Your
Forex Strategy -
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Interested
In Fibonacci? |
In a nutshell, the Fibonacci Two-Step means you set an entry order to be pulled in if and when price touches the Fib50% retracement level, and you set your target at the Fib1.27% extension level.
Use this strategy in line with your other indicators and trade in the direction of the trend for minimal risk.
Why is this strategy so successful? Because it’s not too ambitious. Price will often pull back to the Fib50% level and no further. It will often go to the Fib127 and no further. So using these two levels puts one on middle ground with a higher chance of getting taken into the trade with the target successfully met.
Before entering the trade, measure the distance between the Fib50% retracement level, your possible entry point, and the Fib79% retracement or even the 100% level. If it is more than 25-30 pips, pass on the trade. The risk is too great. If price pulls back further than the Fib50% level even all the way back to the last swing high/low, you will be in trouble.
However, if the Fib79% or 100% level are within 25-30 pips of your entry at Fib50%, you have a possible trade.
Notice in the example below how price just reached the Fib50% retracement and just touched the Fib127% extension. Don't be too ambitious and profits will come!
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GBP/USD Entry at 1.8691 - Fib50% Exit at 1.8634 - Fib127% Profit: 39 pips (43 pips minus spread) |
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