Hourly Fibonacci Method (Day Trading)

On the Daily chart (attached), since the latter part of last month, we’ve been having what I would consider an interesting price action, which resulted in sort of a channel formation (as observed within the two blue horizontal lines): Price, after failing to breach the, at that time, most recent swing low (not highlighted to avoid cluttered chart), retraced upward, only to meet an uncompromising “veteran” resistance level, which “produced” the most recent Daily swing high @ 1.6132 (that we’ve highlighted using the upper blue broken line). With the stiff resistance, price had to turn around, again, to retest the previous swing low, which, also by now, has “produced” the most recent Daily swing low @ 1.5808 (which we’ve highlighted using the lower blue broken line). Now, price is showing signs that it is not prepared to be sent back upward: the most recent Daily swing low @ 1.5808 has been breached; however, for further bearish move confirmation, we would like to see price to, not only close below the 1.5808 level by the end of today, but also below the lower edge of the downward or bearish channel. In all, with the support of higher time frame charts, our bias is currently bearish; but conservative traders might prefer to wait for today’s candle close to make their final conclusion.
Also, trade volume would most likely be thin today as there’re bank holidays in Japan, US, and Canada; and that might result in unusual or erratic price movements. Please let’s also bear that in mind if we would be trading.

On the H4 chart (attached), price has broken the most recent swing low @ 1.5857 (which we’ve highlighted using the blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.6119 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

Hi Tunji, thanks for yr thoughts and teaching. I leard from you daily, except Saturday and Sunday that u did not postThanks

Thanks Tunji

On the Daily chart (attached), yesterday, with the support of higher time frame charts, we concluded our bias was bearish, but that we would like to see price to, not only close below the most recent Daily swing low @ 1.5808 (which we’ve highlighted using the lower blue broken line) by the end of yesterday, but also below the lower edge of the downward or bearish channel. As at the end of yesterday, though price closed @ 1.5798 – slightly below the 1.5808 level, it was unable to close, clearly, below the downward or bearish channel. However, current price action is strengthening our bearish bias: price recently breached yesterday’s low @ 1.5727 (not highlighted to avoid cluttered chart). This single price action, with the support of previous price actions, is quite good enough for us to seek Short trade setups on the Hourly charts – supported by the H4 charts.

On the H4 chart (attached) price has broken the most recent swing low @ 1.5727 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. Please NOTE that 1.5727 – the most recent swing low level – also happens to be yesterday’s low, which we discussed on the Daily chart.
The white horizontal line @ 1.5882 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

Freedomsg & Fosgate r, you’re much welcome.

If you were able to identify the EURUSD Long trade set-up, which occurred yesterday – around 14:00 GMT – and took the trade, that’s great.

On the Hourly chart (attached), we had a support-confluence around, at that time, the most recent “broken” swing high @ 1.4800. The support-confluence included the swing high, overlapping fibs, and a Daily pivot. Less than an hour ago, price hit the primary profit target – the 127% ext. @ 1.4905. If you managed your trade properly, scaling out your profits and adjusting your Stop Loss appropriately, you would’ve had a minimum of 2:1 reward/risk profit i.e. your profit would’ve, at least, doubled the amount you initially risked.

P.S.:
This trade was fully supported by the H4 chart price action.

On the Daily chart (attached), on Friday, last week, we anticipated a bullish retracement based on price’s sharp break above the lower trend-line – which was, most likely, aided by the strong support area @ 88.00 (that we've highlighted using the lower blue broken line). Based on further analysis, we also noted, using the following words, that: “We expect the bulls to meet their next major resistance around a major Daily swing low @ 90.11 (that we've highlighted using the upper blue broken line), which might be forming a resistance-confluence with the upper bearish trend-line (the bold red line).”
In line with our analysis, the rally stalled around the 90.11 level; and currently, preceded by previous two days’ reversal candle formations, the bears seem ready to continue their movement. We expect major support around the same 88.00 support level, which previously was unbreakable for the bears. From a day trade perspective, we seem to have enough room to seek Short trades.

On the H4 chart (attached), price has broken the most recent swing low @ 89.61 (which we’ve highlighted using the blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The white horizontal line @ 90.02 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

On the Daily chart (attached), since the beginning of this month, the bulls have been raging; and, though we might have a bearish retracement soon, the bulls seem determined to hold on to their reign for sometime: major resistance levels are being breached on the Weekly and Monthly charts, and the fundamentals – recent economic reports – are fully in support of a sustained rally; although, uncertainties still abound. Price is currently around the upper edge of the upward or bullish channel, hence, there’s a possibility of, at least, a short lived bearish retracement; after which we expect price to find support around the most recent Daily swing high @ 1.4817 (which we've highlighted using the blue broken line). It might take more than a whole day for us to see the above explanation unfold – if we happen to have judged correctly; however, since no price action is currently supporting a suitable bearish move, it’s advisable to wait for a Hourly chart Long trade setup, which must be confirmed by Hourly price pattern forming higher highs and higher lows, and supported by the H4 chart.

On the H4 chart (attached), price has broken the most recent swing high @ 1.4874 (which we've highlighted using the lower blue broken line) upward. That sustains our bias in favor of an upward price move. The green horizontal line @ 1.4761 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts - using Fibonacci retracement levels and important support levels - to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

On the Daily chart (attached), earlier this week, we expected further bearish movement – in line with the major downtrend, however, the bulls proved they weren’t prepared to let go just yet. Price continued its upward retracement, broke above the most recent Daily swing high @ 90.45 (which we've highlighted using the lower blue broken line); and now, it seems set to test the next resistance level – a resistance confluence of fib 38.2% ret. and the most recent Weekly swing low @ 91.71 (which we've highlighted using the upper blue broken line). From a day-trade perspective, though price has already moved a considerable distance today, we can still seek opportunities to go Long, using our Hourly charts.

On the H4 chart (attached), price has broken the most recent swing high @ 90.77 (which we've highlighted using the blue broken line) upward. That sustains our bias in favor of an upward price move. The green horizontal line @ 88.82 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts - using Fibonacci retracement levels and important support levels - to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

On the Daily chart (attached), we seem to be getting signals that price is probably set to resume its movement in direction of a strong downward trend – supported by the Weekly and Monthly charts, as well as a number of chart patterns on the Daily chart, which include a head and shoulders formation (as shown). Earlier today, price breached Friday’s low @ 1.6251: a relatively good sign that the bears are ready to resume their activities. From a day-trade perspective, we seem to have the opportunity to short the GBPUSD pair. The most recent Daily swing high @ 1.6119 is a support level we have to bear in mind: the bears might encounter hurdles around this level.

On the H4 chart (attached), price has breached the most recent swing low @ 1.6251 (which we’ve highlighted using the upper blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The 1.6119 support level, which we discussed on the Daily chart, is also shown on the H4 chart (the lower blue broken line). Price is currently over a 100 pips from this support level; hence, we seem to have enough room to seek Short trades.
The white horizontal line @ 1.6398 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

On the Daily chart (attached), in the past two weeks, we’ve been experiencing a bullish retracement in a strong downtrend. We expected price to move up toward the resistance-confluence of fib 38.2% ret. and the most recent Weekly swing low @ 91.71 (which we've highlighted using the upper blue broken line). However, the bulls couldn’t garner enough strength to push that high: they were stopped about 40 pips away @ 91.31. Currently, buoyed by the longer term downtrend, our bias is bearish. The next critical support level is the most recent Daily swing low @ 88.82 (which we've highlighted using the lower blue broken line).

On the H4 chart (attached), price has broken the most recent swing low @ 90.35 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The 88.82 support level, which we discussed on the Daily chart, is also shown on the H4 chart (the lower blue broken line). Price is currently more than 150 pips away from this support level; hence, we seem to have enough room to seek Short trades.
The white horizontal line @ 91.31 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

Earlier today, we concluded today’s bias is to go Short.

The Hourly chart (attached) is currently forming a tradable pattern. Price seems to have bottomed temporarily @ 90.06. Hence, we expect price to retrace to the area between 90.42 and 90.78 (which is the area between the 50% and 100% fib. retracement levels – drawn from the most recent Hourly swing high to the current price-bottom). Let’s seek to sell around this area. If price exceeds the 90.78 level upward, our bearish bias is no more valid and we enter a no-trading zone. Our primary profit target is @ 89.87 (the 127% fib. ext.).

Also, if price breaks below 90.06 (current price-bottom) before retracing to the sell-area, we’ll have to redraw our Fibonacci tools using a new bottom & the most recent Hourly swing high to determine new potential areas to sell.

The 15min. chart (attached) gives us a clearer view of the Hourly price action and the potential areas to sell (please note it’s advisable to set a Limit order ahead of time as price could move up to these levels and reverse sharply in our favor).
This chart is rather cluttered but if we look closely, there are a couple of potential reversal levels available. You choose your preferred level based on your personality.

fib 50% ret. @ 90.42;
fib 61.8% ret. @ 90.51.

Personally, based on the broken most-recent Hourly swing low @ 90.49, which I believe is a potentially strong reversal level; I would opt for the 61.8% ret.

Initial Stop Loss @ 90.80; primary Profit target @ 89.87 (Please remember to factor in your broker’s pip-spread).

Please note that all these Fibonacci (fib.) levels have other pivots, overlapping fibs or previous highs/lows supporting them (they are the cause of this cluttered chart). As such, price could reverse at any of the points. The issue here is that the higher the fib level you choose to sell from, the smaller the pips you’ll risk and the more your pip-profit; BUT, also the more the likelihood of you missing the trade as price might not retrace that high before moving back downward.
You need your own discretion here.

Please keep your risk low. Don’t risk more than 2% of your capital. Personally, I risk about 0.5% per trade; and each trade has a potential profit target of about 1% – based on my exit levels.
We MUST NEVER assume we KNOW where price is going next!

P.S.:
Also, always keep in mind any major news releases. Be wary of possible price volatility during these periods.

The USDJPY short trade didn’t completely work out as we anticipated. However, we had enough opportunity to protect our Short positions, and even make a few pips – if we managed our trades properly.

On the Hourly chart (attached), price, after hitting the fib 61.8% ret. level, reversed southward by over 30 pips to the 90.15 level (highlighted with the lower blue broken line). From a day-trade perspective, that gave us the opportunity to scale out a few pips, and also adjust our Stop Losses to break even – or, at least, a couple of pips above the point where price initially reversed @ 90.58 (not highlighted).

On the Daily chart (attached), we could observe that the bulls are shattering a number of resistance levels. The most recent of these levels was a resistance-confluence: the combination of a Daily swing high @ 1.6468 (which we've highlighted using the lower blue broken line), and the upper edge of the downward or bearish channel. This resistance level @ 1.6468 managed to hold the bulls throughout yesterday, which resulted in a reversal candle formation (doji). However, the doji only succeeded in creating a false signal as the bulls, by the early hours of today, ignored the doji and surged further. It’s noteworthy that this recent bulls’ move is not without a strong fundamental sentiment: the recent equity market gains have been encouraging risk-taking, which favors the euro, and other so-called higher-yielding currencies. However, the bulls still have a lot to prove to nullify the overall bearish sentiment.
In all, from a day-trade perspective, we’ll still have to go with the bulls for now, until we start receiving contrary signals. The next critical resistance level is the most recent Weekly swing high @ 1.6741 (which we've highlighted using the upper blue broken line). The 1.6741 level is also acting as the area where we have both right and left shoulders of the Head & Shoulders formation; and that makes it a very significant level.

On the H4 chart (attached), price has broken the most recent swing high @ 1.6488 (which we've highlighted using the blue broken line) upward. That sustains our bias in favor of an upward price move. The green horizontal line @ 1.6327 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts - using Fibonacci retracement levels and important support levels - to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

On the Daily chart (attached), yesterday, we observed that the bulls were “shattering a number of resistance levels. The most recent of the levels was a resistance-confluence: the combination of a Daily swing high @ 1.6468 (which we've highlighted using the lower blue broken line), and the upper edge of the downward or bearish channel. This observation is still valid and very useful. However, current price action compels us to exercise restraint in riding the bulls: earlier today, price hit the previous day’s high @ 1.6636 but was unable to hold above it; hence the bears are currently holding sway for today. We expect price to find support around the previous resistance-confluence @ 1.6468 (which should now act as a good support level). Our bias is still very bullish, but we would need further confirmation on the Hourly chart – supported by the H4 chart – to seek Long trade setups.
As we also concluded yesterday, “the next critical resistance level is the most recent Weekly swing high @ 1.6741 (which we've highlighted using the upper blue broken line). The 1.6741 level is also acting as the area where we have both right and left shoulders of the Head & Shoulders formation; and that makes it a very significant level.”

On the H4 chart (attached), similar to yesterday’s analysis, price broke the most recent swing high @ 1.6488 (which we've highlighted using the blue broken line) upward. That sustained our bias in favor of an upward price move. The 1.6488 level is another area where price could find support.
The green horizontal line @ 1.6327 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts - using Fibonacci retracement levels and important support levels - to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.

Hello tunji and those following this thread,
i personally have a system i use but your professional approach to trading really caught my attention. I didnt even demo trade....but jumped live due to your explicit explanation.
Few questions pls:
Do u have a fixed time for daily analysis? Pls address your ''today'' with respect to GMT as u are addressing the WORLD. This may help some newbies.
When shud we be b4 our PC?........Curiously waiting for your analysis?!
Confluence of event around current price action makes your system to have really high chances of winning trades .....but few or no such thing as ''overlapping fibs''. Mayb i need some clarification on that pls.
And.....we may need the ''Items'' of this system posted or mention....so that we may chat together on this ''method'',but no problem if u decide to be the general boss. You make things easy for us!!!
Thanks. Many are following out here and there!!!

Hello Goodwings, thanks for your kind words. First of all, please be careful about bypassing demo trading; and if you really feel you’re okay going straight to live trading, please don’t risk the money you sincerely don’t want to lose. It's already cliché, but it’s an “evergreen” rule guiding successful traders/investors.

I really don’t have a specific time for the daily analyses. I usually post when I’ve settled down to trade for the day, which is often around early to mid London session. I would’ve loved to make it a fixed period, but, currently, I’m not in a position to promise that. And thanks for the suggestion on defining “Today,” I’ll see to it.

I would agree that the frequency of trade setups based on the thread’s method, which requires overlapping fibs, is relatively low – but they occur (please check previous posts). Actually, I always like to reinforce my belief that we, as traders, have higher chances of having successful trading careers when we stick to methods that suit our individual personalities. While I believe the daily analyses are helpful to many traders, the thread’s method might suit only a few.

If I interpreted this statement correctly: “And.....we may need the ''Items'' of this system posted or mention....so that we may chat together on this ''method'', but no problem if u decide to be the general boss.” The method is very much open to discussion.

Thanks again Goodwings.

Hello tunji This is Bomi in Houston, Tx I am a newbee here . yout thread caught my attention. Now I am long at 1.6660 TP 1.6700. What is your view for tonite london session?

Dear tunji and my fellows,
Tanx 4 your last reply.
I used your system straight ahead because of its similarities with mine,infact yours ''swallowed'' mine. Being a day trader, i was saved by your method of entry,using fib ret to minimize my loses and sometimes increase my profit. Then comes your Analysis using the bigger picture(daily and 4hr) which explained to me why i was stopped out in trades in the past.
Now, the ''items=tools=indicators'' are mostly Channels,R/Slines ,chart pattern,MACD and fibs. All of these items are automated and can be found on these thread so anyone interested can search.
TO THE NEWBIES: The ''system'' is based on fibs but the''method'' of analysis, which is more important, is based on items listed above, just to increase chances of winning, making the market timer {u and me} making an educated risk on our invested capital. Our work in trading is to provide liquidity to the financial market....for profit....if....they appreciate it at the time we allow it to circulate. Thats the only reason that makes fx trading far and different from gambling but ''may'' have higher risk. Tanx.

Time of Posting – Fri. Oct. 23, 2009. 09:55 GMT

On the Daily chart (attached), we would observe the bulls’ unrelenting move since the start of October. Though price, for a few days, has been struggling to break decisively above the upper edge of the upward or bullish channel, we are yet to have any convincing signal on the daily chart that the bulls are weak enough to buckle. Currently, price has broken yesterday’s high @ 1.5037: a sign of a possible continuous upward price movement. However, price rally has been relatively steep, and it’s just natural for this move to halt, at least temporarily, at a certain point. But from a day-trade perspective, as long as we believe in the strength of technical analysis, we have no choice but to keep our bias in favor of the bulls.
And whenever price finally decides to have its bearish retracement, we expect a strong support around the most recent swing low @ 1.4827 (which we've highlighted using the blue broken line)

On the H4 chart (attached) price has breached the most recent swing high @ 1.5045 (which we've highlighted using the blue broken line) upward. That sustains our bias in favor of an upward price move. However, we would observe a reversal candle formation around the 1.5045 level; that’s another sign that the bulls might be experiencing difficulty maintaining their hold. Please let’s bear that in mind.
The green horizontal line @ 1.4943 highlights the most recent swing low, and as long as price stays above it - in the absence of any new and higher swing low - our bullish or upward bias remains intact.

However, we still need our Hourly charts - using Fibonacci retracement levels and important support levels - to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows. Please note that our aim is to buy a dip in today's up-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.