Fibonacci Trading with Bobokus

Going back in time a little here Ill attempt to try and explain following price with fibs and projecting its next move. If we go back in history Ill pick a starting point and we will follow along with some explanation of what we will be looking for and how I follow along and make the decisions on my trades as I go.
Things of note are when I refer to the fib levels of a fib I am talking about the 38.2/50/61.8 levels. I rename my fib levels to represent what they mean to me and I only pull them or place them in one direction from the high to the low.The reasoning is there is no point to have to wonder which way to pull them under this logic. If price remains above or only retraces to what would normally be the 38.2 the currency is in a long condion, If price moves farther or retraces farther than 61.8 I consider it a short condition. The 50 fib level I consider the balance point between a long and a short condition...hence the renamimg of (Pivot).
If you place a fib on the chart no matter if you draw from top to bottom or bottom to top the 3 main levels of 38.2/50 and 61.8 will be in the same place since they are the inversion of each other and the reasoning behind my renaming them and placing them from top to bottom...it doesnt matter, they are the same measurment in either direction.
Ok in this first example we have the Fib drawn as described before and our fib levels are 1.9768/1.9656/1.9544. These are the points at which you will buy into the uptrend that the fib is drawn on...these are the bounce points. Now if price were to break through them past the Short fib(61.8) we would be switching gears and look to sell rally's instead.
In an Uptrend you buy the dips....In a downtrend you sell the rally's.
Me personally I always draw my fibs on the Daily chart and switch it to the 1 hour to make my trades from.But for the exercise we will stick to the Daily until we get closer to the point in time we are now.
OK now that we have established this first Fib on the Daily the 2nd chart posted shows the action I take, what I will do as each new high is made is start pulling a retracement fib on the Daily, what this shows me is if price will be maintained above its levels for the upmove to continue or if its levels are broken the retracement will continue and I follow it this way as it retraces to the Up moves fib levels for the bounce points.
The 2nd chart begins the progression i go through to follow along with the next fib (retracement).
In the next post I will continue the progression.

Now that I see the levels of the retracement fib are broken it tells me we are going to make an attempt to test support levels established by our Up Trends fib and its levels.So i will now switch to selling rally's as we make our way to the Up Trends levels.
As new lows are made I pull the Low of my retracement fib to the new low which in turn changes and also lowers my resistance points (fib levels of the retracement fib), which become my sell points unless they too are broken through which signals another reversal.
Example 3 chart shows the 1st step of the progression in following the retracement after lows are made its levels hold signaling farther retracement.
this is where learning price action and experience will make the difference as the next steps in example4 chart will show. What happens is we hit the 1st bounce point from the Up Trends Long fib (38.2), this causes a little uneasiness as buyers begin to get in early, but not enough of them are present so the price action says its a failed attempt to go back up...so far. So we go to the next step in the progression in the next post.

Example 5 shows that another low was made and another attempt to test the retrecment levels occur, Still once again price fails again at the retracement fibs levels , but this time we something different...Price has failed to make a new low and makes a higher low before bouncing...picking up more buyers now.It turns out to be short lived as once again the retracement fib levels hold but we see it test all the way up to the Long fib level a 61.8 move back up.
The retracement continues and this time will test the Pivot of the UpTrend (50 Fib).The 50 fib level holds and now the bargain hunters are starting to get in and more buying occurs, this time its enough as we see the Retracement fib levels get broken.

Now that price has broken from the Retracement fibs levels, we dont take it off just yet as it still offers some information we want to see...its extension levels.
Another thing to note and that I will do now is as we make new highs I will pull the Up trends high to the new highs that are made , just like we followed the lows with the Retracement fib.As we go we still look for opportunitys to start pulling another retracement fib..in this case none occur for some time , not until we do meet the extentions of the 2 fibs we are using.
If you'll notice in the Example 8 chart that once I pulled my high to a new high that was made, no retracement was made untill it reached its goal...the 138.2 of the Uptrends fib, which is why I leave it here at this high. You only want to pull to new locations when another either above it in an uptrend or below it in a down trend are established.
By established I mean price didnt make a high and then back away from it only moved sideways before continuing up.Something else I look for in an upmove like this in order to start a retracemnt fib we have to make lower highs and lows...the simple stuff.


Ill continue from here tomorrow, its getting late and Im too tired now...LOL

If you want to play around with this here is a template from where I have started this, its got all the fibs you need to continue this if you like or just want to experiment with it.

Just tried Bo's strategy on Vhands for the last hour......turned 10k into 13k. Looking forward to using real money after more vigorous testing.

23 trades total, 20 winners and only 3 (small) loosers.

I am beginning to like GU more than GY now that I know about this strategy!

Sorry for my stupid question, i don't have fibo indicator for your template, so my chart still naked.
Who have those indi , plz post it ... thx.

The template is for GBP/USD if you put the template on another pair the fibs will be set to the price of cable.

Very good thread. But, it would be of even more value if not only fibonacci price but also fibonacci time was here...
For that we need to know somethings about time, waves and of course fibonacci. If interest, I will give it a shot........

I just found this thread and it is very interesting . I will have to go back and read the entire thread as there is alot of this i dont understand. Anyway thank you for all your work posting here. GB

Now we get to a point that price has made a new High and another retracement occurs, we know this because after this High the candles begin to make lower highs and lower lows. This is also another opportunity to play the retracment once again, it is a repetitive process.
With that in mind I will repeat the process as before and start pulling the retracement fib again and sell the rally's down to the bounce points provided by the UP Trends Fib...its fib levels. The first chart here Example 9 shows the Up Trends new high and the support levels it has pulled along behind it.
In example 10 this chart shows the first stopping point for the retracement fib and gives you the resistance levels necessary to break in order for the currency to be considered Long again, so from the point that price is rejected by the Retracment fibs levels I would be selling the rally's until they are broken to the Long side. I will continue to pull the low of the Retracement fib down as new lows are made just like before, and bring my resistance levels down with it..This particular move down turns into a good correction, but notice where it did find enough support to pick up the bargain hunters again...its no big secret.

These next examples are the same progression as before as new lows are made I pull the low of my Retracement fib to the new lows and bring the resistance levels down with it...a break through its levels and price has reversed and the Up Trend will continue. If its levels hold price below it the correctin move will continue.
This move free falls all the way to the 61.8 (Short fib of the Up Trend fib) but it does in fact hold, this was a deep correction but the Up Trend remained intact...its fib levels have held and the buyers are back.
This next post is somewhat tricky so I will try and make it as simple as possible but new measures will be introduced, because price does something a little different here and Ill attempt to show you how to deal with it.
We get to the point that our fib levels begin to merge with each other, creating a battle zone for buyers and sellers.

This goes into some of how I deal with Intraday trading and the measures used to deal with the smaller moves.
We get to the point we need fibs within fibs, when these condition occur you can make 2 separate charts if you wish to remove some of the clutter.
For the exercise here I will remove the Uptrend fib and the Retracement fib, since we will concentrate more on each smaller move, normally these 2 fibs would remain in place.
Remember as long as the fib levels of the Up Trend hold price above them the Up move is still in play, sometimes news or economic conditions can cause hickups in the move.This may be do to some investors being cautious and squaring their postions out or whatever. regardless we still trade the fib levels in the same manner.
I removed the Uptren fib and put horizontal lines in place of its levels, I left the retracement fib but will remove it as well in Example 13.
This is more of what I do on the Intraday level with an Intraday fib and a swing fib on the 1 hour timeframe.I actually started using this on the Daily but saw it was applicable to the 1 hour timeframe as well when trading Intraday.
What happens is price stalls out for whatever reason and moves back and forth across both the Uptrend levels and the Retracement levels.But how do you deal with this.You simply measure these moves and use the same rules with these smaller fibs in following price...as long as price is maintained above its levels it considered long, if price is maintained below its levels it is considered short.
From where price stalls out here gives me an opportunity to pull what I call a swing fib, I use it to measure each individual move that occurs and it comes in pretty handy Intraday and scalping, but the purpose here is to find where will price go after this stall in the momentum.
In Example 14 ,I see that the levels of the swing fib hold at what is the 38.2 level (Long fib level) a good indication this is just a hiccup in the move upwards and its a strong candle that forms after contact with it.The next post I will continue the use of this tactic.

Now thatI see most likely we are still Long, I continue to trace price by measuring each move and in this case I will move the low of my swing to the low created when its levels were first tested, from here I lookj to the extensions of it as a gauge for price movement...how far should it go after a bounce off the fibs levels.I see that the swing fib levels hold and make good strong moves off its levels by leaving long wicks. Using the extensions of this fib I see that its 138 and 161 are met and price retreats once again. At this point once price begins to retreat again...lower highs and lows, I will pull the high of the swing to this new point From here we still Look to the UpTrend levels as support since they have not been broken and are still the major support lines.
Price retraces again and The Up Trend levels hold again, but this time price does not retrace as far as before it begins to get picked up at the 50(pivot) fiib level.
Also if you will notice that from the swing high to the last low created in the smaller move up...the extensions from it are occupying the same space now as the Uptrend fib levels.
Continued in the next post.......

Now I continue to follow these smaller moves with the Swing Fib untill price can make a breakaway from what were The Uptrend fib levels and the Retracement fibs levels.
Now price has bounced from the Uptrend fib levels for the second time and the momentum slows 1 more time from this bounce, so I simply continue to follow the moves with the Swing fib and this slowing down of momentum i use my Swing and see its levels hold again and I in turn look to its extentions...this time if price reaches the extensions of my Swing it will have broken free from this indecision area and the Up Trend can continue. We get just that price bounces from the swings support levels and tracks to its extensions. Clearing this area and the Up Trend continues. From here the Swing is no longer needed and it has served it purpose of folloing price during this period, I now go back to the point I left off at with the UP Trend Fib and the Retracement fib, looking to their extensions now that we have cleared their levels again.

Looking now to the extensions of both the Retracement fib and The Uptrends extensions, we have the next targets. At any point during this last move up we could have gotten another retracement and the process would start all over again..adn I would repeat the very same process over again. Price does infact make it to the targets but falls about 50 pips short of the UpTrends target.
As I go along I do use the other fibs and this is more of a generic or basic following of price.In example 20 I placed a Swing fib and indicated its high and low that get it in range of the overall high of the year.
I think maybe I should mention that the fib tool is only a guide, a gauge to measure price movement and if you are looking for it to hit to the pip you are gonna be disappointed. I never expect it to hit to the pip and I see alot of posts that condemn fibs because they dont hit to the pip, LOL.
All i look for from fibs is to get me in the correct area to look for turning poins,next possible highs and lows, for that purpose I have not in my experience ever seen or used anything that can even come close. Others can say whatever they want...me Ill use em just like I have been.

Now since the high of 2.1161 has been made this pair has gone into a deep deep correction, The way I handle the UpTrend fib now is since its levels have been broken I have to go back farther in time to see what the next levels are beloe the low that I am currently using. I have to pull the Low of the Uptrend now all the way back October of 2006 now to see where we are in time, in reference to the UpTrend that has been going for several years now.
This correction is treated the same way now and I begin the same process with the Retracement fib to follow the correction move. Selling rally's along the way the the Up Trends levels.

I continue with pulling the low of the retracement until the market turns by breaking through it levels.Just as before the process repeats up to the current point in time.

There are many factors that remain but I realise now its alot for someone to absorb and that I can be a little confusing and hard to follow, but I just dont know any other way to explain how this is done outside of a classroom type environment. I myself didnt realise how much information it takes to try and get how this worls across, and doing this with text and a few examples is difficult. I will try and answer everyones questions If you have them, and I hope I dont discourage you from learning fibs since they, to me are all you need next to learning price action.

Hey Bobokus,


I popped by from the "other"(duh duh duhnn) thread and went through your stuff. I think you are incredibly well spoken and easy to follow despite what you think It is beautifully simple which is something I love.

I am nobody, but I would say you have put a lot of goodness in here and some rock solid fundamentals.

Does it ever get any simpler then trade the trend and buy low sell high?

Up until a few weeks ago I had never really worked with fibs and now they are fast becoming fixture in my style.

If I may, again being nobody, my OPINION is that a trader would be well served to take this methodology and possibly build off of it with price action try it... or overlay it on your current style... or don't it is gret the way it is.

You have put a lot of time and work into this and it is awesome hopefully people keep an trader's mind about it because they would be missing out if not. Thanks for your thread!

Sizz.