Fibonacci Extentions for profit taking targets in FX

[hagadol]

Is anyone here using Fibonacci Extentions for profit taking targets in FX ?

If yes, can you explain how you are using and which levels do you consider important.

I religeously use Fib retracements to help with my trading. Key retracement levels, 38.2 50.0 and 61.8 seem default, though when it comes to Fib Extentions, after much research, it seems that there are many different interpretations.

Most common extention levels used seem to be 1.382 (weaker trend) and 1.618 (stronger trend).

Anyway, interesting to here any thoughts.

 

[ajay]

yea hagadol,
i use fib extensions for calculating the targets. What i use are 1.236, 1.618, 2.618 and 4.236. Infact the retracements i consider only to guage the strength of the trend, once it takes out the pivot. And when the price is apporaching the expansion levels, i observe the reaction. i just won't get out. wait for the move to settle. look at the bars behavior in different time frames and initiate my trades. And a rection from 1.628 should shoot back after retracing from 1.236 level, if there is a lot of steam left in that move. maximum allowed is it should react at 1.00 level. If it penetrates the 1 level, then the halts should be at .786 level or .618. if it travels below the .618 level, generally the move fails. so i don't try to initiate the trade again at these levels. looking from which level the market moved to cross the 1.618 after correction after hitting it once, i calculate the strength of the move and initiate the trades. and i also observed that 2.618 is not that strong to hold the market. so a clear penetration at 1.618 generally travels upto 4.236, but with a rhythm in the price behavior. Hope this is enough for taking a try.
thanks and happy trading
ajay

 

[Paddington]

fib extensions

Good extensions I find alongside 1.618 are 1.272 (sqr 1.618) and 1.414.

I'm a pattern trader however so wouldn't be looking to capture longer trends that much so don't look for larger numbers than that. On trade exits to be honest I would pretty much scale out by the 1.272 unless there were signs that the move may be an extended one

cheers
P

 

[Lightning McQueen]

I've started getting into this Fibonacci lark of late, its appears really quite good when you get to grips with how to draw grids and what its for. (is there a right or wrong way? )

The resources on t2w for Fib are a bit thin on the ground, so I will post bits and bobs that may be of use in various Fib threads as I find them on my learning quest.

Anyway heres a link thats relevant to this thread.

http://www.traderslog.com/fibonacci-tricks.htm


don

 

[Trdr]

I've been using Correction / Retracement / Projection fibos for Price targeting since first reading
‘Elliott Wave Principle : Key to Market Behavior’ by Frost and Prechter, using fibos in conjunction with EW analysis. EW is subjective and may or may not be required in order to use fibos.

Always enter the exact H, L, C amount into the fibo tool Start/End points —
don't 'eyeball' draw fibos

Correction - down in uptrend / Retracement - up in downtrend fibos are usually the simplest fibos
to work with, tho as illustrated with the Retracement fibos on the chart, more than one fibo may
need/should be drawn. Similarly drawing fibos from HC / LC as well as HH / LL particularly on
long trends is required.

Projection fibos are more difficult to work with — how High / Low will the Price go ?
often the Projection fibo levels will coincide with the Correction / Retracement fibo levels see chart
'confirming' a Top / Bottom has occurred.

The Standard Error Channel is very useful since the Price will often 'react' at the intersection of
the SEC, fibo lines and Time target.