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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Submitted by Agus Setiawan on August 4, 2008 - 12:23.

How to read ADX? I rather like to add EMA 10, EMA cross, make WMA 5 stronger..

Thx''

Agus Setiawan

Submitted by Edward Revy on August 9, 2008 - 00:49.

Hi Agus,

Should work too. The key is to use indicators which you understand.
Regarding ADX, let me refer you to a simple yet good article at: Trading with ADX.

Regards,
Edward

Submitted by Qais on August 18, 2008 - 06:59.

Dear Edward,

I would like to thank you for assisting me in being able to properly comprehend the utilization of the Fibonnaci System. But I still have an enquiry with regards to what happens when the o.618 level is penetrated, do we simply wait until we find the new AB Swings and reverse the trade?...or do we simply exit the trade? ...A live example of this is on the HOURLY chart of the GBPUSD 18/08/2008 (A=1.8786; B=1.8514);WHEREAS THE O.618level =1.8683 HAS BEEN PENETRATED??
Thanking you in advance for all the time & effort you have put in helping others!
God Bless You,
Qais

Submitted by Edward Revy on August 20, 2008 - 12:10.

Qais,

In that case we simply exit the trade.
I've made a screen shot for everyone to follow.

Fibonacci trading system

Happy trading,
Edward.

Submitted by User on September 25, 2008 - 09:45.

Please explain, how come the 1.618 is lower than the other lines ?

When i draw my fibo, it appears above them....

Thanks in advance

Submitted by Edward Revy on September 25, 2008 - 14:00.

You draw it right.

It's me who changed the numbers (in Photoshop).
I tried to fit two parameters in one screenshot.
I showed first that the market retraced N% first.

Then after we enter, the Fibs are re-drawn with the same Fib retracement tool to project the target at 1.618.

Regards,
Edward

Submitted by Jason on September 26, 2008 - 23:06.

Hello Edward,

I have tried many systems over the many months that I have been trading and I must say that this one has been the most profitable by far.
I find that the 20 EMA and 200 EMA that you suggested are very good filters.

As with all other profitable systems it requires alot of patience and discipline, but once one possesses these qualities there is no limit to the amount of profits you can reap.

Excellent lesson....

Thanks
Jason
Jamaica

Submitted by User on October 9, 2008 - 17:17.

Seems in a sideways market cannot work, isn't it ? waiting for your reply. Thanks