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



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

In this example the market is in a Strong Downtrend! We know the trend is strong because the market does not rally up to the .38 Fib Retracement. It pauses at the lows. Because of this we know it is unsafe to buy the first 1.382 Fibonacci Profit Target and should wait for the 1.618 to get hit. The market carves through the first Fib Target but we expected that and stops almost on a dime at the 1.618 Fib Target. We place our buy order here at 1.3113 and set a 10 pip stop.

Most of the time this trade finds 10 to 20 pip counter trends. The farther the previous down trend has gone the bigger the counter trend move will be. Don't get greedy and exit the trade at the first signs that its stalling. In this example the market shot straight up 30 pips!



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

This is a great example of a normal trending market. The market first breaks out and its a failed breakout, falling back down to a low below the breakout level. Because the market retraces back up to the .38 Fibonacci Retracement level we know the market is behaving "orderly" and is not "super weak".

Because of this we look to buy the First Fibonacci Target Level of 1.382. So we buy at 1.3114 and place our stop 5 to 10 pips under the second Fib Profit target. It doesn't show on this cart but assume a 15 pip stop. In this example the market stops and immediately reverses at this key support area. This happens over and over because this is where the world's biggest traders heavily buy and sell! The market rallies Straight Up 35 pips!



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

Here's another example of the market making a sharp down move and later retraces back up to the 38% Fibonacci Retracement. This tells us the market is not super weak. Super weak markets make lower lows after a pause without first retracing to a Fib level.

Starting from the left of the chart the market double topped which was a sign of a downtrend. It then broke lower and made new lows, retraced up 50% of the drop and then slowly fell lower. It retraced back up again and made a sharp drop. It again retraced back up. Notice after all of the drops it retraced back up some of the down move.

Because of this slow and orderly drop and because after we draw our Fibonacci levels the market retraces back to the 38% Fib we want to buy at the FIRST 1.382 Fibonacci Target. Also, buying after the THIRD wave down adds to the probability as Elliot Wavers Look at this as an intermediate low.

We buy here and the market slowly rallies up 22 pips



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

In this example the market rallies up 80 pips but is unable to retrace back to the 38% level. Normally this is a sign of extreme strength and we want to skip the first fibonacci target level and trade at the second one. In this particular example the market had rallied up about 78 pips before this 80 pip second wave.

The longer the market SWING the more likely the first 1.382 Fibonacci Profit Target will be Resistance

In this case we short and the market falls 20 pips, rallies back up giving us an opportunity to again short at the double top! When markets are strongly trending they often hit and reverse off these Fib target levels. They then often double top there giving us the opportunity to catch bigger pip moves. What I often do is take a quick 10 pip profit on the first trade and look for 20 to 30 on the second one after double top has formed and all traders who are long start to panic and sell. Professional traders are then looking for support to form before buying again and this can be 30 to 80+ pips lower.

It then proceeds to fall 80 pips!



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

Here's another great example of how amazingly accurate Fibonacci Profit Targets are at stopping a trend and causing a reversal.

In this case the market makes a big move hours earlier and then explodes up right to the first Fibonacci 1.382 Target and stops on a dime. Markets frequently make double tops/bottoms at these levels and this is a low risk, high probability area to take a counter trend trade and exit any long position you may have had.

It makes two 20 pip drops from this level!



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures

Here's a great example of using Fibonacci Profit Targets with our Heat Maps to INCREASE your probability of a winning trade.

Normally we buy the 1.382 Fib Target but as you can see in the Forex heat map the CHF is the weakest currency. KNOWING that the CHF is so weak we wait for the 1.618 Fibonacci Profit Target to get hit and the market immediately reverses up 35+ pips!



Please view our Hypothetical Results Disclosure and LeverageFX Disclosures