In recent months, I have added the use of Fibonacci to my trading. I
have found that these levels are especially usefull when the match
another level, perhaps support / Resistance or pivot.
I am trading spot cable, using 1 and 5min charts for entries.
Looking to trade mainly with the higher time frame trend (30min, 1
hour).
Having read some books / web sites, which often differ, quite a bit,
in approach, I have narrowed down my use to the following. Would be
interested to hear comments:
Fibonacci Retrace:
==============
Levels in order of importance:
1st 50%
2nd 38.2% and 62.8%
3rd 23.6% 78.6% (I do not plot these)
Strong trend, expect a retrace between 23.6% and 38.2%
Weaker trend, expect a retrace between 50% and 61.8%
Price moving through 61.8 signals a possible reversal
I look for a confluence of levels, which should be stronger, than
singles. For example taking the retracement levels from the same
lows to 2/3 different highs and seeing if any of the levels are in
the same zone. By a zone I mean within 5/6 pips.
I always like to see if a retracement level is close to a pivot
(Pivot, S1 S2, R1, R2) or a support or resistance level. Also to
confirm with divergence for an entry.
Fibonacci Extention:
===============
I have not started implementing extentions yet, though my basic
understanding is:
Weak Trend: Seed move x 1.382 expectation
Strong Trend: Seed move x 1.628 expectation
have found that these levels are especially usefull when the match
another level, perhaps support / Resistance or pivot.
I am trading spot cable, using 1 and 5min charts for entries.
Looking to trade mainly with the higher time frame trend (30min, 1
hour).
Having read some books / web sites, which often differ, quite a bit,
in approach, I have narrowed down my use to the following. Would be
interested to hear comments:
Fibonacci Retrace:
==============
Levels in order of importance:
1st 50%
2nd 38.2% and 62.8%
3rd 23.6% 78.6% (I do not plot these)
Strong trend, expect a retrace between 23.6% and 38.2%
Weaker trend, expect a retrace between 50% and 61.8%
Price moving through 61.8 signals a possible reversal
I look for a confluence of levels, which should be stronger, than
singles. For example taking the retracement levels from the same
lows to 2/3 different highs and seeing if any of the levels are in
the same zone. By a zone I mean within 5/6 pips.
I always like to see if a retracement level is close to a pivot
(Pivot, S1 S2, R1, R2) or a support or resistance level. Also to
confirm with divergence for an entry.
Fibonacci Extention:
===============
I have not started implementing extentions yet, though my basic
understanding is:
Weak Trend: Seed move x 1.382 expectation
Strong Trend: Seed move x 1.628 expectation
