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Fib 4Hour MTF Moving Average

  • #41
  • Jan 28, 2009 3:59am Jan 28, 2009 3:59am
Quoting maximteo
Thanks Robby for sharing this system.
I have a silly question though.. why 38.2 and 61.8 fibo and not 50%?
Is there a reason behind this?
The reason is if it breaks 50% level there can be a counter trend and price would never come back to 50% and below levels...
  • #42
  • Jan 28, 2009 4:03am Jan 28, 2009 4:03am
what about this setup?
Attached Image (click to enlarge)
Click to Enlarge Name: gu.gif Size: 11 KB
  • #43
  • Jan 28, 2009 4:10am Jan 28, 2009 4:10am
i think i can answer that,

the 50 level is not a "real" fibo number.

The main Fibonacci ratio is 61.8%. It is found by dividing one number in the Fib series by the number that follows it.
e.g 8/13=13/21=0.618

The 38.2% ratio is found by dividing one number in the series by the number that is found two places to the right.
e.g 8/21=13/34 0.382

It is the FIB numbers in play here. Somehow its magical.

Anyone got an interesting book about fibonacci to read. Preferably a storybook ha.
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  • #44
  • Jan 28, 2009 4:16am Jan 28, 2009 4:16am
Quoting Wallboroff
what about this setup?
In some way I agree with cris and right now it is a kind of short-term trend against dollar as RSI is over 50 and it is in the oversold area... The price action will force RSI to go out of the oversold area.
  • #45
  • Jan 28, 2009 7:38am Jan 28, 2009 7:38am
Robby, again i must say: what sense does it make to enter at 38 and close at 62 if you are just going to enter again at 62. Just keep the same trade open until 100 pips above/below 62.

why bother with the 2 trades?????

it should be 1 trade. enter at 38 with stop loss 100 pips above/below 62.

not sure of the logic for the 2 trades???
  • #46
  • Jan 28, 2009 7:52am Jan 28, 2009 7:52am
Quoting robby2007
If you pay attention to your picture, you are drawing your fib from a movement previous to a little retrace, which i am sure retraced to a 61.8 fib line, Draw your fibs in between two points that has no retrace to any fib line, and if the 0 and 100 lines arenīt broken i will consider reentering on a second test of the 38.2
Appreciate it. What if the re-test is within the same candle session? Price moves beyond 75 pips and sets your trailing stop. Then price comes back and takes out your trailing stop and re-test the 32.8 line. This could happen all day without ever breaking the 0-100 lines and not go much above 38.2 level.

If the price retraces to the 38.2 then comes back down, but does not break the 0-100 line, do you only start to draw your fibs for longs if your moving average is curved up/price trading above? Hope some of this makes sense.

Adam
"Your big opportunity may be right where you are now." Napoleon Hill
  • #47
  • Edited 8:08am Jan 28, 2009 8:06am | Edited 8:08am
Quoting jtmoore007
Robby, again i must say: what sense does it make to enter at 38 and close at 62 if you are just going to enter again at 62. Just keep the same trade open until 100 pips above/below 62.

why bother with the 2 trades?????

it should be 1 trade. enter at 38 with stop loss 100 pips above/below 62.

not sure of the logic for the 2 trades???
You can see it as getting in at a better price. Since you are bias one way, long or short (according to the MA- use short for the this example), you would be looking to take advantage of the pull back and get back in with the trend. Your first point would be the 38.2, where your hoping price has exhausted and will continue in its current trend, but price decides to go further and test either the 50 (Robby doesn't use 50) or 61.8, or whatever level it wants to hit to cause it to turn back down and continue the down trend. Well since you're positioning the size of your trades according to what you withstand to risk, Your 61.8 trade level would offset your loss to the 38.2 trade. BUT if you were not to cut your trade at 61.8 and price totally disapproves both levels, then your loss will be greater with not closing your first trade. The thought is that most likely the 61.8 level will hold and carry on making up for your 38.2 trade, but those stops are there for the occurence that they do not hold.

Also, it really all boils down to how your position yourself with each trade. You could adjust the position sizes so that you could hold the stops the way you suggested, but the entrance of 61.8 is a way of getting in at a better price if it does not hold at the first level.

Also, you could get discretionary and end up closing your first trade if the bias changes while in the trade or you have a move that retraces back to the fib 38.2 within your original setup.

I have a feeling this is not going to be very understandable lol but I hope you get my "idea".

Adam
"Your big opportunity may be right where you are now." Napoleon Hill
  • #48
  • Jan 28, 2009 8:36am Jan 28, 2009 8:36am
I "get" your idea but.... say you are willing to risk "x"% per trade. if you lose the 1st trade, you will be risking less money on the second but come on, how much less really. so if you lose both, it is the same as just losing 1 with sl 100 pips above/below 62. now if you are changing lot sizes at the 62 then yes i get it but then you are talking martindale and everyone knows what that gives you.

i mean go ahead, take 2 trades if you want to, i still don't get the logic. you aren't getting in at a better price because you just lost the money from the 38.

i like the idea of the system and all don't get me wrong. i just want it to make sense
  • #49
  • Jan 28, 2009 9:01am Jan 28, 2009 9:01am
I agree with JT. If you're martingaling, then sure the 618 makes sense with 2 trades. But if lot sizes are the same for both the 382 and 618 trade, then I have the same questions as JT.
  • #50
  • Jan 28, 2009 9:29am Jan 28, 2009 9:29am
Quoting jtmoore007
I "get" your idea but.... say you are willing to risk "x"% per trade. if you lose the 1st trade, you will be risking less money on the second but come on, how much less really. so if you lose both, it is the same as just losing 1 with sl 100 pips above/below 62. now if you are changing lot sizes at the 62 then yes i get it but then you are talking martindale and everyone knows what that gives you.

i mean go ahead, take 2 trades if you want to, i still don't get the logic. you aren't getting in at a better price because you just lost the money...
You are right. I just look at it as that you're likely to lock in some of profit, if it were to go through the 38 without ever triggering the trailing stop, then with it hitting the 61.8 and triggering the the trailing stop, without taking any further losses from the 38 . You can make some of the profit from the turn around at 61.8. So you can cut the losses and then maybe you will make some,all, or more back. Thats if the trailing stop is triggered on the 61.8 trade. With the 38, you never have a chance once its falling back unless you apply some discretionary reason to exit.

Adam
"Your big opportunity may be right where you are now." Napoleon Hill
  • #51
  • Jan 28, 2009 9:42am Jan 28, 2009 9:42am
Quoting Wallboroff
what about this setup?
That is correct
  • #52
  • Jan 28, 2009 9:44am Jan 28, 2009 9:44am
For your target, do you place your trailing stop from the first pip or after a certain amount reached?
  • #53
  • Jan 28, 2009 9:52am Jan 28, 2009 9:52am
Quoting jtmoore007
Robby, again i must say: what sense does it make to enter at 38 and close at 62 if you are just going to enter again at 62. Just keep the same trade open until 100 pips above/below 62.

why bother with the 2 trades?????

it should be 1 trade. enter at 38 with stop loss 100 pips above/below 62.

not sure of the logic for the 2 trades???
Ok i will try to answer this, i hope you understand me, this is more like a psychological game, if you loose big time in one trade, you lose faith, if you lose this loose confidence in your method, you put your pending on the 38.2, price keeps going, breaks the 50, the 61.8, and finally takes out your 100 pip SL, how much in one loss is that it could be 500 pips, it looks better to just loose less pips and if the 61.8 works, you will be happy recovering your pips, plus i had a very ugly experience with drawdown, so i donīt want to see a humongus drawdown never again , regards
  • #54
  • Jan 28, 2009 10:05am Jan 28, 2009 10:05am
Quoting jtmoore007
I "get" your idea but.... say you are willing to risk "x"% per trade. if you lose the 1st trade, you will be risking less money on the second but come on, how much less really. so if you lose both, it is the same as just losing 1 with sl 100 pips above/below 62. now if you are changing lot sizes at the 62 then yes i get it but then you are talking martindale and everyone knows what that gives you.

i mean go ahead, take 2 trades if you want to, i still don't get the logic. you aren't getting in at a better price because you just lost the money...
Guys, donīt forget that this thread is intended for newbies, people who lost their money or just donīt know how to trade so please donīt treat this as a perfect method it is just my way of trading it and i am doing very well, it isnīt too much work to set 2 pendings, if some how itīll give yo some peace of mind (as it does for me)if you like just set a pending at the 38.2, and put your SL 1000 pips away (which maybe will never get hit), but if you see this kind of drawdown it really messes up with your head, i hope you understand me
  • #55
  • Jan 28, 2009 10:06am Jan 28, 2009 10:06am
So in this situation, you would have entered short at the 38.2 with a 348 pip sl?
Attached Image (click to enlarge)
Click to Enlarge Name: fib trade.png Size: 13 KB
  • #56
  • Jan 28, 2009 10:13am Jan 28, 2009 10:13am
Quoting BenQ
So in this situation, you would have entered short at the 38.2 with a 348 pip sl?
Correct, and i did, but i would start drawing my fibo 4 candles later than in your picture, i am now looking for maybe buying GU, because my fibo itīs going to be up since this last nmovement without retrace is going up
  • #57
  • Jan 28, 2009 10:18am Jan 28, 2009 10:18am
I closed the trades from post # 25 all in positive, except for the UCHF which didnīt hit yet +212 pips for last night not bad uh?
  • #58
  • Jan 28, 2009 10:40am Jan 28, 2009 10:40am
buying gu around 1.4060?

Quoting robby2007
Correct, and i did, but i would start drawing my fibo 4 candles later than in your picture, i am now looking for maybe buying GU, because my fibo itīs going to be up since this last nmovement without retrace is going up
  • #59
  • Jan 28, 2009 10:43am Jan 28, 2009 10:43am
Quoting BenQ
buying gu around 1.4060?
Exactly, i am currently short GU because of a longer down fib, and i will buy at 1.4060
  • #60
  • Jan 28, 2009 10:51am Jan 28, 2009 10:51am
Where are you short from -- can you post that chart?

Quoting robby2007
Exactly, i am currently short GU because of a longer down fib, and i will buy at 1.4060
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