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The Truth About Fibonacci Trading 2

The Truth About Fibonacci Trading

The truth about Fibonacci levels is that they are useful (like all trading
indicators). They do not work as a standalone system of trading and
they are certainly not the “holy grail”, but can be a very effective
component of your trading strategy.

But who is Fibonacci and how can he help you with your trading?

Leonardo Fibonacci was a great Italian mathematician who lived in the


thirteenth century who first observed certain ratios of a number series
that are regarded as describing the natural proportions of things in the
universe, including price data. The ratios arise from the following
number series: 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 ……

This series of numbers is derived by starting with 1 followed by 2 and


then adding 1 + 2 to get 3, the third number. Then, adding 2 + 3 to
get 5, the fourth number, and so on.

The ratios are derived by dividing any number in the series by the next
higher number, after 3 the ratio is always 0.625. After 89, it is always
0.618. If you divide any Fibonacci number by the preceding number,
after 2 the number is always 1.6 and after 144 the number is always
1.618. These ratios are referred to as the “golden mean.” Additional
ratios were then derived to create ratio sets as follows:

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The Truth About Fibonacci Trading 3

Price Retracement Levels


0.236, 0.382, 0.500, 0.618, 0.764

Price Extension Levels


0, 0.382, 0.618, 1.000, 1.382, 1.618

The first set of ratios is used as price retracement levels and is used in
trading as possible support and resistance levels. The reason we have
this expectation is that traders all over the world are watching these
levels and placing buy and sell orders at these levels which becomes a
self-fulfilling expectation.

The second set is used as price extension levels and is used in trading
as possible profit taking levels. Again, traders all over the world are
watching these levels and placing buy and sell orders to take profits at
these levels which becomes a self-fulfilling expectation.

Most good trading software packages include both Fibonacci


Retracement Levels and Price Extension Levels. In order to apply
Fibonacci levels to price charts, it is necessary to identify Swing Highs
and Swing Lows. A Swing High is a short term high bar with at least
two lower highs on both the left and right of the high bar. A Swing

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The Truth About Fibonacci Trading 4

Low is a short term low bar with at least two higher lows on both the
left and right of the low bar.

Fibonacci Retracement Levels

In an uptrend, the general idea is to go long the market on a


retracement to a Fibonacci support level. The price retracement levels
can be applied to the price bar chart of any market by clicking on a
significant Swing Low and dragging the cursor to the most recent
potential Swing High and clicking there. This will display each of the
Retracement Levels showing both the ratio and corresponding price
level. Let’s take a look at some examples of markets in an uptrend.
The same points made by these examples are equally applicable to
markets in a downtrend.

Example 1: Here we plotted the Fibonacci Retracement Levels by


clicking on the Swing Low at about $71.31 and dragging the cursor to
the Swing High at about $89.83. You can see the resultant levels
plotted by the software. Now the expectation is that if the market
retraces from this high it will find support at one of the Fibonacci
Levels, because traders will be placing buy orders at these levels as
the market pulls back.

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The Truth About Fibonacci Trading 5

Example 1

Example 1.1

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The Truth About Fibonacci Trading 6

Example 1.1: Now let’s look at what actually happened after the
Swing High occurred. The market pulled back right through the 0.236
level and continued the next day through the 0.382 level before
finding support. After a few days, the market resumed its upward
move. Clearly buying at the 0.382 level would have been a good short
term trade.

Example 2: Again, the Fibonacci Retracement Levels were plotted on


the chart in the same manner as described in Example 1. Again, we
are looking for the market to retrace from the Swing High and find
support at one of the Fibonacci levels.

Example 2.1: Now let’s look at what actually happened. The market
again pulled back right through the 0.236 level and continued to pull
back until it found temporary support at the 0.50 level (a lot of buyers
at this level). However, once the buying power was exhausted, the
market continued to retrace all the way down to the 0.764 level before
resuming its upward trend. In this case, buying at the 0.764 level
would have been a good short term trade.

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The Truth About Fibonacci Trading 7

Example 2

Example 2.1
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The Truth About Fibonacci Trading 8

Example 3: Here’s another example. If the market retraces from the


Swing High, where will it find support?

Example 3

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The Truth About Fibonacci Trading 9

Example 3.1: Well, in this case the market found support at the 0.50
level. Buying at this level would have been a great trade as the
market gapped up a few days later.

Example 3.1

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The Truth About Fibonacci Trading 10

Example 4: Here’s one more example.

Example 4

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The Truth About Fibonacci Trading 11

Example 4.1: Whoops! The market gapped down through all levels
of support and never looked back. A long trade here would have been
a loser or at least an open lose position.

Example 4.1

You can see from these examples that the market often finds at least
temporary support at the Fibonacci Retracement Levels – not always,
but often. It should be apparent that there are a few problems to deal
with here. First, there is no way of knowing which level will provide
support. The 0.236 level seems to provide the weakest support, while
the other levels provide support with approximately the same
frequency. Second, the market will not always resume its uptrend
after finding temporary support, but instead continue to decline below

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The Truth About Fibonacci Trading 12

the last Swing Low. Thirdly, placement of stops is a challenge – it is


probably best to place stops below the last Swing Low, but this
requires accepting a high level of risk in proportion to the likely profit
potential in the trade. Another problem is determining which Swing
Low to start from in creating the Fibonacci Retracement Levels. One
way is from the last Swing Low as we did in the examples. Another is
from the lowest Swing Low of the past 30 days. The point is, there is
no one right way to do it, and consequently it becomes a guessing
game.

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The Truth About Fibonacci Trading 13

Fibonacci Price Extension Levels

In an uptrend, the general idea is to take profits on a long trade at a


Fibonacci Price Extension Resistance Level. The Price Extension Levels
can be applied to the price bar chart of any market by clicking on a
significant Swing Low and dragging the cursor to the most recent
Swing High. Then by clicking on the Swing High and back down to the
retracement Swing Low and clicking there. This will display each of the
Extension Levels showing both the ratio and corresponding price level.
Let’s take a look at some examples of markets in an uptrend. The
same points made by these examples are equally applicable to
markets in a downtrend.

Example 5: Here we plotted the Fibonacci Price Extension Levels by


clicking on the Swing Low at about $38.20 and dragged the cursor to
the Swing High at about $47.67 and then down to the retracement
Swing Low. You can see the resultant levels plotted by the software.
Now the expectation is that if the market continues higher it will find
resistance at one of the Fibonacci Levels, because traders will be
placing sell orders at these levels to take profits on there long trades.

Example 5.1: Now let’s look at what actually happened after the
retracement Swing Low occurred. The market rallied making new
highs pausing at the 0.382 level and again at the 1.000 level after a
retracement down it rallied again going right through the 1.382 and
1.618 levels. Taking profits at the 0.382 level would have been
premature, but taking profits at the 1.000 level would have made a
nice trade.

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The Truth About Fibonacci Trading 14

Example 5

Example 5.1

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Example 6: Again, the Fibonacci Price Extension Levels were plotted
on the chart in the same manner as described in Example 5. Again,
we are looking for the market to continue higher before finding
resistance at the Fibonacci Levels.

Example 6
The Truth About Fibonacci Trading 16

Example 6.1: Now let’s look at what actually happened. The market
rallied, making new highs and pausing between the 0.382 level and
the 0.618 level, and then continued higher. This up move could well
continue up to at least the 1.000 level. Taking profits at the 0.382
level would have been premature and only time will tell if taking profits
at the 0.618 level was the optimal place to exit the long trade.

Example 6.1

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The Truth About Fibonacci Trading 17

Example 7: Here’s another example. Will the market continue higher


to one of the Fibonacci Price Extension Levels?

Example 7

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The Truth About Fibonacci Trading 18

Example 7.1: Well in this case the market found resistance at the
0.382 level which would have been the place to take profits on any
long trades.

Example 7.1

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The Truth About Fibonacci Trading 19

Example 8: Here’s one more example.

Example 8.1

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The Truth About Fibonacci Trading 20

Example 8.1: Like the last example, the market found resistance at
the 0.382 level which would have been the place to take profits on any
long trades.

Example 8.1

You can see from these examples that the market often finds at least
temporary resistance at the Fibonacci Extension Levels - not always,
but often. As in the examples of the Retracement Levels, it should be
apparent that there are a few problems to deal with here as well.
First, there is no way of knowing which level will provide resistance.
The 0.382 level was a good level to cover any long trades in two of the
examples, but in the other examples taking profits at that level would
have been premature. Another problem is determining which Swing

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The Truth About Fibonacci Trading 21

Low to start from in creating the Fibonacci Extension Levels. One way
is from the last Swing Low as we did in the examples; another is from
the lowest Swing Low of the past 30 days. Again, the point is that
there is no one right way to do it, and consequently it becomes a
guessing game.

Alone, Fibonacci Levels will not make you rich. However, Fibonacci
Levels are definitely useful as part of an effective trading method that
includes other analysis and techniques. You see, the key to an
effective trading system is to integrate a few indicators (not too many)
that are applied in a way that is not obvious to most observers. All
successful traders know it’s how you use and integrate the indicators
(including Fibonacci) that makes the difference. The lesson learned
here is that Fibonacci Levels can be a useful tool, but never enter or
exit a trade based on Fibonacci Levels alone.

Good Trading,

P.S. If you’re really serious about learning how to use what you’ve
learned here along with other indicators, you need to try my trading
course, Instant Profits. Turn the page to find out more.

© 2004 Profits Run, Inc. Rev 01-20041124


The Truth About Fibonacci Trading 22

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© 2004 Profits Run, Inc. Rev 01-20041124


This is a tutorial about a Fibonacci Extension method that can be used to set very precise take profit
levels and to determine Support and Resistance levels.
In this tutorial I use screen shots from VT trader. It is free to use with a demo account. The grey
screenshots are from Tradestation.
The setup in popular charting tools like Tradestation or e-signal is very similar.
As an alternative you can download my MS Excel based Fibonacci Calculator
http://www.aergo.ch/download/webFIBOcalc-v2.zip and use a free chart at www.netdania.com

My preferred timeframe for this method is the 1h chart, but it is working on any timeframe.

Step by Step Tutorial

To use Fibonacci you must know the High, Low and the retracement depth of a swing.
Sequence in a Upswing: Low -> High -> Retracement
Sequence in a Downswing: High -> Low -> Retracement
The next screenshots shows what we are looking for.

Important: Highs and Lows ARE ALWAYS the peaks, for retracements you can choice if you
take the peak or the candle body as the reference.
To draw the Fibonacci lines press the button left to the arrow. Then click on a Swing High, hold the
left-mouse button, move the cursor to the low and release the mouse-button.
After that double click on a Fibo line to open the properties and enter the values from the next
screenshot. Set it as default to have it in all charts.

The rule & Levels


Based on the depth of the retracement I set my Take profit levels on the related Extension level.

Retracement Level Take Profit Extension


61.8% 176.4%
50 or 38.2% 161.8%
26.4% 127.2%

The 233% Extension is strong level as well, that’s why I always include it into my charts.

Example: If the price retraces to the 61.8% Level I set my main Take Profit level near the 176.4%
Extension (a little bit below in an Upswing and a bit above in a Downswing).
In the above example the retracement low-peak was at the 50% level but the candle closed above the
61.8% level. In this case you can choice if you now place your take profit Levels at the 176.4% or the
161.8% level.

Lets take a look into the following swing.


Retracement to the 38.2% Swing = Master Extension level = 161.8% but it is always a good idea to
take part profits on the 127.2% level.

For a Downswing you have to draw the Fibo from Low to High.
Another downswing example in Tradestation:
Clustering the Fibos

You properly noted that the Extensions are often acting as Support and Resistance levels for further
price action.
A cluster appears when multiple extensions and/or retracement levels from other swings are near
each other, these levels are heavy barriers.

I hope you liked this tutorial, further examples are included in the manual which comes with our Excel
based Fibonacci Calculator downloadable here: http://www.aergo.ch/download/webFIBOcalc-v2.zip

Author: Dave @ aergo.ch


TEKNIK ANALISA FOREX – 2

~TEORI 123 ~
~ TEORI ELLIOT WAVE ~
~ FIBONACCI RATIO ~

Teori 123 (Law of charts)


Umumnya pergerakan harga akan membentuk suatu pola zigzag atau biasa disebut teori 123.
Dimana jarak 1-2 lebih panjang dari 2-3 dan harga akan meneruskan sesuai trend pada 1-2. Pola ini
dapat terjadi pada chart dengan dengan skala time frame berapa saja.

Strategi Teori 123


Bila terjadi pola 123 dimana C adalah harga saat ini maka tempatkan entry point pada titik B dan
Stop Loss pada titik C atau A. Tempatkan target point kurang lebih setengah dari AB. Bila TP1
tercapai pindahkan SL ke C dan begitu selanjutnya.

Eliot Wave Theory (Pola 5-3)


Mr. Elliot menemukan bahwa pergerakan harga memiliki pola gelombang 5-3 yang selalu berulang-
ulang, dimana pola gelombang 5 disebut impulse wave dan pola gelombang 3 disebut corrective
wave. Teori Elliot ini di dasarkan pada psikologi pasar, seperti dijelaskan di bawah ini :

Elliot Wave Theory menjelaskan sbb:

Wave 1
Harga stock bergerak naik, disebabkan beberapa orang berpikiran
saatnya untuk BUY.

Wave 2
Harga stock turun, disebabkan beberapa orang merasa harga sudah
cukup tinggi dan waktunya untuk take profit.
Wave 3
Harga kembali naik, disebabkan orang ingin mengulangi profit saat wave 1 dan merasa stock
tersebut dapat menghasilkan profit. Biasanya harga bergerak lebih tinggi daripada wave 1.

Wave 4
Harga kembali turun, disebabkan harga sudah cukup tinggi dan saatnya untuk take profit.

Wave 5
Harga kembali naik, disebabkan orang-orang memburu stock tanpa alasan, setelah melebihi harga
wajar maka trend berubah menjadi pola ABC.

TEKNIK ANALISA FOREX


Halaman 1 dari 5
Pola 5-3 dapat pula terbentuk dari beberapa pola 5-3 yang lebih kecil

Kalau kita amati lebih jauh sebenarnya teori ini adalah pengembangan dari teori 123 dimana Elliot
menemukan bahwa dalam suatu pergerakan harga pola 123 terjadi 2 kali sebelum akhirnya berbalik
arah dan dilanjutkan dengan pola 123 kembali pada arah sebaliknya.

Fibonacci Ratio
Fibonacci Ratio adalah pengembangan dari teori 123 dan Elliot Wave dikombinasikan dengan
perhitungan Fibonacci Ratio yang berfungsi untuk menentukan level Support & Resistance.

Prinsip dasarnya sama dengan teori 123 yaitu dimana gelombang panjang (1-2) disebut swing akan
diikuti dengan gelombang pendek (2-3) disebut retracement. Dengan perhitungan Fibonacci kita
dapat mengetahui level support dan resistance dari pergerakan retracement.

Untuk menenentukan Fibonacci harus diidentifikasikan dulu Swing High dan Swing Low pada chart.

1. Fibonacci Retracement Level


Biasanya pergerakan retracement akan mencapai level 23,6%; 38,2%; 50%; 61,8%
kemudian kembali lagi ke level 0% hingga berlanjut ke extension level. Jika harga tidak
sanggup menembus level 0% maka harga akan bergerak ke level 100%. Begitu pula
sebaliknya.

2. Fibonacci Extension Level


Yaitu level support & resistance yang diharapkan akan dicapai setelah pergerakan harga
berhasil melewati level 0%

TEKNIK ANALISA FOREX


Halaman 2 dari 5
Berikut ini gambar contoh penerapan Teori 123, Elliot Wave & Fibonacci dalam chart.
• 1,2,3 menggambarkan Teori 123
• A,B,C,D,E & a,b,c menggambarkan Teori Elliot Wave
• Garis kuning adalah level Fibonacci & garis biru adalah level expantion Fibonacci

PENERAPAN TEORI 123, ELLIOT WAVE & FIBONACCI

Ketiga teori di atas dapat diterapkan secara bersamaan dalam Time Frame berapa saja. Prinsip
dasar sebenarnya yaitu prinsip breakout strategi juga dimana secara psikologis harga akan
bergerak berkelanjutan jika berhasil menembus level high atau low sebelumnya.

Strategi 1 :
1. Tentukan dahulu swing harga yang sudah terjadi dengan sempurna (level High & Low) dan
pastikan harga sekarang ada di antara level High & Low.
2. Pasang order stop BUY pada level High + 2xspread, dan pasang order stop SELL pada level
Low – 2xspread.
3. Pasang Stop Loss untuk kedua order tersebut di level 50% Fibonacci atau pada posisi
high/low.
4. Jika anda ingin menggunakan Target Poin gunakan level Fibonacci Expantion sebagai target
poin. (Jika Anda tidak ingin menggunakan Target Poin bisa lanjutkan ke Strategi 2).
5. Pindahkan Entry Anda yang belum tersentuh ke level swing baru yang sudah terbentuk
sempurna. Hal ini berguna apabila Trend berubah dan harga berbalik arah sebelum
mencapai target poin.

Strategi 2 : Trailing Stop


Jika harga sudah menembus Entry poin dan berhasil mencapai target yang diharapkan gunakan
Trailing Stop untuk meminimalkan resiko dan mengamankan profit yang sudah Anda dapatkan.

Gunakanlah selalu Stop Loss (SL). Dan pindahkan SL jika target sudah tercapai.

Contoh :
C = harga saat ini
B = entry order Buy
A = entry order Sell
D = Prediksi Target Poin

Saat swing C-D terbentuk pindahkan SL ke B


Sehingga posisi Anda aman, resiko = 0
Saat swing E-F terbentuk pindahkan SL ke E
Diposisi ini profit Anda aman.
Saat swing G-H terbentuk pindahkan SL ke G
Begitu seterusnya.

TEKNIK ANALISA FOREX


Halaman 3 dari 5
Strategi 3 : Compounding Profit
Tambahkan entry point saat harga sudah mencapai target.
Contoh :
C = harga saat ini
B = entry order Buy
A = entry order Sell
D = Prediksi Target Poin

Saat swing C-D terbentuk pindahkan SL ke B


Sehingga posisi Anda aman, resiko = 0
Saat swing E-F terbentuk pindahkan SL ke E
Diposisi ini profit Anda aman.
Saat harga di G stop order Buy di F dengan SL di G
Saat swing G-H terbentuk pindahkan SL1 ke G
Begitu seterusnya tambahkan order Buy setiap posisi Anda
aman maka profit Anda akan berlipat-lipat.

KELEMAHAN TEORI 123, ELLIOT WAVE & FIBONACCI


Tidak ada satupun teori yang 100% sempurna begitu pula dengan ketiga teori di atas. Meskipun teori
di atas dapat memperkirakan formasi yang akan terjadi tetapi tidak dapat menentukan kemanakah
arah zigzag selanjutnya? Arah zigzag dapat terjadi baik ke atas maupun ke bawah.

Kalau kita lihat chart di atas seharusnya harga bergerak naik sesuai prinsip Elliot Wave tapi
kenyataannya zigzag malah terbentuk ke bawah.

Kelemahan lain teori ini adalah apabila terjadi gerak sideway (consolidasi). Biasanya gerak sideway
terjadi setelah adanya swing yang cukup panjang. Untuk mengetahui market sideway gunakan
indikator tambahan untuk melihat kekuatan momentumnya.
Contoh : (indikator MACD, Oscilator MA & Slow Stochastic)

TEKNIK ANALISA FOREX


Halaman 4 dari 5
Setelah terjadi swing yang cukup panjang A-B, disusul kemudian retracement B-C lalu swing C-D.
Pada C-D tidak bergerak jauh dari level B karena momentum lemah (MACD trend Up, Osma Up,
Stochastic oversold). Kemudian terjadi swing D-E. Disusul kemudian swing E-F dimana F menyentuh
level D. Menurut teori seharusnya harga akan terus bergerak turun, tetapi harga malah berbalik
karena momentum tidak kuat (MACD trend Up, Osma Up, Stochastic oversold). Hingga terbentuklah
swing F-G, sekali lagi terjadi harga menyentuh level E yang menurut teori harga seharusnya terus
bergerak naik malah berbalik (MACD masih trend Up, Osma mulai menurun, stochastic overbought).

Bila terjadi market sideway sebaiknya gunakan indikator untuk mengambil keputusan.

Salah satu contoh Fibonacci yang gagal :

A = stop order BUY


B = stop order SELL
C = harga saat ini
SL di 50%

Pada contoh di atas harga menyentuh stop order Sell di D tetapi harga malah berbalik ke E.
Pindahkan stop order Buy di C dengan SL buy pada level 50% swing Fibo yang baru.

Harga kemudian bergerak kembali menuju F, pindahkan stop order Buy ke titik E dengan SL
buy pada 50% swing yang baru.

Saat harga menyentuh level E maka order Sell yang sudah aktif akan close terkena SL,
selanjutnya yang aktif adalah order Buy hingga mencapai titik G. Dalam trading ini Anda loss
kurang lebih 50% dan win kurang lebih 50% sehingga resiko Anda menjadi 0.

Untuk mengatasi kelemahan teori ini tetap harus didukung dengan indikator lainnya, support &
resistance. Dan jangan lupa tambahkan spread dalam entry order Anda.

Ketekunan & Kesabaran Adalah Kunci Kesuksesan Anda

~~~ Semoga Bermanfaat ~~~

Goldmaster

Dirangkum dan diterjemahkan dari http://www.babypips.com/


dan sumber lain

TEKNIK ANALISA FOREX


Halaman 5 dari 5

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