Fibonacci Expansion Trading System
(I am not a native English speaker. Please forgive my incorrect word choice or grammatical errors.)
0. Name <br> This trading concept should be called Fibonacci Extension Trading System (FETS) , or, Tokyo Reed System (TRS) .
1. Rules
(1) Find the LL-HH-HL formation. Please see attached picture. A The price is low. B The price is high. C is the higher low price. B must be higher than A. C must be lower than B, but higher than A. This is the LL-HH-HL arrangement. Of course the opposite (HH-LL-LH) is also possible. I often use fractals to find A, B, and C.
(2) Apply Fibonacci expansion to ABC.
(3) Place pending orders according to the following rules: stop loss is C, entry price is ABx0.618, breakeven price is ABx1.000, and take profit is ABx1.618. That is, if the market price reaches the breakeven price, you must change your stop loss from C to the entry price. In addition, if the market price is below C and does not reach the entry price, you must cancel the pending order.
2. Time range <br> I recommend 4H, 1D and 1W. (Because day trading is painful.)
3. Transaction size <br> The risk per trade is less than 1%.
4. Backtest <br> I roughly backtested the system manually on XAUUSD, EURUSD, USDJPY, GBPUSD, AUDUSD and USDCHF the other day.
The results are as follows (PF stands for profit factor).
[Time range: 4H]
XAUUSD 108 Trading PF 1.98
EURUSD 138 trades PF 1.41
USDJPY 156 transactions PF 2.13
GBPUSD 167 Transaction PF 1.43
AUDUSD 147 transactions PF 1.19
USDCHF 227 Transactions PF 2.23
[Time Range: 1D]
XAUUSD 121 transactions PF 2.20
EURUSD 167 trades PF 1.16
USDJPY148 Trading PF 1.36
GBPUSD 131 Transaction PF 1.75
AUDUSD 130 transactions PF 1.04
USDCHF 138 transactions PF 1.90
[Time range: 1W]
XAUUSD 42 transactions PF 2.02
EURUSD 49 trades PF 1.84
USDJPY 48 trades PF 1.52
GBPUSD 43 transactions PF 1.08
AUDUSD 40 transactions PF 1.86
USDCHF 46 transactions PF 1.83
I think this trading concept needs further improvement. For example, TP should be 2.618; do not place orders when BC/AB is less than 0.382; do not buy below EMA200 and do not sell above EMA200; use trailing stop loss instead of breakeven...etc. I look forward to lots of constructive or productive comments.
with best regards.
0. Name <br> This trading concept should be called Fibonacci Extension Trading System (FETS) , or, Tokyo Reed System (TRS) .
1. Rules
(1) Find the LL-HH-HL formation. Please see attached picture. A The price is low. B The price is high. C is the higher low price. B must be higher than A. C must be lower than B, but higher than A. This is the LL-HH-HL arrangement. Of course the opposite (HH-LL-LH) is also possible. I often use fractals to find A, B, and C.
(2) Apply Fibonacci expansion to ABC.
(3) Place pending orders according to the following rules: stop loss is C, entry price is ABx0.618, breakeven price is ABx1.000, and take profit is ABx1.618. That is, if the market price reaches the breakeven price, you must change your stop loss from C to the entry price. In addition, if the market price is below C and does not reach the entry price, you must cancel the pending order.
2. Time range <br> I recommend 4H, 1D and 1W. (Because day trading is painful.)
3. Transaction size <br> The risk per trade is less than 1%.
4. Backtest <br> I roughly backtested the system manually on XAUUSD, EURUSD, USDJPY, GBPUSD, AUDUSD and USDCHF the other day.
The results are as follows (PF stands for profit factor).
[Time range: 4H]
XAUUSD 108 Trading PF 1.98
EURUSD 138 trades PF 1.41
USDJPY 156 transactions PF 2.13
GBPUSD 167 Transaction PF 1.43
AUDUSD 147 transactions PF 1.19
USDCHF 227 Transactions PF 2.23
[Time Range: 1D]
XAUUSD 121 transactions PF 2.20
EURUSD 167 trades PF 1.16
USDJPY148 Trading PF 1.36
GBPUSD 131 Transaction PF 1.75
AUDUSD 130 transactions PF 1.04
USDCHF 138 transactions PF 1.90
[Time range: 1W]
XAUUSD 42 transactions PF 2.02
EURUSD 49 trades PF 1.84
USDJPY 48 trades PF 1.52
GBPUSD 43 transactions PF 1.08
AUDUSD 40 transactions PF 1.86
USDCHF 46 transactions PF 1.83
I think this trading concept needs further improvement. For example, TP should be 2.618; do not place orders when BC/AB is less than 0.382; do not buy below EMA200 and do not sell above EMA200; use trailing stop loss instead of breakeven...etc. I look forward to lots of constructive or productive comments.
with best regards.
📦 Summary of post attachments (2)
Below are all the files (2) shared in the reply.
💡 Featured Recommendations
✍️ Latest by the author
- •
- •
- •
- •
- •
- •
📌 Popular topics
- •
- •
- •
- •
- •
- •
- •
- •
🔗 You May Be Interested In
- •
- •
- •
- •
- •
- •
