Through my view, fibonacci pricing for S/R is set for brokers as future charts for potential manupulation…
Why? The explanation is general at the same time it is raw and not precise…
However, I’ve always believed that the more the thing is known and used …the more it dont work…
So basicly whats is in all forums are well known… so it dont work conceptly…It doesnt mean that it wont bring profits… but whether you’re in TANK or on a BIKE… you decide…
There is HOLY GRAILS existence… if not there will be no Warren Buffets…
The holy grail is knowing the future because you know… and not knowing future because the tools say so…
How to know the future because you know ? The present and the future is right on the charts… see and think like a creator… and not like a librarian…open your mind… embrace the beauty… open your arms… and trade with sharpness yet be humble… sooner or later you will discover whats for you…
Ok. im just going over my journal and most times i dont get filled at the 61.8 line. i get filled between the 61.8 level and the 50% level. Let say for simplicity i i get filled at the 50% level and place my at the 87% level. My profit target is the 23.6% level, so R:R=(50-23.6)/(87-50)= 0.7. if i get filled at the 61.8% level my R:R= 1.5.
Should i always use limit orders to make sure that i get filled at the right price. hence having an acceptable R:R??
Thats why we don’t take entries that the 50% level. I have another grid on my charts at the 56% level… If I can’t get into a move at or below the 56% its not worth it. Ideally though I try and enter as close to the 62 (or 75, 87 depending on what grid i’m playing) as possible. If you have any issues, put limit orders for the 61.8 values if you want strict adherence to Risk:Reward. Thats why on the shallow pullbacks i’ve been advocating entering with limit orders at that precise level.
You bring up a valid point and one that should be addressed. If the move blows away, let it go. From a risk standpoint its not worth chasing it. More often than not though you can get in at or a pip or two above the 61.8 level. When in doubt do that, you’ll miss a few moves here and there but you won’t have to worry about your risk being out of proportion.
Just wanting to post another example. Would the red arrow have been a good entry? Entering at the 75% level. Just trying to understand all the setups more. Thanks all
No. Look at your bias lines… you are in a strong uptrend… why are we trying to sell this?
We should be trying to buy the pullbacks all the way up the chart.
I’ve attached 3 setups of that chart that I would’ve taken. As you can see price action is currently in a shallow pullback long entry with your stop at breakeven.
I draw my grids up to two swings back and see where price action respects them.
But I can’t stress this enough… DO NOT TRADE AGAINST THE TREND. That is RULE #1.
Well like all things it depends on your timeframe and perspective. The trend on the 4H is arguable but I would say is clearly ranging. The flow is likely to be short again at this level until the resistance breaks. The H1 is now in a head and shoulders pattern so again a short play is on. On both frames we are in the 78.6 retrace area so this looks powerful. I am awaiting on a reversal signal on the 15 min for a short entry here this morning
For my rules, no. There is a gray area on the charts between 50 and 61.8, personally I look for one or the other. And as always, when its ambiguous go somewhere else. There are more than enough solid, quality, simple to see setups from one day to another on some time frame, on some pair… why risk it?
Remember, as traders we are predisposed to getting bored and jumping into positions because we feel we “need” to be in something or were not being productive - even if the setup isn’t that great. We are actually paid to sit there and do nothing most of the time.
[B]
Being flat is more important than being long or short![/B]
Nice point daedalus! I never looked at it that way.
I hope everyone had a better day than I did. There’s always tomorrow!
I’m not sure I understand you kagein. If a pair retraces below the 50% level, wouldn’t that be the 61.8% level? Or do you mean pulls back up to the 50% level? Sorry, but I’m confused. Could you help me out.
I noticed in this post that you mentioned the MA/RSI bias…however, I haven’t been able to find much reference to the RSI part…is there more, or do you still use it, and if so, could you give more info on how it would be used here?
I don’t know, it lacks punch don’t you think? I was thinking more along the lines of “The Official Forex System to Complete and Utter World Domination” or something like that…
I used to use RSI on my longer term charts to confirm trend bias. But frankly, I found it to be superfluous, and in some of the deep pullbacks, RSI wouldn’t confirm, even though the move was genuine and you missed out on a lot of great trades. If you wanted to do anything to add a trend confirm, I would through the RSI up on a daily chart of whatever symbol your trading and just trade in that direction (>50 bullish, <50 bearish). However, I think this is overkill and the MA’s do a fine job of keeping you on the right side of the trend.
I am actually using a 50ema and 100ema these days. The 62/78’s work just fine, just as any setting would. Don’t get caught up on the ma settings. They account for about 5% of our method. Switching them will miss a certain set of trades and get you in on a different set, but over the same 100 trades the outcome is going to be roughly the same!
Got a couple questions on what my charts look like and how much i’m looking at at any given time…
Heres my actual screen. Note that at the bottom this is just one tab of 6 different timeframes i’m trading, all the setups on the other tabs are identicle, only the timeframe changes.
[B]BEFORE YOU ASK! The TTM Value chart indicator on my charts is just a different way of looking at stochastics and is proprietary to the tradestation platform (ie. not available to 99% of you)… But don’t get caught up on it… its just another overbought/oversold stochastic look alike.[/B]
I uploaded this on another server so you could see it full size…
I got a quick question. If price breaks the 87% level and closes below it, the trend is broken right? So is that indicator to start drawing grids in the other direction? Or stay out a while and see what plays out?
