Cases of Using Fibonacci Retracement

Hello!

Satori here, researching FX.


This time, we will introduce a practical example of using Fibonacci retracement.

The indicator used for the verification is the "Fibonacci Retracement Indicator Push Up," based on wave theory utilizing Dow Theory and the Fibonacci sequence.

Dow Theory and Elliott Wave, which state that markets form trends through higher highs and higher lows and lower highs and lower lows, reproduce the basic psychology of people.

For example, when an uptrend is forming, if you buy at half of the price range after a rise (Fibonacci sequence 0.5), and you do not break the low of the previous valley nor exceed the high of the previous peak, an uptrend is considered to be formed and you can ride the trend.

By applying the Fibonacci sequence to Dow Theory, you can adaptively respond: when the market is strong, pullbacks are shallow, so buy at 0.236 or 0.382; when the market is weak, pullbacks are deep, so buy at 0.5, 0.618, or 0.764.

The figure below shows an example of an upward wave on the USDJPY 5-minute chart.

We are using the "Fibonacci Retracement Indicator Push Up" pullback buy setup.

The diagram above shows an example of a signal that won 10 in a row over about 12 hours.

The total gained pips in the figure above is 48.2 pips.

Please use it as a day trading and scalping example.

The trade rules in the figure above are as follows.

When the trend is moving upward, open a buy with the 0.382 pullback red downward arrow signal
Take profit at TP = the high of the previous peak
Stop loss at SL = the low of the previous valley

The lower figure is a partial enlarged view of the above trade.

When the 0.382 pullback occurs, a red downward arrow and reversal (= turning) price are also displayed.

The figure below shows a downward wave example on EURUSD 1-hour chart.

We are using the Fibonacci Retracement Indicator Push Up for retracement selling.

The diagram above shows an example of a signal that won twice over about 3 days.

The total gained pips in the figure above is 124.7 pips.

Please use it as a swing trading example.

The trade rules in the figure above are as follows.

When the trend is moving downward, open a sell with the 0.618 pullback blue upward arrow signal
Take profit at TP = the low of the previous valley
Stop loss at SL = the high of the previous peak

Thus, the "Push Up" can be applied from 1-minute to weekly charts, suitable for day trading, scalping, and swing trading.

Also, as shown in the diagram below, the expected reversal price is updated in real time at the right edge of the chart, allowing you to place a limit order at the reversal point.