Created: Jun 27, 2022

How I trade FIB's

 -In this write up I am going to go over how I use fibs to enter and exit trades. If you do not know what fibs are I suggest you watch some YouTube videos to familiarize yourself with them. I find Trading Warz to be the best in explaining how to draw and play them but let me warn you, he can be a bit much at times, so if he's not your cup of tea there are numerous others who are very knowledgeable and can give you the basics on how they work.

- I will be using QQQ in the below charts.

-First, I always start on the daily. The daily will give you stronger levels but they are too spread out to use them to day trade usually. In the example below you will see that I identified the trend by drawing the channel of it (in white). This is an uptrend so I begin at the 269.28 level (100%) and draw to the 296.89 level (0%).

-I have the golden zone highlighted with yellow lines (38.2% to 78.6%). You'll notice that my golden zone is a little different than most. I believe that the 38.2 level acts as support more times than not. I'll go over how I use that level on the next example so it should be clear why I use it. Smaller accounts I would suggest that you do not include that level when drawing your levels. I scale in and out so if it continues to retrace further I will just keep adding. You might not have that luxury so I would suggest that you start your golden zone at the 50% level.

-Also you will see that I have some levels green and some red. These are my price targets and stop loss. 100% will always be a hard stop.

Weekly channel .png 217.69 KB

-Now lets go to the intraday 5 min chart. This is my go to chart. I will also keep the 10 min and the 15 open to confirm ema clouds.

-I did remove the daily fibs just so you could see the intraday better. There was some overlap that made the chart a little busy.

-All of the following examples will be Thursdays chart. I did not want to skip around to different days. I wanted you to see how a typical day looks.

-I usually wait at least 15 mins after open to take a trade. So my first set of fibs would be off the 15 min orb.  Occasionally I will play the 3 min orb but that will come on a later post possibly.

-On this example we started the day in a downtrend. So I started my fibs at 283.89 level and ended it at the 280.67 level.  Honestly I would have taken a trade here and been stopped out as soon as we hit that 100% level. That also would be where I reversed my fibs to an uptrend.I pointed the break out by the white arrow. (Disregard all the other colored arrows. Those are Saty pivot points)

Thursday ORB fib.png 218.57 KB

-On the next chart you will see I drew my fibs from low to high. 280.07 level to the 284.75 level (trend reversed). Here I would take my first position at the white arrow. You see the two candles before it broke the 38.2 level. The next one used that level as resistance and finally it broke and that would be my entry. The 38.2% intraday was also the 50% daily level.

-The reason I use the 38.2 level is that I find it acts as support a good bit of the time (especially when it lines up with a longer frame level). I also scale in and out of my plays (why I mentioned above for small accounts to stick to 50% as entry). So I will take 4 cons at the 38.2% level, 4 cons at the 50%, then I will wait and see if the 78.6% level holds up. If it does I will take my last 4. 

thursday first fib entry.png 200.97 KB

-On this screenshot you can see that it didn't come back to any other fib levels in the golden zone it actually went up to my first target at the 0% level. I would scale 2 of the 4 here.

Thursday first scale out .png 201.1 KB

-Since I only had 4 cons I would scale 1 more at the -38.2% level. (Yes I skipped the -23.6 fib because I wasn't all the way in. If I was I would scale at that level too).  Now I set my stop loss back at the 0% level. Each level it goes up I will move my stop loss up with it.

Thursday second scale out.png 203.34 KB

-This is how I typically play fibs. I hope this helps some of you. Any feedback would be greatly appreciated. I don't usually do write ups so if you need more detail or just have a comment let me know.  I will always try my best to answer any and all questions that you might have. 

- I have another post on here describing how I play the Elko Zone. It is when vwap is at one of my key fib levels. I encourage you to read it. I think it will be helpful. I usually go in a little stronger on those levels instead of scaling in.

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