Hello everybody, it's been a while since I posted on this thread but I thought I wanted to share with you an easy and effective way of how to best ascertain your trade direction utilising the Fibonacci method outlined previously and to pair this with a purist price action approach to activate your own trades.
Utilize the 38.2 or the 30.9 Fib level for a way point - over those anchor points take long transactions and below, short trades.
The clear benefit of this over using moving averages or another derivation thereof (ie RSI, CCI etc.) to determining the trend is, that it will provide you the chance to buy in oversold and market in overbought market (so basically get in ancient ); the beauty of Fibonacci is that it's a fully self adjusting, dynamic and a fluid approach, something that MA's may not provide you as efficiently as using natures best friend.
And when for anything, if those Fibo levels are OTT for you, fine, no problem, then perhaps just use the three of them, the:-0.382 (renew fib degree ) 0.309 or 0.382 (anchor points long/short, over the 0.309/0.382 lengthy and below short) 1.382 (renew fib degree ) With respect to what I mentioned about trading from price action, a few easy approach ideas for you if I could:
Wait for a retrace, so lets say in an uptrend wait to get a bearish candle creation then, thereafter to get a confirmation of a bullish candle and trade from this (you can add principles; for example, that the market would need to go higher than that bullish candle within the next candle period and should not then no trade. etc.).
And for higher time frames (ie H1 or greater ), you can trade direct from a bearish candle long, at an uptrend, and off of a bullish candle short, in a downward trend.
Just some ideas here.
Good trading everybody.