DislikedIn these next few examples here im going to try and show you the importance of the 38.2,50 and 61.8 fib levels especially from the longer term type fibs.Im going to do this from the 1 hour timeframe...same as I trade from. But the fibs we are using will represent where they would be in place from the daily chart.I know you hear alot about how the 38.2,the 50 and 61.8 fib are the most important and when we are done here I think you will see why.A majority of the trade decisions are made at these points and the reason you dont even see me using fibs like the 23.6 and the 76.4 they are just simply not traded off of, they do show good support and resistance points but I dont see any decisions being made from them.Alot of folks talk about fibs and price reaching this fib level and blah blah blah. But no one is showing you whats going on here at these levels and it is one of the most important keys to understanding fibs and trading with them.This is the reason I re-labeled my fib levels and I feel this will help make it clear why.There is no need to try and figure out do I pull the fibs from the top or the bottom they are exactly the same in either direction. Knowing this we can re-label the 38.2 to Short fib, the 50 to the Pivot fib and the 61.8 to the Long fib.Now you always pull from high to low and no need to figure out the way to place them.If price is above the Long fib the market is long...If price is below the Short fib the market is short.If price is in between its decision time, and the 50 fib (Pivot fib) is the balance point between Long and Short.
In the beginning I should have shown this first but not realising most traders seeing this are new to fibs and here I am showing some off the wall, unorthodox and unconventional way to trade fibs.I can fix it though.
We are gonna use 3 fibs to accomplish this:
Up Move Fib
Down Move Fib
and a Retracement Fib
Provided is a template with these fibs on the chart already so you wont have to try and recreate them like in these examples you can place them on your own platform and do the exercise yourself and follow along. Fibonacci realy is a very simple way of trading, once you get the basics it becomes very clear.
This will also show the importance of the longer term fibs verses the Intraday and the Swing fibs, its my fault for showing them first since I thought most people here on the forum did have at least some experience with Fibonacci but I have found out otherwise. The Intraday and Swing fibs do work but they are a smaller reflection of what I am going to present here.The Intraday and Swing fibs work in exactly the same manner as the longer term fibs do just on a smaller scale.Trading this smaller scale is fine and can be very profitable, but I think something is missing in what Im getting back as feedback and the posts everyone is making.Too much emphasis on the Swing fib which is nothing more than a confirmation of direction type fib with weak levels.Yes they will show support and can be traded from but it should be looked upon more as scalping than trading.To me Trading Intraday and Swings during a single day are scalping on the 1 hour timeframe and I do it every trading day.
I just want everyone to be able to see the bigger picture and it will help when using the Intraday and Swing fibs.Ignored
To quote Darth Vader: "Impressive.....most impressive."
You have just opened another eye in my trading brain. Thank you very much Bobokus.