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
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Hi Nique,
by that I meant that while we stayed in a trade (Entry Long) there were 4 cases when we had to re-set Fibonacci (and we did), because, according to our rules, quote: "once another wave greater than 100 pips occur, set a new Fibonacci on the new wave".
We did that because we need to have a fresh set of Fibonacci lines each time there is a new wave over 100 pips is span, because:
a) it allows us to adjust a Stop loss.
b) it provides a new "must channel" area, which we also have to monitor in case we need to exit (should a full candle trades and closes outside 0.250 on our first screenshot on the first page)
Hope it makes sense :)
Regards,
Edward
Got it Ed, thank you very much.
Nique
Hi Edward,
I am literally blown away by the magnitude of the really good strategies that you have brought to the forex community. Kudos! A really noble achievement...
What do you think about the use of fractal and zig-zag indicators to determine surrent price waves? These indicators have specific criteria to establish their respective positions. My point is that this would present a more uniform set of criteria for determining the wave, rather than my own indiscriminate method of determining what I think a new wave is. And yes I realize the ZZ can repaint, but price could do that to me anyway with my wave selection, as well.
Many thanks,
Bob in Wisconsin
Edward,
I forgot to ask you which of the many strategies are your favorites, and which are the most profitable.
Thanks again,
Bob
Hi Bob,
thank you for your feedback as well as the good comment.
I must agree with your suggestion about using ZigZag and Fractals. Makes a lot of sense, because not only it is easier to select swings for Fibs, but also you'll be "trading on the same page" if I can say so, e.g. using the same reference points as many other traders do.
My favorite strategies are advanced #3, #5; 9 EMA method #1; I like the idea and application of advanced method #10 & #14; also simple #5 and #8... Possibly I forgot to mention other strategies, there are lots of good ideas almost in every method, plus they add up quickly, it gets challenging to rate them all.
Best regards,
Edward
Hello Edwards and many thanks answering all these comments.
Can you tell me how much profitable is this strategy for you?
Thanks
I can say it is making profits, but I'm not ready to tell how much since I'm using Fibonacci method in combination with other methods, which is rather a complex chart analysis.
Best regards,
Edward
Happy New Year Edward, thanks for sharing this with us, I am trying out your strategy, but got a question for you, what the red SMA 150 is over the green EMA 100 meaning is downtrend right, but RSI on daily chart showing just bigger than 50, just under 70, so the trends from these indicator do agree with each other, now the candle has touched the 'must channels' and the new candle complete above 75% mark, can I go long?
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