Trading fib retracement after news spikes? | Forex Factory

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Trading fib retracement after news spikes?

  • #1
  • First Post: Nov 20, 2014 4:55am Nov 20, 2014 4:55am
Does anyone here trade a retracement such as this?

I added some fibs to the spike on gbpusd from the positive GBP - retail sales m/m release

Of course a big problem in entering a news release after the fact is that you will only catch the tail end of a spike.

This is just one example I'm sure the retracement sometimes is not a 100% one and might only hit 38.2 or 61.8.

This would make sense in this situation to have attempted to buy gu after the 100% retracement because of the positive gbp release.

Does anyone else trade retracements off of news spikes in the direction of the original news for some pips?

Attached Image (click to enlarge)
Click to Enlarge Name: gu.png Size: 26 KB
  • #2
  • Nov 21, 2014 10:19pm Nov 21, 2014 10:19pm
Nobody tries to trade retracements after news spikes in conjunction with the fundamental data? or any other method of continuation with fundamental data?
  • #3
  • Nov 21, 2014 10:25pm Nov 21, 2014 10:25pm
Serious question though.

How do you know you're placing your 0 - 100 fib extension in the right spot? Sometimes it seems you can adjust it and it looks like it can fit in one spot and then another spot too and then bounces happen at either placement so it's almost like it feels like it's luck that you place them correctly from time to time
  • #4
  • Nov 21, 2014 10:33pm Nov 21, 2014 10:33pm
It's frustrating too because sometimes it fits and sometimes price can bounce off of the 38.2 sometimes 50.0 sometimes 61.8 sometimes it's a full 100% retrace sometimes 161.8 seems like a perfect bounce it just seems like it's luck that you happen to fit the fibs into the correct spot How do you know you have your 0 - 100 area correctly chosen??
  • #5
  • Nov 22, 2014 4:03am Nov 22, 2014 4:03am
Quoting justin7
Serious question though. How do you know you're placing your 0 - 100 fib extension in the right spot? Sometimes it seems you can adjust it and it looks like it can fit in one spot and then another spot too and then bounces happen at either placement so it's almost like it feels like it's luck that you place them correctly from time to time
You should be drawing your fibs from one end of the swing to the other. I don't understand what you've done. From your chart, I would draw it from 1.564 to 1.5686. Nice idea, but I think it's one of those things which look good in hindsight. S/R levels are preferable in my opinion; where you've drawn the 100 line was a good level and price did bounce back up off it .
Attached Image (click to enlarge)
Click to Enlarge Name: gu.png Size: 23 KB
  • #6
  • Nov 22, 2014 7:06pm Nov 22, 2014 7:06pm
Quoting jen101
{quote} You should be drawing your fibs from one end of the swing to the other. I don't understand what you've done. From your chart, I would draw it from 1.564 to 1.5686. Nice idea, but I think it's one of those things which look good in hindsight. S/R levels are preferable in my opinion; where you've drawn the 100 line was a good level and price did bounce back up off it . {image}
I agree now as well s/r levels are preferable and the best points for reversals. How do you spot the best s/r areas for bounces?
  • #7
  • Nov 25, 2014 4:46am Nov 25, 2014 4:46am
Quoting justin7
{quote} I agree now as well s/r levels are preferable and the best points for reversals. How do you spot the best s/r areas for bounces?
Look up Niall Fuller. He explains very well where to draw key levels. Good luck!
  • #8
  • Last Post: Nov 25, 2014 6:57am Nov 25, 2014 6:57am
Quoting jen101
{quote} Look up Niall Fuller. He explains very well where to draw key levels. Good luck!
thanks jen I will
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