Complex trading system #5 (Fibonacci trading)

i like this trading system and have been using it on demo for sometime now.the main problem i have is drawing the fibonacci. sometimes i will draw it based on the smaller trend and this results in me getting stopped out by my stop loss because it is respecting the larger trends fib 61.8% line.(stop loss line)

I use the chaos fractals to judge the swing lows and highs and draw fibs according to that.

Can anyone help suggest ways to recognise and draw fibonacci correctly.

I use the 15 min tf btw.

Thank you.

For me: 1h, 15 min.

Thomas

which time frame has been more successful with this strategy?..

VERY GOOD

The Fibonacci tool and levels are the same for all platforms, but you can customise how many levels/lines you want to see.

The strategy requires a retracement to be in between 38.2% and 61.8%.

Kind regards,
Edward

Hi

I dont understand.Is yo strategy only valid while we are between the 66.6 and the 33.3 range only?

Hi

Say i have a 100 to 0 fibonacci,does it mean yo levels are the same as mine coz yos seems to have 4 lines and mine 5 lines.So which ones would be almost equivalent to yours?

Hi Shane,

in MT4 we use 2 tools:

1. Fibonacci Retracement - which we'll draw from the bottom to the top i an uptrend (from the top to the bottom in the downtrend).

2. Fibonacci Expansion - for setting profit goals, such as 1.618, for example.
This tool might not be visible on your initial MT4 platform menu, so you have to customize it by Right clicking on the menu somewhere near the Fibonacci Retracement icon and choose "Customize". Find and add Fibonacci Expansion tool.
To use it you have to connect 3 points: A, B and adjust the third line to the point where the retracement has ended.

Kind regards,
Edward

Hi Edward great site and very good explanation although I would get my head round how the fib levels are as per your original screenshot. I am having a problem with this and wondered if you could help me. Please view the screenshot i have attached in which it shows that the 38.2 and 61.8 retracement levels are by default of MT4 (Alpari) shown opposite to that shown by your screenshot as a result I would like to know how I can change this to the same appearance of your initial screenshots.

Am i correct in assuming that in an uptrend you would drag fibs from high to low (in downtrend low to high). If this is the case the two fib levels (61.8 and the 38.2) are shown the opposite way around as identified in my screenshot. This is clearly impacting on the take profit targets of the 138.2 and the 161.8 and i wonder how i can resolve this problem.

Hope this makes sense. Please see my screenshot for better understanding.

Kind Regards

Shane

I've heard that 50 SMA is good for these purposes, as well as 20 EMA if you want more precision for smaller trends.

Mark

hi guys..been trying this system on the 15 min chart..making profits but losing them in the end...think the system is good ...maybe i am not getting the trend right...which ma is the best for determining the trend?

Hi,
It will, in fact be the same 5 period WMA.

Regards,
Edward

Hi Edward,

God bless you for helping us out.
One quick quest..what wma to use on an 1 hour chart?
thank you.

Hi Josh,

5 min can be traded as well. Use same 5 WMA there.
5 min TF is a very comfortable time frame once you get used to it, oftentimes it feels more flexible and revealing than 15 min. So, definitely try it.

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