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Old 02-13-2007, 10:42 PM
leveragefx leveragefx is offline
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Join Date: Feb 2007
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Using Fibonacci Extension Levels to find Counter Trend Trade
Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particularly trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk. Variables such as the ability to adhere to a particular trading program in spite of trading losses as well as maintaining adequate liquidity are material points which can adversely affect actual real tradingresults.”



We believe that one of the highest probability ways of finding the lowest risk counter trend trades involves using "Fibonacci Targets".

Click Here to Take our FREE 5 Day Fibonacci Course

Goal: Find Quick 10 to 20+ Pip Counter Trend Trades

Step 1) Find a Forex swing of over 25 pips. Smaller swings don't work nearly as well as we are looking for "market exhaustion".
Step 2) Using LeverageFX's Fibonacci "3 in 1 Tool" left click on the swing low and hold button down as you drag mouse over swing high. Release and this will then plot the Fibonacci Retracements, Fibonacci Targets, and Fibonacci Time Extensions.
Step 3) In this example the market is very strong and doesn't even retrace down to the first .38 Fib level. Short the 1.618 extension. If the market had retraced .38 to .62 then short the first profit target of 1.382

In this example the market went and stalled at the 1.618 Fibonacci Extension level. For traders looking for even lower risk, higher probability trades you could short the double top formed at this major resistance point.

Why do Fibonacci Targets Reverse Market Trends such a High Percentage of the time?

Fibonacci Targets or Extensions work because the world's largest Forex traders, Banks, and Institutions use them to determine when to exit or "lighten" their positions. Let's face it, small retail traders have no impact on the Currency markets but the major banks and players do. Fibonacci Retracement and Extension levels play heavily into their trading strategies. They tend to buy Fibonacci Retracements in the direction of an up trend and sell at the Fibonacci Targets. We believe it's that simple and that they work, so use them when trading Forex.



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

Last edited by leveragefx : 06-30-2007 at 07:28 PM.
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