[Soultrader]

I want to briefly explain a fibonacci trading strategy I use on a daily basis. I look at two key retracement lines: the 61.8% and 50% fib retracements. This I call this zone the "hot zone". I will pay close attention when prices retace or pullback to this zone.

Uptrend strategy: In an uptrend, I want prices to retrace below the 50% fibonacci retracement but close above the 61.8% retracement. If the hot zone acts as a key support zone, I will enter a long position with a 3-5 tick stop below the 61.8% retracement line. I will scale out +10 for the dow mini's and exit all or most of my position at the previous swing high.

Downtrend strategy: In a downtrend, I want price to retrace back to the 50% fibonacci retracement line but not close below the 61.8% retracement. I am looking for the hot zone to act as a key resistance level. I will enter a short position using a 3-5 tick stop above the 61.8% retracement. I will scale out +10 for the dow mini's and exit all or most of my position at the previous swing low.

Just remember this: 61.8% for an uptrend & 50% for a downtrend. These are the two main levels I will look at. I time my entries based on the tape. For those who are not tape readers, I highly recommend you put the time and effort into learning this valuable skill.

[bobcollett]

Originally Posted by Soultrader »

I want to briefly explain a fibonacci trading strategy I use on a daily basis. I look at two key retracement lines: the 61.8% and 50% fib retracements. This I call this zone the "hot zone". I will pay close attention when prices retace or pullback to this zone.

Uptrend strategy: In an uptrend, I want prices to retrace below the 50% fibonacci retracement but close above the 61.8% retracement. If the hot zone acts as a key support zone, I will enter a long position with a 3-5 tick stop below the 61.8% retracement line. I will scale out +10 for the dow mini's and exit all or most of my position at the previous swing high.

Downtrend strategy: In a downtrend, I want price to retrace back to the 50% fibonacci retracement line but not close below the 61.8% retracement. I am looking for the hot zone to act as a key resistance level. I will enter a short position using a 3-5 tick stop above the 61.8% retracement. I will scale out +10 for the dow mini's and exit all or most of my position at the previous swing low.

Just remember this: 61.8% for an uptrend & 50% for a downtrend. These are the two main levels I will look at. I time my entries based on the tape. For those who are not tape readers, I highly recommend you put the time and effort into learning this valuable skill.

Dear Soultrader
Do you still look at this "hot zone"?
Or has the market moved on.
Kind regards
bobc