establish a bias on a certain timeframe, divide that frame by 3 to 5 and on that frame look for retracements and use fibs to find a good spot to get in. these are the best places to get in on an ongoing trend, you will know when the ride is over and then you jsut reverse the operation from buy to sell and back again. that and keep risk managed equals success but we over complicate things
i guess this thread is for trend traders that want to share some cool setups they have spotted historically or live
dont you just love it when you catch the absolute tip of a retracement
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I use Fibonacci as a framework for my trade setups but I would not use a Fibonacci retracement level by itself as a reason to enter a trade. If I removed the Fib and the setup no longer makes sense, I probably shouldn’t consider taking that setup.
The part that’s missing is some sort of confirmation to know if the corrective phase is over and the impulsive phase is resuming. Otherwise you’re entering on a Fib level hoping that it’s a retracement and not a reversal.
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fib levels offer tick precision, they are meant to catch the absolute high or low of a given period
except when they don’t. We’re designed to see patterns and have a confirmation bias so when it works we say we’re correct and this is a thing, but when it doesn’t we make an excuse and say it wasn’t with hindsight.
Let’s play a game, I’ll go to a random chart and plot 4 random lines from a number generator between the high and low. Let’s see what that looks like:
Oh wow, I’ve found a cool new tool to predict areas of structure! Except this was just random, weird right?
Now I’ll add yellow lines for everywhere that could possibly be considered a price of interest based on that chart.
That gives me 16 lines in a 900 point range that could be considered valid. Since we don’t expect pip accuracy, I’d say +/-20 pips accuracy is good, we basically have a situation where you can draw a line anywhere and it can be considered relevant to price.
This is why fibs, structure, fvg and almost any concept of drawing lines appears to be correct, and when it blows straight through we rationalise why that was an exception, but we can only do that after it happened, not as it is happening.
It’s also why any of these can work if you can manage trades properly. Actually, if you can manage trades properly, you can probably enter at any point on the chart with the correct sentiment and be profitable. Even completely random entries can be profitable if you can manage them well on certain instruments.
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There are three key skills involved in trend-following - summed up as the study of the start, the middle and the end.
Newcomers to trend-following see the starting point of the trend as the key, and they most fear an unexpected end. Some fear false starts and sudden ends so much they switch back to other trading styles. It’s a kind of a trend.
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