First of all i would like to say hello to all of you FX traders on this forum as this is mine first post.
Last two days i have learned hard and i tried to aplly on chart things i have been reading.As it was weekend and market was closed i have tested/practiced trend lines,trend channels and fibonacci retreacement and extension levels(expansion on MT4:confused: )on historical charts.
I understand that Fibo extension levels are taken as profit takeing levels(0.618,0.500ā¦)
BUT what i dont get is about retreacement levels.One can take any of this numbers as entering points??Also as stop loss points??How??I have read that 0.618,0.500 and 0.382 are best for entering the trade??
It dose not make any sense to meā¦Could someone explain this,please.
Please have little bit more patience and go on whit me thru this post;)
As we can see on the .jpg that i have sent,0.0 and 23.6 are acting like resistance and support levels(RIGHT???)
I have enterd a long (demo account) position @1.5421 after two bearish spinning tops(they did not have really long shadows,but i think that we could call this two small candels spining tops,right???) appear on chart.Also,the 23.6 support line was broken few times till then.I have set stop loss and take profit orders.
I have set take profit @61.8 of Fibo extension.
So i have took this ride almost till F. extension.I got out @1.5468 because it looked like bulls were exhausted and bears will take over.(although market has pirced F.extension @61.8 later)
Now the questions are as followed:
1.Have i corectly ploted Fibo extension,retreacement levels and trend channel?
2.I think that i have predicted an uptrend.WAS THIS ONLY LUCK:( ?
ā¦or it was a result of hard work and studying???
THIS IS THE MOST IMPORTANT QUESTION,SO PLEASE ANSWER THIS ONE AFTER LOOKING AT THE CHART THAT I HAVE SENT
If i did anything wrong,if i had any wrong conclusion-PLEASE corect me.
If you have ANY comment on post it is more then wellcome.
Best regards and thanx in advance!
Oups!Sorry!I have not uploaded attachment,but now it is here.I hope that i will get answers soon.
Greetings
Well, you sound alot like me when I first started trading. Hard working, ready to put my nose to the grindstone and sprint my way to a quick victory. Then I quickly realized that this would not be the case. This is a marathon, not a sprint. You need to be willing to take at least a year out of your life and totally live breath and sleep forex. Think of it like you would getting a Phd. It takes timeā¦ It takes practiceā¦ it takes dedication. You may hear stories of traders who have made mega bucks quick and were born traders and I would argue that these people are out there, but they are the execption not the rule. But beleive me, there are traders out there bringing in 5 digit a week income at this, but 99.99999999% of those traders had to work hard at it for quite some time before even becoming profitable.
Ving, now I will get on to your question about fib retracements: Why do they work? Well, there may be other underlying reasons, but there is nothing magical about themā¦ They work simply because so many traders use them. And they do not work all the time. Might I suggest that you consider fib levels more of a range instead of set in stone levels to the pip. Added, you will see from time to time, price in the middle of no where with nothing but a fib and price will bounce off a 50% retracement level to the pip. I however, always line up my fibs with other reasons to trade. It can be as simple as taking the trade in the direction of the trend, or a bounce off of some previous level of support. I really like a bounce off a medium term EMA (I prefer a 21 ema) between the 38.2 and 50% fib ret. levels.
Consider the area between the 38.2 and 50 level as the most desired level for a continuation, and the 50 to 78.6 level to be the least desireable. If price makes it above the 78.6% retracement level, it is no longer a retracement, it is a reversal. I usually place my stop somewhere above the 78.6 retracement level on any fib entry.
Sorry for the long postā¦ let me know if I can clarify in anyway.
GBLilleyUSMC-thanx for advice.I know that FX is looong run rather then a sprint.I am not a gambler.And even if i would be one-i would rather be the casino owner;)
You have wrote things that can be found in mine books,but on other hand there are things from your expirience.That can not be found in any book and i think that is worth of reading!
Again,thanx guys and have a nice trading day!
Cheers!
P.S.
Any one else?Maybe some one whit XXL trading expirience?I would appreciate that!
I trade mostly support and resistance levels. One thing that helps a ton if you have the indicator on your platform is ADX(directional movement index). Basicly if the ADX is below 25 then expect retracements from support and resistance levels.
Youāll hear alot of advice. If I were you Iād try out some of the systems under āThe Holy Grailsā before you try to make one of your own. Imo its better to copy someone thats already a success than to try to reinvent the wheel. I use the systems in this thread: 301 Moved Permanently
I have been practicing Wing Chun for about a year now under the lineage of Steve Swift/Ip Ching but I just started to learn and demo trading about 1 month ago.
I am hoping that my kung fu training will in some way help my trading as it does in other areas of my life.
kjcallaway2-LOL!No,i think that mine VT is far more better then mine ātradingā.
I am not a trader.I am still student.And even when i become a trader i will still be a student;)
I am training Wong Shun Leung lineage almost for two years.
Just keep a calm head same as you would do in the fight.At some way that is a fight-with market.You can win,you can lose or it ould be draw:D
Cheers!
VTK
hi, iām a noob hereā¦ you sound comfortable working with fibbs thereā¦ Iām just wondering if you can help me clarify a few things about itā¦
ok all i got so far from fib is thatā¦ Fib works by taking price a and price bā¦ then plot on the graph certain percantage of the price difference. 31.8, 50, and 68.4? (lol i donāt remember the exact number). Then we calculate the retracement point etc etc. And thatās all fine and dandy. But how do we even know that the price A and B (the swing high/low) is an important price that we should work our signals with? on the 15 mins chart, ok iām seeing a swing highā¦ thereās 2 candles down on the right side of it (is that even an objective swing high?). But how do i determine the swing low? do I just take the lowest price as shown currently on the chart? if soā¦ what about the lower swings not shown in the chart (like you have to scroll backward to see it). Or does it just not work at all with short time frame charts?? Iām very very confused about fibbs.
But there is something. Something that attracts me to using fibbs in my repertoire of trading tools. I have a hunch itās a pretty powerful tool that can improve my trading system dramatically.
If you can help me with this, itāll be very very much greatly appreciated, thx
If you took away all of my tools and told me, you can keep just one, I would probrally choose Fibonacci retracements/extensions. However, after you use them enough, you get to where you can see them without drawing them.
As long as you understand what the definition of a swing high and a swing low is, you should have no problem. Remember, the market is fractal, so you will have patterns inside of patterns and the same rings true for fibs. You will have fibs within fibs. Be careful though, you can fib yourself to death! LoL. So what I recommend is zooming out and looking at multiple time frames then deciding which swing high and swing lows are the most important. Remember that they work cause other traders use them (and there are some psychological reasons too) So you need to pick the swings that you feel the most traders will be looking at.
I would suggest that you play with the fibs and experiment with them. See when price reacts and when it doesnt. Even if you draw them right they will not work always anyway though, but if you play around with them, you will quickly see the power in them. Make sure your trading on a demo account until you are comfortable trading live. I would recommend that you have a track record of success before going live.
