MTF FIB Breakout System by Spud

[JumpyStoryteller 7]

MTF FIB Breakout System by Spud
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Since learning about Fibonacci numbers, they have piqued my pure mathematical statistical side to the point of obsession. Having said that, it appears that for such a simple sequence of numbers, they can lead to very complicated trading methods.

Here's a simple day trade system based on stochastics and Fibonacci numbers that could help you win more trades.

Indicators:

Stochastics 5,3,3 and 14,3,3 (high/low, simple)....only use the percent K line and overlay in one indicator window.

Fibonacci levels are: 0 labeled as 100.764 labeled as 23.6.681 labeled as 38.2.500 labeled as 50.0.382 labeled as 61,8.236 labeled as 76.4 1 labeled as 0
Always draw the Fib line from the previous day's low to the previous day's high.

Set-up
Draw your Fib line from the previous day's low to the high at the close of the trading day (call this the previous day since this day is now over) and draw it so the level lines extend into today (i.e. set your chart up with a shift)

Entry
Look for the price to break through the Fib's 100 or 0 level. This can be accomplished by keeping an eye on or placing a long order slightly above the 100 level or a short order slightly below the 0 level. You want the price to cross the 100/0 line, not just come close to it.

Meanwhile, look at the stochastics....when/prior to/or just after the price breaks the 100 Fib line, you can almost be certain that the stoch is breaking the 80 line or higher....well, we want it to be or we will wait for it to do it before entering the trade. Similarly, if the price breaks the zero line, we want the stochastic to be in the 20s or lower.

You have the option to take a few more risks. If the stochastics are climbing together after a down move and a turn up in a long, or if the stochastics have crossed 20 and are moving up.

Exit
When the price breaks 100 (using long as an example), move your FIB line up to where the 100 line was. Exit when you reach 23.6 (123.6), 38.2 (138.2), and/or other values.
Allow the stochastics to guide you...if both or one of them remains above 80, continue to ride the trade.
The 14,3,3 stochastic has a greater impact on the trade than the 5,3,3, but both are in perfect harmony.

What is MTF and where can I find it?
MTF stands for multiple time frame, and it is stochastic in the 5,3,3 and 14,3,3 ranges.

Timetable
I use the 1H chart on a daily basis. You can use the 4H chart, but you'll be trading weekly. I would not use a time frame shorter than 1H because the Fib's reliability begins to deteriorate.

Currencies
This is universal, but I particularly like the GBPJPY. You want pairs with a good daily range as well as large Fib numbers so you can make some pips!
Use the 4H/weekly fib when trading the smaller day range pairs.

Isn't this merely a breakout above yesterday's high/low?
Well, it is if you only trade the breakout and use the stochs....but laddie, there is so much more to this simple system......
The Fib levels give you exit targets, so use them and get used to them...you won't be sorry, and you'll understand what comes next (in a little while) a lot better.

[BleedingFox 66]

We appreciate your most recent method.

One question here: why are we required to draw falsehoods from low to high? Your chart demonstrates that the gj is increasing in value. As a result, we draw the falsehood from low to high. when it begins to decline, so that we can draw the fib from high to low? Am I correct regarding this spud?

I apologize if this is a ridiculous question. I'm still a student. I'm particularly fond of the fib thingy.

[JumpyStoryteller 7]

3 minutes ago, BleedingFox said:

We appreciate your most recent method.

One question here: why are we required to draw falsehoods from low to high? Your chart demonstrates that the gj is increasing in value. As a result, we draw the falsehood from low to high. when it begins to decline, so that we can draw the fib from high to low? Am I correct regarding this spud?

I apologize if this is a ridiculous question. I'm still a student. I'm particularly fond of the fib thingy.

To make the level labels make sense, I only draw from low to high, so they will always be 0 at the bottom and 100 at the top. It's not that important right now, but there's a reason for my craziness.

[ScandanaviaDover 36]

2 minutes ago, JumpyStoryteller said:

To make the level labels make sense, I only draw from low to high, so they will always be 0 at the bottom and 100 at the top. It's not that important right now, but there's a reason for my craziness.

To make the level labels make sense, I only draw from low to high, so they will always be 0 at the bottom and 100 at the top. It's not that important right now, but there's a reason for my craziness.

[BleedingFox 66]

2 minutes ago, ScandanaviaDover said:

To make the level labels make sense, I only draw from low to high, so they will always be 0 at the bottom and 100 at the top. It's not that important right now, but there's a reason for my craziness.

thank you very much.

[ScandanaviaDover 36]

Here's another long example...notice the stochastic exit indication.

Also I've added a few Fib levels to make life easier. The Fib levels are now:
-1 label as 200
-.764 label as 176.4
-.681 label as 168.1
-.500 label as 150.0
-.382 label as 138.2
-.236 label as 123.6
0 label as 100
.236 label as 76.4
.382 label as 61.8
.5 label as 50.0
.681 label as 38.2
.764 label as 76.4
1 label as 0
1.236 label as -23.6
1.382 label as -38.2
1.500 label as -50.0
1.618 label as -61.8
1.764 label as -76.4
2 label as -100

[ScandanaviaDover 36]

The stochastics don't lie again.

In this chart, we get a good entry, but the market goes against us. The stochastics give us plenty of warning, and depending on how long you waited, your losses would be minor, if any at all...you might even have gained a few pips.

[SydKr 2]

As usual, excellent work from your mind. I'm curious if the method you describe here is meant to replace the earlier MTF Stoch, or if it's just another way to look at Stochs.

Thanks

[GambitMark 7]

This appears to be another successful method of yours, and your chart is extremely easy to look at as well as read. I'm curious if you realize how much of an encouraging and positive impact your knowledge and generosity have on so many people. It boosts the confidence of new traders like myself, especially when we see profitable trades. Thank you once more.

[SangreBobcat 28]

good information, a couple of questions

1. You said 1hr is like a daily timeframe, but I thought 1hr with 14,3,3 was like a 4hr chart; I'm just perplexed.

2. How many pips do you consider sufficient for a hi or low break?

Thanks