Fibonacci retracement filter

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I was thinking about a new strategy to implement in CP.Maybe also someone can give some advices on how to improve it.

So the strategy works like this. We will draw a trend line on higher time frame like h1.

Then we will go to lower timeframe like M5 and we will try to best catch retracements.


To best catch retracements we will use fibonacci retracements. I will post a picture so it will be more clear for everybody.

Another confirmation of entry that i use when i trade, is volume. When Price approaching Fibonacci line, and there is decreasing volume, is Good confirmation.

PS: I still need to try this strategy and find best way to use it.

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drago babnik

I support the idea. Channel trading is successful mainly in a long-term strategy (you wait for the result for a week or more). Fibonacci and trendline for retracements. Standard Deviation channel breakout to confirm change of direction.

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giulio de meo

I think we can build a short term and long term strategy around this

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Andrey Khatimlianskyi
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Fibo from Min[x bars] to High[x bars] and enter on specified retracement % — is good idea for signal. Let's implement it.

But how do you use trendline from H1? Need more details.

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giulio de meo

Ok so I found out that this strategy works good on trend market. 


I putted trendline because I check main trend on h1, then I enter in and out in M5 with this strategy of fibonacci. Please let me know if you have any improvement of the strategy.

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Andrey Khatimlianskyi
Quote from giulio de meo

Ok so I found out that this strategy works good on trend market. 


I putted trendline because I check main trend on h1, then I enter in and out in M5 with this strategy of fibonacci. Please let me know if you have any improvement of the strategy.

How do you determine "main trend" using this line?

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giulio de meo

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Andrey Khatimlianskyi
Quote from giulio de meo

And?...

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giulio de meo

I draw channels/trendline to get the trend. But actually we already have filters todetermine trend so no worries.

Just the Fibonacci should be ok to get a Good enter and ride the trend. (For sure better tan stochastic i think).

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Andrey Khatimlianskyi
Quote from giulio de meo

I draw channels/trendline to get the trend. But actually we already have filters todetermine trend so no worries.

Just the Fibonacci should be ok to get a Good enter and ride the trend. (For sure better tan stochastic i think).

So, improvement will be the following:

  • Apply Fibo from Min[x bars] to High[x bars]
  • Allow BUY if price <= y% of fibo
  • Allow SELL if price >= y% of fibo

Correct?

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giulio de meo

Ok 👍