My Trading Strategy 1- Fibo Confluence

Deleted Thread.

S1 - Fibo Confluence

To use S1, we need to know to draw Fibonacci Retracement 50%-61.8%(fiboR), Horizontal Support Resistance(SR), and Trend Line(TL).

This system concept is base on moving price have a tendency to bounce back when hitting fiboR, SR or TL.

Where there is a cross point between fiboR with SR or TL, probability of bouncing is even higher.

So this will be the edge.

For the fiboR, from 50% to 61.8%, i have choosen 58% as my fix percentage value to enter trade.

Therefore the confluence point will be 58% cross with SR/ TL,
or 58% cross with SR and TL.

I usually use limit order, or sometimes instant order to enter trade
when i miss the order setting.

I will place chart examples.

See eg. chart.

Price down after confluence point FiboR, SR x Trend Line.
Actually there was Profit taking after 500 pips.

My SL to PT ratio is 1:1

I will post more S1 charts in the future.
Everyone is welcome to view and post in this thread.

Although I use Strategy 1 only to trade gold (xauusd),
I believe S1 is a universal & very powerful system.

This method can be extended to trade any forex pairs, commodities or even stocks.

As well as any Time Frame.

Good start,

keep up the good work

Interesting, but I still think using sl/tp 1:1 with gold is wrong, I think 1/3:1 would be a much wiser option, but that's just me.

For every entry, lot size can vary from 0.5% to 3% of account size.

I choose 2% for this strategy.

As like any trading system, when to exit a trade?
We can choose from a various of exit strategies, including base on the Sl to Tp ratio:

1) Sculping, which Sl is bigger than Tp (or Sl>Tp)

2) Sl:Tp is 1:1

3) Sl<Tp for example 1:2 or 1:3

4)Double position

5)Triple position

6)Partial profit

7)Let the profit run

I have 2 other strategies where Take profit Level is more than Stop Loss Level.
For this strategy, I choose Sl/Tp ratio 1:1

I think it is simple and effective.
Remember KISS (Keep it simple stupid).

When we use a trading strategy, initially we can test it out by either trading in demo, or live account with small lot size.

We should make a minimum of 10-20 trades using the strategy, if it is a good system it should give us more winning than losing trades(sl to tp ratio 1:1). we can evaluate the system and fine tune the strategy along the way to suit our trading style, until we find comfortable and confident using it.

Ok, so now the 'prototype' has pass the test.

We will increase the trading lot size until it reach our target 2% position size follow money management.

Stick to the strategy, use it again, again & again until this become our 'second nature'.

Since luck does matter in small number of trades,
don't concern too much about winning or losing a few trades.
Think at least 30, 50, 100 times using this same strategy for trading.

Be diligent, be positive.
All the best in trading for you.

Interesting! I am Trading live since 3 years with a similar strategy, instead of waiting for s/r my element is a candelestick pattern... . Waiting to follow your strategy... . Have a good sunday evening!

This strategy S1 is usually done using preset or limit buy/ sell order.
Set order at good confluence point 1) FiboR 58% cross TL or SR, 2) FiboR 58% cross both TL & SR

Extension of S1 strategy, using Candlestick/ Breakout pattern comfirmation:

If the price just miss the pending order, and the price is between FiboR 50% & 61.8%,
we can consider using instant order or 'stop' order to enter trade instead.
How?

By waiting for candlestick(cd) or breakout pattern comfirmation.

If we see 'pin bar'(or candlestick with small body long shadow), it is a good confirmation sign to enter trade.

For breakout pattern, double top/ bottom is a nice confirmation.
Enter trade at the breakout point.

If you use multiple time frame for trading,
for this S1- Fibo Confluence, the cross point at a higher time frame is more accurate than lower time frame.

Suggestion: Use D1 & H4 to draw FiboR58% (50%-61.8%), Horizontal Support Resistance and Trend Line.

For the cd and breakout pattern comfirmation, use M15 for more precise entry.

it is nice method, but where do u set SL ??

For my Strategy1 - Fibo Confuence, stop loss & profit taking level is actually very simple and straightforward, the value is already fix.
For xauusd, i choose sl & pt level 5 USD, or 500 pips.

For other forex pairs, based on the sl to tp ratio 1:1, you can 1st experiment with a few sl & tp value, then choose the one you find comfortable and effective.
Lets say, eurusd 35 pips, usdjpy 30 pips, gbpjpy 45 pips?


Other Options with Stop Loss & Profit Taking Level:

My original method was quite direct. Just in case you find it not suitable, you are allowed to modify it to suit your own trading stlye.
eg. If the trade is an instant order, we can place Sl just behind the recent wave pattern. According on the risk reward ratio choosen, we can then set the pt target.

You may also use other exit strategies.

Hi Lau

Thanks for posting your ideas and strategy
This could be a nice piston
But allow me to note:
1- Tracing T/L---- this is very Clear
2- Relying on Support Resistance--- Also very clear
3- But Tracing Fibo-- This could sound a bit complicated specially on 15'
Only this item, i feel not very useful on short TF
---------------------
anyhow, we are following u--
Rgds

Pending order.Sell Limit 1511

See FiboR 58% confluence with SR

Hi chehab, tq for posting. Why is it complicated..?

The strategy seems good, but wth trendline and S/R we dont have many trading opportunities. Patience is the key....