Hi Daedalus, when you get time, please could you confirm your current entry rules on the deep retrace setups…not sure if you prefer limit orders at the 61.8/78.6 levels, or whether you enter at market on the next bar/candle of a ‘tested’ fib level?
Thanks.
Hey Cowaboi!
Current rules are that you get price to move into that grid and HOLD it on all of its closes, it should not violated the fib level. Then wait for a candle reversing in the opposite direction and then I enter at the open of the next candle.
Heres a good example off the 1HR. Comes down into the 87, holds it perfectly, prints a green up candle, so i enter at the open of the next candle.
Does that help?
Cheers!
many thanks, it does…i’ve been missing some important detail in the forward testing so far.
Cheers and good trading!
Daedalus,
I’ve read elsewhere on the forums that you’re with EFX now as your broker (from Tradestation, right?). Funny, I used to be with Tradestation too. But despite the wonderful charts they had too many things ticked me off and I left them for EFX too.
I’m currently trading a scalping strategy on EFX (MBT) on the 5 minute charts, which work out really well. However, I’d like to explore strategies with longer timeframes too, and I’ve observed yours with interest.
However, it doesn’t seem that EFX is the best broker for longer timeframes for two reasons:
Their platform shuts down twice a day (once before Sydney opens, and again at midnight), which leaves you vulnerable if you have an open trade while the system is “down”.
Their roll-over rates aren’t the most attractive in the business.
Just wondering if you think you’re better off trading your system (on longer timeframes such as 30min-4hrs) on EFX than with your previous broker. (you were with Tradestation as well, right?) Does the platform “down” time put a kink in your system? How about the rollover rates?
Don’t mean to hijack your thread, but I wanted to put the question where you’d see it.
Thanks!
Dahlia
Hey Dahlia!
Very True. However, using their TTO orders I have no more risk than normal and thus far it has never been an issue.
Their rollover rates do suck. However, holding through them is typically less expensive than flatting the position and re-entering everyday with the commission costs. They have the best execution and commissions for a reason, but after speaking with them over the phone they said they have to sacrifice rollover rates to offer that commission structure. Its not perfect, but i’d rather have their execution than messing around with GAIN or someone else just because they have slightly better rollover rates.
Actually, I’m hearing that open orders (TTO or otherwise) don’t get executed while the platform is down. So, if you have a stop loss that was hit during the time that the servers are down, it doesn’t get executed properly, if at all. That’s what I’m told. Is your experience different?
Down times are during slow hours anyways, so chances are you’ll be fine most of the time. I’m just paranoid of those black swan events, ya know?
I must add though that between Tradestation, EFX wins hands down. ECNs are the only way to go in my opinion.
I do miss the charts and the historical data though…
Thanks everyone for the information they’ve contributed thus far. I’ve been waiting for a thread like this. Your guys made my day!
Happy trading
I don’t know that the Bank of England is going to do about interest rates, but the indications are that we are in for a choppy ride. Wouldn’t hurt to see what expert advisors on some of the forex trading education sites have to say. ForexFace is a good one.
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just dropping in daedalus, hows it been going? Well I hope. Are you still on the same timeframes? I’ve moved down to the 5min and 30min. Have you ordered the ferrari yet?
Trade well!
Lol. Good to hear from you man! I hope trading is going well for you!
I’m actually just swing trading now on the 240 and 60 minute charts because I am trading the Nasdaq 100 futures all day. I really love that market. I think i’m going to start daytrading more on a 2 minute or similar time frame in the foreign currency futures markets as well. I just can’t daytrade currencies with the spreads and I use a lot of volume analysis these days and I find it very helpful. But there is no quoted volume in the spot markets as you know so I much rather pay a commission and have a fixed 1 tick spread to enter and exit positions off of as well as quoted volume.
But i’m working hard to get that F-car! Same setups are working just as well as ever!
Found anything that has improved your trading in the past months?
Hi Daedalus
I’m so glad I found your thread …long ago now 
And also TRO’s Never Lose Again thread.
When I put the two together, I finally seem to get the grids in the right direction (that was my biggest frustration) and now it’s been quite “profitable”.
There is still a dilema of knowing whether to take a 38 or 61 retrace. So yesterday I opened a trade short trade at 38, and it went on up to 61, thus putting me in negative pips for awhile. However, all the biases still pointed down. So resisting closing at a loss, I opened another short at the 61. I’ve read that this is considered “adding to a losing position” and a no-no :rolleyes:
Anyways, to my delight, price went down and both trades profited. 
So I tried it again…same thing!
I’ll keep testing this because 2 times isn’t much to base any kind of consistency on, but it’s worth looking into…again…and I’ll try to post my results and some pics too.
Just thought I’d share that.
I welcome your input sweet pip! I’m glad to hear its still working out for you.
38% can work, but they tend to work best on those moves that break away from consolidation and make a run for it, they tend to pullback shallower than a typical, congestive retracement. Typical retracements pullback further because the market isn’t usually making big direction moves, but rather bouncing between areas of S/R and Fibs of importance.
Look for grid confluence around those 38 grids for even better entries and basic S/R and you’ll do just fine.
Cheers! Best of luck to you and your continued success!
I that in one of the Videos at learntotradethearket.com , Nial Fuller demonstrates how he uses Fibonacci levels to help him trade. He uses price action as the main thing and fibs are just there to help. I’m not sure which video he uses it in however, but I’m sure watching trading videos is no chore…
The only thing I’ve done that has helped with the fibs is using a 21 MA on the longer tf. If price is above that 21 on the longer tf, draw fibs to the upside on the lower tf. If below then draw them to the downside. Making sure the market is not ranging.
Thats really the only thing that helps me decide which way to draw my fibs.
I’m sure you already do something to that nature already though.
I’m still working toward my LP640. Can’t wait!!
Trade well
I am a forex trader, i make normal profit and for me to make more profit i need to know how to set up pending for both BUYING and SEL. The reason why i needed it is that i dont have enough time to monitor the chat, i will therefore set pending order go on my normal business.
Pls someone help me out
A question if I may…
Looking at the following picture, how would I know that although the price seemed to stall at A (the fib 50.00 mark) it would actually continue up to B (the 61.8 mark).
The stochastics would seem to indicate and area of over buying at A also, which would lead me to enter the trade there looking for a return down to a lower fib line.
If the answer is simply “You can’t know for sure” then that’s fine. Or am I missing something else here?
Thanks a lot guys!
Cord
For me the answer is really that you cannot know for sure. I mean, if I could know for sure where price is going I wouldn’t bother with a trading system, I would just place a trade and close it whenever price reached the preset point.
But anyways, a couple of observations on your chart:
your 38.2 level looks like a support to me, I can count 6 candles around the 6th November at 21:30 touching the level and closing above or on top of it
price at your point A reacted again to the same support level, seeing it going up was not that strange
The stochastics crossing down is a valid setup as far as the shallow retracement technique mentioned in this thread goes: now how would I had traded this setup? I would have placed a pending short order at the 23.6 level, with a stop between the 45.0 and the 50.0 level. Since this 23.6 level was never hit and price retraced back to the 61.8 level, I would then have canceled my short order and looked for another opportunity.
I’m looking forward to see other observations from the other people following this thread, and if daedalus wanted to chime in it would be great, too.
You can’t know for sure. The point is this. We don’t play 50% retraces with this method. The risk:reward isn’t there for this particular method. So they are insignificant. We are only interested in 61.8 and deeper retracements.
The picture you posted is a classic setup. EXACTLY what you’re looking for. Multiple tests of the 61.8 without breaking it. I think you’ve grasped this method, the trade you posted is a perfect trade. Now it just comes down to pulling the trigger and managing it without emotion, greed, or fear. And thats the hard part.
Good work!
