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Chapter 10, Part IX. Using Fibonacci for placing orders. Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 17, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Pipruit: Cool! So, you mean that, if, for example, I want to Buy at 0.382 support level I should place Buy Limit order a bit higher, and if I want to Sell, for instance, from 0.618 Resistance - I should place it a bit lower?​

    Commander in Pips: That’s right. Look at the chart:


    Chart #1 EUR/USD 60 min
    [​IMG]

    Commander in Pips: The same is true for entering Short:


    Chart #2 EUR/USD Weekly
    [​IMG]

    Pipruit: I see, and what levels are better for entering the market? How to increase my probability to successfully enter?​

    Commander in Pips: First, you should apply different analysis tools – combination Fib levels with trend and other lines, and also candlestick patterns. Later we will learn other tools for that purpose. Second, if we talk purely about Fibonacci tools – for entry it is better to use Agreements, Confluence areas or their combination. Look at the same chart – see, market creates an Agreement with 0.786 Fib resistance, so this level is stronger than just single Fib resistance, hence to enter short from there is safer:


    Chart #3 EUR/USD Weekly
    [​IMG]

    Commander in Pips: I hope that you remember what Agreement and Confluence are, do you?

    Pipruit: Yes, Commander. Besides, we’ve already talked that these areas are stronger, so to use them for entering sounds logical.
    Commander in Pips: All right, then. There are another couple of moments that I want to attract your attention to. We also have spoken about it, but in a bit different view:

    1. 0.382 and 0.618 levels are well tracking and extremely applied by market makers and investors. So, be ready for Wash & Rinse of these levels and stop licking price action around them. You can take this fact in consideration in three ways:

    - Place entry order as usual – before the level, but place stop loss order in view of possible penetration of these levels;

    - If you want enter from 0.382 or 0.618 level - Place entry order at 0.5 or 0.786 level due to possibility of Wash&Rinse. Although this could work, this is not so attractive due to possibility to not get filled;

    - Enter after Wash&Rinse is fully completed. This is excellent approach to entry technique, but it demands more experience. Also, if the market will not show W&R pattern at all, you may skip a good trade.
     
    #1 Sive Morten, Dec 17, 2013
    Lasted edited by : Mar 6, 2016
    Hamza Samiullah and fran alvarez like this.
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