Fibonacci's Or At Least How I Use Them...

Discussion in 'Systems and Methods' started by Tansen, Jun 19, 2013.

  1. Tansen

    Tansen Well-Known Member

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    Fibonacci's

    I'm going to start by saying what I might say can and will be wrong to some or all readers. The reason I say this is because we all use it differently and that it's wrong to say there's only one way to use it.

    From what I was taught it was a ratio of numbers that are perfect in nature. If you read my other thread about my first trading system's you'll know that I was first exposed to Fibonacci from one of my father's friends. However due to my other primary focus at the time a lot of it I cannot remember. The sequence of my fib's go are 0%,23.6%,38.2%, 50%, 61.8% or as I refer to it the 62, 70.7%, 78.6% or the 78 as I refer to it, 100%, 126%, 161.8% (May not be there), 200%, 261.8%, and the 423.6%. Although it's not listed and I rarely use it anymore but the 90% is also there because I used to use it as an ejection point to get out of a trade if it exceeds the 90% however with the dynamic nature of trading I hardly use it nowadays and it's there for nostalgia.

    To be more specific I use the Fibonacci retracement tool and I use it almost exclusively for my entries and my exits.
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    Going Long

    The way I use it is as follows:

    1st Decide going long or short for example sake we're going long.

    2nd Since were going long I want to draw from the low to the high off a 15 min chart. Although any will do it's not exclusive to the 15min

    3rd I will get my entry at the 78% this is a personal preference from what I was taught you are able to get in anywhere between the 62 to 78%

    4th I will redraw since I am going long from most recent high to low so the same as #2 but opposite to see the extensions 126, 161, etc. These are the levels I look to target as plausible points of profit takings.

    Going Short

    1st Decide going long or short for example sake we're going short.

    2nd Since were going short I want to draw from the high to the low off a 15 min chart. Although any will do it's not exclusive to the 15min

    3rd I will get my entry at the 78% this is a personal preference from what I was taught you are able to get in anywhere between the 62 to 78%

    4th I will redraw since I am going short from most recent low to high so the same as #2 but opposite to see the extensions 126, 161, etc. These are the levels I look to target as plausible points of profit takings.


    Although I learned personally I cannot sit still for more than 2 months on a position the 423% is rarely used along with the 261%. However if my analysis shows I have the high or low I will hold for that or even longer for an attempt at an absurd amount, my record is I think 300? I'm not sure I have to recheck.

    The way I use this is exclusive to my style and therefore I am saying if you have a different method don't become infatuated or obsessed with the why and the how I use it. I'd much prefer you to adapt or modify what I do as your own personal means of being introduced to Fib's.

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    Blending


    One of the strongest thing's I would suggest if you want to venture on this route to try it out or to play with is BLEND IT WITH SOMETHING.

    I am a fan of the 3's... 3 concepts, 3 views, and 3some's <== I am a major fan of this! :D

    What I am trying to say is if something else you use in conjunction with another indicator agree's with this it just enhances your reasoning and some would argue stack more odds in your favour. For instance, you use this with your stochastics 10,3,3 it says there is a down trend imminent because there's a divergence in price and the stochastics and you have a level of resistance close /touched/ or slightly above and this just so happens to coincide when you see a down leg and it has a minor rally right into that area I described earlier (62 to 78). That's a good enough 3 for me to take a short.

    _____________________________________________________________________


    Credit

    I believe in referencing and thanking those who have taught me and although I cannot go back that far in history to thank the originators I will thank those whom have had the pleasure of meeting.

    The follow is a thank you to those who have helped me perfect to a new level or have impacted me on this..

    Rob Rosenberg
    ICT / Michael Huddleston
    Clark Lai / CEO Pinebaycm
    Wade Cowell / CFO Pinebaycm

    _____________________________________________________________________

    I will add some images if there are some more interest or I have some time when I get back I will add some pictures and examples.
     
  2. Donnald_Darvy

    Donnald_Darvy Member

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    Waiting for the extreme retrace levels is different from how I've seen fibs being used, but I like it.

    a more precise entry, meaning tighter stops, always good
     
  3. Tansen

    Tansen Well-Known Member

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    The style changes between fx and stocks. Stocks will have a tight stop no matter what because of my environment for risk. Fx will generally range because it's dynamic to the pair or price history.

    I primarily like the 78 because it's how I was taught despite what the other mentor said about anywhere between the 62 and 78. It drives you up a wall sometimes because he kept saying "its a knack" but for the most part I thought it was because however given the time from then till now it's subjective to how an individual thinks and feels
     
  4. TheInnerCircleTrader

    TheInnerCircleTrader Well-Known Member

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    You are quite welcome... ;)
     
  5. brians1128

    brians1128 Well-Known Member

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    Hi guys just introducing myself im brian, i use a much similar style i learned back in the day but all my refinement and credit to getting to the next level goes to ict!! thanks mike, i use the 707 and 78 and like you i tend to be shy away from the 61.8 but to each there own i feel no need to catch every trade
     
  6. Ramy3

    Ramy3 May the pips be with you!

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    Welcome to the forum Brian1128 and good luck with your trading.
     
  7. brians1128

    brians1128 Well-Known Member

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    new york open OTE short underway, fib retracement to .707% with momentum of new york to drive it
     

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  8. Tansen

    Tansen Well-Known Member

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    That's a pretty good catch.

    If I had that and mind you don't let my way of seeing it poison what your original plan was you could potentially hold and see if it reaches 1.5167 or the 200% ext I am not so bearish on the EU and GU since bonds are down and I am waiting to see if this is a market shift.

    [​IMG]
     
  9. brians1128

    brians1128 Well-Known Member

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    shopster care to email me or discuss how you calculated your exit.

    i turned my fib upside down to get the extension levels and pulled a fib from the higher time frame swing high and swing low, and found the overlap at 1.618 ext and 61.8 retracement as my exit
     

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  10. brians1128

    brians1128 Well-Known Member

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    i too am not really bearish on the the pound but i gotta trade what i see. I would really like to see a good drive down to the 1.5130 level for support and clear out stops and get some momentum
     
  11. brians1128

    brians1128 Well-Known Member

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    no but i know what i would do if price traded down there
     
  12. jack

    jack Administrator Staff Member

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    No problem with drafting up ideas should price reach an arbitrary point as par of something you'd like to see happen but doesn't look like it will follow through.

    The only wrong way to 'wish and hope' is when you're in a position and 'need' price to move your way, which is deadly.

    For instance, I'm 'wishing and hoping' Canadian bank stocks start yielding 6+% in dividends with no real issues on their books, like they did during the credit crisis, because I would buy the crap out of them for my retirement account if they ever did so again.

    I'm not, however, hoping my NYSE closing trades work out today. I have an entry and an exit and only the strategy dictates the trade parameters, not my dreams.

    So yeah, the planning part is fine, but don't get lost in hypotheticals and miss what price is actually doing right in front of you. :p
     
  13. jack

    jack Administrator Staff Member

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    But I can dream! :p So long as I'm not tossing money away chasing it before that dream comes true.
     
  14. Tansen

    Tansen Well-Known Member

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    Well sometimes Shop it's a test and see kind of trade lol. With very tight risk.


    Also you have so many terms I've never even heard before, I had to google, some of them. I think we need to find someone to compile a glossary lol
     
  15. Tansen

    Tansen Well-Known Member

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    Whoa don't threaten me with a good time lol, I might actually do one now before it gets buried in the next 100 posts!.
     
  16. brians1128

    brians1128 Well-Known Member

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    omg please!! lol
     
  17. Alpha-Bet

    Alpha-Bet Well-Known Member

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    Nice thread 8)

    The power of the Fib....
     
  18. brians1128

    brians1128 Well-Known Member

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    tap off of tokyo high for long lets see how it plays out
     

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  19. brians1128

    brians1128 Well-Known Member

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    also 61.8% retracement of current swing
     

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  20. brians1128

    brians1128 Well-Known Member

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    and if you were up for london open you can see a nice ote, from midnight ny new day up to tokyo high for an ote at london open
     

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