BELAJAR TRADING EMAS ONLINE

DARI BERBAGAI SUMBER

old Day Trader Shares His Trading Secret

Monday February 23, 2015 14:51

It does not matter what your specialty is for trading is we all have our own little trading secrets to
help use better time our trades. While many day traders focus on individual stocks like aapl, goog,
tsla etc... I like to focus on day trading gold.

Years ago I shared this little secret on how I get an edge day trading gold and it still amazes me how
many of those people still use it today, including myself.

Time and time again gold traders are given great insight on how and when to day trade gold. I use
the free 24hour Kitco gold chart which is shown below, and I watch it like a hawk.

It is easy to get a feel for how gold moves each day with this chart. Once you get a feel for it and see
price patterns repeat themselves week after week, these opportunities quickly become an easy way
to add a few trades to your day trading routine.

This Kitco day trading gold chart is an amazing tool for observing the price of gold over a 3 day time
frame. What I’m going to show you is how it can provide opportunities for day trading gold.

While this chart may not look like a quality trading tool it does provides very detailed information for
daytrading gold and for swing traders as they get ready to enter or exit positions. Looking at the
chart below you will notice that price has similar price patterns and turning times throughout the day.
Often enough the movements are very similar allowing us to take advantage of these price patterns
to day trade precious metals, silver included.
Free Day Trading Gold Charts – By Kitco

Close Up of the Spot Day Trading Gold Chart

The chart below is regular trading hours only 9:30am – 4:00pm ET. You can see the price action
following the previous day’s movements. Blue is the previous trading day and Green is the Current
day.
When there are large price movements in gold during these hours I like to take advantage of them
using the previous days price action as my guide. If you didn’t notice the Green line (Today) makes
the move before the previous days move. Why? Looks to me like there are a lot of other traders out
there like me getting ready for these opportunities and because its human nature to want to be first
they cause the moves to happen slightly sooner than the previous day. You should factor this into
your trading and be ready to take action when price looks to be starting a predicted move.
Intraday Trading Gold Chart via GLD
The chart below shows the last 4 intraday sessions for gold using the GLD ETF. As you can see
these sessions had very similar price movement. This is a 5 minute chart of gold using GLD. I trade
it using the 3 minute chart as it allows the best timing for entering and exiting positions and this 5
minute chart keeps my head clear for the key turning points because it is easy to get caught up in
the one minute chart noise and miss the important patterns.
If you prefer trading spot golc via FOREX/CDF/Spread Betting and you are not a US resident you
can use the firm which I have been using for nearly 8 years and the broker is AVAFX. The nice thing
about trading this way is that you can trade 24/7, you get a lot of leverage, its commission free
trading, and they have 100% signup bonuses to match the amount you deposit.
Example Day Trading Gold Chart

Above is the chart of GLD ETF and some actual trades. I am a very conservative trader and I like to
lock in profits once I am satisfied with a move or if the chart shows any indication it may go against
my position. I tend to exit trades a little too early but my focus is on catching the middle section of a
trend because they are the safest areas to trade I think.

When there are no swing trading setups I focus on finding these intraday day trading gold patterns
along with SP500 index and Nasdaq day trades to generate my weekly income.

My main focus for trading is swing trading ETFs and I have an automated trading system which i
developed and it trades most of my capital on autopilot.
To sum things up I wait for a trend reversal or continuation pattern to form before I enter and exit
positions. I am a firm believer of using breakeven stops, meaning once a position moves a certain
amount in my favor I move my exit order to my entry price so that I have a risk free trade running. My
swing trading goal for GLD ETF is 2-5% per trade which would last 2-10 days.

Chris Vermeulen
http://www.GoldAndOilGuy.com
3 Langkah Mudah Mengejar Profit Dengan Teknik
“Scalping”
denis sumaryadi 29 09.09.00

3 Langkah Mudah Mengejar Profit

Dengan Teknik “Scalping”

Sobat Tradig Emas dalam dunia trading banyak trader yang ingin menerapkan strategi forex dengan
teknik scalping karena ingin cepat mendapatkan keuntungan karena meskipun kecil namun bisa dilakukan
berkali-kali sehingga hasilnya cukup besar. Namun banyak pula trader yang tidak tahu cara mengawalinya.
Nah, pada kesempatan kali ini Anda akan mempelajari 3 cara mudah menerapkan strategi scalping.
1: Find The Trend

Langkah pertama adalah menentukan trend. Menentukan trend menjadi sangat penting sebab akan
membantu Sobat Cara Investasi Emas memperkirakan pergerakan harga kedepannya. Jika trend adalah
naik maka Anda sebaiknya hanya akan fokus mencari sinyal Buy. Sebaliknya, trend-nya adalah turun maka
Anda hanya akan mencari sinyal Sell.

Sebuah trend naik (uptrend) memiliki ciri sederetan “puncak” yang

lebih TINGGI daripada puncak sebelumnya, serta sederetan “lembah”
yang juga lebih TINGGI daripada lembah sebelumnya.

Sebaliknya, trend turun (downtrend) memiliki ciri sederetan

puncak yang lebih RENDAH daripada puncak sebelumnya, serta
sederetan lembah yang juga lebih RENDAH daripada lembah
sebelumnya.

Perhatikan contoh grafik dibawah ini. Anda bisa lihat USD/CAD berada dalam kondisi uptrend. Ini artinya
Anda hanya akan mencari peluang untuk mengambil posisi Buy.
2: Time Your Entry

Secara umum
Langkah selanjutnya adalah memutuskan bagaimana cara untuk masuk posisi.
seorang scalper akan memilih memanfaatkan saat terjadinya koreksi atau
memilih saat terjadinya breakout.
 Seorang scalper yang memilih memanfaatkan koreksi akan fokus saat harga mengalami koreksi
untuk mencari sinyal Buy di harga rendah atau memanfaatkan terbentuknya “lembah”.
 Sebaliknya, scalper yang menggunakan cara breakout akan memanfaatkan break out hanya akan
masuk posisi Buy jika harga menembus resistance dengan perkiraan harga akan membentuk
“puncak” baru.

Perhatikan grafik dibawah ini :

Scalper yang memanfaatkan koreksi akan masuk posisi Buy saat harga turun dan cenderung membentuk
“lembah” baru yang lebih tinggi dibandingkan lembah sebelumnya. Dengan memanfaatkan garis
Fibonacci retracement terlihat harga mengalami koreksi dan tertahan di garis fibo 50%. Nah, di
level inilah Anda bisa mengambil posisi Buy.

Perhatikan grafik di bawah ini :

Seorang scalper yang memanfaatkan strategi breakout akan menunggu hingga harga menembus
resistance dengan asumsi harga akan naik dan akan membentuk puncak yang baru.

3: Manage Risk

Hal terpenting dari setiap trading adalah me-manage resiko yang mengiringi transaksi setiap transaksi.
Agar strategi yang sobat Trading Emas lakukan berjalan sesuai rencana maka Anda juga harus menyiapkan
langkah-langkah apabila analisa Anda salah.

Untuk menentukan batasan resiko ini banyak sekali caranya. Namun untuk scalper, disarankan untuk
tidak meresikokan lebih dari 1% dari modal Anda tiap kali melakukan transaksi.

Selain itu untuk menentukan batasan kerugian juga bisa memanfaatkan penembusan support atau
resistance yang terbentuk dari koreksi, seperti terlihat pada grafik dibawah ini:
Jika sobat Cara Investasi Emas menggunakan Strategi Forex dengan breakout maka batasan kerugian
Anda adalah jika ternyata harga berbalik arah dan kembali menembus support atau resistance, perhatikan
grafik dibawah ini:
Silahkan latih kemampuan anda dengan memanfaatkan fasilitas DEMO ACCOUNTterlebih dahulu sampai
anda paham dan mahir. Cheers.

3 Cara Mengembangkan Skill Trading Anda

denis sumaryadi 2 13.37.00

3 Cara Mengembangkan Skill Trading

Emas Anda

Sebagai seorang trader, jangan pernah beranggapan anda akan menjadi seorang
master trader yang tidak pernah loss. Kesempurnaan dalam seni trading
forex maupun trading emas itu sesuatu hal yang mustahil. Kita tidak akan bisa
selalu profit, suatu saat akan mengalami yang namanya loss.
 Tujuan pertama menjadi seorang trader adalah bisa mendapatkan akumulasi profit
secara konsisten. Bukan berarti selalu profit, melainkan loss yang dialami tidak
menghapus keuntungan yang sudah didapat.

Pada artikel ini, akan diulas tiga cara sederhana untuk bisa
mendapatkan profit yang konsisten, yaitu :

1. Gunakan Stop dan Target Serta Tetap Memperhatikan Manajemen Resiko

Sudah bukan rahasia lagi bahwa semua trader sudah mengetahui tujuan
menggunakan stop loss dan limit, tetapi kenyataannya sering diabaikan.
Inilah alasan kenapa trader pemula kehilangan modalnya.

Hal ini karena sifat dasar manusia yang serakah dan tidak mau rugi. Selama tidak
bisa mengontrol dua hal ini maka jangan berharap anda akan bisa mendapatkan
profit yang konsisten.

Banyak dari trader yang beranggapan tidak perlu memasang stop loss karena merasa
modalnya cukup besar dan terlalu percaya diri. Sikap inilah yang akan
membunuh Anda. Sombong, terlalu percaya diri ditambah tidak mau rugi... tinggal
menunggu waktu Anda akan menangis dalam penyesalan.
2. Menyusun Trading Plan Yang Seimbang

Hanya menerapkan management resiko tidak bisa menjadi jaminanAnda akan bisa
sukses di dunia trading. Manajemen resiko hanya memberi Anda kesempatan untuk
bisa mendapatkan keuntungan secara kontinyu. Setelah Anda belajar bagaimana
yaitu mulai
mengelola resiko dengan benar, maka Anda selangkah lebih maju
fokus terhadap persentase kemenangan serta fokus
terhadap strategi yang digunakan untuk masuk posisi.

Pada tahap inilah trading plan mempunyai peranan yang sangat penting.

Dengan trading plan ini Anda akan tahuapa yang harus Anda lakukan, kapan
saatnya masuk pasar, kapan saatnya keluar dari pasar. Dengan kondisi pasar
yang tidak bisa dipastikan dan kadang kala susah diprediksi maka trading plan ini
menjadi sangat penting.

3. Practice...Practice...and Practice

Di Dunia trading emas maupun forex merupakan dunia yang aneh, karena tidak
jarang trader pemula bisa mendapatkan keuntungan dalam jumlah besar hanya
dalam beberapa transaksi. Bahkan keuntungan yang didapat bisa mengalahkan
keuntungan yang diperoleh oleh trader profesional. Tapi hampir bisa dipastikan umur
account trader pemula ini tidak akan bertahan lama karena ia tidak akan bisa
kontinyu atau konsisten mendapatkan keuntungan.

Trader professional biasanya akan bersikap hati-hati, dalam artian mereka tidak
akan tergesa-gesa untuk masuk pasar karena mereka paham tentang resiko
yang mereka hadapi.

Sementara trader pemula biasanya akan bersikap agresif, tidak memperhatikan atau
mengantisipasi resiko yang ada. Bahkan meskipun mereka loss mereka akan
mencoba untuk mengembalikan kerugian yang mereka terima. Jika posisi yang
mereka ambil salah biasanya akan ditahan dan akan melawan pasar karena dengan
kepercayaan diri yang terlaluberlebihan, bahkan sombong.

Belajar trading semestinya seperti ketika kita belajar mengemudi,

atau belajar untuk menerbangkan pesawat, ketika kita cenderung tak
mau mengambil resiko yang besar. Dan alasan untuk ini adalah sederhana: risiko
kegagalan sangat jelas, dan mahal
Jadi biasanya pengemudi yang masih pemula akan memulai mengendarai
kendarannya dengan kecepatan yang rendah misalnya hanya 20-30 km/jam di
tempat yang tidak terlalu ramai, hingga suatu saat kecepatannya akan ditambah
sampai akhirnya mereka mahir dan berani mengendarai kendaraan dengan
kecepatan tinggi di jalan raya.

Ok Sobat Trading Emas Untuk melatih kemampuan skill trading dan menguji Trading Plan anda silakan
gunakanlah DEMO ACCOUNT terlebih dahulu sebelum benar benar menggunakan real account

Use Fibonacci To Point Out

Profitable Trades
By Alan Farley

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Fibonacci analysis can supercharge your market performance but you’ll need to
master a few tricks of the trade to gain maximum benefit from this mathematical
sequence, uncovered in the Western world more than 800 years ago. Let’s tackle
the subject with a quick primer and then get down to business with two original
strategies that tap directly into its hidden power.

12th century monk and mathematician Leonardo de Pisa (later branded as

Fibonacci) uncovered a logical sequence of numbers that appears throughout
nature and in great works of art. Unknown to the great monk, these Fibonacci
numbers fit perfectly into our modern financial markets because they describe,
with great accuracy, complex relationships between individual waves within
trends, as well as how far markets will pull back when they return to levels
previously traded.

Starting with 1+1, the Fibonnacci sequence, of which the first number is 1,
consists of numbers that are the sum of themselves and the number which
precedes them. As a result, 1+1=2, 1+2=3, 2+3=5, 3+5=8, 5+8=13, 8+13=21,
13+21=34 and 21+34=55, which indicates that 1, 2, 3 5, 8, 13, 21, 34 and 55 are
all Fibonacci numbers. Subdividing these numerical strings uncovers repeating
ratios that have become the basis for Fibonacci grid analysis in swing trading and
other market disciplines.

The .386, .50 and .618 retracements form the basic structure of Fibonacci grids
found in popular market software packages, with .214 and .786 levels coming
into play during periods of higher volatility. The initial analysis technique is simple
enough for market players at all levels to understand and master. Just place the
grid over the ending points of a major high and low in an uptrend or downtrend
and look for close alignment with key price turns.

Deeper market analysis requires greater effort because trends are harmonic
phenomena, meaning they can subdivide into smaller and larger waves that
show independent price direction. For example, a series of relative uptrends and
downtrends will embed themselves within a one or two-year uptrend in the S&P
500 or Dow Industrials. (See video: The Dow Jones Industrial Average.) We see
this complexity most clearly when shifting higher, from daily to weekly charts, or
lower, from daily to 60-minute or 15-minute charts. (For related reading,
see: Understanding And Playing The Dow Jones Industrial Average.)

A single Fibonacci grid on a daily chart will improve results but ratios come into
sharper focus when examining two or more time frames. Swing traders taking the
next step will find great value in daily and 60-minute charts while market
timers will benefit when they step back and combine daily and weekly charts. In
both cases, alignment between key Fib levels in different time frames identifies
hidden support and resistances that can be utilized for entry, exit and stop
placement. (For related reading see: The Daily Routine Of A Swing
Trader and Market Timing Fails As A Money Maker.)

Strategy 1: The Fibonacci Flush

Microsoft (MSFT

) pounds out a deep low at 42.10 in October and rallies in a vertical wave that
ends at 50.05 a few weeks later. The subsequent pullback settles on the 38%
(.382) for four sessions and breaks down into a mid-December gap that lands
the price on the 61.8% (.618) Fibonacci retracement. That level marks a tradable
low, ahead of a sharp recovery that stalls at the 78.6% (.786) retracement.
Notice how other charting features interact with key Fibonacci levels.
The selloff into the 62% level also fills the October gap (red circle) while the
subsequent bounce stalls near three November swing highs (blue line) aligned
with the 78.6% retracement. This tells us that Fibonacci analysis works most
effectively when combined with other technical forces in play, such as
gaps, moving averages and easily observed highs and lows. (For related
reading, see: How To Use A Moving Average To Buy Stocks.)
Now let’s zoom in and identify a Fibonacci technique you can use to find low-risk
entries missed by less observant market players. Falling price sits on the 38%
retracement for four sessions, sucking in a supply of capital looking for
a reversal. The downward gap traps this crowd, who are shaken out at the same
time the stock posts a volatile low at the 62% level. While it makes sense to buy
at that support level, it’s a risky strategy because the gap could easily kill the
upside and force another breakdown. (For related reading, see: Playing The
Gap.)

Now comes the important part. The surge back above the 38% retracement
reinstates support, triggering a Fibonacci Flush buy signal, predicting that
positions taken near 47 will produce a reliable profit. At the same time, shaken
out shareholders are reluctant to buy back at this price because, as the
expression goes, “once bitten, twice shy”. This lowers interest in the trade,
allowing new money to carry risk in a lower volatility tape, relying on a long
observed tendency for support to hold after it’s tested, broken and then
remounted. (See: Support and Resistance Basics.)

Strategy 2: The Parabola Pop

The 78.6% retracement level stands guard as the final harmonic barrier before
an instrument completes a 100% price swing, higher or lower. This is valuable
information because it tells us that a breakout above this level in an uptrend, or a
breakdown in a down trend, will extend all the way to the last swing high or low,
as a minimum target. Doing the math suggests a free ride for the last 21.6% of
the rally or selloff wave.
This Parabola Pop strategy works very well on longer time frames and can even
provide early entry to major breakouts and breakdowns on widely held issues. As
an example look at Facebook (FB) after it peaked at 72.59 in March 2014 and
entered a correction that found support in the mid-50s. The subsequent bounce
reached the 78.6% retracement at 68.75 two months later and stalled out,
yielding nearly three weeks of sideways action.

The stock rallied above harmonic resistance on July 21st (red line) and took off,
completing the last 21.4% of the 100% price swing in just four sessions. In
addition, the fourth day yielded a breakout above the March high, setting off a
fresh set of buy signals that gave Fibonacci-focused shareholders many
profitable options, including letting it ride, taking partial profits or risking the
balance on the new uptrend.

The Facebook breakout highlights a second advantage of the Parabola Pop

strategy. Markets tend to go vertical into these 100% levels, as if a magnet is
pulling on price action. This parabolic tendency can produce outstanding results
over very short time periods. Of course, it isn’t a given because anything can
happen at any time in our modern markets but even a slight tilt toward the
vertical marks a definable edge over the competition. (For related reading,
see: Introduction to the Parabolic SAR.)

As a final note, the thrust from the 78.6% into 100% marks a fractal tendency that
appears in all time frames, from 15-minute through monthly charts, and can be
traded effectively whether you’re a scalper or market timer. However, intraday
holding periods are more likely to face trade-killing whipsaws and shakeouts,
while the size of the expected rally or selloff is often too small to book a reliable
profit, especially after the negative impact of transaction costs.

The Bottom Line

Viewing the trends of the market through the lenses of a Fibonacci grid enables
investors to see larger patterns beyond immediate upturns and downturns and to
pinpoint prospects for profits that may be just beyond the view of investors who
are spooked out by a short-term view of the trends. If used well, the tools of
Fibonacci analysis equip an investor with the confidence and insights needed to
withstand shakeouts prompted by drastic downturns and to take advantage of
opportunities to profit from approaching vertical shifts. Doing so requires,
however, a willingness to withstand the unnerving volatility that exists within
compressed periods of time to see the market movements that a Fibonacci
believer anticipates, based on math formulas that have stood the test of time.

Read more: Use Fibonacci To Point Out Profitable Trades |

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point-out-profitable-trades.asp#ixzz56pqAUAJ7
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Using Fibonacci to Analyze

Gold (GLD, GC)
By Alan Farley | August 21, 2015 — 12:33 PM EDT

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GLD
SPDR Gold Trust

124.77

-0.17%

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The gold futures market has lost considerable ground since posting an all-time
high of $1921.50 in 2011. But the yellow metal still attracts massive speculative
interest around the world, with investors, traders and hedgers all trying to predict
a great buying or selling opportunity. While gold bugs (those bullish on gold) rely
on supply, demand and world economic conditions to predict direction, the
trading community prefers technical analysis of short and long-term price action.
As with all liquid commodities, gold is a great subject for Fibonacci studies.

Fibonacci studies can identify hidden harmonic levels that can provide
major support or resistance (see Use Fibonacci To Point Out Profitable
Trades and Placing Fibonacci Grids Is Key To Your Trading Strategy) While
many folks place Fibonacci on the same level as astrology or reading tea leaves,
the method does have a firm basis in mathematics and is widely recognized for
its power in finding proportions within nature. This quality translates well into the
study of crowd behavior, like the emotional buying and selling of securities.

100-Year Gold History [1915-2015]

As you can see in the above chart, the 100-year spot gold history showed little
movement until the 1970s, when it took off in a strong uptrend. The movement
was underpinned by rising inflation triggered when crude oil prices rocketed due
to the Arab oil embargo. Gold prices peaked near $700 a troy ounce at the end of
the 70s. That’s when restrictive monetary policy formulated by Federal
Reserve Governor Paul Volcker started to bring down exceptionally high interest
rates.

The subsequent downtrend continued into the late 1990s when gold bottomed
and entered a historic uptrend that culminated in the 2011 all-time high. Price
action since that time shows a steady decline, dropping more than $700 per troy
ounce in 4 years. Short-lived bounces and short squeezes within this brutal
downtrend have drawn in waves of bottom calls, but the downtrend is still clearly
visible and ongoing.

Fibonacci Analysis
Fibonacci analysis of the gold futures chart offers great insight on price
movement in recent decades and can help predict future levels of interest as
well. This has great value because one of these levels may eventually end the
downtrend and support an uptrend that tests the all-time high. This examination
also assists market players in finding short-term trading opportunities that evolve
within the macro scale trends.

Fibonacci studies can be broken into two parts: retracements and extensions.
Retracement analysis places a grid across the entire trend, as well as smaller
subsets within the trend, to identify harmonic levels at 38%, 50% and 62% where
a rising or falling market is likely to stall or reverse. Extension analysis projects
harmonic levels above or below a trend, pointing to price or reward targets where
a reversal is likely to come into play. Some typical trend expansion levels are
150%, 162% and 262%.
Gold Futures Monthly 1997-2015

A Fibonacci grid stretched across the multiyear uptrend shows key harmonic
levels at three points, shown in red on the chart above. Point 1 is 1280 (38% - 1),
Point 2 at 1082 (50% - 2) and Point 3 at 888 (62% - 3). The downtrend off the
2011 peak price reached the 38% retracement in June 2013 (see line A in the
chart above). While the decline continued for another month, the instrument
finally eased into a trading range that bisected the retracement level for over a
year. A trend will often overshoot the level and then settle near its boundaries
once volatility eases up, so this is typical behavior. Gold futures broke the trading
range in October 2014 and spiraled lower, reaching the 62% retracement in July
2015 (see line B in the chart above), where it bounced once again.
Gold Futures Monthly 2006 - 2015

The long-term uptrend shows just one major correction, which occurred between
2007 and 2009. This is useful for Fibonacci analysis because it lets the
technician place a secondary grid across the smaller-scale trend and look for
interactions with the larger-scale grid. Closely aligned harmonic levels tend to
generate stronger support or resistance than single lines, supporting more
reliable predictions. This analysis follows the principles discussed in the
article Applying Cross-Verification To Trading Strategies.

The 38% retracement of the longer-term trend (see Line 1 in the chat above)
intersects with the 50% retracement of the shorter-term trend (Line 5 in the chart
above). The grids show alignment between the 50% retracement of the longer-
term trend (Line 2) and 62% retracement of the shorter-term trend (Line 6) but
not as tightly as the 38%-50% combination. However, you can see that gold
futures initially found support at the 62% retracement (Point A in the chart
above), bouncing at that level for 8 weeks before breaking down and dropping
into the 50% retracement (Point B in the chart above).

Gold Futures Weekly 2009-2015

The bounce at the 50% long-term retracement in August 2015 has the potential
to carry higher, due to its perfect harmonic location. This allows the technician to
use Fibonacci to gauge potential price targets. It is a simple process when
working between 38% and 62% retracements because those levels also mark
significant support and resistance. In this case, a bounce to the 38% retracement
looks like a realistic scenario, providing a target at 1280.

The Bottom Line

Fibonacci analysis shows that gold futures reached the 50% retracement of the
1999 to 2011 uptrend in the middle of 2015. This level presents strong harmonic
support, indicating the yellow metal could head higher for a number of months.
However, it may take years to establish a significant uptrend that challenges
the all-time high above 1900.

Read more: Using Fibonacci to Analyze Gold (GLD, GC) |

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Placing Fibonacci Grids Is Key

To Your Trading Strategy
(VDSI, GLW)
By Alan Farley

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VDSI
Vasco Data Security International Inc
13.65

+1.87%
GLW
Corning Inc
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+1.13%
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The Fibonacci grid found in popular charting programs lets traders uncover
hidden support and resistance created by the Golden Ratio, but most fail to tap
its enormous potential because they don’t know how to stretch the grid, often
picking the wrong prices. Even worse, they fail to add long- term grids that are
often needed for an in-depth harmonic analysis. Let’s correct these technical
errors with a quick primer on the most effective ways to construct perfectly
placed grids. (For more, read: Fibonacci And The Golden Ratio).

The Fibonacci grid supports all sorts of profitable trading strategies as outlined
in Use Fibonacci To Point Out Profitable Trades, but incorrect placement
undermines prediction and confidence, generating misguided entries and exits.
Traders get frustrated when this happens, often abandoning the tool in favor of
more familiar analysis tools. But persistence pays off because the arcane
mathematics outlined by Leonardo de Pisa, aka Fibonacci, in the 13th century
give birth to trading edges that last a lifetime.

The grid supports both retracement and extension analysis. A retracement

happens when price turns and tests the last trend, higher or lower. An extension
occurs when price clears the grid and pushes into a new high or low. Traders
learning to use the grid effectively should stick to retracement analysis because
moving averages, round numbers and gaps will intersect with key levels,
assisting price prediction.

Zoom Out, Zoom In

Start grid placement by zooming out to the weekly pattern and finding the longest
continuous uptrend or downtrend. Place a Fibonacci grid from low-to-high in an
uptrend and high-to-low in a downtrend. The grid should be set up to display the
.382, .50 .618 and .786 retracement levels. View the first three ratios as
compression zones, where price can bounce around like a pinball and the .786
as a line-in-the-sand for the trend, with violations then yielding 100%
retracements that signal trend changes and trading ranges.
Now move to shorter-term trends, adding new grids for those time time frames.
Once completed, your chart will show a series of grids, with lines that are tightly
aligned or not aligned at all. Tight alignment identifies harmonic support and
resistance levels that can end corrections and signal new trend advances, higher
or lower, especially when supported by moving
averages, trendlines and gaps. Loose alignment points to disorganization, with
conflicting forces generating whipsaws that lower predictive power and profit
potential.

Targeted Grid Analysis

Gain experience with multiple grid placement and then cut your workload by
ignoring harmonics that come won’t into play during the position’s life cycle. For
example, it makes no sense for a day trader to spend time looking at weekly
levels that have no bearing on intradayexposure. But common sense also
dictates that trades lasting for weeks may reach deep harmonic levels going back
five or six years. A narrow focus on key harmonics isn’t hard to learn, often
requiring a quick glance at long term trends to confirm they won’t interact with
expected price action.

Next, apply a small dose of formfitting to align your grid more closely to charting
landscape features, like gaps and intermediate highs and lows. Move the start or
end point to the next most obvious high or low to see if it fits better with historic
price action. This often means choosing the higher low of double bottom or lower
high of a double top. (To learn more, see: Trading Double Tops And
Double Bottoms). Just be careful because formfitting can elicit false signals
unless used sparingly.

A Real World Application

Corning (GLW

GLW
Corning Inc

28.77
+1.13%
) grinds through 4 major trends in 7 years. The 2008 crash (A) gave way to a 2-
year bounce (B) that yielded multi-month reversals at the .386, .618 and .786
retracements. The downtrend into 2012 (C) adds a third trend, finding support at
the.786 retracement of the bounce and yielding a new uptrend into 2015 (D). We
can’t place a grid over that price swing yet because it doesn’t show an obvious
end point but we can estimate it will reach the 2008 high because it’s cleared all
harmonic resistance levels.
The three grids align tightly in clusters near 15.50, 17.50 and 20.50, identifying
hidden harmonic support and resistance levels. These come into play many
times, triggering narrow range action that lasts for months, before giving way to
the next cluster. The 2014 pullback (blue circle) highlights the profit potential of
these magic numbers, with price dropping like a rock into the 17.50 cluster and
then rocketing to a 6-year high.

The Bottom Line

Build your Fibonacci skills by finding the longest term price swing on your chart of
interest and placing a grid over the trend. Repeat at shorter intervals, looking for
tightly aligned clusters that reveal profitable entry and exit levels.

Read more: Placing Fibonacci Grids Is Key To Your Trading Strategy (VDSI, GLW) |
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Tips to Keep in Mind

Day trading practice depends largely on the strategy that’s being used to trade. For
example, some day traders are focused on ‘feel’ and must rely on paper trading
accounts alone, while others use automated trading systems and may backtest
hundreds of systems before paper trading only the most promising ones. Traders
should choose the best broker platform for their needs based on their trading
preferences and paper trade on those accounts.

When paper trading, it’s important to keep an accurate record of trading performance
and track the strategy over a long enough time horizon. Some strategies may only work
in bull markets, which means that traders could be caught off-guard when a bear market
comes along. It’s important to test enough securities in enough market conditions in
order to ensure that their strategies hold up the best and generate the highest risk-
adjusted returns.

Finally, paper trading isn’t a one-time only endeavor. Day traders should regularly use
paper trading features on their brokerage accounts to test new strategies to try their
hand in trading new markets. Simple mistakes can be incredibly costly for day traders
that risk tens of thousands of dollars in hundreds of trades per day, which makes paper
trading an integral part of long-term success.

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Strategies For Trading

Fibonacci Retracements
By Dan Blystone

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Leonardo Pisano, nicknamed Fibonacci, was an Italian mathematician born in

Pisa in the year 1170.

His father Guglielmo worked at a trading post in Bugia, now called Béjaïa, a
Mediterranean port in northeastern Algeria. The young Leonardo studied
mathematics in Bugia and during extensive travels he learned about the
advantages of the Hindu–Arabic numeral system.

After returning to Italy, in 1202 Fibonacci documented what he had learned in the
Liber Abaci (Book of Abacus). In doing so he popularized the use of Hindu–
Arabic numerals in Europe.
The Fibonacci Number Sequence

In the Liber Abaci, Fibonacci described the numerical series now named after
him.

In the Fibonacci sequence of numbers, after 0 and 1, each number is the sum of
the two prior numbers.

Hence, the sequence is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233,
377, 610 and so on extending to infinity.

Each number is approximately 1.618 times greater than the preceding number.

The Golden Ratio

This figure 1.618 is called Phi or the Golden Ratio. The inverse of 1.618 is .618.
The Golden Ratio mysteriously appears frequently in the natural world,
architecture, fine art and biology.

The ratio has been observed in the Parthenon, Leonardo da Vinci's Mona Lisa,
sunflowers, rose petals, mollusk shells, tree branches, human faces, ancient
Greek vases, and even the spiral galaxies of outer space.

Fibonacci Levels Used in the Financial Markets

The levels used in Fibonacci retracements in the context of trading are not
numbers in the sequence, rather they are derived from mathematical
relationships between numbers in the sequence.

The basis of the 'golden' Fibonacci ratio of 61.8% comes from dividing a number
in the Fibonacci series by the number that follows it. For example, 89/144 =
0.6180. (See Investopedia's great video on Playing the Golden Ratio.)

The 38.2% ratio is derived from dividing a number in the Fibonacci series by the
number two places to the right. For example: 89/233 = 0.3819.

The 23.6% ratio is derived from dividing a number in the Fibonacci series by the
number three places to the right. For example: 89/377 = 0.2360.
Fibonacci retracement levels are depicted by taking high and low points on a
chart and marking the key Fibonacci ratios of 23.6%, 38.2%, 61.8% horizontally
to produce a grid. These horizontal lines are used to identify possible price
reversal points.

[Fibonacci retracements are just one form of technical analysis that traders
can use to find and capitalize on opportunities. To learn about others,
check out Investopedia's Technical Analysis Course, which provides over
five hours of video and several case studies showing how to use technical
analysis in practice.]

The 50% Retracement Level

The 50% retracement level is normally included in the grid of Fibonacci levels
that can be drawn using charting software. While the 50% retracement level is
not based on a Fibonacci number it is widely viewed as an important potential
reversal level, notably recognized in Dow Theory and also in the work of W.D.
Gann,.

Fibonacci Retracement Levels as Part of a Trading Strategy

Fibonacci retracements are often used as part of a trend trading strategy.

In this scenario traders observe a retracement taking place within a trend and try
to make low risk entries in the direction of the initial trend using Fibonacci levels.

Simply put, traders using this strategy anticipate that price has a high probability
of bouncing from the Fibonacci levels back in the direction of the initial trend.

For example, on the EUR/USD daily chart below, we can see that price was in a
major downtrend since early May of 2014 (point A). Price then bottomed in June
(point B) and retraced upwards to approximately the 38% Fibonacci retracement
level of the downmove (point C).
Figure 1: EUR/USD Daily Chart Fibonacci Retracement. Chart Courtesy of
TradingView.

In this case, the 38% level would have been a good place to enter a short
position, with a view to capitalizing on the continuation of the downtrend that
started in May.

There is no doubt that many traders were also watching the 50% retracement
level and the 61.8% retracement level, but in this case the market was not bullish
enough to reach those points. Instead, EUR/USD turned lower, resuming the
downtrend and taking out the prior low in a fairly fluid movement.

Keep in mind that the likelihood of a reversal increases if there is a confluence of

technical signals when price reaches a Fibonacci level.
Other popular technical indicators that are used in conjunction with Fibonacci
levels include candlestick patterns, trendlines, volume, momentum oscillators
and moving averages. A greater number of confirming indicators in play equates
to a more robust reversal signal.

Fibonacci retracements are used on a variety of financial instruments including

stocks, commodities and foreign exchange. They are also used on multiple time
frames. However, as with other technical indicators, the predictive value is
proportional to the timeframe used, with greater weight given to longer
timeframes.

So for example, a 38% retracement on a weekly chart is a far more important

technical level than a 38% retracement on a 5 minute chart.

Using Fibonacci Extensions

As we saw above, Fibonacci retracement levels can be used to forecast potential

areas of support or resistance at which traders can enter the market with a view
to catching the resumption of an initial trend.

Fibonacci extensions can compliment this strategy by giving traders Fibonacci

based profit targets.

Fibonacci extensions consist of levels drawn beyond the standard 100% level
and can be used by traders to project areas that make good potential exits for
their trades in the direction of the trend. The major Fibonacci extension levels are
161.8%, 261.8% and 423.6%.

Let's take a look at an example here, using the same EUR/USD daily chart:
Figure 2: EUR/USD Daily Chart with Fibonacci Extension. Chart courtesy of
TradingView.

Looking at the Fibonacci extension level drawn on the EUR/USD chart above, we
can see that a potential price target for a trader holding a short position from the
38% retracement described earlier lies below at the 161.8% level at 1.3195.

The Bottom Line

Fibonacci retracement levels often mark reversal points with an uncanny

accuracy. However, they are harder to trade than they look in retrospect.

The levels are best used as a tool within a broader strategy that looks for the
confluence of a number of indicators to identify potential reversal areas offering
low risk, high potential reward trade entries.
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Fibonacci retracement is named after the 13th century mathematician Leonard

Fibonacci, who developed a series of numbers that contain ratios that have proved
important in technical analysis of the stock market. Fibonacci’s original sequence is 0,
1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Certain repeating ratios exist within these
numbers. For instance, the ratio of approximately 61.8%, called the “Golden Ratio”, is
created by dividing one number by the number that follows: 8/13 = 61.53%, 34/55 =
61.81%, etc.

The key Fibonacci retracement ratios used by technical analysts are 23.6%, 38.2%,
50%, 61.8% and 100%. Although the reasons why are uncertain, a stock’s trend tends
to retrace a prior trend once its price hits one of the key Fibonacci Retracement ratio
points.

Traders take advantage of the trend behavior indicated by the Fibonacci retracement
analysis to determine the best time to buy or sell securities.

For instance, if a stock’s price hit the 38.2% point, and then started to trend downwards,
a trader using this analysis will expect the stock to start trending back upwards after the
price falls to the 23.6% point. He will set a buy order to purchase it at the 23.6% point
so that he can take advantage of an anticipated upward trend.

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Fibonacci And The Golden
Ratio
By Justin Kuepper

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There is a special ratio that can be used to describe the proportions of everything
from nature's smallest building blocks, such as atoms, to the most advanced
patterns in the universe, such as unimaginably large celestial bodies. Nature
relies on this innate proportion to maintain balance, but the financial markets also
seem to conform to this 'golden ratio.' Here we take a look at some technical
analysis tools that have been developed to take advantage of it.

The Mathematics
Mathematicians, scientists and naturalists have known this ratio for years. It's
derived from something known as the Fibonacci sequence, named after its Italian
founder, Leonardo Fibonacci (whose birth is assumed to be around 1175 AD and
death around 1250 AD). Each term in this sequence is simply the sum of the two
preceding terms (1, 1, 2, 3, 5, 8, 13, etc.).

But this sequence is not all that important; rather, it is the quotient of the adjacent
terms that possesses an amazing proportion, roughly 1.618, or its inverse 0.618.
This proportion is known by many names: the golden ratio, the golden mean, PHI
and the divine proportion, among others. So, why is this number so important?
Well, almost everything has dimensional properties that adhere to the ratio of
1.618, so it seems to have a fundamental function for the building blocks of
nature.

Prove It!
Don't believe it? Take honeybees, for example. If you divide the female bees by
the male bees in any given hive, you will get 1.618. Sunflowers, which have
opposing spirals of seeds, have a 1.618 ratio between the diameters of each
rotation. This same ratio can be seen in relationships between different
components throughout nature.

Still don't believe it? Need something that's easily measured? Try measuring
from your shoulder to your fingertips, and then divide this number by the length
from your elbow to your fingertips. Or try measuring from your head to your feet,
and divide that by the length from your belly button to your feet. Are the results
the same? Somewhere in the area of 1.618? The golden ratio is seemingly
unavoidable.

But that doesn't mean that it works in finance … does it? Actually, the markets
have the very same mathematical base as these natural phenomena. Below we
will examine some ways in which this ratio can be applied to finance, and we'll
show you some charts to prove it!

The Fibonacci Studies and Finance

When used in technical analysis, the golden ratio is typically translated into three
percentages: – 38.2%, 50% and 61.8%. However, more multiples can be used
when needed, such as 23.6%, 161.8%, 423% and so on. There are four primary
methods for applying the Fibonacci sequence to finance: retracements, arcs,
fans and time zones.

1. Fibonacci Retracements
Fibonacci retracements use horizontal lines to indicate areas
of support or resistance. They are calculated by first locating the high and low of
the chart. Then five lines are drawn: the first at 100% (the high on the chart), the
second at 61.8%, the third at 50%, the fourth at 38.2% and the last one at 0%
(the low on the chart). After a significant price movement up or down, the new
support and resistance levels are often at or near these lines. Take a look at the
chart below, which illustrates some retracements:
Created Using MetaTrader

2. Fibonacci Arcs
Finding the high and low of a chart is the first step to composing Fibonacci arcs.
Then, with a compass-like movement, three curved lines are drawn at 38.2%,
50% and 61.8%, from the desired point. These lines anticipate the support and
resistance levels, and areas of ranging. Take a look at the chart below, which
illustrates how these arcs do this:
Created Using MetaTrader

3. Fibonacci Fans
Fibonacci fans are composed of diagonal lines. After the high and low of the
chart is located, an invisible vertical line is drawn though the rightmost point. This
invisible line is then divided into 38.2%, 50% and 61.8%, and lines are drawn
from the leftmost point through each of these points. These lines indicate areas
of support and resistance. Take a look at the chart below:
Created Using MetaTrader

4. Fibonacci Time Zones

Unlike the other Fibonacci methods, time zones are a series of vertical lines.
They are composed by dividing a chart into segments with vertical lines spaced
apart in increments that conform to the Fibonacci sequence (1, 1, 2, 3, 5, 8, 13,
etc.). These lines indicate areas in which major price movement can be
expected.
Created Using MetaTrader

[The Fibonacci studies are great indicators of likely areas of support and
resistance, but they work best when combined with other forms of
technical analysis. Investopedia's Technical Analysis Course provides
traders with an in-depth overview of technical indicators and chart patterns
with over five hours of on-demand video. You will not only learn about
these technical strategies, but how to implement them in the wild to
improve your trading success.]

Conclusion
These Fibonacci studies are not intended to provide the primary indications for
timing the entry and exit of a stock; however, they are useful for estimating areas
of support and resistance. Many people use combinations of Fibonacci studies to
obtain a more accurate forecast. For example, a trader may observe the
intersecting points in a combination of the Fibonacci arcs and resistances. Many
more use the Fibonacci studies in conjunction with other forms of technical
analysis. For example, the Fibonacci studies are often used with Elliott Waves to
predict the extent of the retracements after different waves. Hopefully you can
find your own niche use for the Fibonacci studies, and add it to your set of
investment tools!
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Top 4 Fibonacci Retracement

Mistakes To Avoid
By Richard Lee

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Every foreign exchange trader will use Fibonacci retracements at some point in
their trading career. Some will use it just some of the time, while others will apply
it regularly. But no matter how often you use this tool, what's most important is
that you use it correctly each and every time. (For background reading on
Fibonacci, see Fibonacci And The Golden Ratio.)

TUTORIAL: Top 10 Forex Trading Rules

Improperly applying technical analysis methods will lead to disastrous results,

such as bad entry points and mounting losses on currency positions. Here we'll
examine how not to apply Fibonacci retracements to the foreign exchange
markets. Get to know these common mistakes and chances are you'll be able to
avoid making them - and suffering the consequences - in your trading.

1. Don't mix Fibonacci reference points.

When fitting Fibonacci retracements to price action, it's always good to keep your
reference points consistent. So, if you are referencing the lowest price of a trend
through the close of a session or the body of the candle, the best high price
should be available within the body of a candle at the top of a trend: candle body
to candle body; wick to wick. (Learn more about candles in Candlestick Charting:
What Is It?)

Misanalysis and mistakes are created once the reference points are mixed -
going from a candle wick to the body of a candle. Let's take a look at an example
in the euro/Canadian dollar currency pair. Figure 1 shows consistency. Fibonacci
retracements are applied on a wick-to-wick basis, from a high of 1.3777 to the
low of 1.3344. This creates a clear-cut resistance level at 1.3511, which is tested
and then broken.

Figure 1: A Fibonacci retracement applied to price action in the

euro/Canadian dollar currency pair.
Source: FX Intellicharts
Figure 2, on the other hand, shows inconsistency. Fibonacci retracements are
applied from the high close of 1.3742 (35 pips below the wick high). This causes
the resistance level to cut through several candles (between February 3 and
February 7), which is not a great reference level.
 Figure 2: A Fibonacci retracement applied incorrectly.
Source: FX Intellicharts
By keeping it consistent, support and resistance levels will become more
apparent to the naked eye, speeding up analysis and leading to quicker trades.
(To read more about reading this indicator, see Retracement Or Reversal: Know
The Difference.)

2. Don't ignore long-term trends.

New traders often try to measure significant moves and pullbacks in the short
term - without keeping the bigger picture in mind. This narrow perspective makes
short-term trades more than a bit misguided. By keeping tabs on the long-term
trend, the trader is able to apply Fibonacci retracements in the correct direction
of momentum and set themselves up for great opportunities.

In Figure 3, below, we establish that the long-term trend in the British pound/New
Zealand dollar currency pair is upward. We apply Fibonacci to see that our first
level of support is at 2.1015, or the 38.2% Fibonacci level from 2.0648 to 2.1235.
This is a perfect spot to go long in the currency pair.
 Figure 3: A Fibonacci retracement applied to the British pound/New Zealand
dollar currency pair establishes a long-term trend.
Source: FX Intellicharts
But, if we take a look at the short term, the picture looks much different.

Figure 4: A Fibonacci retracement applied on a short-term time frame can

give the trader a false impression.
Source: FX Intellicharts
After a run-up in the currency pair, we can see a potential short opportunity in the
five-minute time frame (Figure 4). This is the trap.

By not keeping to the longer term view, the short seller applies Fibonacci from
the 2.1215 spike high to the 2.1024 spike low (February 11), leading to a short
position at 2.1097, or the 38% Fibonacci level.

This short trade does net the trader a handsome 50-pip profit, but it comes at the
expense of the 400-pip advance that follows. The better plan would have been to
enter a long position in the GBP/NZD pair at the short-term support of 2.1050.
Keeping in mind the bigger picture will not only help you pick your trade
opportunities, but will also prevent the trade from fighting the trend. (For more on
identifying long-term trends, see Forex Trading: Using The Big Picture.)

3. Don't rely on Fibonacci alone.

Fibonacci can provide reliable trade setups, but not without confirmation.

Applying additional technical tools like MACD or stochastic oscillators will support
the trade opportunity and increase the likelihood of a good trade. Without these
methods to act as confirmation, a trader will be left with little more than hope of a
positive outcome. (For more information on oscillators, see our tutorial
on Exploring Oscillators and Indicators.)

Taking a look at Figure 5, we see a retracement off of a medium-term move

higher in the euro/Japanese yen currency pair. Beginning on January 10, 2011,
the EUR/JPY exchange rate rose to a high of 113.94 over the course of almost
two weeks. Applying our Fibonacci retracement sequence, we arrive at a 38.2%
retracement level of 111.42 (from the 113.94 top). Following the retracement
lower, we notice that the stochastic oscillator is also confirming the momentum
lower.

Figure 5: The stochastic oscillator confirms a trend in the EUR/JPY pair.

Source: FX Intellicharts
Now the opportunity comes alive as the price action tests our Fibonacci
retracement level at 111.40 on January 30. Seeing this as an opportunity to go
long, we confirm the price point with stochastic - which shows an oversold signal.
A trader taking this position would have profited by almost 1.4%, or 160 pips, as
the price bounced off the 111.40 and traded as high as 113 over the next couple
of days.

4. Don't use Fibonacci over short intervals.

Day trading the foreign exchange market is exciting but there is a lot of volatility.

For this reason, applying Fibonacci retracements over a short time frame is
ineffective. The shorter the time frame, the less reliable the retracements levels.
Volatility can, and will, skew support and resistance levels, making it very difficult
for the trader to really pick and choose what levels can be traded. Not to mention
the fact that in the short term, spikes and whipsaws are very common. These
dynamics can make it especially difficult to place stops or take profit points as
retracements can create narrow and tight confluences. Just check out the
Canadian dollar/Japanese yen example below.

Figure 6: Fibonacci is applied to an intraday move in the CAD/JPY pair over

a three-minute time frame.
Source: FX Intellicharts
In Figure 6, we attempt to apply Fibonacci to an intraday move in the CAD/JPY
exchange rate chart (over a three-minute time frame). Here, volatility is high. This
causes longer wicks in the price action, creating the potential for misanalysis of
certain support levels. It also doesn't help that our Fibonacci levels are separated
by a mere six pips on average - increasing the likelihood of being stopped out.

Remember, as with any other statistical study, the more data that is used, the
stronger the analysis. Sticking to longer time frames when applying Fibonacci
sequences can improve the reliability of each price level.
The Bottom Line
As with any specialty, it takes time and practice to become better at using
Fibonacci retracements in forex trading. Don't allow yourself to become
frustrated; the long-term rewards definitely outweigh the costs. Follow the simple
rules of applying Fibonacci retracements and learn from these common mistakes
to help you analyze profitable opportunities in the currency markets. (For related
reading, also take a look at How To Become A Successful Forex Trader or
discuss other Fibonacci strategies.)

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