Advanced system #2 (Fibonacci trading)

Hi Edward,

Did I miss where you talked about taking profit?
If yes, sorry, can you repeat where to take profit?
If no, can you offer an opinion on where to take profit?

Are the EMA's on the 4hr? Will take profit be based on the 4hr?

Thanks,
Larry

Mr./Ms. Admin, you did exactly what I hoped you do!!!!
Now, just waiting for Edwards reply. Thanks!!!

Hi Larry,

Exit rules/taking profits are as follows:

If Long, exit with either profit or loss, when price closes below current 0.250 fibonacci retracement level or when a stop loss, which is kept below the Fibonacci 0% (swing low) is hit. In the last case a position will be taken out automatically.

If Short, exit when price closes above 0.750 Fib retracement level, or if a trailing stop, which is kept always above the most recent fibonacci zero point - swing high - is hit.

The goal for this system is to let the trade run. Alternatively, you may set a fixed profit target to 1.272 and/or 1.618 fibonacci extension levels.

If by the end of the week your position is profitable, you may close it on Friday evening.
EMAs should be set either on 3 hour or 4 hour time frame. TP is also based on 3 or 4 hour charts.

Regards,
Edward

Thanks Edward, understand.

Say TP at 162%, and you draw a new fib, where price is ranging at 75% the say from 0GMT to 8GMT, it is still ranging, and the price moves up towards 100%, without touching 62% or below...... what is the trigger to buy?

A. no trigger, because it didn't dip below 62%.
B. a break of 100%, with a goal of 125%, 150%, or 162%
C. ???????
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Also, I thought the 25 was the sl for longs, and 75 for shorts on the current fib, not swing low or swing high, unless you were talking about the next, new fib.

If a new fib, going up, then new swing low is 0, if that is what you mean, got it.
If a new fib, going down, then new swing high is 0 or 100, if that is how you draw your fibs, if that is what you mean, got it.

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Have you come across an EA to trade AS#2 (Fibonacci Trading)?
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Much appreciated!
Larry

Hi Larry,

The answer to the first question is A.
Now, you've got it right. We are prepared to exit if the price closes below 25 for longs and 75 for shorts; but the key word here is "closes". It may spike below 25 of above 75 and turn back closing still safely. That's why I suggest keeping a trailing stop below 0 - last swing high/low - and visually monitor price activity further, deciding on manual exits when price closes below 25 for longs and 75 for shorts.

"If a new fib, going up, then new swing low is 0, if that is what you mean, got it..." That's right.

I haven't seen such EA so far.

Kind regards,
Edward

Edward,

Thanks re Answer A.

Followup on Answer A., price is ranging 100 to 75, and breaks above 100, and gets to 139, then we can sell below 125? Yes?

Next question, relating to A, price has dipped below 62, reversed above 75, breaks 100, gets to 120, and reverses, and close below 75, also, no new fib has been drawn, close with a small loss, or wait for close below 25?

Larry

Hi Larry,

You may sell below 125 for a short target at 100. However, this is going to be a modification, your new trading rule.

Now, to the second case:
if your goal is to let the trade run (which is what this strategy is made for), then you will exit only if price closes below 25.
If your goal is fixed, then the best thing to do is to add additional studies to double your chances in finding the right exit. Pivot points (daily, weekly and monthly) and trend lines are always a good addition.
The way you use those tools is, you simply look where two or more lines/levels merge, for example, you may find that one of the fib projection levels is merging with pivot level or there is a trend line crossing nearby; or there might be a pivot plus a possible double/triple top price formation on the horizon coming up together at certain price level: chances are the price will stop there. This would be the logical place to put a fixed Take profit target.

If price reaches 120 without reaching your fixed target and returns below 75 without new Fibonacci for us to set up, then simply exit a trade with a small loss.

Best regards,
Edward

Thanks Edward,

I've been testing on the E/J on 1hr with daily fib based on 0 GMT.

As you thougth, I've been using fixed tp targets, roughly equally 13 Gross Pips or 10 Net Pips. 13 Gross Pips - 3 spread = 10 Net Pips.

I've been using the previous days S/R on the 4hr, pivots based on 0 GMT, price movement broken into 3 candles (3 gmt - 7 gmt, 8 gmt - 12 gmt, 13 gmt - 20 gmt), along with breaks above and below 75 and 25.

It appears that upon breaks of 106, you can go to 120 or breaks of -6, you can go to -20.

It appears that your thought on a sl of 75 or 25 works upon a break towards 120 or -20 helps.

It appears that you should not take trades from 21 gmt to 2 gmt, but can resume after 3 gmt.

Primary movement is 8 gmt to 20 gmt.
Secondary movement is 3 gmt to 7 gmt.

I'm hesitating to say the following, but here goes....you could almost just fib 3 gmt to 20 gmt.

Any thoughts?

Also, I appreciate your thoughts and feedback.

Regards,
Larry