Fibonacci trading

Why most traders are so fascinated by Fibonacci trading? Both swing and trend traders are using it to project where the markets are heading to.


If you have an up FIB, you are bullish on the market and you wanted to ride from levels to levels.


If you have an down FIB, your are bearish on the market and you wanted to ride from levels to levels.


An example here showing a 6E chart (Euro vs USD), we classified this Fibonacci as a pattern FIB (does it look like head & shoulder pattern to you?)


6E -- Pattern FIB

From start of the move till the very last target on this Fib, 58 tics profit. If we take very conservative trading size of 3 lots, our risk for this FIB are 7 tics, 6E per tic = USD 12.50


So, we risk USD 262.50, and profit target is USD 2,175 for the whole entire move.


The important point on getting the Fibonacci to work for you, is getting the correct starting point and ending point so that you can project your target, at the same time, a good FIB can stay with you for a long time (using it as rotation play) until you see the next good FIB appear.


I have notice a number of new traders, after learning this skill, start to pull the FIB as and when they "like". They find it so fun and didn't realize that by doing so, you are not following the winning formula that is being passed down to you. At the end of the day, these traders will turn around and asked, why sometimes it work and sometimes it doesn't? They didn't realize the root cause actually started from their attitude towards using this tool.


An example using SiMSCI, also a pattern FIB (BearFlag), see how well the price bounces on the FIB levels. This morning, market open at support 261.8%, and rebounce from the previous day drop.


SiMSCI -- a Bear Flag pattern

[Statistic are always right, everyone wanted to be "rich", but not many people are willing to put in the effort to get there]


After completing the course, not many traders post their trades on the FB, only a handful are still doing it. Show me you care, and I will care for you. 礼尚往来.

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