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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I am new to your site. I would just like to say I love it and it is helping me alot.
I have a question for the strategy. I use the FXCM trading station and I don't see that it offers A WMA but it offers a LWMA
(linear Weighted moving Average) can I use that instead.
Thanks
Adam
Canada
Thank you, Adam.
Yes, that's the one you need in MT4 - LWMA (Linear Weighted Moving Average).
Regards,
Edward
HI,i am a new trader. pls can i know it at all, cause of names you mention above. how do i start learning now. i need to understand it with your experience. q1.what is swing high,swing low?
In other words, you can call it a top of the price wave and the bottom of the price wave.
Regards,
Edward
This system works well with M15 TF.
I thought about some improvements to reduce losing trades:
1. If your entry point is close (5-10, depending on the pair you trade) to any Pivot-Level (PP, R1, S1, R2, S2, R3, S3) better not enter, because price often bounces off these levels. Pivot-Levels can be found at http://www.actionforex.com/technical-analysis/pivot-points/pivot-points-... or you can use my indicator I posted here: http://forex-strategies-revealed.com/scalping/1minute-pivot-point-scalpi....
2. The same is with major support/resistance. These levels can be found easily by drawing horizontal lines at higher timeframes. If price has to break support/resistance to become profitable you better not take this entry.
3. If there is a major news release close (5 min prior - 5 min after) to the time you want to enter also do better not enter, because some news have a high impact (the red ones at http://www.forexfactory.com/calendar.php) and will move price quite a few pips (sometimes about 100 pips, depending on news and currency pair) and you will get stopped out if price moves against you, although in most cases price comes back (but not always, so you might end up with a minus of 100 or more pips if you decide to sit out this movement).
So from my point of view the reward is not worth the risk.
Regards
Philipp
Beautifully written, Phillip
This approach should be used not just for this trading system, but for majority of trading systems. Thank you for highlighting this topic!
Regards,
Edward
I use FXCM my Fibs
show from
0.000
0.328
0.500
0.618
1.618
I cannot use 0.618 as stop loss and 1.618 as target or exit please advice?
H.B
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