LeMercenaire wrote:Mira wrote:LeMercenaire wrote:
I think this is the same place.
For me, I go back to my trusty steed. I've left the fib on the level it would have hit on the first drop and assuming I would be looking at the same move you did - which for me is always going to be a retrace...and retrace is what we got. Classic Dead Cat Bounce.
NZDUSD m15 Chart
Screenshot 2019-01-22 at 12.41.20 - Edited.png
So, to be clear, I would have gone short off the 50% level once I had seen signs of rejection. (At the time, I think the higher tf was short bias as well - but can't swear to that).
Thanks for the reply and for your help.
Is there some rule about drawing fibos?
I was looking for a long at the 50% there:
Best way to remember it is to draw from where price has been to where price is going.
Also, I am using fibs specifically here to look for continuation levels, so I will already have a base directional bias. I am then waiting for a pullback and the fib (drawn from in this case, the high to the low) gives me an idea where the price will pull back to.
Yes, you will sometimes get a close over that then turns back - especially on the lower time frames (not so much on the higher) but I will not be looking for that direction. So in my example:
Price has dropped and is now in a pull back. The fib is drawn. I look for rejection at the 23.6 (weak) and the 50 (strong) levels (and I would suggest using the 23.6 as well as the 50 on the indi) I will often have back up from micro S+D. If I get a close over that level, then I do not go in long - I simply don't go in short (see what I mean). I wait for a shrot directional move and jump on board.
I am not anal about it having to be dead on the level. That's why I will go in at market, not by using orders. Use all that knowledge of price action that you've built up over the years to maximise that entry (or again, micro S+D - or even a fib-inside-a-fib!)
Now that I spent all the afternoon drawing fibos I’m thinking about something..
LeM, are you saying that we need to give a context at the trades?
Because Doji’s Zones are just like MightyZones or any place showing momentum in direction of profit.. however I think that trading those zones away from a “major S/R” would raise the success rate.