Advanced system #2 (Fibonacci trading)
Submitted by Edward Revy on May 6, 2007 - 04:39.
The fact that Fibonacci numbers have found their way to Forex trading is hard to deny.
Moreover, trading currencies with Fibonacci tool for many traders have become the bread and butter of their whole trading career.
So, shall we look at the one of such good Forex trading systems today?
Trading setup and tools we need:
Time frame: 3 hour (or 4 hour).
Currency pairs: any.
Indicators:
Fibonacci tool - our main tool
EMA 100 – green (visual guidance)
SMA 150 – red (visual guidance)
RSI (14) on a daily chart
Read entire post >>>
Hi Larry,
Your report is quite impressive and constitutes a thorough research being done.
I totally agree with you on the definition of primary and secondary movement time frames; and also that there no trades should be taken from 21:00 GMT to 2:00 GMT.
Totally new idea for this system is to use a small profit target, which was interesting to learn about. I think it should work pretty well.
It should be interesting to try your almost scalping technique out, which I'll set the time to do this summer.
Thank you!
Best regards,
Edward
if the daily RSI is bearish and on the 4 hour chart price retrace above the 75% fib. can we buy? because in that case we are going against the trend. is it safe?
eugene
Hi Eugene,
We use daily RSI suggestions. If it is bearish, then only Short positions are taken.
Regards,
Edward
Hello Sir Edward,
I dont think you know how much you are helping traders like me.Sir I am from India and here we are slowly getting on with electronic trading system.I had a question as I recently started following the charts by your technique 4hours and i can use 3 day maximum but how to find the trend as initial bar needed to find the trend as days keeps changing every next day and so the needed bars can we start from any bar on 3 days please explain.
Thanks a lot
Biju
Hello Biju,
As per strategy rules we decide on a trend by simply using
EMA and SMA - see the screenshot on the main page:
http://forex-strategies-revealed.com/advanced/fibonacci-trading
green on top – uptrend, red on top - downtrend.
Is it possible for you to send me a screenshot of your chart and the questions you've got about it. It would be easier to understand your concerns and help you out.
Kind regards,
Edward
Edward:
1. I understand that when using the RSI, it is used on the daily chart only; is that correct?
2. I am not sure about the EMA and SMA which I have 2 questions. Are these two moving averages applied to the daily chart or to the shorter term chart such as the 4 hour chart, 5 minute chart etc.?
3. When configuring EMA and SMA, there is a parameter settings which asks whether to apply it to the "close", "open", "high", "low", etc... Which one of these should be chosen when using EMA and SMA?
Thank you for your help.
Steve
Hi Steve,
1. Yes, RSI is used on daily charts only.
2. EMA and SMA both are applied only to the shorter time frame - the one you choose to trade with. In my case, I applied them to 3 hour frame.
3. Both EMA and SMA are applied to Close.
Happy trading,
Edward
Hi Edward,
Also this fibonacci system is great. thank you for sharing.
I have a question about opening a trade after following the rules as discribe.
What are u doing when the candle that closed below or above the level(0.75 or 0.25) is a trend reversal stick like dojis for example. Are get in de market or are u waiting for the Highest level of the trend reversal stick for example? or maybe something else?
many thanks
Kind regards
Dennis
Post new comment