Fibonacci Trading - Page 34

Bertie Stemp · #**496** (**permalink**) 10-30-2008, 08:27 PM

Thankyou Gregory for your valuable insight, it is much appreciated.

When you trade do you combine Fib levels with other indicators? I know of traders who only use Fib Levels and nothing else, then again I also know traders who use only candlesticks and nothing else!

Obviously, there is no holy grail, and everyone likes to use different indicators and chart setups, but what are your preferences? I like to hear new things, that way i can try them myself and see if they work for me.

Also, those other more "uncommon" levels that you allude to, when might a trader use those? Simply as further aids to entry/exit points?

Thanks

Bertie

gandalf · #**497** (**permalink**) 10-30-2008, 10:08 PM

Quote:

Originally Posted by Gregory McLeod

Fibonacci values are valid on all time frames. However, very small time frames do not provide good money management opportunities. For example, if you trade on a 1 minute chart, fibonacci levels may not exceed the spread costs. So using a daily chart, 4 hour chart or 60 minute chart will give you levels in price that can provide good risk/reward opportunities.

In general, the longer the time frame, the less volatile a chart is as well and the more "reliable" support and resistance levels become. The most common Fibonacci levels are .382, .50, .618, .786.

There are also some not so common levels as 23.8, .707, .889.

Hi Greg the .50 fib level is a pivot point or what when it reaches that point not quite sure how to interpet it?? Is there any book or books you would recomend to sharpen up on Fibonacci values and trading?? Your post are most helpful for someone trying to grasp this 4X tiger Thanks!

Gregory McLeod · #**498** (**permalink**) 10-31-2008, 12:33 AM

Quote:

Originally Posted by gandalf

Hi Greg the .50 fib level is a pivot point or what when it reaches that point not quite sure how to interpet it?? Is there any book or books you would recomend to sharpen up on Fibonacci values and trading?? Your post are most helpful for someone trying to grasp this 4X tiger Thanks!

Thank you for the kind words. I am glad to be of help.

As traders, our goal is to buy at or near a significant support level in an uptrend and SELL at or near a significant resistance level in a downtrend. Significant support/resistance (S/R) can be a round .000 figure, a pivot point, a Fibonacci level, a moving average like the 200MA. Fibonacci is a special case support and resistance because it forecasts where possible "hidden" levels of support or resistance can be after a big move up or down. In the following example, notice how the EURUSD pushed down to the 12335 area making and bounced to the 13302 level which was the 38.2% Fibonacci resistance level. The Fib was drawn connecting the 14987 high to the 12335 low. The Fibonacci tool fanned out these price levels 3 days in advance! Notice the high wicked candle being rejected from this level.

I use stochastics and MACD in addition to trend channels.

My fellow instructors and myself give these and types of answers and interaction on our 8-day FX Power Course 24 hours a day during global market trading days. We have a section on Fibonacci that contains videos, text, illustrations and hands on assignmens. You can even download a PDF version of the lessons. It's the best $20.00 that you will ever spend. If you open up any size live account, you will have direct email access as well for 12 months. However, I will still answer yours and any other forum members' questions in this forum whether you open an account or enroll in a class.
See the attached chart:

Gregory McLeod · #**499** (**permalink**) 11-02-2008, 03:49 PM

Quote:

Originally Posted by Abosamra

hey guys...just wanna show my gr8 impression about dailyfx and the instructors..u guys are gr8 and keep up the good work...actually this is my first post and i thought i would like to share my trade yesterday waiting for any advises or comments for maybe better approaches...i attached 3 GBP/USD time frame charts that i basically decided to enter the trade upon...as u can see the daily chart showed the price closely hitting the fib level .618 and starting to reverse..and i didnt predict anything coz the candle was not completed yet..so i opened the 60 mins chart and the 5 mins chart...wrote some analysis on the em to help me figure out my entry...my entry was short @ 1.6522,stop loss:1.6575..short term targets were hitting the 100% fib level set on the 5 min,60 min charts..if the market continues so it will be the 1.618%...long term target is the 1.618% daily chart...please take a look at em and tell me ur comments...thx

Great trade setup. Thanks for posting this. You are trading in the direction of the down trend, selling at a Fibonacci resistance level with stops and limits.

Bertie Stemp · #**500** (**permalink**) 11-03-2008, 07:36 PM

Hi Abosamra,

I like your setup also, it looks like a sound strategy. Do you just trade technically?

I have a quick question also for anyone who might be able to help.

When drawing the Fib levels, how do you know where to draw the line from? I know its supposed to be from the top of price action to the bottom, but you could in theory do this for every candle!

So is it when there is a significant move in one direction that you draw your points? I could not work out where you had drawn yours from Abosamra. Please enlighten me, thanks

Bertie

cliff · #**501** (**permalink**) 11-04-2008, 12:19 PM

What do you think. Will my stop get triggered , How is my r/r ratio ?

Gregory McLeod · #**502** (**permalink**) 11-04-2008, 12:25 PM

You can use the "Print Screen" button to capture your chart and then paste it from the clipboard into MSPAINT.

Start-->Programs-Accesories-->Paint

cliff · #**503** (**permalink**) 11-04-2008, 01:21 PM

thank you sir !

cliff · #**504** (**permalink**) 11-04-2008, 01:57 PM

Demo trade ,
Please assist with comments , suggestionsand criticism, Thanks

qsx · #**505** (**permalink**) 11-04-2008, 05:19 PM

Quote:

Originally Posted by Gregory McLeod

You can use the "Print Screen" button to capture your chart and then paste it from the clipboard into MSPAINT.

Start-->Programs-Accesories-->Paint

different topic: i see you have all kind of traders on your PC, including Jchart. any opinion on that? do you use it, does it help you? making money? any literature?

Bertie Stemp · #**506** (**permalink**) 11-04-2008, 05:41 PM

Hi again everyone,

Just interested to know what Fib levels everyone uses? I know the most popular are 0.382, 0.500, 0.618 , but i recently read something about "extension levels", these being 0.618, 1.000, 1.618, does anyone use these, im assuming you do, but why and are there any charts people can post to show me their implementation?

Thanks

Bertie

qsx · #**507** (**permalink**) 11-05-2008, 04:47 AM

hi,

here is one example. IMHO the last rally up in the DJI is a wave 4 correction from a elliot wave perspective. if it is a zigzag, then a nice target would be where the two waves are equal, which in our case just nicely coincidents with the psychological 10.000 level.
the other important extension in corrections is the 0,61.

if you are looking for a impulse wave in the direction of the trend, you would follow a 1.61 or 2.61 extention.

i pay them alot of attention, when the extension is absolutely the same as a ordinary fib level from the top, for me that is a strong sign for a reaction around that levels.

cliff · #**508** (**permalink**) 11-05-2008, 05:14 AM

Well I just tried those fibs that you read about, The 1.00 is just the start line and does make things easier to spot the low or hi, depending what direction you drew. hi-low or low to hi !
I have been taught with the same thing at learnforex.com.But I never seem to use them as an addition to my trading. I do not know the significance of those fibs

Hi again everyone,

Just interested to know what Fib levels everyone uses? I know the most popular are 0.382, 0.500, 0.618 , but i recently read something about "extension levels", these being 0.618, 1.000, 1.618, does anyone use these, im assuming you do, but why and are there any charts people can post to show me their implementation?

Thanks

Bertie[/quote]

Gregory McLeod · #**509** (**permalink**) 11-06-2008, 08:19 AM

Quote:

Originally Posted by cliff

thank you sir !

You are welcome.

Gregory McLeod · #**510** (**permalink**) 11-06-2008, 08:25 AM

Quote:

Originally Posted by qsx

different topic: i see you have all kind of traders on your PC, including Jchart. any opinion on that? do you use it, does it help you? making money? any literature?

I don't use those anymore. I use Proreal Time or FX Trek Intellicharts. Charting packages are like pens an pencils to a writer, they can make your writing look better but its the skill and knowledge behind them that makes them useful for good writing. I can use the free package with netdania.com or an expensive Esignal or Tradestation but they will not help my trading if my approach is not sound. As instructors, we are given access to products to promote. I use Proreal Time because I can move through many charts and time frames quickly.