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Simple Fibonacci Trading

  • #681
  • Apr 21, 2012 5:11pm Apr 21, 2012 5:11pm
Quoting marijan993
Great work, Hugh, Though it does not work for me, since I'm using 5 min Tf's, I think your analysis is good. There is one almost perfect way to determine s/r levels. You can simply use volume. Put volume indicator on 1 hour chart and look for highest volume readings in a day. Then simply put horizontal line on the close of the candle which had highest volume reading. It is almost prefect to a pip. I will try to upload some pictures later.
Notice how last three days price obeyed early drawn s/r levels.
  • #682
  • Apr 21, 2012 5:20pm Apr 21, 2012 5:20pm
Quoting marijan993
Great work, Hugh, Though it does not work for me, since I'm using 5 min Tf's, I think your analysis is good. There is one almost perfect way to determine s/r levels. You can simply use volume. Put volume indicator on 1 hour chart and look for highest volume readings in a day. Then simply put horizontal line on the close of the candle which had highest volume reading. It is almost prefect to a pip. I will try to upload some pictures later.
Yes, with lower timeframes you're mainly just going to be following the trend but for higher timeframes I think we needed some sense of direction.

I'll look into the volume thing, thanks for pointing it out, an interesting idea.
  • #683
  • Apr 21, 2012 5:52pm Apr 21, 2012 5:52pm
I suggest that everyone gets familiar with Supply/Demand and loose the indicators. Indicators will only give you a bias and thats the worst thing that you can have is a bias. You can map out fibs from a Higher TF to lower and just about road map the pullbacks not 100% but a huge help. For me I don't consider a run up or down until the pullback has reached the 50 if it only stops at a 38 its not finished. Lots of looking back and plotting out fibs is really the quickest way to learn. Just my 2 cents.
  • #684
  • Apr 21, 2012 9:42pm Apr 21, 2012 9:42pm
Quoting Hugh Briss
FerruFX, thank you kindly for your work on the ea so far but I wonder if you could incorporate these new rules into a seperate version for testing? So the parameters are roughly the same, retrace to 50%, place the trade at 38.2, take full profit at 0.0 and optional move to break even at 20%? I would be grateful if you could incorporate this change? Thanks.
Here you go!

The default "Level_SLtoBE" is set to 20% ... If you don't want to use it, just set it at TP2 or TP3.

Hope that will help.
Attached File(s)
File Type: ex4 FibonacciTradeManager_v6.ex4   19 KB | 1,096 downloads
MT4/MT5 EAs/Indicators/Alerts coder
  • #685
  • Apr 22, 2012 1:10am Apr 22, 2012 1:10am
Quoting 60minuteman
Hi Hugh, good thread, fibs and trends, can't go too far wrong!

I know a really nice bottom and top forming fib structure... maybe something you could add...

Have a look on your charts at the end of strong trending moves...

So you could trade it long with the trend and then look for this structure to trade the counter move...
This is an hourly chart of seven JPY pairs combined. The yellow ball is a 3-balls zigzag indicator that marks strong reversal points pretty effectively (though it repaints). Your observation stands well!
Attached Image (click to enlarge)
Click to Enlarge Name: Noname 2012_04_22.png Size: 27 KB
  • #686
  • Apr 22, 2012 2:42am Apr 22, 2012 2:42am
Quoting FerruFx
Here you go!

The default "Level_SLtoBE" is set to 20% ... If you don't want to use it, just set it at TP2 or TP3.

Hope that will help.
Excellent, thank you very much again.
  • #687
  • Apr 22, 2012 4:23am Apr 22, 2012 4:23am
Quoting RisingSun
This is an hourly chart of seven JPY pairs combined. The yellow ball is a 3-balls zigzag indicator that marks strong reversal points pretty effectively (though it repaints). Your observation stands well!
yeah, as always its a pro traders observation that I have copied... I know nothing, but i'm good at listening to the right people...heheheh

Love that price action to, I trade that all the time...

the slow crawl back down to a trigger point then one explosive candle engulfing the last 7 or so hours.... not hard to see it was going long for the session... simple repeating patterns...
tradewith60
  • #688
  • Apr 22, 2012 5:31am Apr 22, 2012 5:31am
Quoting Hugh Briss
Excellent, thank you very much again.
You're welcome.
MT4/MT5 EAs/Indicators/Alerts coder
  • #689
  • Apr 22, 2012 6:10am Apr 22, 2012 6:10am
Guys, I have noticed that, the shorter the trend is on which we apply fibbs, the worse is risk/reward ratio. On 5 min TF I had risk/reward 1:2 when my reward was 40 pips, and I had risk/reward 3:1 when my reward was 6 pips. I don't know where I'm going with this, I'm just pointing it out.
  • #690
  • Apr 22, 2012 6:21am Apr 22, 2012 6:21am
Quoting marijan993
Guys, I have noticed that, the shorter the trend is on which we apply fibbs, the worse is risk/reward ratio. On 5 min TF I had risk/reward 1:2 when my reward was 40 pips, and I had risk/reward 3:1 when my reward was 6 pips. I don't know where I'm going with this, I'm just pointing it out.
Maybe we should only look for setups which only have positive risk/reward ratio...
  • #691
  • Apr 22, 2012 6:46am Apr 22, 2012 6:46am
Quoting marijan993
Maybe we should only look for setups which only have positive risk/reward ratio...
The risk/reward ratio is only important when you also know what your win/loss ratio is... from that you can calculate how much account balance to risk...

A 1/1 risk to reward will be fine if your win/loss is sufficient and you are risking the right amount...

Do a search on "chris capre risk of ruin table"... then you just need data from your trading
tradewith60
  • #692
  • Apr 22, 2012 6:53am Apr 22, 2012 6:53am
Quoting 60minuteman
The risk/reward ratio is only important when you also know what your win/loss ratio is... from that you can calculate how much account balance to risk...

A 1/1 risk to reward will be fine if your win/loss is sufficient and you are risking the right amount...

Do a search on "chris capre risk of ruin table"... then you just need data from your trading
And also to be completely honest I don't think anyone has compiled detailed profit/loss, risk/reward and/or win/loss data anyway. I think to take this to a higher level we're going to have to put in the detailed work over a period of time. So far there are not many traders here telling us they have taken multiple losses trading this system, for the most part the anecdotal evidence suggests a very profitable system with very low stress trading (with the ea). I'm here to see this through to the end so I am more than prepared to put the required work in to definitively be able to say, this is a profitable system worth following.
  • #693
  • Apr 22, 2012 7:01am Apr 22, 2012 7:01am
Quoting 60minuteman
The risk/reward ratio is only important when you also know what your win/loss ratio is... from that you can calculate how much account balance to risk...

A 1/1 risk to reward will be fine if your win/loss is sufficient and you are risking the right amount...

Do a search on "chris capre risk of ruin table"... then you just need data from your trading
Thanks, I will do the search.
  • #694
  • Apr 22, 2012 7:06am Apr 22, 2012 7:06am
One more thing: I did a back testing and it appears that setups with better risk/reward ratio were more successful. In fact, all negative trades I saw in my back testing had a poor risk/reward ratio. I think this is because when you put your fibbs on a bigger trend, you are trading more important moves. The smaller moves appear to be just noise, or even counter trend trading.
  • #695
  • Apr 22, 2012 7:33am Apr 22, 2012 7:33am
Quoting Hugh Briss
And also to be completely honest I don't think anyone has compiled detailed profit/loss, risk/reward and/or win/loss data anyway. I think to take this to a higher level we're going to have to put in the detailed work over a period of time. So far there are not many traders here telling us they have taken multiple losses trading this system, for the most part the anecdotal evidence suggests a very profitable system with very low stress trading (with the ea). I'm here to see this through to the end so I am more than prepared to put the required work...
I do blocks of 100 trades, updating my data every 4 weeks or so...

As for this strategy being profitable, I can't see why it wouldn't be with the right money management..

I will do a few fib trades next week in between my H4 stuff..
tradewith60
  • #696
  • Apr 22, 2012 7:38am Apr 22, 2012 7:38am
Quoting 60minuteman
I do blocks of 100 trades, updating my data every 4 weeks or so...

As for this strategy being profitable, I can't see why it wouldn't be with the right money management..

I will do a few fib trades next week in between my H4 stuff..
That makes a lot of sense, 100 trades would amount to a meaningful data set to work with. Maybe a quarterly evaluation would be a good idea? I will start tracking trades and recording data as from tomorrow and come up with a spreadsheet with the information at the end of June.
  • #697
  • Apr 22, 2012 7:39am Apr 22, 2012 7:39am
I've done more analyses on the other pairs but as they are fairly minor pairs and you get the general idea of what I am doing I won't post them all. I will post during the week as and when trades set up and trigger.
  • #698
  • Apr 22, 2012 7:41am Apr 22, 2012 7:41am
Liquidity Gaps Webinar

this webinar gives a good explanation why fibs should work, why we get pull backs after impulse waves..

I really rate this trader, a proven track record in forex and one of the best traders to have a thread on FF...

Should be helpful for this strategy I hope..

http://www.nobrainertrades.com/2011/...-34-pulls.html
tradewith60
  • #699
  • Apr 22, 2012 9:54am Apr 22, 2012 9:54am
Here are my templates for the coming week.
Attached File(s)
File Type: rar templates.rar   22 KB | 853 downloads
  • #700
  • Apr 22, 2012 9:59am Apr 22, 2012 9:59am
With fibs being so subjective ib the way different people draw them the data that will be collected won't be the most accurate. Hard to make fib drawing mechanical. Not trying to be negative about collecting data but the subjectivness of fibs is the problem. If everyone drew them on the same swings and such the data could be accurate.Hope this makes sense.
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