Just Fibo

Nothing really new here, just my take on one way you might be able to make Fibonacci work for you.

• I look for trends on H1, then proceed to M15 to see if I can find a set up I like.

• Using Fibonacci retracements, with pending orders, and small to larger orders, is all it takes.

By using progressively larger orders, with the same fixed stop loss for all orders, any losses can be smaller than potential wins.

The chart below shows today's trade on ChfJpy, that is still in play.

This 12 minute video, should answer most questions;

This is trade I took on Wednesday this week.
• H1 put in Higher Lows, and then a High High.
• Choosing a swing from M15, I drew a fibonacci.
• First entry of 2 lots (Risk=28p), was between 38 & 50% retrace, based on M15 S/R. Also the move up since Asia, was quite steep. Often swift moves have smaller retracements, so this level looked to have good potential.
• 2nd entry of 3 Lots (Risk=16p), was just below 61%, which was also almost to the figure (1.1600), which can give a good bounce.
• 3rd entry of 5 Lots (Risk=10.5p), was almost to 78%. This would be the final entry.

1st position yielded BE.
2nd netted 16 pips.
3rd position took off, and I closed it @ 58 pips. I probably would have closed it sooner, but was not at computer.

Quite often my last entry will have no Take Profit, in case the trade is a runner.

The basic philosophy on multiple entries, is to increase your chances of getting out of the trade without a loss.

Also, when I talk about Lot Size the numbers I use are simply ratios. 1 lot can be $1k, 10k, 100k, or any multiple of those.

The theory behind increasing trade size is what gives you the opportunity for larger positions, to more easily overtake smaller positions that are negative.

Let's use a 50 pip retracement as example. Lot sizes are Ratios ONLY:
• Entry 1 is 2 Lots, @ 38% retracement, gives you approx a 28p SL, (using 88% SL). In the case 38% is your only entry, because price did not reach @ least 50%, then I look for a Target of 127%, or 27% the other side of 0% line. Profit potential about 30p.

• Should 50% retracement get hit, Entry 2 is 3 Lots, you have about a 21p SL.

• Should 70% retracement get hit, Entry 3 is 5 Lots your SL is 12p SL.

** In the next post, I'll show a breakdown of Risk:Reward based on 10¢ per pip.

** This calculation is based on all 3 trades (5 Lots + 3 Lots + 2 Lots) whose total = $1/pip.

Full Loss.
3 is -6 (-12)
2 is -6.30 (-21)
1 is -5.60 (-28)
Total - $17.9

• 5 pips in trade direction;
3 is +2.50 (+5)
2 is -2.10 (-7)
1 is -2.80 (-14)
Total - $2.40

• 10 pips in trade direction;
3 is +5 (+10)
2 is -0.90 (-2)
1 is -1.80 (-9)
Total + $2.30

• 15 pips in trade direction;
3 is +7.5 (+15)
2 is +0.90 (+3)
1 is -0.80 (-4)
Total + $7.60

• 18 pips in trade direction;
3 is +9 (+18)
2 is +1.80 (+6)
1 is BE ( 0 )
Total + $10.80

20 pips in trade direction;
From this point trades size =’s 80¢ ($ .80)/pip
3 is +10 (+20)
2 is +2.40 (+8)
1 is Closed (If price retraces as far as 70% I will close earliest entry @ BE)
Total + $12.40

25 pips in trade direction;
3 is +12.50 (+25)
2 is +3.90 (+13)
1 is Closed
Total + $16.40

Should price go all the back to “0%”-
Entry 3 would be up 33 pips, or $16.50.
** I’m reluctant to let other positions go that far, because of increased chance of substantial bounce at high or low of session.


•• I double checked the math on this. Does not mean these numbers are error free. If you find errors, please advise.

Thanks, and good trading,
Darryl

Current EU trade on M15. Stop is @ 88%, 1.1682.

SL (@ 1.1686) is for pending sell based on Daily retrace.

This is the H4 EU. My current pending order @ 1.1760 is based on retrace to almost the 61%. Also, in that zone, is heaven resistance shown by 'Golden Zone Power Miner' (Thin light brown lines) indicator, generously provided by 'Quinton'. For complete info on this indy, see his thread: https://www.forexfactory.com/showthread.php?t=596821

A little tip on using the 'Golden Zone Power Miner', once you install on chart, draw 2 vertical lines. Then move one, either way, to get S/R levels, only in area between the two lines. Should you change TF's, you'll need to adjust at least one of the lines to update indicator.

Other things to know about this unique indicator;
• It also should be used with a script called, 'Golden_Level_Remover'. Should you want to remove excess lines, this will erase all.
• You can adjust vertical lines to highlight whatever areas you want to isolate.
• Indicator has defaults of "5" lines. You, of course can change that.
• One foible I've encountered is that the indicator, on rare occasion, will remove itself from a chart. It will normally follow guidelines you've set for inclusion on a template, but just know, you may need to double check it does not show any lines.
• The indicator needs a given number of S/R zones to show up, so if you put the vertical lines between 2 areas that only have larger bars going through it, nothing shows up.

** 'Golden_Level_Remover' needs to go into "Script" Folder.

Earlier trade got stuffed. OK, next...

Hey diamond,

can´t believe that nobody responds to your important fib thread. Hmm, maybe everyone is shocked....
Anyway, I wanna thank you for your work, doing a video and bringing fib-tech to the traders.

When Im back to the states we have a beer or ten...

Here is how I use the fib tool (made percent-tool out of it) Many levels are close to fib, but I know the manipulativ bastards with the big money, do not order in fib, they order in an amount of pips and certain amounts of percent-price-change.

Have a look how amazing the percentlevels fit (very often in all timeframes). This is gbpcad H1. Thanks for your interesting way of calculation. Very good.

Hi diamonddbw,

Nice system u have,its very simple ,these Fibbo levels are made by any indicator or tool which is in MT4,if suppose its an indicator,will u please share for me. Thanx

This is gbpcad H4. Better to see that many levels fit to the pip.

If only we knew which is the goal, which will hold. Many times the 50 steps like 150 and 200, but only the smart money is "making" the real levels. We see it only when it is history.