Hi Guys,
I just wanted to show every one some alternative ways to enter these trades and avoid some large draw downs. I have attached 1hr EURGBP chart for review. We have drawn our descending fib on the 4hr chart from A-B. Price has started to go up from point B and we wait for it to hit the 38 Fib level and the 61 Fib level. Here is what I do to try to avoid some of the draw downs. When price gets close to the 38 fib level rather than entering blindly at the 38 Fib I drop down to the 1hr chart and look for price action to tell me to enter short. In this case you can see that price just blew right threw the 38 fib level. So now I wait for price to get to the 61 fib level. As you can see price never makes it to the 61 fib level. It actually tests the 50 fib level 3 times. This tells me that we have a significant resistance level at the 50 fib level. At this point we have a down trend fib drawn and we are looking for a short trade but we don't have any price action at our entery fib levels of 38 and 61. Now here's what I do, when price moves down and breaks the 38 fib level I wait to see if it re-tests the 38 fib level and if it does I enter short. Now if you missed that entry I have indicated 2 other entries with red arrows. Break of the trend line and break of last weeks low. Hope this helps some of you.
I just wanted to show every one some alternative ways to enter these trades and avoid some large draw downs. I have attached 1hr EURGBP chart for review. We have drawn our descending fib on the 4hr chart from A-B. Price has started to go up from point B and we wait for it to hit the 38 Fib level and the 61 Fib level. Here is what I do to try to avoid some of the draw downs. When price gets close to the 38 fib level rather than entering blindly at the 38 Fib I drop down to the 1hr chart and look for price action to tell me to enter short. In this case you can see that price just blew right threw the 38 fib level. So now I wait for price to get to the 61 fib level. As you can see price never makes it to the 61 fib level. It actually tests the 50 fib level 3 times. This tells me that we have a significant resistance level at the 50 fib level. At this point we have a down trend fib drawn and we are looking for a short trade but we don't have any price action at our entery fib levels of 38 and 61. Now here's what I do, when price moves down and breaks the 38 fib level I wait to see if it re-tests the 38 fib level and if it does I enter short. Now if you missed that entry I have indicated 2 other entries with red arrows. Break of the trend line and break of last weeks low. Hope this helps some of you.
Attached Image (click to enlarge)
