Fibonacci Retracement Strategy — Step-by-Step Guide & Transcript

[00:00] This, is the FIBONNACI RETRACEMENT tool. Yeah, you probably have heard of it. And unfortunately, most traders use the Fibonacci tool completely wrong. I m going to show you how to use it correctly and give you an amazing strategy using it.

[00:15] These strategies will give you sniper entries, with tight stop losses, and HUGE take profits. Then for the cherry top ill give you a secret hack that will completely change the way you trade with Fibonacci forever. Sooo basically, after this video, you ll fibonnaci

[00:32] pro. Lets get straight to it. To start us off, we have to go over how the make move like this. A Move with a big trend upwards, a retracement,

[00:44] and then continue process. Making this point, a beautiful entry. Our goal with the fibonnaci retracement tools is to predict the end of this pullback point as accurate possible, so we can enter here, and benefit from the move upwards with as

[00:59] little risk as possible. Which is exactly what these 3 strategies do. Now, there is a lot of controversy on what fibonacci levels are the best. I think 0.706 and 0.618 are the best levels that preposterous obviously the 0.79 and 0.5

[01:21] levels are the best actually ive done my analysis and the 0.382 different levels. But for my testing, and these specific strategies. But first let me tell you about hankotradeeeee

[02:12] Okay, lets go back to the most optimal fibonnaci settings Here are the levels we will be using: 0, 0.382, 0.5, 0.618, and 1.

[02:33] Giving you something that looks like this. These 3 levels are the most important and what I call, THE GOLDEN ZONE. The golden zone is where price is most likely to pullback and reverse. Now one of the biggest mistakes traders have

[02:48] when using the fibonnaci tool is not knowing where to have the starting point and the ending point of the fibonnaci. And this can cause a lot of problems, because if you use the wrong starting point and the wrong ending point, you ll get some bad losing

[03:01] would get confused. Do you put it here, do you put it here. Where do you put it? Heres a quick and simple way to know exactly where to put the fibonnaci, so you get the perfect starting and ending point every time. First go to the indicators tab and type in

[03:16] fractals. Click this one right here. Your chart will look something like this. The green arrows are bullish fractals. The red arrows are bearish fractals. But as you can see there are a lot of fractals. Going on every single possible reversal.

[03:30] We want to lower the sensitivity of this indicator so we only see the major reversal. To do that, go to the settings of the indicator and change the periods to 10. But as you can see, the indicator Is still giving us some irrelevant swing points.

[03:47] So sometimes you are going to have to do your own due diligence and only look for the strong moves. So for example, you would use these two fractals here, because they are very close togethers and it s a very weak trend.

[03:59] It is very important we only use the fibonnaci on strong trends. Once you find a strong trend like this, grab your fibonnaci tool and mark it from the red

[04:11] fractal to the green fractal. As you can see price came to the gold zone, Just this alone will work alright. But we are going to add some confluences with this

[04:23] to make it perform even fn amazing. Confluence is the key to success. What I found works really good. Is pairing this with support and resistances. Specifically, retests. Here s what I mean. So here we found a strong trend. We see our

[04:37] two fractals we get our fibonnaci tool and market the high and low. We have a strong resistance level right here, and price broke right though it, meaning it

[04:50] can now be used as a support or in otherwords a retest. If you look even closer, this retest level, is exactly where the golden zone is. Adding even more confluence to this strategy. But wait, theres more. We can add even confluence.

[05:06] To do this go to your indicators tab and add a ema. A 200 ema, on a large timeframe is going to act as a very strong support and resistance.

[05:19] For example, in this uptrend, you can see price used this ema as a support and bounced used the ema as a resistance and again bounced off many times.

[05:31] Find our fractals, draw our fibonnaci tool, look for price to retrace to the ema, and CONFLUENCE. But wait theres more.

[05:46] We are going to be adding ANOTHER confluence to make this strategy work absolutely beautiful. We will be using the anchored vwap. If you don t what the anchored vwap is, its basically just a normal vwap, but we can specifically choose where it begins.

[06:02] So for example, you would use it like this. Go to this left tool bar and select the anchored the beginning point of the strong trend. Or where the red fractal is.

[06:14] This will put the anchored vwap on your chart. Go to the settings of the anchored vwap and uncheck all of these boxes beside the vwap, as that s all we care about with this strategy. The vwap works very similar to the ema as price likes to bounce off this line and can

[06:30] be used as a support and resistance. So if you did the math, we now have 3 strong confluences. Making our trades have an extremely high probability of winning and we have the best chance at finding the exact retracement point like we

[06:45] This is how you would do it. First things first, I like to use this strategy on higher timeframes like the 1 hour or 4 For this example, we are using the four hour. We see a big move upwards. Remember, if we

[06:59] are going to be using the fibonnaci, the move has to be a strong trend. We then draw our fibonnaci retracement tool. With the help of our fractals. We now see where our golden zone is located. If we look a bit closer, you can also see

[07:12] price broker through this resistance right here, and can now use it as a support and retest off of it. It is also located exactly in the golden zone. Perfect. We then add the 200 ema to the chart and see it is also directly in the golden zone.

[07:27] Then finally, we add the anchored vwap by starting it exactly at the bottom of the big move or at the red fractal. And as you can see, it is also exactly in the golden zone. So we now have 4 confluences. The golden zone,

[07:42] the retest, the ema, and the vwap. Which means, price has an extremely high probability of bounce at this point. I like setting my take profit at the high of the move and setting my stop loss right below the golden zone.

[07:56] And just like that, price bounces perfectly at the golden zone and hits our take profit profitable trades Next, im going to talk about how you can pair this with supply and demand. As I found that works extremely well with

[08:12] video, and ill see you guys next time.