clarification needed on trading with fibs

[DaveB]

Hello,

I am currently using Metatrader 4 and the fibs begin a 0 and extend to 100 (if you didn't know already . What I need some clarification on is where to begin the extension for a buy or sell retracement. For example, the trend is heading down, there is a corrective retracement to 62% then it heads down again. Would I place 0 on the fibs at the High and extend down or would I begin by placing 0 at the Low and extend up. The same question applies to the opposite long trade.

Advice much appreciated,

Regards,
Dave

[foamgod]

I am not a fibo expert but I would think you would always do it from left to right. So if it is a downtrend, top to bottom; if it is an uptrend, bottom to top. When you look at retracement, you want to guess if the price will continue in the up/downtrend.

[MickMason]

Originally Posted by DaveB

Hello,

I am currently using Metatrader 4 and the fibs begin a 0 and extend to 100 (if you didn't know already . What I need some clarification on is where to begin the extension for a buy or sell retracement. For example, the trend is heading down, there is a corrective retracement to 62% then it heads down again. Would I place 0 on the fibs at the High and extend down or would I begin by placing 0 at the Low and extend up. The same question applies to the opposite long trade.

Advice much appreciated,

Regards,
Dave

Here's the charts from my trade this morning, target was just met, does that help?

To draw in projections from a retracement level in a downtrend draw from the low point to the retracement level to give you 161.8, the opposite in an uptrend.

Cheers

Mick

[foamgod]

Originally Posted by MickMason

Here's the charts from my trade this morning, target was just met, does that help?

To draw in projections from a retracement level in a downtrend draw from the low point to the retracement level to give you 161.8, the opposite in an uptrend.

Cheers

Mick

Hi Mick, based on your fib1, wouldn't this be a failure of fibo, since the price did not follow through after breaking the 61.8% level?

[MickMason]

Originally Posted by foamgod

Hi Mick, based on your fib1, wouldn't this be a failure of fibo, since the price did not follow through after breaking the 61.8% level?

Hi foamgod

A failure? No, it retraced 61.8% and met target at 161.8%, that was the plan.


Mick

[foamgod]

Originally Posted by MickMason

Hi foamgod

A failure? No, it retraced 61.8% and met target at 161.8%, that was the plan.


Mick

Doesn't a 61.8% retracement imply that a new trend is establishing itself?

[MickMason]

Originally Posted by foamgod

Doesn't a 61.8% retracement imply that a new trend is establishing itself?

Not to me it don't

You tell me, anything here to suggest a trend change during this 2 cent move on Cable this morning.....

[foamgod]

Mick: :PPP I do not use fibo! :PPP

Because from what I read, that's what a 61% retracement is supposed to mean. Was that source wrong?