### Reblog: Fibonacci Trend Line Strategy – Simple Fibonacci Trading Strategy

##### Fibonacci Trendline Strategy: 5 Steps To Trade

I am going to share with you a simple Fibonacci Retracement Trading Strategy that uses this trading tool along with trend lines to find accurate trading entries for great profits.

There are multiple ways to trade using the Fibonacci Retracement Tool, but I have found that one of the best ways to trade the Fibonacci is by using it with trend lines.

The Fibonacci Retracement tool was developed by Leonardo Pisano who was born around 1175 AD in Italy was known to be “one of the greatest European mathematicians of the middle ages.”

He developed a simple series of numbers that created ratios describing the natural proportions of things in the universe.

And these numbers have been used by traders now for many years!

With this strategy, you will learn everything you need to know to start trading with the Fibonacci Retracement tool. You’re going to find out the Fibonacci meaning, Fibonacci algorithm, Fibonacci biography, the Fibonacci formula for market trading, Fibonacci series algorithm, the Fibonacci sequence in nature, along with many other useful facts about this great tool!

What is price action trading and why it does make you a better trader

Price action trading is a type of trading that allows traders to observe and study the current market. This, in turn, allows you to anticipate the market trend and make certain assumptions/decisions based on the current (and actual) price movements.

Price action trading is the purest type of trading that eliminates all noise.

It does not anticipate, it reads the market.

Price action is great!

Hard to say.

It is really difficult to say if one type of trading is better than another. What matters is which type of trading fits your personality.

Another important element of trading is money management. What matters is even not that much the trading system, but the way you use it.

Profitable traders will agree with me.

### Reblog: The 6 Stages Of A Trader’s Development Part 1

1. Heard of a day trader making millions, or buying options is safe and can make you rich quickly
2. Beginner Luck in first few trades.
3. You will buy just to see the market reverse and you will short just as the market starts to rally. Someone is tracking my trades and making me lose money.
4. Most of your trades are done emotionally. You buy just because the markets feel strong without any logical reason
5. You have no clue how the mechanics and psychology of trading works. What’s worse? You are not aware that you don’t know.
6. Most traders will blow their entire account multiple at this stage.
7. Mostly you start your trading in fag end of bull market
8. You will spend more time finding a broker charging least brokerage.Tracking World Markets, Bitcoins instead of making a trading plan for next day.
9. A big majority of people will leave trading and blame the randomness of markets, or say markets are always manipulated
10. You don’t know what is short selling or have never tried it, no idea of stop loss as well
11. You are in the unconscious incompetence stage, at this stage, your capital is at maximum risk

### Fibonacci Sequence

The Fibonacci sequence is being used by traders to get some indication of how the market is likely to move.

Advanced trading education sometimes involves figuring out quite strange and seemingly illogical concepts. But these could make the difference in your performance in stock trading.

Can the Fibonacci numbers help predict market moves? According to experienced analyst Martin Tillier, they apparently can, though he was skeptical when initially introduced to the concept. When you think about it, it doesn’t quite seem logical to believe that calculating major stock market levels on the basis of some mathematical sequence actually works. Can the figures thrown up by a numerical relationship affect the real world stock prices?

### The Fibonacci Sequence

LiveScience defines the Fibonacci sequence as number series where you get to a number by adding the two numbers just before it. So if you start with 0 and 1, and the sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, etc. The concept has its origin in the theories of many scholars of ancient Indian mathematics, particularly Pingala in 200 BC, Virahanka in 700 AD and Hemachandra in 1150. It was introduced to the Western world by Italian mathematician Fibonacci in his book Liber Abaci in 1202.

### The ABCD

Let’s start this lesson with the simplest harmonic pattern.  So what could be more basic than the good old ABC’s? We’ll just pop in another letter at the end (because we’re cool like that), and we’ve got the ABCD chart pattern!  That was easy!

To spot this chart pattern, all you need are ultra-sharp hawk eyes and the handy-dandy Fibonacci tool.

For both the bullish and bearish versions of the ABCD chart pattern, the lines AB and CD are known as the legs while BC is called the correction or retracement. If you use the Fibonacci retracement tool on leg AB, the retracement BC should reach until the 0.618 level. Next, the line CD should be the 1.272 Fibonacci extension of BC.

Simple, right? All you have to do is wait for the entire pattern to complete (reach point D) before taking any short or long positions.

Oh, but if you want to be extra strict about it, here are a couple more rules for a valid ABCD pattern:

• The length of line AB should be equal to the length of line CD.
• The time it takes for the price to go from A to B should be equal to the time it takes for the price to move from C to D.

Three-Drive

The three-drive pattern is a lot like the ABCD pattern except that it has three legs (now known as drives) and two corrections or retracements. Easy as pie! In fact, this three-drive pattern is the ancestor of the Elliott Wave pattern.

As usual, you’ll need your hawk eyes, the Fibonacci tool, and a smidge of patience on this one.

As you can see from the charts above, point A should be the 61.8% retracement of drive 1. Similarly, point B should be the 0.618 retracement of drive 2. Then, drive 2 should be the 1.272 extension of correction A and drive 3 should be the 1.272 extension of correction B.

By the time the whole three-drive pattern is complete, that’s when you can pull the trigger on your long or short trade. Typically, when the price reaches point B, you can already set your short or long orders at the 1.272 extension so that you won’t miss out!

But first, it’d be better to check if these rules also hold true:

• The time it takes the price to complete drive 2 should be equal to the time it takes to complete drive 3.
• Also, the time to complete retracements A and B should be equal.

Here’s a forum thread discussing the ABCD pattern and a trade setup with the three-drive pattern.