This
strategy refers to the category of trading near significant levels. The
main meaning of the strategy is the definition of a breakdown or a
rebound in the price of achieving important psychological levels. In
this case, the strong levels of support and resistance are Fibonacci
lines. Applying Fibonacci lines on the lower time frames, such as the 5-minute and 15-minute ,
is not effective because it means minor variations that cannot play the role of the important levels. In this strategy, the line will be applied to the timeframe not less than one hour.
After that the lines are marked go to the15-minute time frame. The meaning of this action is logical: levels are the strongest but in the trading relative to them there are certain problems - high stop. When
opening a smaller timeframe levels remain the same, but consider the
movement around them can be more detail, thanks to the increase of the
potential of more accurate input in the deal, and to put less stop.
1.usd / cad > 4-hourgraphic
As
an example, will be taken graphic of the currency pair usd/cad with
4-hour period for which marked the line of the Fibonacci. For a more
detailed consideration open in the same window time frame of 15 minutes.
Let us consider 4 example 2 on the rebound from the level and 2 at the breakdown. The graphics are separated by flowers on the 4-hour and 15-minute time frames.
2. usd/cad, > the 15-minute graphic
Example 2 The price is re-approached to F 0.0, built on the 4-hour
graphic. On the 15 minute shows that the price stood below the level and
for a long time traded near its border. Failing to overcome the mark,
the fall has started, where was necessary to open transaction on the sell. The main advantage of the strategy is a short stop, which we should set higher than F 0.0.
3.usd / cad > 15-minute graphic
Example
3 Understand, was the breakdown of the level in the fact, or
it is a trick of large investors is rather difficult. However,
the clearest signal is the following - the price before breaking
through important level, should a long time to test this level. As the
graphic shows the price was in the range, the upper boundary of which
was the level F 38.2. The deal should open at the place indicated by the
arrow.
4. usd / cad > 15-minute graphic
i.e.
at the moment when the price broke through the upper border of the
channel, and thus the level of F 38.2 . Stop is also a short, under the
break-out level
5. usd / cad > 15-minute graphic
Example
4 This situation is ideal, as to the breakdown graphic for
a long time has been consolidated under the break-out level, and after
the breakdown it also confirmed that the breakdown of high-quality,
trading some time above the F 23.6. The deal should be open after the
breakdown of the level up. Stop, as in the previous situation, put under
the break-out level.
General rules:
1 - Transaction is opened only after the breakdown of the level;
2 - The volume should increase in the breakdown;
3 - Stop is recommended to set at the level in the opposite breakdown.
