Advanced system #2 (Fibonacci Trading)

Hi Dennis,

As we know, doji is a reversal candlestick. It certainly lowers our chances to be right, so why take unnecessary risks. Instead, use a logical approach: set a pending order above or below the doji candle according to a trend.

Best regards,
Edward

Hi,

Would this strategy also work on smaller time frames, i.e. 1hr.

Thanks
Mike

Hi Mike,

It would, but with some additional false signals.

Regards,
Edward

Hi Edward,

Please explain further, when you mean the whole candle should close above/below the 25/75 level before placing an entry trade.

I have noticed that when that happens, (i.e the whole candle to be closed above/below the 25/75 level), the candle itself is usually a long candle and we would have most of time entered at a much higher price than the previous high of the fib wave (BUY scenario) and vice versa. this would have made us lost quite a substantial no. of pips from the retracement level, say at ard 0.618 or 0.382 level if we chose to enter at those price levels.

thanks for your patience.. cheers

Jo'

Hi Jo

Correct.
That's they way to trade this method.

With regular Fibonacci rules, we enter at retracement levels of 0.618, 0.50 and 0.382.
But, note that in order to jump on such retracement, you need to be sure that the market is going to obey it. To do so, you need to make an additional chart analysis, or call for a help from another indicator, otherwise you're guessing at every Fib retracement level, rather than trading.

Returning to our strategy here. If you don't like to be that late on entry, then you can try monitoring a smaller timeframe, for example, 1 hour or 30 min, where you'll look for the same requirement: a whole candle needs to close outside 25 or 75 level.

Regards,
Edward

Sorry for the newbie question but I'm confused on what indicators to pull in Mettrader and the settings. I know how to add to the charts but not sure speciffically in Metatrader where the RSI SMA and EMA indicators are. I find moving averages but not Simple Moving Average or Exponential Moving Average.

Michael

That's simple, Michael.

"Insert" -> "Indicators" -> "Moving average".

The settings menu for the Moving average will pop up. Find "MA Method" there and change it to Simple, Exponential or whatever is needed.

The same way you add RSI or any other indicator.
RSI is found at: Insert -> Indicators -> Oscillators -> Relative Strength Index.

Good luck!

Thanks Edward.

I normally scalp with good success. I don't use these indicators for scalping. I am now looking to add long term strategy to my arsenal, hence my interest.

3 Questions:

You are referring to the 25/75 level but by default on Metatrader when I apply Fibonacci retracement. I only have 0, 23.6, 38.2, 50.0, 61,8 and 100. Should I be tweaking the properties in the indicator, and if so, what tweaks should I add?

Do you recommend any specific pair more then others ?

Is this trading strategy one that can be used 24 hours a day or are there certain times where I should not be trading?

Thanks in advance for your help.

Michael