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  1. #1
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    Lightbulb Best Retracements?

    Hello Guys and Girls,

    Thanks for this wonderful forum. It is not only about the shared material but also the knowledgeful discussions.

    I would like to ask what experience everyone has regarding the best retracements to trade on. I myself have tried several on different timeframes and despite looking for the best confluence of Pivots and Fibs, I get stopped out 70% of the time. I have often followed this method of uptrend meaning higher highs and higher lows, but what happens when a retracement makes a lower low to your point of confluence. Should that be considered a retracement for a long and should it be stayed away because it has made a lower low. the same problem arises when I am looking to go short on retracements?

    Can anyone enlighten me on this? I have read several books, but this matter still remains unsolved.

    I am sure this will help other members who are just as confused.

    Thanks in advance.

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  3. #2
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    Hi Gambler, I'll give you my honest opinon and i've been trading a good while. You probably will be disappointed but seasoned traders i've come across use them all 38.2. 50 and 61.8. ....Some will use 61-38 from the last 2 swings with tight conflluence on fibs with trendlines connecting. ...one trader i know only trades the 38.2 after a strong impulse move....others trade all theses different zones with candle stick patterns. I guess that is why the market is wild and wooley Take care,Rob

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  5. #3
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    but .786 retracement works better

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  7. #4
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    There ok silly ---I normally place stops btween 78.6 and 86 when trading the 61.8. 127-78.6 confluence is good on gartleys but i still don't thnk they have a 70% win rate as all these harmonic gurus claim and hitting the first target.

  8. #5
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    Thanks for your input rob123, but regarding candlestick patterns, what time frame do you use for the pattern and how do you trade this particular pattern, eg. the Bearish engulfing? If sometimes you look at a higher time frame, like the one hour or 4 hour, which the books say are more reliable, the pattern almost retraces from one fib level to the next. Then where do I place my trades?

  9. #6
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    Your welcome Gambler.Let me see if i can help you here. I've seen quiet a few fib methodsfrom different companies. Type in ratiotrading.com they have a free news letter and video once a week where the owner does a free video analysis on stocks, options,currencies etcYou can sign up there if your interested it's free Also they have a webinar coming up i believe dec8 and the costs is 95.00 if your interested.

    I have there basic package and the file is huge so i can't download it.One particular set up i like is the pull back trade which only takes trades off the 61.8 level....I mainly look at the daily and take trades off the 4 hr charts . What we want to do is find an impulse move coning off the daily chart....once we do that we look for SR---closed and open candles not wicks to the left---symmetry ---fib ratio confluence -trendlines--weekly pivots or just any pivot really. ....we just need one of these to be present to qualify.One imprtant point it can not bounce off the 50% fib off the impulse move

    Let me give you an example:: I have IBFX feed :
    1.Go to the daily chart on the usd/jpy chart and locate the 11/23/10 candle
    2.You can see that is a swing low candle with an impulse move,so we draw fibs from that candle to the top with our 4 hr charts
    3.we place a buy limit order at the 61.8 and are first target with half are risk would be the 38.2 level up.Are stop would be between 78.6 and 86.0 level.
    4. Stops moved up from the 78/6 right under that low.
    5.The reason for this trade was trendlines very close to 61.8 and we didn't get a bounce off the 50% fib coming down.
    6. Some traders wait for candle conformation---so now you have a pin bar there.....but ratiotrading does not use candle confirmation
    7. 70% of time price will go to 127 level and then 45% it will go to 161.8 level.

    Hope this helps some.It does take practice and it's not the holy grail . I thnk if you take the best trades that your familiar with and comfortable with i beleive a 65% percent hit rate is achievable and you can get some awesome runs on the last 2 postions some times.

    take care,Rob

  10. #7
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    Hi
    Interesting discussion on Fibo retractment.
    I also trading based on Fibo, but mainly on the break of 76.8% level.
    As mentioned, lot of people trade based on the 38-61.8% depend on their
    strategy.

    Personally, I think there is no best retractment, how is well we
    able to determine which of the retractment is A+ setup to give
    us a higher level of probability.

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  12. #8
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    Thanks again Rob, very much apprected. I think I am getting the gist of the matter. I will give ratio trading a try.

  13. #9
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    Your welcome gamble .Hope it helps . Rob

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    Fibo retracements are usually hindsight observations. I would only give credibility to a retracement if it happened at previous support, resistance or pivot levels. Otherwise it is like catching a falling knife.

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