Entering on Fibonacci retracements.

i have recently begun to take an interest in trading fibonacci retracements, but i am having trouble actually identifiying the correct time to buy.

when do YOU actually chose to enter?

what are you looking for when you make your decision?

do you just wait untill you see a candel hit one of the Retracements and turn around abit, and then enter? do you will untill you see a couple of candels in a row hit the same retracements? mabye a Candelstick pattern you like? or mabye you wait untill price hits a retracement and then crosses back past the 0.00 point to enter?

do you like to use indicators to help you find entries? or mabye exits? which ones?

do you use a filter(s)

what do you like to do to choose a stoploss? mabye when you open a trade you will place the stoploss one retracement beyond where price reached?

and what retracement and extensions do you use?

i use:


i use 0.786 ( apparently most people use .764 but i got this one from a book i read)

0.618

0.50

0.382

1.27

1.618


what about you guys?

do you like .786 or .764 ? doies it make a difference to you?

lets share.

p.s i looked through alot of fibonacci threads, but alot of them are convoluted and contain people bickering and stuff like that, and for newbies to fibonacci it is way to much stuff to go through and i couldnt find what i was looking for.

also, how would you have traded this?

Try using a 1-2-3 approach. Most retracements make an ABC as well.


When you post charts, you should show the currency and time frame. Also, put the labels on your fibs.

I don't use fib numbers exactly, at least not the way most ppl do, but I do find myself using the half, 1/3 and 2/3 marks quite a bit lately. I suppose fibs are more or less the same thing, really, if you boil it all down.

I think the most important part is just realizing you're buying/selling on a pullback. Have an established trend, wait for the pullback, then enter. You could use candlesticks, but I think you're likely to miss a lot of entries. You could put a buy/sell stop, which is what I usually do, or even use something like an MA crossover back in the trend direction. You could also use macro patterns like H&S or double top/bottom to confirm the end of the pullback.

The trick is just making sure there's some confirmation of the level, there's no reason to think price will obey you just because you've drawn a line on the screen, so wait for something to indicate that price is moving back in the right direction.

Here's a chart of the Aussie. Pretty clear uptrend. Breakout of the earlier range, so the question is... when will the price resume it's up trend? If it's early enough, prolly be a good buy. If it falls below the range, well, then the double top might indicate a local reversal.


http://i34.tinypic.com/28kkb4h.gif

hey guys, the pic i posted was of eurusd 5min, sorry i didnt mean to cut the info off, but icropped it to make it smaller.

and rabid, thanks that is helpful info

I also try to use it in practic but for me it's a few difficult but I'll practise much!!

This is an example of why I sometimes use, but dislike, fibs (or any retracement count).

It draws a ton of lines on the screen, and the truth is... w/ enough lines, eventually you'll get a hindsight match. Likewise you'll notice that some of the key turning points happen at other locations.

http://i36.tinypic.com/14mguma.gif

Drawn a fib from the recent high to the recent low. Notice the fibs that correspond to highs and lows, the "axis" (today's open), moving average (the red is a 100), etc.

Still, it's a good way to figure out probable levels if you're using confluence. For instance the confluences at 1.5970, 1.5830 and 1.5745 are all likely levels to consider a reversal. At that point I could just draw the lines, clear out the fibs and simplify down to a small handful of S&R levels.

You could use that in conjunction with a reversal indi like stochs or an MA cross, or w/ a bar pattern like a pinbar, and get decent results... which is what a lot of ppl do.

But anyway, you get the point. There's motion in the market, a defined trend, etc, and we're just trading that. Sell the rally, trail your SL as you go, perhaps take part of the trade off as you go.

We could completely get rid of the fibs and use any number of other methods to make the same determination. So you can use them if you want, or not if you don't. It's all context, fibs are just a way of determining the context of the market. Don't make it harder than it has to be, don't over-think it.

hey thanks rabid, good, helpful posts.

keep em comin guys

No one is surprised when Price is often challenged near the Horizontal Fib 50 level. It bounces & falls until it decides; Up or Down: {Wow; Great observation Bemac: Next I expect you to inform me that, 'Once it stops going up, it will go down. Unless, of course, it goes sideways.'}

Here's the deal.
Horizontal Price Channels Are Huge Banks of Information for Traders.

Uh Duh... Revelation... Current Horizontal Price Action may be 50 % of the {un-noticed} Fib Move in progress.

ie. Find a Horiz. Channel and consider that, possibly;
The Center of the Channel is 50%
The High of the Channel is 53.44% (or 46.55% depending on direction)
The Low of the Channel is 46.55% (or 53.44% depending on direction.)

And, btw, I use 76.3932%

Nod, the current sideways motion is heading towards the 50% retrace of the bigger wave in the cable and the euro, both I noticed earlier. Happens a lot.