I dont trust fibonacci. How do you know is it retrace or start of a new trend?
Ok it went back from bottom to 50%, then went down again a little. You entered SELL. And then! it starts to go up again, but now going up much higher and you cant see the end. At this point you should be very scared and exit trade with loss.
I see that you are referring to the Hypothetical trade on the EURUSD.
The farthest above my trade entry before reaching the more aggressive TP was only 11 pips. Had I been “very scared” at that point, I would have missed out on the 68pips the trade had to offer. At which point, the trade would have been closed with my 50pip TP.
That is what a 25pip SL is for.
Prior to moving above 50% (by only 11pips), the trade had already moved 47pips in my favor.
The 11 pips above 50% is the 38.2% mark, ALSO a predicted resistance level by the fibo.
All in all: I would have profited 150pips from the 3 trades, though I may have been fazed by the 11 pips of heat.
Are you drawing your fibs from B to A? I don’t know if it really makes that much difference except that your fib % levels are backwards between 0 & 100. The 50% is fine…lol…it’s in the middle. But the 38 & 61 ones are incorrect. If price retraces 61% of the AB line, then C is a lot further away from B…more than 50%. Conversely, if the retrace is 38%, C will be closer to B.
However, they are just lines. Important thing is to get to know which ones each pair respects more often, whatever it’s called. But it helps to have it correct when discussing it with others or it may cause confusion.
No indicator should be trusted 100% including fibonacci, however traders use indicators as variables to get an edge in the market. As a user of fibonacci I must admit its has been great for me with the system I trade. By looking at a naked chart you will see that it moves in waves and swings, fibonacci is a/the tool most use to determine the end of a retracement to try and get in for the next swing or the completion of a wave.
Sprigs as Sweet Pip pointed out your fibs are wrongly placed. You cannot have a retracement to a 618 before a 382. Go to properties and edit the settings. Below is an example of the levels should be placed.
I realize the fibo is upside down, but i didnt know how else to use it to predict the continuation down. I’m pretty sure I used the lines correctly, even though they are labeled with the wrong numbers. Should I add -27.1, -38.2, and -61.8?
btw, I cant read the numbers on ur image cadar.
Also, I’m looking for a good fibo manual online (a video would be nice). I found FXKnights video on youtube to be much more useful than FX360’s manual.
Fibonacci is a tool, but a magic movement indicator. Price will tell you what it’s doing and with Fibonacci you can probably gauge the strength of trends and reversals.
Also, if you’re using proper money management you should never be scared if price moves against you. A successful trading strategy includes losses into the equation.
Does fibo works as well in lower timeframe compared to higher timeframe
I felt resistance and support and trendline is more well respected regardless of
what timeframe. Thats how i perceived. Good luck with your fibo strategy
Fibs works well on any time frame, however its always best to watch a higher time frame than to one you trade from. Fibo used with resistance, support and trend lines is one of the better ways to trade. I use a similar system.
