*”My long trade in EUR/USD at 1.4986 as made about 30 pips for now….:) and your article about Fibonacci techniques are great and very amazing…!!”*
This was a recent quote from trader “Haryo” on my Fibonacci Trading Facebook Page.

Through my Daily Forex Charts service, I work with traders on a daily basis- discussing strategies using my Fibonacci techniques and applying them to the current markets. I can’t even begin to tell how rewarding it is for me to see these strategies work time and time again.

Recently, I made a short video lesson to share with you how my Fibonacci techniques can make your trades profitable. This video lesson is based on a GBP/USD 4 hour chart that I recently posted to my Fibonacci Trading Facebook Page when the trade opportunity was setting up. See that chart which was posted before the (predicted) trade.

Click to watch Fibonacci video lesson

Click here to see the Fibonacci Trading Made Easy lesson, showing my Fibonacci techniques in action.

It’s the day before Thanksgiving Holiday, a long weekend break for many traders. Best wishes to all our readers in the USA.

-Neal Hughes “FibMaster”

Click to enlarge

ORIGINAL POST on 19 Oct 2009:
This is a preview of a trade under discussion at the Fibonacci Trading Forum at DailyForexCharts.com.

Cable (GBPUSD) is at a key decision point here. I have marked the attached Daily chart with a green arrow for a long zone and a red arrow for a short zone. The 1.6400 level is critical.

Look to short rallies in the red shorting zone, or buy dips in the green long zone.

To monitor specific entry/exit details as the trade progresses, join us in the Fibonacci Trading Forum at DailyForexCharts.com

Click to enlarge

UPDATE on 20 Oct 2009:
Trading is often not as clean and tidy as we would like. Since the Trade alert above, GBP/USD has stalled right around the predicted 1.64 area. This pair could break either way, but the problem now is to avoid being tempted into false triggers.

Patience is important, we must wait for a break to be confirmed, and then we want a follow-through with momentum after entry.

DailyForexCharts members are monitoring this (potential) trade in the Fibonacci Trading Forum.

I will post an update here in the coming days after my live chat session with DailyForexCharts members.

I was planning to update this trade setup, when a DailyForexCharts member posted a message on the Fibonacci Trading Forum. His message summarizes the trade perfectly, so I have copied it below. Click the chart below to see his trade. The Yellow triangle/arrow is the entry, for a 160 pip profit.

You can learn these trading techniques easily, just watch my video lessons.

Click to view chart

>MartinUK wrote:
>
> Hi Neal
>
> Thanks again for a great live chat very useful and very informative, I
> must say I have joined many clubs re-forex to learn forex trading, but
> yours is by far the best, the interaction you have between and for your
> members is first class.
>
> For me as I love fibs /support & resistance / and price action
> ( candles) your way of trading is the best for me.
>
>Thanks again for all your time and help
> MartinUK

Have you noticed less momentum, more whipsaw, smaller trends and more ranging markets lately?

In today’s charts, I want to show how some subtle market changes can eat into your profits, and what you should do about them. We must adapt to maintain our profitability.

This blog post will help you gain & maintain profits in current conditions.

Markets are continuously evolving, they never rest, and they never remain constant.

Traders must maintain a sense of current market action, and monitor for changes. Trends change, volatility changes, momentum changes. All of these have an effect on profitability.

DOW & Gold charts, ATR

We are fortunate that Fibonacci and TRSI automatically take changes into account, because they both use price action to help us control risk and take profits. However, there are some long-term subtle changes that we should take into account when we plan our trading strategy.

Start with the DOW and Gold chart on the left. These are monthly charts, showing a strong rally by both of them, with an up-trend on the TRSI. The TRSI has been pointing the way to profits, but what I really want you to notice is the Average True Range (ATR). Both of these charts are showing a dramatic drop in ATR. You would find the same ATR pattern on the weekly chart.

EURUSD & USDJPY, ATR

Now look at the second chart showing EURUSD and the USDJPY monthly charts. It’s the same picture, the ATR is dropping fast! USDJPY is the down-trending chart on the left, and EURUSD is the rallying chart on the right.

As usual, the TRSI is reliably showing the trend of the chart. Whether in an up-trend or down-trend, the ATR is dropping aggressively. 2009 is a year of falling ATR.

GBPUSD & Oil, ATR

Just to prove the point, I have also supplied the GBPUSD and Oil (e-mini crude) to show the same phenomenon. ATR is plummeting!

Whatever you are trading, look at the monthly ATR. Pay attention to this, the markets are changing.

What does it mean? World-wide, many trading instruments are trading in smaller moves, less momentum, shorter trends, lower volatility. There are practical implications for traders, and it may be showing in your trading account.

If you are not adapting, you are taking more losses and making fewer profits. Your trades are moving slower (less momentum), and you experience more whipsaw.

We can expect lower momentum, with more consolidation and trading ranges, overall less volatility.

What should you do? As long as this pattern continues on monthly and weekly charts, we must capture smaller moves. Generally, our profit targets should be closer, and our exits quicker. If we are entering on a trend, we can expect smaller retracements for quicker entries, and overall, smaller moves to nearby profit-points. In general, we must be more nimble, ready to take a profit and re-enter if the move continues.

Members of DailyForexCharts are constantly updated on market conditions, and traders who have studied my seminars on Price Action and TRSI trading are well positioned the adapt with the markets.

Monitor the markets, price action tells you everything!

-Neal “FibMaster” Hughes.

Want to know how to trade the Cable (GBP/USD) chart? See a recent chart posted for DailyForexCharts members last week predicting resistance and a shorting zone at 1.6070.

What a great call! Take a look at today’s chart, with a sneak preview of DailyForexCharts.

That’s a shorting zone of 200 pips! Do you want great trading calls like this in your email every day? Join DailyForexCharts to get great trade setups like this in your email everyday.

This may give short opportunities in the coming London session. Bullish if it takes out today’s swing high, so no shorting up there..

Please watch tonight’s DailyForexCharts update for details of a short setup on this pair.

I’ve literally just signed up so hope its ok i post my thoughts and a question here.
I was whip-sawed out of this cable short earlier when it spiked upwards – just before the sudden massive drop down

Now that its moved so far , is there another fib setup on offer – pullback in action as we speak?

Thx

The trade i got stopped was based on a H1, but my entry was amateurish at best admittedly, and the stop was easily taken out by the spike.

pipmyride wrote: I’ve literally just signed up so hope its ok i post my thoughts and a question here.
Thx

Sure! Welcome..

pipmyride wrote: The trade i got stopped was based on a H1, but my entry was amateurish at best admittedly, and the stop was easily taken out by the spike.

Click image to enlarge

Ok 1 hour entries.. I can’t tell where you entered, or which spike took you out. It may be that your stop was too close or your entry too early.

Attached is a 30 minute chart, showing SK resistance at about 1.6300 which could be a [pace to look for shorts. This chart has long-term support in the 1.61 area, adding to the risk. No fun shorting right at support, easier profits if he support breaks first.

Click image to enlarge.

Thx Neal – i should have posted a chart though to show my thoughts and entry.
As you can see – using the fibs for entry is still an area i’m learning and getting a grasp of – i’m trying to be positive though and see it as a move i just missed out that would have netted 100+ in about 2 hours.

Even with our best efforts, we will still take a loss now and then, and miss a trade..

Some other traders here may comment on your setup.

Some things to check;
Did you have SK resistance at the .382 for your entry ?
Was your stop protected by SK resistance?

I have family coming into town, so will have interrupted access here today. If I don’t respond sooner, then I will later.

-Neal.

Hi Pipmyride

What I observe from your trade is the following:

1. From your charts I do not see that you used an indicator to trigger your trade. Normally I rely on the TRSI as developed by Neal, but MACD could also be useful.

2. Fibs are great, but we cannot use them in isolation especially single Fibs. It is normally safer to have more than one FIb coinciding at a similar level e.g. 38.2 & 61.8 at similar levels. Your trade you only focused on the 38.2 from a very recent swing, without taking into account what happened on the bigger picture.

3. You also placed your stop too close and that is why you were spiked out and your stop should rather act as a disaster stop (extreme situation) otherwise you’ll keep on being spiked out. With your specific trade I would have suggested placing it above the 61.8 Fib @ 1.6408 and that would have kept you in the trade, because your analysis was correct, but the close stop killed it.

From your post you also stated that you are still learning and I would suggest to you that you get hold of Neal’s training material,if you haven’t done so (http://www.fibmarkets.com/video-seminars/overview/). Many of these issues you’ve experienced with this loosing trade is addressed by him and it will help you become a more succesful trader.

I can also promise you that you won’t regret the expense because Neal’s material will save you mega bucks in the long run and his teaching on Fibs is unsurpassed!! You could also consider subscribing to Neal’s daily chart updates during which he’ll point traders to daily levels to watch for during trading (http://dailyforexcharts.com/subscribe.html) and the beauty is that you have a money back guarantee!!!

Just remember that losses are part of trading and don’t be disheartened by one trade or the fact that you missed a trade. The secret is to accept it as part of trading and to learn from past mistakes.

Lifesong wrote:Hi Pipmyride

What I observe from your trade is the following:

Thx – i actually have the basic/adv fib seminars and just purchased the trend trading one. I just need the experience trading the system.

Having said that i am not new to trading, just trying to expand my knowledge of using fibs to find those key areas.

Click image to enlarge

For Fibmaster and others, i viewed the GU email update and i’m finding it difficult to see the fib high and lows that you have marked because your chart software does not have the line drawn as does MT4 – i’ve included a H4 chart that you can see the fibs i’ve drawn – could you confirm these are correctly drawn – as far as i can see you have first resistance at 1.6070 (which we are touching as i write) and my chart shows that level is the 23.6 of the entire current down move. I dont see a cluster there – is this correct ?

Thx for your patience

Thx

Hi Pipmyride,

If you are using MT4, you may want to edit the Fibonacci property to delete away other fib levels except 38.2 and 61.8 for ease of viewing. To derive the 1.6070 SK resistance, you have to go down to 1hrly chart where you should be able to draw two more study; from the high of 1.6388 and from the high of 1.6233 to the same low of 1.5770.

I hope this help!

Regards,
Kim

Hi Pipmyride,

 

If you are using MT4, you may want to edit the Fibonacci property to delete away other fib levels except 38.2 and 61.8 for ease of viewing. To derive the 1.6070 SK resistance, you have to go down to 1hrly chart where you should be able to draw two more study; from the high of 1.6388 and from the high of 1.6233 to the same low of 1.5770.

I hope this help!

Regards,
Kim

Great !
I think i got it .. thx

Click image to enlarge

Pipmyride,

Learning like you, but here’s my attempt, I’m sure FibMaster will weigh in and give us both some insight. If you’ve seen the videos you’ll remember that we normally disregard the minor fibs of .236, .5, and .768, .886, .707 and probably a few others. I do find that sometimes these minor fibs line up nice with SK resistance (a .382 and .618 in ‘close’ proximity). I’ve marked my reactions (swing hi’s with red arrows.

Thanks,
Rhino

pipmyride wrote:

Lifesong wrote: Hi Pipmyride

What I observe from your trade is the following:

Thx – i actually have the basic/adv fib seminars and just purchased the trend trading one. I just need the experience trading the system.

Could you confirm these are correctly drawn ?

Thx

You are on the right track. Definitely remove all those less-reliable Fibonacci levels, they will just cause confusion. It is important to stick to the Fibonacci levels that work best, most often.

Look at Rhino’s chart above, the red arrows mark the correct places to measure the FibLevels. You want to use all the stand-out major swing points for Fibonacci support or resistance.

It looks like others have answered your questions very well. Let me know if any part of your question has been missed, or if I can help any further.

-Neal.

Rhino – that chart helps beautifully – i really appreciate the time you’ve taken to post this.

Thx very much all, thx fibmaster

Combat Trading Losses

 
Below are trades and comments from members at FibMaster’s Trading Forum.<<-Click to join

Click to enlarge

Hi,
I am following this pair today. Daily and 4 hour are down. Maybe a bit oversold on lower time frames. I am hoping for pull back to SK resistance at 1.6228 or 1.6280 for a short entry.
The blue line on 30 min chart is the neckline of a possible Head & Shoulders on the Daily. let’s see.
Hussam.

I like it, a weak rally would be great for shorting.

Click to enlarge

should get it…little buy pattern earlier but great downtrend.

Hi Neal,

We are pushing through the 1st SK resistance at 1.6230, and heading to the next SK at 1.6292. I guess above that , no shorting. 4 hour TRSI looks like it wants to cross up. Does that make sense ?? Thanks.
Hussam.

Hi Hussam,

The SK Resistance is based on 1hrly chart, the price is rejected at the SK resistance with 4hrly TRSI is about to cross up and 1hrly TRSI is in up trend. If you want to wait for 1hrly TRSI to cross down, the play could be well over.

My opinion for such setup is to scalp only on lower time frame such as 5/15min chart where you enter short if 5min shows LL LH below SK resistance @1.6230.

Regards,
Kim

Click to enlarge

Originally posted by “Bert”; Mon Sep 21, 2009 10:27 am

Always amazed (and thankful to Neal) at how well SK resistance works! Amazing!

Thanks!
Al Bert

Hi Kim,

Thanks Kim. I feel you could be right, in general. I am keeping an eye on the 5 min as well, but if I trigger on the 5 min, then I am really trading a 5 Min chart on the 30 min trend. In this case, 30 min TRSI had crossed up (for the pull back). So, really, I can’t trigger on the 5 min. Also, I noted earlier that the pair maybe a bit oversold and the 4 hour TRSI was trying to cross up. AS it happens, in about 4 minutes my 4 hour TRSI will have officially crossed up, in conflict with the daily. So, it is messy, at the moment. I decided to wait.
Regards,
Hussam.

Hussam wrote: Hi Neal,

We are pushing through the 1st SK resistance at 1.6230, and heading to the next SK at 1.6292. I guess above that , no shorting. 4 hour TRSI looks like it wants to cross up. Does that make sense ?? Thanks.
Hussam.

Hussam,

I’m sorry I missed this post earlier. I was around at that time, but with London nearing a close, I missed your post.

-Neal.

Bert wrote:  Always amazed (and thankful to Neal) at how well SK resistance works! Amazing!

have a good day everyone

Yes, nothing better than Fibonacci for trading! If you know how to do it right, of course.. Your chart was right on.

Kim wrote:  Hi Hussam,

The SK Resistance is based on 1hrly chart, the price is rejected at the SK resistance with 4hrly TRSI is about to cross up and 1hrly TRSI is in up trend. If you want to wait for 1hrly TRSI to cross down, the play could be well over.

My opinion for such setup is to scalp only on lower time frame such as 5/15min chart where you enter short if 5min shows LL LH below SK resistance @1.6230.

Regards,
Kim

Very good observations.

Hussam wrote:Hi Kim,

Thanks Kim. I feel you could be right, in general. I am keeping an eye on the 5 min as well, but if I trigger on the 5 min, then I am really trading a 5 Min chart on the 30 min trend. In this case, 30 min TRSI had crossed up (for the pull back). So, really, I can’t trigger on the 5 min. Also, I noted earlier that the pair maybe a bit oversold and the 4 hour TRSI was trying to cross up. AS it happens, in about 4 minutes my 4 hour TRSI will have officially crossed up, in conflict with the daily. So, it is messy, at the moment. I decided to wait.
Regards,
Hussam.

Click to enlarge

TRSI gives you a good sense of the market, the direction, momentum, likelihood of change, strength of trend. It helps you to train your mind, your gut, to make better decisions.

You nailed it today, saved yourself from a losing trade.

I’ll post a 15 minute chart, showing how it rallied and would have been a loser if you were short.

FYI, on a 5 minute chart, there were tons of opportunities to see that the short trade was not working, so a large loss would not be likely, if you traded with my techniques. Without those techniques, I imagine traders crossing fingers, wishing their stop doesn’t get hit again lol !

-Neal.

FYI, I’m recording a DailyForexCharts video update on this pair right now. Still some downside opportunity, but we need to get further away from support.

Neal wrote :
” Great decision! Where did you learn to read the markets like that? ROFL !! ”

Thanks Neal. Well, I can only recommend that people visit www.fibmarkets.com

Thanks,
Hussam.