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 :eek:
looks like an uptrend/ swing high to me starting from the jan 29 0630 gmt candle. where’s daedulus?
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 ?
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
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
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/showimage.phtml?id=12016301852523&print=1
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!
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.)
hi
unfortunately for me, my chart shows the 62 EMA ABOVE THE 78 EMA, signalling an uptrend.
http://md6.it-finance.com/MDV6/showimage.phtml?id=12017103962939&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?
also my chart was drawn on the 29th around 1200 GMT on the 30 min chart.
so, while the 1 hr chart shows a down trend, that is not what i was seeing since i did not know then that i had to look at the 1 hr chart.
Sounds like you need to go back to school 
Babypips school of Fib Retracement can be found here (theres even a video): Fibonacci Retracement - 3rd Grade: Fibonacci - Beginner’s Guide to Forex Trading, Free Forex Education, Learn to Trade Forex, Forex Training - BabyPips.com
When drawing a down trend fib, click on the last swing high, and drag down to (or click on depending on software) the last swing low. Do the opposite for an up trend.
thanks. back to school it is.
Its important to remember not to get too caught up in the MA values… they are just guidelines. I said first and foremost we need to respect price action. Did that chart make a higher high? Or a Lower Low? No and No. That chart doesn’t have a trend and thats why regardless of the MA values you should stick on the sidelines.
hi
i’m using MT4 alpari. thefib extension button there won’t let me do the fib extension example on metatrader4 is there a another way to plot the extension?
i keep getting a pyramid, not the upward extension shown in the babypips example.
please don’t say find another platform
I’m at work and don’t have MT4 in from of me but I think if you look under the Chart menu (I cant recall exactly which one) but the correct one will also list options like channels, lines, trends etc, if you highlight Fibs, it will give you several more fib drawing tools.
I’ll check for sure in a few hours when I get home unless someone else can check first.
The “pyramid” you get is correct for the Fib Extension. With MT4 You will have to adjust the 2nd line of the “pyramid” to touch the retracement low or high…not to just accept where it puts it.
What I think is happening is that the extension grid is appearing above the viewing area of your chart where you can’t see it. If you shrink your chart it will appear. To the right of your screen, where the prices are listed, your mouse pointer will display a bi-directional arrow…click and drag down and your chart will compress horizontally and you will see the extension grid lines on your chart.
Different platforms do the same things differently, or not at all, or more than others. MT4 doesn’t seem to come with a Pivot Points tool so I had to hunt around for one.
You just have to play and get to know it.
yes i had o have the pivots downloaded as a custome indicator from somewhere else.
re: the fibs: i found the extension button, but it really won’t do the retracements the way its done in the baby pips example. i keep trying and trying. i mean does anyone else use this MT4?
