One of the highest probability ways of finding the lowest risk counter trend trades involves using "Fibonacci Targets".

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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. It's really that simple! They work, so use them and make more money trading Forex. In this example, Fib Targets Profited 20+ pips!



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