Fibonacci Signals Forex Strategy

The Fibonacci Signals Forex strategy is a trading strategy that tries to place price action in the right trend direction by deploying the famous Fibonacci sequence.

Traders are fully aware of how frequent these numbers are being applied in the financial markets.

With this strategy, we’ll avoid looking at each price change individually and concentrate on the bigger picture which implies that major trends can become readily identifiable and more profitable.

Chart Setup

MetaTrader4 Indicators: bobokusfibo-indicator.ex4 (Default Setting), Parabolic SAR of MA mtf.ex4 (Inputs Variable Modified; MaPeriod=56), MACD.ex4 (Default Setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Enter a bullish trade if the following indicator or chart pattern gets put on display:

  1. If 3 consecutive candles are seen to open and close above the Fibo level of the bobokusfibo-indicator (revert to Fig. 1.0), price is said to be pushed to the upside i.e. a trigger to go long on the stipulated forex pair.
  2. If the Parabolic SAR of MA mtf Metatrader 4 indicator display a lime green signal ball that is aligned somewhat below the price bars as shown on Fig. 1.0, bulls are said to be pushing price higher, therefore a buy alert will suffice.
  3. If the silver histograms & red line of the MACD custom indicator stay above the 0.00 horizontal level as illustrated on Fig. 1.0, bulls are said to be taking price higher, therefore a buy will do.

Stop Loss for Buy Entry: Place stop loss 5 pips below the most recent support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit from all trades if the following rules or conditions takes precedence:

  1. If while a bullish signal is ongoing, 3 consecutive price bars are seen to close below the Fibo level of the bobokusfibo-indicator, bulls power is said to be weaning, hence an exit or take profit is recommended.
  2. If the Parabolic SAR of MA mtf indicator display a red signal ball during the course of a bullish signal, an exit or take profit is duly advised.
  3. If the red line of the MACD indicator dips below the 0.00 signal level, an exit or take profit stance is apt.

Sell Entry Rules

Go short if the following setups gets displayed rightly on the activity chart:

  1. If 3 consecutive candles are seen to open and close below the Fibo level of the bobokusfibo-indicator (see Fig. 1.1), price is said to be pressured lower i.e. a trigger to sell the currency pair of interest.
  2. If the Parabolic SAR of MA mtf custom indicator displays a red signal ball that is place slightly above the price bars as exemplified on Fig. 1.1, bears are said to be pushing price lower, therefore a sell alert is appropriate.
  3. If the silver histograms & red line of the MACD custom indicator stay below the 0.00 horizontal level as shown on Fig. 1.1, market momentum is said to be in favor of bears, hence a signal to sell the selected forex pair.

Stop Loss for Sell Entry: Place stop loss 5 pips above the most recent resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a bearish trend is running, 3 consecutive price bars are seen to close above the Fibo level of the bobokusfibo-indicator, bears power is said to be halting, hence an exit or take profit is advised.
  2. If the Parabolic SAR of MA mtf indicator display a lime green signal ball during the course of a bullish signal, an exit or take profit is duly recommended.
  3. If the red line of the MACD indicator surges above the 0.00 signal level, an exit or take profit stance is appropriate.

Sell Trade Example

Fig. 1.1

Free Download

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About The Trading Indicators

The bobokusfibo-indicator.ex4 is a Fibonacci retracement tool that creates areas of support and resistance on the activity chart.

The Parabolic SAR of MA mtf.ex4 is a multi-time frame modified Parabolic SAR indicator that is used to gauge the direction of an asset’s momentum.

The Moving average convergence divergence (MACD) is a trend-following momentum indicator that reveals the connection between two moving averages of price.

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