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Trading with Fibs


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Trading with Fibs

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  #1 (permalink)
California
 
Experience: Intermediate
Platform: MT4, TOS
Trading: /ES /CL
 
Posts: 110 since Feb 2012
Thanks: 15 given, 120 received

Hello futures.io (formerly BMT),

I have decided to start a journal here to keep myself more accountable, and to force myself to review every trading day to spot pitfalls, strengths, and prepare for the next day.

A little about me. My current trading style is that of Dave Halsey from eminiaddict. I don't want to go into too much about that since it will make me look like I'm advertising but that is where I learned my current trading style and it is so far the most suitable one for me. I trade /ES, /6E, /6B, and /TF with it. That is the bulk of my trading. I also trade /CL ACD style but I have personalized it so it gives me very little trades due to my risk parameters. For the purpose of this thread, I will only be reviewing my fibs trade.

A little bit more about me. I started in 2008 when my friend introduced me to the stock market. I began trading after learning some simple TA. My instrument then was options and occasionally pennies. I remember my first option trade ever. It gave me a 20% loss in my account. It was the day before RIMM earnings. Because I was so smart, I thought if I bought a call and a put with stops, I will profit when RIMM opens the next day and will rocket one way or the other and I will profit. Well, I didn't think about what happens if it doesn't move after earnings and that was where my loss came in. Both my positions were stopped out. That was my first trade ever and the most memorable one.

It only took a few months before I suffered a total loss of 80% in my account. At that point, I decided to put whatever funds I have left into a micro stock. I did my own research and felt certain this will be a big win many years from now (I was thinking long term). The stock was ASTC and I was entered at a price of 1.25. I checked in a few months later and found this has gone up to $4! I didn't take profit. I kept telling myself, this is going to be my first 10 bagger ever! I was 99% sure! Another few months passed, I checked in and I was down 50%.

I raised the white flag and exited the market.

About two years since, I rediscovered trading. This time in the FOREX market. I was fortunate enough to stumble upon the giant price action thread on FF and learned everything there. I began practicing it on demo, then on a real mini account, and I was winning consistently. Here's the problem, it trades on a daily time frame. With a small account, it will take forever to build it up. When stops are 100-200 pips and account size is small, I'm pretty much trading at 10cents per pip. I can fund a larger account so that I can trade larger size, but the problem remains the same it takes too long. I have to wait a few days or maybe a week just to see a 1% gain in my account. That's when I told myself I need to migrate into lower time frame.

I eventually came into futures and traded /ES on 3min time frame with just price action. I use a combination of MA's, Pivots, and Candle patterns. I thought this was my holy grail. I was averaging 67% win with 1:1.5 risk/reward. I was doing this for a while until I realized sitting in front of the computer all day is not preferable to my lifestyle. I am soon to be a graduate student in Accountancy (yes I still have to go to school and work..unlike some of you here ) and I won't be able to monitor the market at all times. I need a way to trade just off predetermined price levels. I stumbled upon eminiaddict and ACD a few months back and have never looked back.

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  #3 (permalink)
California
 
Experience: Intermediate
Platform: MT4, TOS
Trading: /ES /CL
 
Posts: 110 since Feb 2012
Thanks: 15 given, 120 received


So the philosophy behind the fibs trading is to trade 50% retracements with a predetermined target. A picture is worth 1000 words so let me showcase the last trade I took before the end of week yesterday.

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  #4 (permalink)
San Jose, Ca
 
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David_R's Avatar
 
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Doubleclick,

I have a question about how you drew your retracement. You went from a swing high to another high. I've always thought you go from a swing low to high if retracing an uptrend and swing high to low if retracing a down trend. Is your method something you found that has worked for you?

David

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  #5 (permalink)
California
 
Experience: Intermediate
Platform: MT4, TOS
Trading: /ES /CL
 
Posts: 110 since Feb 2012
Thanks: 15 given, 120 received


David_R View Post
Doubleclick,

I have a question about how you drew your retracement. You went from a swing high to another high. I've always thought you go from a swing low to high if retracing an uptrend and swing high to low if retracing a down trend. Is your method something you found that has worked for you?

David

The way I learned it, there are two ways to draw the fibs.

Traditional - which is just swing high to low or vice versa as you pointed out

Extensions - which is drawn from high to high or low to low

One of the member was kind enough to make a video on how he uses it. It was through his video that I discovered this method:


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  #6 (permalink)
California
 
Experience: Intermediate
Platform: MT4, TOS
Trading: /ES /CL
 
Posts: 110 since Feb 2012
Thanks: 15 given, 120 received

I have tried many trading methods and what I learned is that simplicity is the best. The less I have on my screen, the better. When I used to trade with MA's, one MA will give a signal long while the other will give me short. Conflicting signals give me headaches. I know some people can utilize it properly and make a lot of money with it, but I can't. What I come to understand is that everything works and nothing works. Trading is highly individualized.

A problem I struggle with (being in west coast) is waking up early enough before the market opens. I was never much of a morning person and I have slowly been working on trying to fix it. I have trouble sleeping at night which leads to waking up late in the morning (hence missing some trades).

For example, yesterday there was a trade for /TF at 700AM PST. I actually woke up half an hour later and missed this. It would've been my only trade for the day and all that I needed. I'm slowly fixing this habit for sure though.

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  #7 (permalink)
BOSTON, MA
 
Experience: Advanced
Platform: Tradestation, TOS
Trading: commodities, TF
 
mfbreakout's Avatar
 
Posts: 7,244 since Oct 2010
Thanks: 3,467 given, 15,279 received

Good luck with your journal 2. It will help you tremendously. I was a member of e-mini addict 2 years ago. I am not sure where he gets his energy from. He patiently answers questions all day long. I just could not figure out how he draws his fibs. I will see if i can pick up from your journal his method. 2 questions

1) What is FF thread?

2) I am always looking for ACD threads to get new ideas? I have found some on internet but they have not been active in a while. Link please.





DoubleClick View Post
Hello futures.io (formerly BMT),

I have decided to start a journal here to keep myself more accountable, and to force myself to review every trading day to spot pitfalls, strengths, and prepare for the next day.

A little about me. My current trading style is that of Dave Halsey from eminiaddict. I don't want to go into too much about that since it will make me look like I'm advertising but that is where I learned my current trading style and it is so far the most suitable one for me. I trade /ES, /6E, /6B, and /TF with it. That is the bulk of my trading. I also trade /CL ACD style but I have personalized it so it gives me very little trades due to my risk parameters. For the purpose of this thread, I will only be reviewing my fibs trade.

A little bit more about me. I started in 2008 when my friend introduced me to the stock market. I began trading after learning some simple TA. My instrument then was options and occasionally pennies. I remember my first option trade ever. It gave me a 20% loss in my account. It was the day before RIMM earnings. Because I was so smart, I thought if I bought a call and a put with stops, I will profit when RIMM opens the next day and will rocket one way or the other and I will profit. Well, I didn't think about what happens if it doesn't move after earnings and that was where my loss came in. Both my positions were stopped out. That was my first trade ever and the most memorable one.

It only took a few months before I suffered a total loss of 80% in my account. At that point, I decided to put whatever funds I have left into a micro stock. I did my own research and felt certain this will be a big win many years from now (I was thinking long term). The stock was ASTC and I was entered at a price of 1.25. I checked in a few months later and found this has gone up to $4! I didn't take profit. I kept telling myself, this is going to be my first 10 bagger ever! I was 99% sure! Another few months passed, I checked in and I was down 50%.

I raised the white flag and exited the market.

About two years since, I rediscovered trading. This time in the FOREX market. I was fortunate enough to stumble upon the giant price action thread on FF and learned everything there. I began practicing it on demo, then on a real mini account, and I was winning consistently. Here's the problem, it trades on a daily time frame. With a small account, it will take forever to build it up. When stops are 100-200 pips and account size is small, I'm pretty much trading at 10cents per pip. I can fund a larger account so that I can trade larger size, but the problem remains the same it takes too long. I have to wait a few days or maybe a week just to see a 1% gain in my account. That's when I told myself I need to migrate into lower time frame.

I eventually came into futures and traded /ES on 3min time frame with just price action. I use a combination of MA's, Pivots, and Candle patterns. I thought this was my holy grail. I was averaging 67% win with 1:1.5 risk/reward. I was doing this for a while until I realized sitting in front of the computer all day is not preferable to my lifestyle. I am soon to be a graduate student in Accountancy (yes I still have to go to school and work..unlike some of you here ) and I won't be able to monitor the market at all times. I need a way to trade just off predetermined price levels. I stumbled upon eminiaddict and ACD a few months back and have never looked back.


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  #8 (permalink)
Aurora, Il USA
 
Experience: Advanced
Platform: TradeStation
Trading: futures
 
kbit's Avatar
 
Posts: 5,902 since Nov 2010
Thanks: 3,294 given, 3,355 received

The way that guy does his fibs makes sense to me but it seems like anything that twitches gets fibbed....is there such a thing as over fibbing

I look at a lot of the moves in a similar fashion so I'm not knocking it...I just do it mentally as opposed to drawing all the lines.

I think FF is Forex Factory......

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  #9 (permalink)
Site Administrator
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Congrats on taking this step to start the journal.

Mike

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  #10 (permalink)
California
 
Experience: Intermediate
Platform: MT4, TOS
Trading: /ES /CL
 
Posts: 110 since Feb 2012
Thanks: 15 given, 120 received



mfbreakout View Post
Good luck with your journal 2. It will help you tremendously. I was a member of e-mini addict 2 years ago. I am not sure where he gets his energy from. He patiently answers questions all day long. I just could not figure out how he draws his fibs. I will see if i can pick up from your journal his method. 2 questions

1) What is FF thread?

2) I am always looking for ACD threads to get new ideas? I have found some on internet but they have not been active in a while. Link please.

1.) As kbit pointed out, FF is Forex Factory. I truly learned a lot from there.
2.) Not a lot of ACD threads out there. There were a few in FF but they aren't active anymore. Yours is just about the only one! Along with another from ET but I really dislike the forum system there.

Here's one of them: https://www.forexfactory.com/showthread.php?t=285053

I'll have to agree with you there. DH is very enthusiastic with what he does and he doesn't mind answering the same question over and over again until we get it. He mentioned not using this on /CL before because of its participants. I will have to test it out though!


kbit View Post
The way that guy does his fibs makes sense to me but it seems like anything that twitches gets fibbed....is there such a thing as over fibbing

I look at a lot of the moves in a similar fashion so I'm not knocking it...I just do it mentally as opposed to drawing all the lines.

I think FF is Forex Factory......

It gets messy sometimes but I keep mine clean lol

Eyeballing it works too I believe, it's just half of a swing after all!



Big Mike View Post
Congrats on taking this step to start the journal.

Mike

Thank you

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