Fibonacci Retracement Strategy

[vinodkrish_r]

Hi Every one,

 

This is my first post. I wanted to really share this info to this community as I have learnt a lot from this site. Now its a give back time.

 

People who feel this doesnt work, may kindly ignore.

 

I believe a lot of people would know this method already, but this is for people who wanted to understand how easy its to trade with Fibonacci.

 

The magic here is

 

You can trade this any time, any pair and any timeframe and still it works.

Possiblity of losing is almost negligible or very little. The win/loss ratio is more than 2 times and the win shall be 2 times greater than the loss. Which makes it the best tool.

 

The only drawback is you need to train your eye to perfection.

 

So here we go.

 

1. Identify the fibonacci retracement tool

 

2. Identify the last high and last low.

 

3. Check what comes first, if its a high or a low from left.

 

4. if Low comes first and High the second, then look for Buy trades and vice versa for sell trades.

 

5. For example lets say we have High first and Low second, click on the Fibonacci retracement tool, goto the Low (This should actually look like the lowest low on the chart to confirm that its the downtrend which is optional but has higher winning probability), now click there and drag it to the high using the Fibonacci Retracement.

 

6. There you go, you will find the levels.

 

Thats it for the setup.

 

Entry :

This is for sell

 

1. Wait for the price to reach 38.2 or 50 or 61.8 and see if the price is reversing at these points. The probability of confirmed reversing could be judged using Pin bars or round digit prices like 1.4450, or 1.4400 or 1.6470 etc and so on where you can find round digit prices at these levels sometimes.

An example of reversing could be that the price touched 38.2 swings for sometime and comes back to high (though not crossing the high point of the price which reached 38.2 level previously) and goes down to the next level of 50. At the level of 50 or if you have found that the price is reversing even before using pin bars etc then you could look for sell trade.

2. The max you could wait for is till 38.2 and if the price has not retraced wait for the price to cross 0, then its a trend reversal, you need to follow the steps for the setup again with the new high and low.

 

Exits

For sell

 

If the price reversed at 38.2, then TP should be 161.8 and SL should be just above the high near to the 38.2

If the price reversed at 50, then TP should be 138.2 and SL should be just above the high near to the 50

If the price reversed at 61.8, then TP should be 121.4 and SL should be just above the high near to the 61.8

 

Hope its clear, Let me know if you have any questions

 

I would be posting the trades I take this way in this discussion. I couldnt find how to attach or I could provide screenshots.

 

Thanks

Vinod

[vinodkrish_r]

High and low for Fib Retracement considered as

 

high - 1.4450

Low - 1.4370

 

Trade Taken just now EURUSD

Entry - 61.8 (price 1.4434)

TP - 121.4 (price 1.4466)

SL - 61.8 (The high did not even touch the level, so I considered 61.8 as SL @ price 1.4419)

 

 

Update :

 

Trade Closed at a profit of 20 pips. Now this trade was closed before it hit the TP as there was a reversal pin bar at the strong resistance point at 100% which is 1.4450, remember the rounded digits I mentioned in the first post? so this along with the pin concluded the price gonna reverse and hence for the need for the closure of the trade manually at 20 pips.

 

Thanks

Vinod

Edited August 17, 2011 by vinodkrish_r

[save2009]

Would appreciate if you have the picture.

[vinodkrish_r]

How can I paste the screenshot here?

[izogrey]

Hi vinodkrish_r,

 

For posting images:

 

1. go to imageshack.us;

2. upload your image ( previously saved by some tool );

3. put "Do not resize" at image size;

4. hit "Upload now";

5. you will obtain some fields with access links;

6. take the entire code from "Forums" field and put it in your post.

 

Hope it helps,

Cheers

[shabz]

You have to upload your image to a file sharing site such: mediafire.com, 4shared.com etc. there are many, look on some of the blogs where people have uploaded & provided the url ( website address where file is located).

 

Once you have done this, go to the advanced reply tab & attach your url address for your file using the attach picture tool (shown as a picture of a tree in a frame).

 

If you use the attach tool option, the screenshot wil show automatically in your post.

 

Try a test, once you do it, it's quite simple.

 

(To Mods: would be simpler if you could directly attach without uploading to a sharing site).

Edited August 17, 2011 by shabz

[vinodkrish_r]

Screenshot

 

http://dc96.4shared.com/img/vVxSAWN7/0.8884440364824866/Buy.JPG

 

Here is the link as well

 

http://dc96.4shared.com/img/vVxSAWN7/s7/Buy.JPG

Edited August 17, 2011 by vinodkrish_r

[psaini1973]

Hi Vinod... thanks 4 the system... actually i have never felt comfortable with fibonacci,, to me it seems like a complex science.. but i hope with ur help i will learn abt fibonacci and overcome this phobia.. thanks

[Danny]

Hi Vinod... thanks 4 the system... actually i have never felt comfortable with fibonacci,, to me it seems like a complex science.. but i hope with ur help i will learn abt fibonacci and overcome this phobia.. thanks

 

Hi Vinod , thanks for your strategy and Psaini1973 you exactly wrote as i feel about Fibonacci. Please Vinod post some more images if possible so we can better understand it.

Edited August 17, 2011 by Danny

[wakjoe]

How can I paste the screenshot here?

 

hi vinod,

try this image hosting

 

http://www.imagebam.com/

 

tq for sharing your experience with fibonacci

[vinodkrish_r]

Thanks guys,

 

Just go through the steps 1 by 1. You need a little reading for sure, but once you grab the basics its easy. To start with, whenever I trade, I will be posting here, you may follow the same so that you will understand things better. But believe me, Market does obey Fibonacci to a great extent. So if you can tame fibonacci, you can tame the market.

[vinodkrish_r]

Another example

 

http://dc395.4shared.com/img/dRTnD5Fm/0.781312726218435/B_online.JPG

 

link here

 

http://www.4shared.com/photo/dRTnD5Fm/B_online.html

Edited August 17, 2011 by vinodkrish_r

[kang]

greatjob vinod , i also trade fibonacci ratios generally retracements and not extensions but in stocks , index and commodities . i can say this much that these natural ratios do work more than often and also sometimes can provide far more better results than expectations although u have said everything in your 1st post the little i would like to add is that if u manage to learn the art of confluencing it with reversal patterns the more powerful it becomes otherwise u can also use trendlines or support/resistance levels to achieve more favourable and profitable results , like even in pic above there was a reversal formation at 38.2 level so more stronger chances of a reversal :) Edited August 17, 2011 by kang
more detail

[scratch]

I tried to trade with fibonacci for years, identifying the swings is an impossible art because you think the swing has finished, you measure with the fibonacci tool, you enter the trade and the swing reverses. Think about it this way, if you know when a swing has finished, then why not just enter then and ride the swing until it finishes again then reverse trade, my point is it's not that easy at all and is what us traders have been looking for until the end of time, point is - you have a 50/50 chance of guessing when the swing has completed, fibonacci numbers make no difference in my experience, but these numbers do: 00/25/50/75, look how price reacts to these numbers it's uncanny sometimes, also look at support and resistance too and trendlines, especially on the higher time frames, as that is where the orders are usually placed as well.

[fxeasy5]

Another example

 

http://dc395.4shared.com/img/dRTnD5Fm/0.781312726218435/B_online.JPG

 

link here

 

http://www.4shared.com/photo/dRTnD5Fm/B_online.html

This method of posting images is not convenient.

Here is a better method:

 

Go to this website:

http://imgur.com/

 

Step 1

http://i.imgur.com/Xj5Wm.jpg

 

Step 2

http://i.imgur.com/VaBjE.jpg

 

Step 3

http://i.imgur.com/xMPYR.jpg

 

This is all and the images appear big and can be read easily.

[vinodkrish_r]

@Fxeasy, I will do that

 

I tried to trade with fibonacci for years, identifying the swings is an impossible art because you think the swing has finished, you measure with the fibonacci tool, you enter the trade and the swing reverses. Think about it this way, if you know when a swing has finished, then why not just enter then and ride the swing until it finishes again then reverse trade, my point is it's not that easy at all and is what us traders have been looking for until the end of time, point is - you have a 50/50 chance of guessing when the swing has completed, fibonacci numbers make no difference in my experience, but these numbers do: 00/25/50/75, look how price reacts to these numbers it's uncanny sometimes, also look at support and resistance too and trendlines, especially on the higher time frames, as that is where the orders are usually placed as well.

 

@scratch

Exactly, this is the reason you need to have some patience, and eye training. I understand that you have done it for years, but you read mine, I have written about the swing reversal as well. I have written about the levels we need to look out for like 50, 38 and 61 apart from which you should never consider others. And a swing reversal can be clearly identified if the price is moving against us if the price crosses these levels and does not reverse back to our side. No trade is a 100% winner, so you might lose some, but if you compare the losses to the profits, its really good. Like your SL will be 50 pips and TP should be more than 100.

[⭐ megashop]

i prefer to draw fibonacci from swing low to high to search buy retracement, and than entry at 61%. or entry at 23% from turning point when the last swing hit the 61% fibonacci and takeprofit 1 at 61%, and 127% for takeprofit2

[f451]

greatjob vinod , i also trade fibonacci ratios generally retracements and not extensions but in stocks , index and commodities . i can say this much that these natural ratios do work more than often and also sometimes can provide far more better results than expectations although u have said everything in your 1st post the little i would like to add is that if u manage to learn the art of confluencing it with reversal patterns the more powerful it becomes otherwise u can also use trendlines or support/resistance levels to achieve more favourable and profitable results , like even in pic above there was a reversal formation at 38.2 level so more stronger chances of a reversal :)

 

Thanks Kang!

 

Can you describe the specific reversal patterns you look for? Or recommend references (books, vids etc) for reversal patterns?

Also, how do you typically draw your trendlines? And at what timeframe?

 

cheers

f451

[vinodkrish_r]

@f451

 

Though the question was not for me, just tryin to help you.

 

A lot of people take the higher timeframe trend and try to follow that. I do the reverse. To follow the trend, I dont use any indicator.

 

This is how it works.

 

Suppose you trade with M15, go to M1 or M5,

 

If you find a series of highs and lows from the left movin up, its an uptrend. So now use the fibo to find the retracement.