The Fibonacci 0.618 Scalping Strategy Explained — Transcript

Full transcript

1. 0:00Fibonacci trading is basically trading
2. 0:03the psychology of the markets. If this
3. 0:06iPhone cost $1,000
4. 0:09and then went on sale 60% off and you
5. 0:13could buy it for 400, you would jump on
6. 0:15that opportunity. The same thing happens
7. 0:18when price is making market structure,
8. 0:21bullish market structure, every single
9. 0:24higher low is a discounted price where
10. 0:26buyers are more interested in getting in
11. 0:29and continuing that trend. So, let's
12. 0:32jump into the charts and I'm going to
13. 0:33show you how to trend trade like a
14. 0:35master. Now, in yesterday's video, I
15. 0:37showed you how to identify RSI
16. 0:40divergences to find the tops and bottoms
17. 0:43of these trends. But how do you actually
18. 0:45trade these trends and get multiple
19. 0:48positions and multiple successful trades
20. 0:51during a trending market? Now, the
21. 0:52easiest way to identify market structure
22. 0:55is by using the brush tool. Mark up
23. 0:58higher highs and higher lows. And then
24. 1:01stop looking at your candles. You can
25. 1:04actually hide them if you want. Now,
26. 1:06bearish market structure is lower lows
27. 1:09and lower highs. Every time a lower low
28. 1:12gets broken and creates a continuation
29. 1:15lower low, these are the ones that you
30. 1:17want to identify as your main higher
31. 1:19highs and higher lows, not all the noise
32. 1:22in the middle. We're only focusing on
33. 1:24lows, not even focusing on
34. 1:28the higher lows. All we want to see is
35. 1:31breaks of structure. Every single one of
36. 1:34these pink lines is a break of the
37. 1:36previous lower low. Now, because we know
38. 1:40that price is making lower lows, price
39. 1:42is continuing to break structure, we
40. 1:45know that we can Fibonacci retracement
41. 1:47trade successfully during this entire
42. 1:50trend. Now, the Fibonacci retracement
43. 1:52tool is the third icon down on your left
44. 1:55toolbar. When you draw on your charts,
45. 1:57it's going to look different if you've
46. 1:58never changed the settings. I like these
47. 2:01settings the best. Here they are, you
48. 2:02can take a screenshot if you want to
49. 2:04make yours look exactly like mine. Now,
50. 2:06zooming in.
51. 2:07When price breaks previous structure and
52. 2:10starts retracing, you can draw your
53. 2:13Fibonacci retracement tool from the top
54. 2:16to the bottom of the move that broke
55. 2:19structure. This is known as an impulse
56. 2:22move. An impulse move breaks previous
57. 2:25structure. And what I want you to do
58. 2:28when you are trading this way, and you
59. 2:29know that market structure is bearish,
60. 2:31to get the highest risk to reward, I
61. 2:34want you to create pending orders. Your
62. 2:36pending orders are going to be in the
63. 2:39Fibonacci gold zone. Keep in mind, the
64. 2:41earlier entry, the worse your risk to
65. 2:44reward. If you enter at a .5 Fibonacci
66. 2:47retracement, and your take profit is at
67. 2:49the end of the impulse move, and your
68. 2:51stop loss is at the beginning of the
69. 2:53impulse move, you will have a one to one
70. 2:55risk to reward ratio. If your entry is
71. 2:58at the .618, you will have a one to 1.6
72. 3:01risk to reward ratio, which is much
73. 3:03better. Sometimes your pending orders
74. 3:06might not get tagged in, but that's
75. 3:07okay, because this is the best way to do
76. 3:09it, because this is the highest risk to
77. 3:12reward. The reason why we target the
78. 3:14bottom of the impulse move is because we
79. 3:16do not know for sure if price will make
80. 3:18a new lower low, but we can almost
81. 3:20assume that price will make a double
82. 3:22bottom if the trend is dying. So, a nice
83. 3:25safe take profit is the bottom of that
84. 3:28impulse move. And you will do this on
85. 3:30every impulse move that broke the
86. 3:33previous structure, and you will have
87. 3:34your pending orders ready at the .618
88. 3:37retracement. And you can see in this
89. 3:39trend, we did not get tagged in many
90. 3:42times along these retracements. But
91. 3:44because we're smart and we want the best
92. 3:46risk to reward, we were able to capture
93. 3:48two wins and one loss out of here. So,
94. 3:51if your risk to reward is one to 1.6,
95. 3:53you got 3.2% for the winners and minus
96. 3:561% for the one loser. That gives you a
97. 3:58net profit of 2.2%. So, with or without
98. 4:02the candles, if you draw your zigzags to
99. 4:04the exact highs and lows of the wicks,
100. 4:07you'll be able to see more clearly
101. 4:08without the anxiety of every single
102. 4:11pullback candle that you can now trade
103. 4:14with the trend successfully, but the
104. 4:16most important thing is being able to
105. 4:18trade with the trend on the pullbacks to
106. 4:21get the highest risk to reward. And if
107. 4:23you really want to go crazy, you can
108. 4:25actually hold these take profits until
109. 4:28you can clearly see that the market
110. 4:30trend is over and we are no longer
111. 4:32making higher highs and higher lows.
112. 4:34That's a huge, incredible risk to reward
113. 4:37ratio. So, hopefully this video gave you
114. 4:40a cleaner look without all the noise of
115. 4:43how to trade with the trend with the
116. 4:45highest probability for success, the
117. 4:47best entry points, and the best risk to
118. 4:50reward. Now, in tomorrow's video,
119. 4:52because this is an entire series, I'm
120. 4:55going to be putting all three of these
121. 4:57trading strategies together in a single
122. 5:00day on a low timeframe, so we can scalp
123. 5:02the markets many times per day with the
124. 5:05highest risk to reward ratio and the
125. 5:08highest probability for success. We'll
126. 5:10be putting together RSI divergences,
127. 5:13Fibonacci retracements, as well as
128. 5:15breakout trading strategies. Thank you
129. 5:17so much for watching and I can't wait to
130. 5:19see you in tomorrow's video.