fibo trading examples

hye all.

in general, fibonacci plays a big part in trading esp currency trading. from my experience, we can't say that fibonacci levels can be considered as entry points but we should respect those levels.what i mean by respecting those levels is that we could expect some reactions in those levels.one major obstacle for new traders is that they found it difficult to draw fibo is identifying swing low and swing high. but trust me,no one can get it perfect.only by practice and observation will make it better.

so how do i use fibo?

i use fibo to identify potential entry and exit points.but, i wouldn't rely solely on fibo.i will look for convergence with other technical tools like the support and resistance, trendlines and pivots.

on the 1st chart, it is a typical example of fibo trade that i had the opportunity to profit from. from my experience, d high of monday and low of the early asian session before the euro session starts are quite significant. in this case, i have more evidence to short because d 50% fibo converged with the resistance.

i want u to practice drawing fibo and look for convergence between the fibo and other tools like S&R and trendlines. its a powerful tool!

more examples coming up

:)

Trading the retracement

Hi guys :)

Its another good trade today. the gbp/jpy fell from yesterday's high at around 133.75 to today's current low at 131.8. note that the 1st chart on the left is 1 hour chart followed by 15 min and 5 min charts. after a big bull candle showed up (point no 7), i quickly pull fibo from d high to d low. the objective was to look for a selling opportunity if it retrace by 50%. remember what i told u? the pounds most of the time like 50% retracement.

• after a strong rally (due to a strong support - 131.30) to 50% fibo, i become excited to short this pair. u might ask me " hafiz, looking at d shadow, the price seems to rally up to 62% fibo. so which 1 should i take? the body or the shadow? ". u have to pick ur poison mates!
• if u trade at the 50% fibo which is around 132.40, u might not want the price to go above the next resistance which is at 132.75 (notice a short black horizontal line slightly above the 62% fibo).
• in my case, i short in between 50% and 62% fibo. i do this when i am uncertain whether to pick the body or d shadow.
• after i short at 132.62, i pull fibo from point 8 to 9 to calculate my potential reward. my best target would be at 50% fibo of that swing. BUT, i have to be careful because the US market is about to open and there will be an announcement on unemployment claims. hence, 38% fibo will be my 1st profit target.
• after few candles, the price moved sideways. at that time, i just do not want the price to move above point 5. if it does, i will cut my loss or just breakeven whenever i have d chance.
• 5 min before the announcement, i was already making 20 pips over. to reduce my risk, i closed few positions
• with some luck on my side, the price went down further due to a bad data!
• i decided to be happy with 40 pips plus.
• as u can see from d chart above, it broke the support level at no 6. this indicates that it could fall further. but again, US market is due to open in an hour and it is best for me to take d money out of the table and re-enter again when the condition is on my favor!
  
  
  cheers :)

Trade on retracement after breaking yesterday's low & support at 131.30 (gbp/jpy 4 hour chart)

• the black horizontal line is the yesterday's low. after the europe market starting to get active, it broke yesterday's low.
• i intend to trade this because i want to expect some retracement.
• furthermore, this pair just touch or trying to break the major support at 131.3 or so. usually the 1st time it touch and trying to break the support, it has the tendency to rebound and tough fight between the bull and the bear will exist.haha
• but then again, u have to be extra careful because when the europe market is open, the price action can be choppy.
• i don't want to target much. still feeling sleepy and i am satisfied with whatever profits i have collected earlier. so this will just be my dessert! :p
• above is a 15 min chart on gbp/jpy. at point no 1 after 3 consecutive bear candles, the market move sideways. ( u can see it clearly on the 5 min chart )
• this price action indicates that the bear is losing its momentum in which u could expect some retracement
• in addition to that, remember that we had a strong support at 131.30 which has been broken. please remember for this to become valid (support is broken), the market needs to test for few times. otherwise it will just be a false breaks.
• since my intention was just to make few pips, i need to some indicator in which in this case i used fibonacci. i pull fibo from yesterday's low to today's latest low. and i target for it to retrace by 5o% - about 30 pips.
• thank god, it hit my limit!

as i am writing this, the price is screaming all d way up! i could have made another 100 pips for this trade. so for the working people, i hope u have a pending order to buy at 131.30. 131.30 is a strong support (4 hour chart) and the market just reacting nicely!

Hi guys!!

So it was nice to be back teaching last night. i did enjoy my time with the students. :). for those who came, i thank you so much!!. in the class, i did mention that u should practice to draw trendlines and trade them. so here is what happened last night. after i reached home, i quickly checked my trades on gbp/jpy. (i will cover this gbp/jpy trade in the next post). after i closed the trade, i drew some support, resistance and trendlines. after i drew the trendlines, i managed to spot a very good downward channel! so i decided to trade this gbp/jpy pair. so here is how i managed the trade after i placed the trade at around 132.7.

• my initial 1st target was to make just no more than 30 pips.
• but then, i decided that i could more from this trade because after the US market opened for two hours, the pair failed to retrace by more than 50% in which i assume that there is potential for this pair to move down further.
• the equity was quite bearish which is good for this trade.
• my risk is that later in the day (late US market session), Mr Bernanke will make some remarks on the market. so i have a big guy standing on my way!
• at point no 2 on the chart above is d last major support that became resistance in the day. so my stop loss will be higher than this level.
• at point no 3 will be my realistic profit target.
• as i closely monitoring the trade, i fell asleep in front of my computer! due to tiredness i guess. durgh!
• as i woke up, the market had reacted after Bernanke comments. good for me!
• after i closed some of the positions at 90 pips or so (remember, don't be greedy!), i took out 4 hour chart and i found a major support at 131.3 (check this on your own).before i continue my sleep i decided to put profit limit at 131.00 in case the asian traders react badly.
• as i am writing this post, they are reacting badly! and i hit my limit at 131.00. $$$$$

i hope u will learn something and i welcome any comments!

p/s : that is why i love teaching. each time after i had a tutorial class, surely i will make some money. so guys, don't forget to teach your peers or anyone that is close to u. what goes around comes around!

What this blog is all about?

I started my trading career back in 2008. throughout the last three years, there were tonnes of bumps i had to go through in order to understand the market well and profit from it. hence i would like to share the experience that i have with you. i believe by sharing, we could develop ourselves and become a successful trader. in this blog, i will share any information that might benefit us. at times i will post my personal trades and how i manage them. i welcome any feedback and questions!

In this journey i will discuss hopefully, many trade opportunities in the currency market, equities, the stock options and others. my trading methods are simple but yet powerful. my main tools are trend line, support & resistance and fibonacci. other supporting indicators comprise of macd, stochastic and sometimes pivot points. together with all the technical indicators, i would also pay close attention on the fundamental factors.

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Welcome note :)

Hello people!

This blog is dedicated to all fellow traders to share our knowledge and experience in the market. with this collective effort, i hope all of us could become a better trader.

Cheers!