## Trade Simple with Fibo_dec Strategy

Bluedragon Przesłąno 1 Sty in #Bearish #Reversal #Breakout #Bullish #Scalping #Money Management #Fibodecsystem #Predominant Trend #Scenarios #BreakevenHello dear members Dukas community, first of all, I want to wish to everyone, a happy 2013, which this year be full of many pips "blue" for all.

This month I return to articles, and once again within the philosophy of negotiating with simplicity. I bring you another strategy that already use a few years ago, call it **FiboDec_System**.

For this strategy, we will use graphs 1 hour time frame.

The analysis should be performed between 18 and 23:00 GMT, and my experience tells me that analyzes at 18:00 may translate into better results, however later analysis also show very interesting perform.

This system should be divided into a few distinct stages, namely:

1) Determination of maximum and minimum of the last 24 hours

2) Application of Fibonacci_Dec (Fibonacci custom which is divided into tenths)

3) Determination of scenario / predominant trend

4) Definition of possible scenarios

Having said this, I try to describe each of these steps so in summary form, to anyone of you could try this system.

**MAX vs. MIN**

The first thing to do is determine the maximum and minimum which occurred in the last 24 hours or since the last review. We'll need these values when we make the application of our Fibo.

**FIBONACCI DEC**

We begin by customizing our "**Fibonacci**", which is actually a graphical representation of the shrinkage and expansion of 10%. For this, we do the following:

a) In H1 chart, begin by drawing a **Fibonacci** retracements, combining maximum and minimum of the last 24 hours

b) What will be our minimum 0% and maximum 100%

c) After that, edit the properties of Fibo (edit Levels) in order to customize the right, and up to this:

a. Putting a new level every 10%, and we should have levels between -70 to +70, distributing follows

i. -70, -60, -40, -20, 0, 10, 20, 30, 40, 50, 60, 70, 80, 90, 100, 120, 140, 160 and 170

b. After this, we rename each level as follows

i. -70% - Dn SLIP/Revaluate Level

ii. -60% - Dn TP3

iii. -40% - Dn TP2

iv. -20% - Dn TP1

v. 0% - Dn TP0/BO to Sell

vi. 10% - Dn Buy Scalping

vii. 20% - Dn Sell/Buy Scalping

viii. 30% - Dn Sell/Buy Scalping

ix. 40% - Dn Reversal/Sell Scalping

x. 50% - MID of Range – OoM (Out of Market)

xi. 60% - Up Reversal/Sell Scalping

xii. 70% - Up Buy/Sell Scalping

xiii. 80% - Up Buy/Sell Scalping

xiv. 90% - Up Sell Scalping

xv. 100% - Up TP0/BO to Buy

xvi. 120% - Up TP1

xvii. 140% - Up TP2

xviii. 160% - Up TP3

xix. 170%- Up SLIP/Revaluate Level

This way we get the following graphic picture (image 1)

**Image 1** - Application of Fibonacci Dec (FiboRet custom)

Now that we applied the **fibonacci**, we must determine at the current time (time of review), what is the predominant trend.

**PREDOMINANT TREND**

To determine the main trend of the moment, we just have to check the time of analysis, where is positioned the current price.

1) If price higher than the current level of 50% [of **MID Range - OOM (Out of Market**)], then the **Bullish** trend is predominant;

2) If the current price is below the level of 50% [of **MID Range - OOM (Out of Market**)], then the predominant trend is **Bearish**;

To identify the predominant trend graphically, we draw a rectangle, which will also identify the area of non-trading, making it as follows:

1) If Bullish - join the 50 to 90% ie: **MID **to** Sell Up Scalping**

2) If Bearish - join the 10 to 50%, ie: **Dn Buy Scalping** to the **MID** (situation the previous scenario)

**Image 2** - Graphical representation of predominant trend

The rectangle shown in ** Image 2**, identifies the area of Non-Trading, area which can be called by

**OoM - Out of Market**. This zone, for more aggressive investors, can be used to scalping trades.

** **

**POSSIBLE SCENARIOS**

Continuing with the previous example, we have the conditions to determine the 3 possible scenarios of negotiation:

1) **Scenario 1** - __Scenario trend reversal__, ie, if we have a scenario predominant "**Bearish**" (which is the case), then the scenario will be reversed to uptrend. The entry will be the **Breakout** of the high ** TP0/BO Up to Buy**, with in this particular case as zone 1.3270/76 (

**TP3/SLIP**- Red rectangle). Beyond the

**TP3**and for this particular scenario, it is even more 3 TPs (

**TP0**,

**TP1**and TP2), of which once reached the

**TP1**, the

**SL**must be moved to

**BE**or even to

**TP0**. The

**SL initial**, should be always the entry value of the scenario 3.

**Image 3** - Graphical representation of Scenario 1 (Bullish Scenario)

2) **Scenario 2** - __Scenario Range/No Trend__ - scalping zone, this area appreciated by more aggressive investors, is regarded as the zone of indecision, area entries and quick exits, the **SL** is a tool not to despise.

**Image 4** - Graphical representation of Scenario 2 (Range/No trend Scenario – __used to Scalping__)

3) **Scenario 3** - __Scenario confirmation bias__, ie if we have a scenario predominant "**Bearish**" (which is the case), then we will see a reinforce of this trend, the entry with the **Breakout** of the low ** Dn Reversal/Sell scalping**, with this particular case as zone 1.31266/329 (

**TP3/SLIP**- Blue rectangle). It is considered even more 2 TPs (

**TP1**and

**TP2**) and once it is reached

**TP1**, the

**SL initial**, should be always the entry value of the

**scenario 1**.

**Image 5** - Graphical representation of Scenario 3 (Bearish Scenario)

If the predominant trend was Bullish, then the determination would be the opposite, respecting the same rules.

This trading strategy allows you to absorb all possible scenarios, requires great discipline, resorting to using Stop-Loss. In this system, although not win in all negotiations, the final balance proves very interesting.

**Money-Management** is also fundamental, we must be careful to enter the market with low leverage, although it is also important to go with a volume which allows us to partial closing when reached different TPs. Here is my suggestion:

1) Perform 25% of the volume in **TP0**

2) Perform 25% of the volume in **TP1**

3) Perform 30% of the volume in **TP2**

4) Perform 20% of the volume in **TP3/SLIP**

When the scenario in question does not have **TP0**, then 25% should be added to the **TP1**, (totaling 50% of the order).

We must also be careful after partial closure, move the **SL** to **BE** in remaining volume.

Then, the **SL** can be managed in the way that anyone thinks best, though my experience says that:

75% of orders are **TP2**, 15% of orders pick up the **TP1** and only 10% of the orders do not meet **TP0**/**TP1**.

Before concluding, let one more suggestion, Every time our **TP3/SLIP**, is reached, we should do a re-evaluation of the scenarios, redefining **Fibo_Dec**, and consequently determining new scenarios.

And this is one more strategy that I wanted to share with you another simple method, because I believe it is the simplicity that can get success.

Good trades for everyone.

APinto - The Bluedragon