Complex trading system #5 (Fibonacci trading)
Submitted by Edward Revy on June 30, 2007 - 13:27.
Traders were asking to post some strategies that will work on smaller time frames.
Here is one very nice trading system that can be worth your attention.
When a trader chooses to use small time frames (like 10 min, 15 min, 30 min even 1 hour) risks to be wrong are always higher than with larger time frames.
Therefore, it is very important to have a really good Forex trading system that can advise on entries with high chances to win and what's more important it should be able to tell exactly where to exit without need to constantly monitor the price.
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Hello,
Please tell me what if very next candle after AB wave take retracement from 38.2 and close below 5 WMA, shall i make entry on new candle opening?
Hello Edward,
Here is my chart for my Eur/Usd m15 trade please tell me is that okay entry or i made some mistake.
Green line is 50 SMA
White line is 5 WMA
Regards
fasi
Hi guys,
if very next candle after AB wave take retracement from 38.2 and close below 5 WMA, that's a valid signal to open a trade.
@fasi: your entry is correct. (There was another, smaller wave starting from the same point A on your chart, but may be you saw it too, just missed).
Regards,
Edward
Hello Edward,
Here is my one more question, What if retracing candle doesn't go above 5 WMA and we dont get any candle above WMA.
Is it must for retracement candle to go above WMA and then any candle close below it for entry.
Regards
Hello Edward,
I am a question boy but i want to go deep in any any strategy.
If candle touch 38.2 and close above it then turned down below 5WMA line without touching next fibo level, is it valid entry or we should wait for next fibo level to be touch.
Regards
fasi
Hello Edward,
I have question about this 3rd rule.
3. The 0.618 Fibonacci retracement level must not fail. Here it means the price should not close below (uptrend) / above (downtrend) 0.618 retracement line. It can touch or poke it, but the level must withstand the "attack".
Q: What if candle touch 38.2 and close above it and next 1 or 2 candle give us entry signal with close below 5wma, Can we take this entry or we shall wait for retracement again for 50.0 or 61.8 level?
Thank you,
pip
Hi pip,
we should take an entry based on signal after 0.382. There is no requirement for price to necessarily retrace to 0.50 or 0.618 level.
Regards,
Edward
Hi Edwards,
Thanks for running this great website. What is your most recommending time frame to use this strategy? It seems that most people are using M15. Using 5WMA is fine with M5 as well?
Best regards,
Josh
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