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Thread: Fibonacci insights

  1. #11
    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.

  2. #12
    Only a live example from today of what I am talking about; the moving average on the initial trade setup is quite far in reach, so no transaction, long which is. And on the second trade setup (second up arrow) looking at the MA a brief trade would've actually seemed more plausible given the strong down momentum. For us it's long. .

    The theory behind this type of strategy is we would say that, provided that the market has not got the strength to trade below the 38.2 or 30.9 degree that anything over that one ought to look to buy into dips/trade off of retracements after a bullish candle formation.

    Further, on a side note I'd like to mention about the zigzag indior; I personally use rather a'tight' setting, so it is the 6 1.7. It has functioned well. I'd gone through zigzag indiors with the intention for any indior into replie what I would've drawn manually and by using my eyes as I had pointed out at a previous post too.

    But the thing is, we're looking for consistency. There is no right or wrong in doing this. Provided that one keeps the tools to any chart at a continues constant. Using a zig indior to isolate the swing lows and top seems the right approach to fix this matter.

    PS: You're looking at a WTI July contract chart. The MA I'd applied for illuion functions is a T3 with a feeling of'a -0.7' and'phases 9'. In the bottom of the chart you can view a traded quantity indior, not a tick quantity ; the histogram bars are colored according to aggressor action with calculated bid vs. ask traded quantity. It is a valuable instrument to filter out transactions; something which trading through any OTC venue is currently lacking unfortunately. I'm for sure not saying it can not be done. But since I had said already I enjoy prices at which a stop is a halt, an actual price. And it is a regulated environment with concentrated liquidity. Anyway.

    Best wishes to everyone.

  3. #13
    Quote Originally Posted by ;
    Just a live example from today of what I am talking about; the moving average on the initial trade setup is very far in reach, so no trade, long that is. And on the second commerce setup (second up arrow) looking at the MA a short trade would've actually looked more plausible given down the strong momentum. For us it is long. . The theory behind this kind of strategy is we would state that, as long as the market hasn't got the strength to trade under the 38.2 or 30.9 level that anything over that one should look to buy into dips/trade off...
    Hi trader this is somewhat confusing, the screenshot you have in this post explains your most recent logic of anything over 38.2 or 30.9 buy and sell if under but on your edited post 1 you have another fib levels that are a tad bit confusing, perhaps not impossible to find out but somewhat confusing, which logic within your opinion should you stick with?

  4. #14
    Hi Caleb hope you thank you for your comments and are well.

    Fibonacci is best utilised as a reference map showing us if the market is in a bullish or instead in a bearish sentiment price cycle.

    I had done was to apply some logic into the various cycles; in saying that, the more price is retracing and setting itself into a current price swing the more or the greater the chance of an impending price reversal, unless, price is once more able to'make it' back into the shallower retracement areas and bouncing from these again, which would apply the current tendency is'active' again.

    It's a logical approach to price action; In a strong trend you want price to just maintain producing shallow retracements. Since the deeper price is currently cutting into higher retracement levels the greater the chance of the current tendency to be'at risk' if you will. I want to reference you to you will find 3 price zones within a busy price swing - one zone and one below it; ranging from a tendency being'super strong' to being'very weak' and being in-between those extremes.

    That is the frame.

    As pointed out earlier, we have to use a cause for our trades. Relying liberally onto a 61.8 Fibo degree to state we proceed or short here is really not advised at all, (unless a egy out of many could be to scale into a position by taking your typical lot size and divide it into 3 or 4 sub lot dimensions and disperse those over any corresponding Fibo amounts ). The use of this specific Fibo tool relies an individual fraction of it.

    But in my own opinion, the best way really is to combine purist price action and/or trend lines/trend channels/fibo fan with the full fetched Fibo tool, in this way, we utilize price action to put us into a trade and eye the Fibo amounts to get us out of it - this is a really effective approach, because you've got a probable profit target price projection which then can help you to calculate your risk reward ratio and prevent loss level; and, last but not least, to have the ability to hold onto only a little bit longer to your trades, this case particularly if price is able trade into the'Projection B/C/D' areas. Those trades are particularly nice because the market is in reversal mode that are frequently accompanied with a more one directional order flow (or price pop in different words).

    Further, back to a question, I wanted to share a means in order for everyone to get off, as far as possible, by using moving averages for tripping a trade or using MA's for determining the trend. By implementing the logic of working with the 38.2 or 30.9 Fibo degree within an anchor point that gives us a dynamic trailing stop for those who will, together with the attractiveness being the Fibo tool remains set up on the current price swing provided that the'renew Fib amounts' either side have not been reached. It's a market approach that implements pure price action and price sentiment rather than the lagging price indiors of sorts.

    Can I suggest the best way really to have a feel of the entire approach is to open a 1 minute chart, or even better than a 30 minute chart, place the zig zag indior settings to 6 and 1.7, apply the Fibo tool and watch the market similar to that for a couple of weeks.

    This really is the simplest method in using little time frames to learn any market - that the markets are fractal in their wave form and price behaviors, what one can learn and watch in little time frames can later be applied and utilised to when trading from larger time frames also if a person wishes to accomplish this, all of which depending of course on the individual trading style, a spectrum that range all of the way from competitive scalping to longer term investing.

    I hope this helps and good trading everybody.

  5. #15
    All crystal clear and known today, articulate and precise..thanks a million partner.

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