Live Trade: Scalping Daily Fibonacci Levels
Hello traders. Welcome to the Scalping course and the fourth module, live examples. In this lesson, we are going to trade the daily Fibonacci level set-up on the Euro-US dollar.
Hello traders. This is the Euro-US dollar five minute chart and what we are going to try to do is we are going to try to spot the daily Fib, okay? Now, remember that… well, this is the Sunday gap and this is all Sunday trading, okay? Seventeen hours, 18 hours, 21, 23. Now, here we have the daily high. This is the daily high, you can see that, well, we have zero hours right here. Well, this is the daily high actually, this is the daily high and this is the daily low. So, the first thing we are going to do is draw a Fibonacci retracement level, okay, from the daily high to the daily low, okay.
Now, here we go. We are going to use the 601878, 6018764 levels and what we are going to do is we are going to spot the next level of support of resistance, but that was tested as support earlier. Let me just change the color on this Fibonacci level because we got too much red on the chart right now. All right, there you go. So, what we are going to do here is try to trade the Euro-US dollar around these levels, around the daily 6018. The reason we are going to try to trade around the daily 618 is because we do have some area of support right here and then it was retested as support once, twice before we broke to the downside. And I think that is very likely that we are going to retest this zone as resistance before moving lower. So, let’s just put on a pending order, okay, right here, a sell limit. That’s five lots if anyone’s asking how much that trade is and we are going to put our stop loss right here, okay?
The reason we are going to put our stop loss above is because if we break to the upside of course, we’d still have the 7064 area to trade-off and we have these lows right here. But I think that, well, if we break with the 6018 and this heavy area of support, we just want to get out of the trade as soon as possible with the loss because our idea is to trade-off these broken levels in confluence with the daily 6018. So, we are going to come back when this trade has developed a little bit and we are going to see what happens with these pending orders. Well traders, we just got field on the Euro-US dollar and well, our stops are in the right place, our trade is going in our favor, but of course, it’s way too soon to tell.
So, let’s talk about targets guys. I think that the first targets are going to go right here if we use a horizontal line, you can see that this area right here was tested once. Then, this spike [SP] is very interesting because it tells us that actually sellers push price down, but the buyers here were so strong that the sellers couldn´t even close a five-minute bar below this area. So, we are going to use this area as our first target and check it out, it’s in confluence with the daily support one, okay? And we are going to put a buy limit here and the second target. Well, when this target gets filled, we are going to talk about second target. It depends on how price reacts to this zone that we just marked with this horizontal line. Because if we get filled and then price shoots up, I think that we are going to close this trade manually. But it depends because price can just go through it and hit our second target that would be around the 0720 level, okay?
Well, let’s put on a second target in case that happens, okay? We are going to put just two lots right here and we are going to give this trade a little time for it to develop.
Hello traders. Just a quick recap and a review of this daily 6018 trade that we are in on the Euro-US dollar. As you can see, price has reacted positively to our idea in our entry point right here at the 6018. Well, just a little recap. Our idea was for the price to retest this area [inaudible] confluence with the daily 6018 and we are going for a quick 26 pip scalp to the previous area of support and when we hit this area, we are going to move our stops to break-even and we are going to look for a flush to the daily lows, okay? Again, if we hit this level and some price react strongly to them, meaning that we find a lot of buyers here, we are going to manually close the trade and take our profits. And of course if it doesn’t, we are just going to be moving our stops and trailing our stops to the next area of resistance.
Now, we are not out of the woods yet guys because we are still inside of this up structure. As you can see, this trend line was started with this low, then was tested once, twice and then… well, we need to break this trend line in order for us to get lower, okay? I mean, price has reacted positively to our idea, but we are not 100% there yet. We need to break with this immediate up structure for us to hit our targets. Now, we are going to come back once this straight developed [inaudible] further.
Okay, so, just a little review on our short position on the Euro-US dollar on the daily 6018 set-up. you can see the price retested at 6018, making a double top which is another good clue that our short position might actually work out. Double top, at a resistance level is a very strong signal for reversals and we have broken with the immediate up structure. Now, we just need to break with the overall structure or the overall corrective move to the upside, okay? We are about to break with this trend line, but I think that it is done incorrectly, the actual trend line is right here. This is the actual structure that we need to break with and once we break with this structure, we are going to take profits at these heights. The reason we are going to take profits at these heights and the reason I moved my profit targets a little to the upside now locking in 22 pips on the first targets is because, if you see right here, we broke to the downside, let me just move this over here.
When we broke to the upside, we tested this area as resistance and then we tested it again here and when we broke, we tested it as support. So, I think this is an area where we are going to find some buyers and we want to get out of the first three contracts on the momentum to the downside when we’d break with the overall structure or the overall corrective structure to the upside. Now, when we would break with this structure and when we take profit here, price might bounce, but since we are ready to profits and our stops are going to go to break-even, we can wiggle a corrective move to the upside before we move to the daily lows and to our final target.
All right traders. We are back with the Euro-US dollar daily 6018 setup and as you can see, we already took profit from the first three contracts and we took profit right at the trend line. The reason we took profit right at the trend line is because price was, well, because of this, let me just thicken out this for you guys, okay?
Now, the reason we took profit right here is because of this candle, this rejective candle right at the trend line, okay. We had this inverted like, dodgy and these candles signal so much rejection that we didn’t want another test at the highs, well not the session’s, but the immediate highs at the 6018. So, we took profits on three contracts for 13 pips and we are going to take profit for the rest of our position at around 22 pips. So, this is how our overall position looks like and we have to move our targets up and we are going to move our stops to break-even and a few pips below because we want to protect some profits and we want to cover the cost of our trade. But as you can see, the daily 6018 worked in our favor and we took profit for 13 pips and we are going to take profits right here for an extra 24. Remember that when we are scalping the markets, we are not looking to make a 100 pips, we are looking to make consistent profits day in day out.
So, here is our Euro-US dollar supposition and our targets are about to get filled. As you can see, it took some time to get there, but we are not scalping the market for five pips at a time, we are going to take whatever the market tells us or whatever the market allows us to take. Now, you can see that I’ve moved my stops to these highs and now I’m going to move my stops right here, above this area of resistance, okay, because if we fail to hit our target, we might move up and I want to protect the remaining profits that I have. But I think we are about to get filled on our position and as you can see, we did find some buyers here at the area that I pointed out.
And we are just a pip away from filling our targets, so we just need to wait a little longer. We got filled on our short position and we need to cancel our stop loss and we just made a cool, 37 pips on this short Euro-US dollar.