[TimRacette]

I had a couple people ask me to start a Fibonacci thread so here it is. As you've probably heard me mention in other posts I enter at 50% lines I use a 6 tick stop on the ES and 8 pip stop on the Euro (6E). I trade in contracts of 2 and take half off at +2 on the ES +4 on 6E. I use a target of 23% past highs.

Be interest to hear how you trade using fibs.

[TheNegotiator]

I tend to use fibonacci ret/ext on the IB and the whole day. I enter a trade purely on a fibo though. I use them in 2 ways. 1- to concrete in a structural framework and 2- for a guide on the relative strength of the market session.

[bigsnack]

Originally Posted by TimRacette »

I had a couple people ask me to start a Fibonacci thread so here it is. As you've probably heard me mention in other posts I enter at 50% lines I use a 6 tick stop on the ES and 8 pip stop on the Euro (6E). I trade in contracts of 2 and take half off at +2 on the ES +4 on 6E. I use a target of 23% past highs.

Be interest to hear how you trade using fibs.

I recognize this strategy

EDIT: I used to do the same exact thing, but I stopped with the scaling out because statistically it didn't work for me. I will occasionally peel off some at +4 on the ES, but only if I'm not feeling confident for whatever reason. -23% targets are sound and are good places to take profit.

[MightyMouse]

Originally Posted by TimRacette »

I had a couple people ask me to start a Fibonacci thread so here it is. As you've probably heard me mention in other posts I enter at 50% lines I use a 6 tick stop on the ES and 8 pip stop on the Euro (6E). I trade in contracts of 2 and take half off at +2 on the ES +4 on 6E. I use a target of 23% past highs.

Be interest to hear how you trade using fibs.

Do you mean you take half off at +2 points or +2ticks? What do you do with the stop on the remaining contract? Also, how big an area are you using for the trade? In other words, how much bigger is your target than your stop.

[TimRacette]

BigSnack, picked up that scale method from David Halsey a few years ago, love it

Mighty Mouse,

For ES I use a 6 tick stop, half off at +2 ticks and stop goes to -4 ticks, initial target 10 ticks. 85.7% of my trades get +2 or better so my risk is extremely reduced right off the bat. For the

For Euro (6E) I use a -8 pip stop, half off at +4 pips and stop goes to -4, this puts me at break even and I just hold to the -23% target. Once we get moving I trail the 233 tick chart.

[bigsnack]

Originally Posted by TimRacette »

BigSnack, picked up that scale method from David Halsey a few years ago, love it

HELL YEAH! I remember watching his YM trading videos and thinking "this is IT"

[MightyMouse]

Originally Posted by TimRacette »

BigSnack, picked up that scale method from David Halsey a few years ago, love it

Mighty Mouse,

For ES I use a 6 tick stop, half off at +2 ticks and stop goes to -4 ticks, initial target 10 ticks. 85.7% of my trades get +2 or better so my risk is extremely reduced right off the bat. For the

For Euro (6E) I use a -8 pip stop, half off at +4 pips and stop goes to -4, this puts me at break even and I just hold to the -23% target. Once we get moving I trail the 233 tick chart.

Tim,

The first leg of your es trade is a -$2/contract loser over the long run even if you attain 90% accuracy, given a normal distribution of wins and losses, taking into account normal commission levels, paying a 1 tick spread, and ignoring slippage. You would be better off trading only 1 contract and moving your stop to -4 ticks when it moves 2 ticks in your favor.The overall profitability of the trade will depend on how far the second leg of the trade goes. You can improve the profitability of that trade by changing your first scale to 4 ticks from 2. That would give you an $8 expectancy over the long run with an 80% accuracy rate, given the spread and commissions.

I know you didn't ask my opinion, but I figured I would point it out since it was staring me in the face. Keep in mind that I an mot questioning your accuracy; instead, I am taking it as given that you will be able to get 85%.

You can probably do your own study and of your actual trades that made 2 ticks and compare them to the trades that you got stopped out of. Over time it will approach something near the -$2 over time.

Good luck

[TimRacette]

The problem with that math is that it doesn't take into account my trailstop and winning trades. My fault for leaving that part out. So 85% of trades go at least +2, I move my stop to -2 when we trade +4 and b/e when we hit +6. I have statistics for where my trades either get stopped out or take a profit and my #s along with my actual p/l show that it's very profitable.

In 10 trades I average 1.5 stopouts, two -2s and the rest of the trades are b/e or greater, that means (sticking with the #2 and using 2 contracts) in 6.5 trades I only have to cover a loss of $250 and according to my live trading statistics I have at least 2 trades of +10 or more per every 10 trades, that right there would cover losses and commission.

The range on the euro is much more conducive and lucrative to this strategy, but the ES is so incredibly technical with extremely high first target rates.