Thread: How often are you using Fibonacci ?

I am no pro and still learning the forex tricks. Like graphical analysis. I am currently using fibonacci on my demo account and find it quite useful (although not that succesful) to define profit levels.

But I was wondering if expert traders are relying a lot on this kind of analysis or if you stop using this kind of tool after a while.

To define profit levels I use support and resistance lines. It is a tool that told me to stop and take those profit out. It is also a tools for re-entry yor position. May be I should combine fibo with support and resistance lines. What do you think ??

Hello,

What kind of profits are you getting with that ? The point is not to know if your strategy is too simple or not but if it's a winning strategy

I use Fibonacci levels frequently to determine potential support and resistance levels.

Choosing a strategy most of the times depend of the market comportment. Some indicators don’t work in some cases, then you should modify or change your strategy to make decisions. Fortunately my platform saves some of my strategies making easier my trading practices. Chrish

Originally Posted by willkaz

I am no pro and still learning the forex tricks. Like graphical analysis. I am currently using fibonacci on my demo account and find it quite useful (although not that succesful) to define profit levels.

But I was wondering if expert traders are relying a lot on this kind of analysis or if you stop using this kind of tool after a while.

Due to its subjective nature, Fibonacci trading is hard if not impossible to backtest. However I have heard that banks and high net worth FX traders use the 50% retracement level a lot, betting that the trend will resume at that level, with a stop at the 68% level.

Yea.

Many traders combine both fibo and EW to find the right entry and exit, and some claimed to have 70% - 80% accuracy.

Moreover, the risk/reward ration is always 1:2 or higher (rewards)

Originally Posted by fffx

Yea.

Many traders combine both fibo and EW to find the right entry and exit, and some claimed to have 70% - 80% accuracy.

Moreover, the risk/reward ration is always 1:2 or higher (rewards)

Yes, if you bet that the trend will resume at the 50% level and you put a stop at the 68% fib, your risk reward is always greater than 2 to 1.

I’ve been trying what you’re suggesting but I didn’t get god answers. I know Fibonacci works most of the time but I need to support it. It means, I’m asking for a simple strategy to set up a stronger one

Originally Posted by forexf

Yes, if you bet that the trend will resume at the 50% level and you put a stop at the 68% fib, your risk reward is always greater than 2 to 1.

Very interesting. Is there somewhere a URL explaining that ?

Risk reward there is quite good, the point being now to choose wisely the high and low for fibo settings.