was down on the 1 hr chart?

thanks

hypnos63

[kagein]

Originally Posted by hypnos63

thanks kagein.

so the 1 hr chart is where we need to be for fib retracement trading? not the 15min or 30 min? because it would be a quite likely that the 4hr trend would supercede the 1hr, and so on and we would never be able to enter a trade?

my original question is how does a trader know when the swing/trend has reached its highest value/high point/top, so that he can get ready to short it with the 23.6% or 38.2 % fib as targets ?

you can do your fib retracements on any timeframe, the longer the time frame the lower the number of fake outs. My personal preference is to know the overall trend of the pair and then only trading in that direction, this helps me avoid some fake outs.

how do we know when to get short? you wait for price action to test the 61.8% fib or the 78.6% fib and respect it( close lower under the fib level). I always wait for a bearish candle before entering. adding a oscillator could help with your analysis as well.


ive added a screenshot of the usd/chf 1 hour chart as you can clearly see where in a downtrend. the 62 ema is green and the 78 ema is purple.

try not to view the ema or the stochastic crosses as definite entry and exit signals but rather as guides....the ema's just tell you your trend bias.

as you can see the downward trend bias hasnt changed since the 22nd jan

[Sweet Pip]

Please clarify... in Hypos63 chart, he's drawn his grid from the 27th 10970 to the 28th 10880...a downtrend. Now isn't the grid supposed to go from 100% down to 0% so the retrace goes back up goes from 0 to 100%, and we either like it best when it reaches between 61.8 or 74.6? Then somewhere in there we place our trade as our best guess that "probablility wise" that it's the top and will continue down again?

In this chart, the grid is backwards when the retrace is going back up through the grid isn't it? ...

http://md5.it-finance.com/MDV6/showi...852523&print=1

[daedalus]

Yes, he drew his grid upside down. (At least how I would perceive that price action to still be in a downtrend.) If that top fails to hold price action down and it makes a higher high then I would draw my grid as he did.

And just a small point here... today in the FOMC rate decision at 2:15EST today. Stay out of the sandbox until after the rate decision if you can. Markets could get rattled!

[Sweet Pip]

Originally Posted by hypnos63

thanks kagein.

my original question is how does a trader know when the swing/trend has reached its highest value/high point/top, so that he can get ready to short it with the 23.6% or 38.2 % fib as targets ?

By you drawing your fibs backwards, you're not on the right % when making your decision. The other thing is that no one knows when the top or bottom is reached.

When you draw your fib grid properly, the 61.8% retrace up is your target (give or take) for you to go short in a down trend, not the 23 or 38 (except on your grid it actually is... but ....it won't make sense in the overall concept of fib retracement.)

[hypnos63]

Originally Posted by Sweet Pip

Please clarify... in Hypos63 chart, he's drawn his grid from the 27th 10970 to the 28th 10880...a downtrend. Now isn't the grid supposed to go from 100% down to 0% so the retrace goes back up goes from 0 to 100%, and we either like it best when it reaches between 61.8 or 74.6? Then somewhere in there we place our trade as our best guess that "probablility wise" that it's the top and will continue down again?

In this chart, the grid is backwards when the retrace is going back up through the grid isn't it? ...

http://md5.it-finance.com/MDV6/showi...852523&print=1

hi


unfortunately for me, my chart shows the 62 EMA ABOVE THE 78 EMA, signalling an uptrend.

http://md6.it-finance.com/MDV6/showi...962939&print=1

the 78EMA is turquoise, the 62 kind of pink

i don't know how these descrepancies occur but there you go. also do we look at the particular higher frame candle governing the time we choose to enter the trade?

my chart was upside down because i was chrting from a low to a high point or so i thought. how are the fibs drawn?