Forex Fibonacci Lines

As many of you know that Fibonacci Lines are some type of resistance and support levels, which help us to predict where the market possibly move.

We know that the market moves up and down most of the time and usually after one big move there will be a correction and Fibonacci lines can help us to predict where the correction might end. But you still need to remember that Fibonacci levels do not guarantee anything so you are  not suppose to trust it 100%.

Let see how we can work or let say I work with Fibonacci Levels:

1. How to draw Fibonacci Lines

Let see, if we had for example a good downtrend and noticing the market starting to slow down at the end and begging to correct itself, then we would draw Fibonacci Retracement from the low of a candle to the high of the candle (I use the ends of the bodies of the candles).

Fibo levels

if it's uptrend than we draw it the other way around from the high of a candle to the low of the candle.

Fibo up


2. Most Important Fibonacci Levels

Fibonacci Retracement levels - you can see them all on the picture below, during trading and in different situations each level could be important but usually the most important are 50% and 61.8%, though 38.2% and 78% also need to pay attention on.

Fibo levels

Fibonacci extension - if the trend continues after a correction or an attempt for correction than the most important extension levels are - 138,2% and 161.8%, also - 118% and 127%.


Fibo levels_1

3. Main factors to consider

Trading with Fibonacci lines more effectively you need to consider some other factors:

  • 1. you need to identify the trend;
  • 2. you need to check the situation on the market in total to understand what is happening with it, for example check the monthly chart and analyze what was happening for the last months and years;
  • 3. you need to use some other support and resistance lines (identify the channels, triangles...);
  • 4. very important - Main Economical events and news


4. The ways to trade Fibonacci Levels

One of the most common way is to buy or sell after correction around levels 50% - 61,8 %, and then follow the trend using Fibo Lines to close the position.

Here is one good example - EUR/USD, 1H chart, we had a downtrend, drawn Fibo lines, market correction reached level 61,8% - we would SELL here. After that we would watch the market, predicting it continuing the downtrend. Some traders would usually watch the market without placing the Stop Loss and Take Profit, some would place the Stop Loss slightly above the level 100% and Take Profit around 138,2% or 161.8%. The best way is to watch the market, analyze the situation and move Stop Loss every time the market moves down.

The most important level 0.0%, usually if the market would brake it it would mean that the trend will continue, if not it would mean that the market changing the trend. In our example the market broke that level and reached 161.8% and went lower. So we could walk away with the profit around 100 pips, or we could continue follow the downtrend, or we could close some positions around different levels, it would depend on your style of trading.

Fibo down trend


Another way to trade Fibonacci levels - when the correction finished and market continue its trend and brakes the level 0.0%.
In our example market correction was finished at the level 61.8%, but we did not sell and decided to wait for the market continue the downtrend. The market was moving in the middle for a while and finally broke the level 0.0%. Here we would need a bit more confirmation, in this example the market formed the channel, so we could draw it and use the system which I use - 20 pips up from it and 20 pips down - Sell. After that as usual we would follow the trend changing the stops and closing some positions.

Fibo down trend safe



If there is no good channel, like in our next example, then you could look for 2 good full candles. Here we have an uptrend and the small correction finished and market trying to brake the level 0.0%, but we have to wait for one nice green candle to cross that level and then we would wait for the second nice green candle which should be bigger then the first candle and higher. Here we had 3 attempts of braking the level - in first, which failed - it was a good candle which crossed the line, but next candle was red, then small green, red again; second attempt also failed - there were 2 green candles which touched the level with the ends of their bodies, then red candle, small green, red; finally the third attempt was successful - good green candle crossed the level, after that there was green but very small candle so we waited for the next good green candle, which closed higher and it was a signal to Buy. After that we would follow the trend as usual, changing Stop Loss, closing some or all positions at level 161.8%. And if we are looking for downtrend then the candles will be red and the second will be lower then the one which must cross the level.



Fibo up 2 candles

If you use these two ways of trading Fibonacci Levels you would need few days, what I mean is - it could take you few days to find the entry for trade or you could be in the trade for few days.


So now, how I use Fibonacci Lines in my day trading - I do not use Fibo lines to enter the market I always draw the channel as you know and use Fibo to exit the trade not just with my 10 pips but bigger profit, if I can watch the market I would follow the trend and change the stop, if I can't watch the market I would place the orders to Take Profit for 10 pips as usual and additionally  around important Fibonacci Levels.

For best results it's always better to watch the market around 06:00am - 16:00pm GMT (or London +-1h) or later if there are news. Or you can place the alarms around important levels, so you can control the situation and analyze the market.

Here is an example of my trade, I draw the channel as usual, I identified the uptrend and it's correction, but I could not watch the market all day, so I draw Fibonacci Retracement instead of extension for the uptrend. I thought, yes it would go up, but what if it will turn, correct that small downtrend and continue go down, so I would better take profit around level 61.8%, it's safer than go for the higher level. So I did, I walked away with my usual 10 pips profit + 40 pips thanks to Fibonacci. But if I would watch the market that day I would not place orders to take profit at 61.8%, I would follow the trend and walk away with at least 80 pips, or, there were news that day and if it would be possible when the market started to move fast high to close positions at 150 - 200 pips profit


October_15

Another example, channel as usual and Fibonacci retracement, predicting the end of uptrend correction around level 61.8%, but to be safe I chose level 38%, because it was quiet day with some but not major news for EUR/USD. I walked away with my 10 pips + 30 pips profit. If I would watch the market my profit would be 10 + 50 pips.


October_16

And last very good example of trades to possibly avoid. As usual I draw the channel and Fibonacci Retracement to predict the end of uptrend correction. First of all the channel was bad, and it's better to avoid channels like this one, it was hard to draw the top line, I chose the level 23%. The uptrend was a bit small should of been higher then the previous uptrend but it stopped. So I was hoping that it should continue go up and brake level 0.0% but if it would go down I thought it would reach level 61.8% which was only around 20 pips away from the channel, too low should not go for trades like that. But I risked it and placed my orders as usual 10 pips profit and 30 pips using Fibo lines up and down. As I did not watch the market, the result was - I made my usual 10 pips profit, but with Fibo lines I lost 30 and made 30 back.

So ones more, for best results watch the market, if you can't - don't go for risky trades.

If I would watch the market that day I would close my loosing trade at break even or with minimum loss after the market tried to brake level 0.0% second time unsuccessfully and walked away with 10 - 40 pips profit.


October_17

Finally, Fibonacci Lines could be used on any pair and time frame, I usually use Monthly, 1H, 30m and 15M time frames.

Here are Fibonacci levels if you don't have them all you can add them in Fibonacci Retracement - Fibo Properties.

0 - 0
0.236 - 23.6
0.382 - 38.2
0.5 - 50.0
0.618 - 61.8
0.78 - 78
1 - 100
-0.18 - 118
-0.27 - 127
-0.382 - 138.2
-0.618 - 161.8
-1 - 200
-1.618 - 261.8


Sorry for my English, if you did not understand something, pl ask questions, I'll try to respond ASAP. :)

You can also watch the video below about Fibonacci Levels trading:



 


All My Forex Articles:

How I use Fibonacci Retracemnet

How I trade Forex News

Forex System Triangle

No Signals No Indicators System

Follow me on Twitter and subscribe on YouTube for new updates and videos.

 

Comments / Комментарии

Posted by tradehappy on
Hi Janna
I use the Tallinex platform but can not figure out how to change the Fibonacci lines to a different color then yellow which by the way does not show up against a white background which is my most desirable to use out of all the other colors.
thanks for your help.

valerie
Posted by Janna FX on
----------------- tradehappy --------------------------

Hi Valerie,

Your broker is Tallinex, but the platform name is MT4 :) In the chart then you use Fibo lines move your mouse to the main trend line (it is red in my screenshots) and double click on it, then click right button of the mouse you will see Fibo Properties so there you can change the color.
Posted by Abdiaziz on
Hello Janna, Thank you for your videoes,they were all awesome helpful for beginners.I want to ask you do you a question about your trading strategy.
Do you use automated trading or manual trading? Iam new to forex if so which one is best to use? thanks
Posted by Janna FX on
---------------------------------- Abdiaziz ----------------------------

Hi, I trade manually, but to place some trades I use an expert adviser. I do not use fully automated trading, I do not believe that any expert can trade automatically, as the market changes it would need an adjustment at one point.
Posted by sebas1987 on
Hello Janna , how are you?
I would like to know how many candles to the past you considerar to draw Fibonacci.
How you determine the begin/end of a trend?

Is important to know the begin/end of a trend to know hoy many candles consider to draw...

Maybe you can help me, thanks,

Really thanks
Regards
Posted by debula on
hy janna, thanks for sharing your trading style, that's very helpfull for me... hope I can success just like you...
Posted by lovewins on
i thought drawing Fibo line is from down to up if it's an up trend and from up to bottom if it's a down trend ... :(
Posted by Janna FX on
--------------- lovewins --------------------

it is
Posted by Awele on
Hi Jan! I'd like to know how you draw your Fibonacci Extension lines. When I draw the lines its usually the retracement lines that shows. Pls let me know. Thank you
Posted by nderimv on
Hi Janna,
I just wanted to ask when can Fibonacci Lines be used. I opened two positions one morning, one trying to catch 10 pips and the other one trying to catch 25 pips using Fibonacci Lines. However, I only got 10 pips because the market reversed and I ended up with 30 pips loss. So I had one profitable trade (10 pips), and the other trade in which I was hoping to get 25 pips using Fibo lines resulted in loss. Is there any specific rule which tells when to use Fibo lines in order to get more pips, and when to try and get only 10 pips.
Btw, thank you for these wonderful videos.
Posted by Janna FX on
-------------------- Awele -------------------------

Hi, at the end of this article you can see additional numbers, they are for extension lines.
Posted by Janna FX on
---------------------- nderimv ------------------------------

Hi,

Fibonacci can be used at any time, you probably chose a bit more riskier way to use them, without any other conformations... For better result as I was saying you should wait for consolidation (a channel) around important levels, analyse the market, identify the trend,look for other support/resistance levels...
Posted by mj4ever on
hi janna
i was watching your videos quite a few days and i noticed that you're using a EA for your trades i appreciate that if you explain a little bit about this particular EA and what is its name and how can we download or purchase it.
thank you for all of your good videos
Posted by Janna FX on
-------------------------- mj4ever -----------------------------------

Hi, this is not my EA, it belongs to another trader-programmer, he does not give or sell it to anyone, I was hoping to make a deal with him, so it will be available for everyone, but he seems does not want to do so... if we will come to an agreement I will send emails to everyone... it is a simple EA which only helps to place the orders and then automatically closes some positions and leaves the rest with a trailing stop. So I still have to find channels and patterns...
Posted by inderjeet on
hi janna i also dont understand the order placement so please share it when triangle breakout then where we can set our pending order buy stop sell stop and where we set stop lose please share it in detail in new article and also share channel breakout and where we set orders
Posted by KASUNLAKSIRI on
MADAM, when we draw fibonacci to a downtrend from bottom to top, level 0 at the top but in your example draw fibonacci for a downtrend level 100 at the top. same as for uptrend when draw a fibonnaci for a uptrend from top to bottom, level 100 at the top.but in your example in uptrend fibonnacci level 0 at the top. please can you explain this?
Posted by KASUNLAKSIRI on
waht is your email address?
Posted by Rusldiort on
Sildenafil Citrate 100mg Lowest Price Strattera Pills Buy Azithromycin Zithromax Venta Cialis Generico Propecia Cheap Price Site Fiable Achat Kamagra Prescription Drugs From India Levitra Plus Comparativa Viagra Levitra Cialis Cialis 40 Mg Erectile Dysfunction Buy Priligy Pills Kamagra Legal In Uk Kamagra Jelly Usa Furosemide Generic Vendita Levitra Controindicazioni Find Isotretinoin Online Discount With Overnight Delivery Cheap Buy Generic Xenical Pilules Priligy En Inde Difference In Viagra Doses Levitra Plus Tiger King Cialis Preise Ohne Rezept viagra prescription Can I Take Amoxicillin With Citalopram Levitra Rezeptfrei In Holland generic cialis Maxifort Online Viagra GСЂВ nСЂВ rique QuСЂВ bec Cheap Cytotec Usa I Europharmacy Tadalafil Tablets 10 Mg Amoxil Cost Antibiotics Metronidazole Without Prescriptions Uk Propecia E Impotencia Garantia Viagra Cartas Kamagra Keflex Causes Constipation Lasix Achat Propecia Direct Cialis Online Purchasing Discount Zentel In Internet With Free Shipping Order Strattera In Usa Mtabs Kamagra Costo Mail Order Clomid Date De Sortie Priligy Australie Levitra Lasting Time Cheapest Lasix Eoro Med Online Propecia Effects On Women Androgenetic Alopecia Kamagra Cialis Online Master Card Viagra Vs Cialis Sales Buy Generic Prozac Online Amoxicillin Cat Keflex And Drug Interactions Accutane Isotretinoin Tagliare Proscar Propecia Sildenafil Gunstig Online Kaufen Kamagra Online Usa Cialis Patentablauf Prix Cachet Viagra Furosemide Generic Propecia Dolore Prostata buy accutane online from canada viagra cialis Elocon With Overnight Delivery Buy Metformin Without Doctor Order Prozac Il Cialis Non Fa Effetto Sans Ordonnance Amoxicillin Sans Ordonnance Comprime L Alcool Isotane Levitra Esercizi Di Kegel Cialis Flussig Kaufen Cialis Zithromax Weekly Pharmacie Cialis Levitra how to get a free trial of levitra Priligy 60 Miligramos Zithromax Dosage Elderly Best Generic Lasix Kamagra Kaufen Ohne Kreditkarte Acheter Viagra Discret Cheap Amoxil Pills Propecia Venta Libre Cialis Generika Bewertung Vibramycin Comprar Cialis Soft Levitra Daily Use Purchase Cialis Acheter Xenical Suisse Farmacie Online Italiane Cost Of Generic Propecia Propecia Adelgaza Cialis 20mg En Belgique Alli Where To Buy Cialis Que Es Viagra 30 Anos Cheap Vibramycin 100mg Methocarbamol 750mg No Prescription Buy Online Tadalis Sx Zithromax 250mg Cialis Senza Ricetta Yahoo Answers Cialis En Vente Libre Viagra Price Deltasone Wiki Acquistare Il Cialis Online Pharmacy Kamagra Photos Amoxicillin Reaction Cialis 4 Tabletas Purchase Generic Cialis Cialis Efectos A Largo Plazo Using Expired Amoxicillin cialis online pharmacy Viagra Generica Barata Where To Get Antabuse In Massachusetts Buy Inderal Online USA Differenze Viagra Cialis Levitra Propecia Schweiz Prices Lasix Lopid Tadalafil 50mg Buy Zithromax Online Us Medicamento Propecia Shipped Ups Secure Ordering Acticin Scabies Online Cheap Cialis Best Place To Buy Viagra Online Viagra Frau Wikipedia Buy Kamagra Cheap Propecia 5mg Forum Viagra 100 Cheap Clomid Online Buy Sildenafil 50mg Uk
Posted by Justisorry on
Cialis Generic Soft Tabs Lagerung Levitra Prostate Fexofenadine Steriods Cephalexin cialis Cyklokapron Discount Coupons For Prevacid Propecia Pve
Posted by Mytishisit on
Посмотрите внимательно документы на квартиру, проверьте паспорт. однокомнатная квартира в мытищах под силу ли вам разгадать все секреты и опередить сами знаете кого? жк отрадный официальный сайт цены на квартиры
Posted by Bettyfet on
online casino real money
kasino
online casinos for us players
online casinos for us players
Posted by Venessadus on
slot game
play casino games online
online casino slots
online casinos for us players
Posted by RositaTuh on
play casinos
online casino slots
free casino games and poker
free online casino
Posted by HelenPibly on
casino casino
online casino games
vegas casino games
casinos online
Posted by AudreyExcip on
casino games
online casino
online slots
online casino
Posted by Lennataw on
casino games
online casino
real money casino
online slots
Posted by Leslieoxymn on
flagyl antibiotic
flagyl antibiotic
flagyl
voltaren tablets
voltaren tablets
voltaren 50 mg
voltaren 100 mg
Posted by Helencet on
casino online
online casino real money
online casino gambling
casino online for fun
Posted by Mariafix on
play casino games online
online casino slots
slot online
online casino games
Posted by HenryMairm on
http://ashematme.ru - ashematme.ru
Posted by Terrigar on
online gambling casino
kasino
casino games
online gambling casino
casino games real money
online casino slots
cassino
casino slots
online gambling casino
best online casino
casino games slots
best online casino
Posted by GudIncick on
Mail Order Amoxicillin generic 5mg cialis best price Priligy Uruguay Baclofene Methadone
You must be logged in to leave a reply. Login »