Perfect Ratio with

Fibonacci Strategy
and Price Action
About Strategy

Fibonacci Retracements, support/resistance zones, candlestick

patterns, and trendlines are all used in this technique.
I'm using it for intraday trading, but you may also use it on
higher periods to execute long-term trades, but I recommend
reducing your lot size for these transactions.
This technique involves trading in the direction of the current
trend utilizing important levels such as support and
resistance,trendlines, as well with Fibonacci retracement levels.
I suggest utilizing this technique for intraday trading on 15M,
30M or 1H timeframes, even though it can be used on any period,
but these two (15min and 30min 1hour) are the most effective.
We use Fibonacci to predict when a retracement may occur.
When combined with excellent risk management, this approach
may be very effective since the risk is low and the reward can be
three times higher.

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Copyright © 2021 SimpleTradeForex 1

"Edge" in the Martket
You could look up the definition of the term edge online, which
is what I did.
You'd most likely come across a definition that has nothing to
do with trading.
Let me break it down for you...
In trading, having an edge implies being able to earn more
money than you lose over a certain number of trades.
Will you profit on the next trade?
Nobody knows, because that isn't the point of the edge.
However, an advantage nearly always ensures profit over a
given number of transactions (a large sample).
Here are a few things to think about:

An edge does not imply that you have more winning

transactions than losing deals.

A competitive advantage does not imply that your winning

transactions are much larger than your losing deals.

In a nutshell, the edge you will have in your trading technique

will offer you an advantage over all of the other traders who are
representing the market.

Getting an "Edge"
Given that having an edge implies making more money than
you lose over time, there are two methods to get an edge as a
Forex trader:

1.You win more frequently than you lose (and your losses are
controlled).

2.You win a greater percentage of the time than you lose.

Copyright © 2021 SimpleTradeForex 2

How To Win More Often Than You Lose
If you want to win more frequently than lose, you must have a
trading strategy that has a greater chance of becoming a win
than a loss.
In other words, you will win more often than you will lose.

Consider the following scenario...

You've probably heard of Support and Resistance zones before.

Those are the areas on the chart where the price has previously
bounced or reversed.
A currency pair's price is likely to bounce or reverse in those
price zones again in the future.
However, not all of those zones will result in a rebound or
reversal, implying that merely buying at a support or selling at
a resistance would not provide much results.
You would not necessarily win more often than you would lose.
When it comes to gaining an advantage, the first thing that
springs to mind is, "How can I enhance the likelihood of that
transaction turning out?"
A very easy method would be to wait for a significant price
action indication in those areas (an Engulfing candle for
instance).
Then you'd have a better idea of who controls the market you're
looking at.
This kind of transaction has a better chance of succeeding.
You would get an advantage by limiting the amount of money
you risk and entering trade setups that would bring in a
suitable amount in the event of a successful trade.
Simple as that.

Copyright © 2021 SimpleTradeForex 3

How To Have Bigger Gain Than Your
Average Loss?
Some transactions are more difficult to confirm than others.
In such scenario, increasing the likelihood of your transaction
succeeding will be considerably more difficult.
Fortunately, you can still make a profit as a trader.

The key to gaining an advantage is to guarantee that your successful

transactions bring in more money than your lost ones.

A breakout trader, for example, may be able to recognize setups with a

reasonable chance of success.
However, the possibility of a "fakeout" (a false breakout) remains strong.
Because he cannot improve his chances of winning consistently, he
would concentrate on ensuring that his winning trades had a far higher
return than the average loss of his losing transactions.

Rather of attempting to earn the same amount of money risked each

transaction, he would want a higher Risk-To-Reward(RR)
The table below illustrates what win rate is required to break even
depending on a particular Risk-To-Reward(RR):

Risk-To-Reward(RR) Required Win Rate

1:1 50%
1:2 33%
1:3 25%
1:4 20%
1:5 17%
1:6 14%
1:7 13%

With a Risk-To-Reward(RR)ratio of 1:3, for example, a breakout trader

would only need the price to reach his take profit 25% of the time to
break even.
He will make money if he wins three deals and loses seven (a win
percentage of 30% over ten trades).

Copyright © 2021 SimpleTradeForex 4

The Key To Getting An Edge
The approach to gaining an advantage as a trader may
be summed up as "turn the odds in your favor."
This may be accomplished by either raising the
likelihood of winning or increasing the amount earned
for each successful transaction.

Things have to be in place:

A risk that is under control

A consistent methodology

And in this book, I am going to introduce you to one of

these strategies. So let's move on.

Dictionary
SL = Stoploss

TP = Take Price

BE = Break Even (it's mean stoploss is moved to entry point

= Support/Resistance zone (S/R zone)

PA = Price Action (candlesticks)

SL to BE = Moving stoploss to entry price

Partials = Closing part of the position

Copyright © 2021 SimpleTradeForex 5

 Drawing Fibonacci

Bullish move
High

Low
Drawing fibonacci is easier than you might think.
When we got a BULLISH move, we place 1 at the low
and 0 at the high of this move.

When we got a BEARISH move, we place 0 at the low

and 1 at the high of this move.

Copyright © 2021 SimpleTradeForex 6

Bearish move
High

Low

There are many strategies with this tool, but here we

focus the most on retracement 0.618. From
experience, I have noticed that this level is the most
effective (after all, it's the "perfect ratio" fibonacci
number). But at 0.5 and 0.786, we can also look for
retracements, because they also happen.

Copyright © 2021 SimpleTradeForex 7

Support and Resistance
Looking at the chart, we try to find levels where the
price tended to change direction, and where there
was some reaction. Designating such areas is used to
plan your investments. This is because the price
movement on the chart creates various types of
cycles and if something happened, if the market has
already rejected a level, we have a very high
probability that it will happen again in the future or
at least we will be able to observe some level in these
areas. reactions.

Resistance

Support

Copyright © 2021 SimpleTradeForex 8

 Resistance - When the price goes up and then pulls
back, the highest position achieved before the price
pulled back is considered resistance at this moment.

Price went up, rejected

this level with strong Rejected again
momentum, so we can Unable to reach this
level few times Reaching this
assume it will be
price level
strong resistance
shows the
strength of
this zone

This is the highest rejected point of the

current downward move, so it could be a
possible resistance area in the future.

After the decline, the price tries

to go up, but finds resistance
and continues down movement.

Copyright © 2021 SimpleTradeForex 9

 Support - When the price goes up, the lowest point
reached before it started back is now support.

We see how price

Resistance has been made
strongly rejected
this level, so we can
expect similar
reaction in a future

Since we've got huge

candles up, we can
consider this zone as
strong

Went down and

strongly pushed up
and made a new high

Copyright © 2021 SimpleTradeForex 10

Major/Minor Support & Resistance levels
Minor resistance or support delays rising or falling
prices within a broader market trend, while
significant resistance or support completely stops
rising or falling prices and causes the larger market
trend to shift direction.

Major Resistance

Minor S/R levels

Major Support

S/R = Support/Resistance

Copyright © 2021 SimpleTradeForex 11

Is support can be resistance and vice-versa?
Looking at the chart, we try to find important levels
above and below the current price. All levels above
are resistance levels and all levels below are support
levels. Among traders S/R zone is often used.

If the price breaks the resistance level, it becomes

support, and the same applies to support but be
aware of fakeouts and zone not always have to be
respected so always wait for the confirmation.

Copyright © 2021 SimpleTradeForex 12

Psychological Levels

If we look indifferently at any market graph, we notice

that it is at round levels that the price always has
problems: it either bounces and reverses its course, or it
passes to test a given level as the opposite pole in a
moment.
They are called psychological levels because humans like
simplicity. Translating this into the trading world, it means
traders value whole numbers, which are often used for trade
entries or exits. This can also happen in form of stop and limit
orders. When such orders are concentrated around a round
price level, this level can turn into support or resistance.

1.4000
1.3400
1.3000
1.2500
1.0000

Copyright © 2021 SimpleTradeForex 13

Trendlines
Trend, as is well known, is one of the basic concepts when it
comes to technical analysis. Simply put, it is the trend that
determines the direction of price movement of virtually the
entire market. The trend plays a key role, above all, in making
decisions to buy or sell.
Setting a trend line is not as difficult a task as it might seem at
first sight. The simplest and most popular trendlines are
created by combining the price of the support points (so-called
lows) and price peaks(highs)in a selected period of time on the
chart.

In this strategy trendlines are used very rarely.

Copyright © 2021 SimpleTradeForex 14

 Strategy methodology

Find a down move, draw

fibonacci retracement Find Support/Resistance (S/R)
zones between 0.5-0.786, wait
for rejection from them, if you
have valid confirmation,
etner the trade

Find Support/Resistance (S/R)

zones between 0.5-0.786, wait
Find a rally move, draw
for rejection from them, if you
fibonacci retracement
have valid confirmation,
etner the trade

Copyright © 2021 SimpleTradeForex 15

 Confirmations and psychology
behind the candlesticks
Evening Star Pattern
It's a 3 candle bearish reversal pattern. It
usually appears at the top of an uptrend and
is a bearish signal.
The first bullish candle means that the bulls
are still strong and are pushing the price up.
The second candle is the “star” with a small body (it might be
bullish or bearish) or without a body (doji candle) and it shows
that buyers losing their strenght and they're not as powerful as
before
The third bearish candle shows us that the strength of the bulls
has been extinguished and now the sellers are taking control.
This gives us a possible signal of reversal.

Morning Star Pattern

The Morning Star pattern is a three-candle,
bullish reversal candlestick pattern that
appears at the bottom of a downtrend. It
shows a slowing down of downward
momentum before a large bullish move lays
the foundation for a new bullish trend.
The first bearish candle shows the selling pressure and
continuation of the existing downtrend.
The second candle has a small real body (open and close prices are
near to each other, sometimes it can be doji candle either) that
presents decline of the current trend.
The first real sign of new bullish pressure is revealed in the third
bullish candle. In non forex markets, this candle gaps up from the
close of the previous candle and signals the start of a new uptrend.

Copyright © 2021 SimpleTradeForex 16

 Engulfing patterns
As the name implies, the Engulfing bar is generated after the
previous candle is completely engulfed.
The engulfing bar can engulf more than one earlier candle,
but at least one candle must be totally eaten to be termed an
engulfing bar.
One of the most important candlestick patterns is the bearish
engulfing.

Bullish Engulfing Pattern

The small body is the first candlestick in the
bullish engulfing bar, and the engulfing candle is
the second.
The bullish engulfing bar pattern indicates that
the market is no longer controlled by sellers and
will be taken over by buyers.
In the context of an uptrend, a bullish engulfing
candle suggests a continuation signal.
The reversal is significantly more strong when a
bullish engulfing candle forms at the end of a
downtrend, as it signals a capitulation bottom.

Bearish Engulfing Pattern

This is how a bearish engulfing bar pattern
appears on your charts,this candlestick pattern
provides us with important information
regarding to market bulls and bears.
This pattern indicates that sellers are in control of
the market in the case of a bearish engulfing bar.
When this pattern appears at the end of an
upswing, it means buyers have been overtaken by
sellers, signaling a trend reversal.

Copyright © 2021 SimpleTradeForex 17

 Other Confirmations
Wick Rejections

#1
So here we have got a few examples of
what I'm looking for when I wait for
confirmation.
Red candle The first thing is wick rejection (# 1, #
engulfs(broke
the low of)
2, #3). Wick's rejection suggests that
previous
Sell buyers wanted to push the price
candle
Entry
higher but they have been overtaken
by sellers (and vice versa). It's a good
sign that the market is going to
Wick Rejections change direction.
#2 The next thing is the length of the
candle's body. When the body engulfs
the last candle (#1) or a few last
candles (#2, #3), it means that the
seller has started to take control of
the market.
Closed below
bodies of a few
Always remember that none of these
Sell
last candles
Entry
things are 100 percent certain.
Wick Rejections Rather, they only indicate that there
are greater odds that the price will
move in a particular direction.
#3

When the price breaks a low or a high

or engulfs the previous candle, don't
try to sell or buy immediately.
Use this with other confirmations!

Sell
Closed below previous 2 Entry
candles bodies(evening

18
star pattern)
Copyright © 2021 SimpleTradeForex
 Other Confirmations
Examples

Green candle showed strong

Last highs should be momentum and closed above
broken to for a last 3 candles(good buy
confirmation to entry confirmation)

Entry and now we

expect price to rise up

Copyright © 2021 SimpleTradeForex 19

 How strategy works?
We combine thing mentioned above S/R zones,
trendlines, psychological levels and fibonacci
retacement to spot good RR trades.

1.Find a rally move (or down move)

Copyright © 2021 SimpleTradeForex 20

 2. If move is bullish draw Fibonacci Retracement from
low to high, if bearish from high to low.

High

Low

3.When you know direction of the move and you have

drawn Fibonacci, look for support zones near 0.5 0.618
0.786 levels.

Rejected as resistance Breakout

Possible support area after a breakout

Copyright © 2021 SimpleTradeForex 21

 4.Wait for rejection and Price Action confirmation to
enter the trade

IMPORTANT!
This is where a small support level was
created that was tested 3 times. These levels
are sometimes manipulated by big players to
grab stoplosses of retail traders. Usually,
after such a false breakout, the trend
continues.

This wick looks like fakeout

(liquidity grab,stophunt etc.)

5.So we got a huge rejection from the 0.618 level, the

S/R zone, and a fakeout. These 3 confluences give us a
high probability trade. We enter the trade at first green
candle after a fakeout, that closed above previous one.
SL under the low of this candle, TP at the top or a little
below last high.

For the simple reason that it was

manipulation, we do not take into account
the low that was created by manipulation.

Copyright © 2021 SimpleTradeForex 22

 7.We observe our trade, how the price behaves, we look for
possible resistance at which the price may turn back and,
above all, we secure the position when it is in profit.

Resistance

Move SL to BE

When price reaches resistance level we can move SL to BE,

then we got risk free trade!You can take partials if you want on
such a level, so when it drops down to BE, you will be in profit
anyway.
8. Watch and manage the trade. This trade was RR 1:4.5

The strategy I am presenting is not a golden grail (something like that does not exist).
This is not a 100% winning strategy. To be profitable, you must properly manage risk
to secure your capital. Remember that the most important thing is
RISK MANAGMENT!
Copyright © 2021 SimpleTradeForex 23
 How to set SL and TP

SL should be above the last highest price

TP should be set at the lowest body close

of a candle.

SL should be above the last highest price

TP should be set at the lowest body close

of a candle.

Copyright © 2021 SimpleTradeForex 24

How to set SL and TP
TP should be set at the highest body
close of a candle.

SL should be below the last low

TP should be set at the highest body

close of a candle.

SL should be below
the last low

Copyright © 2021 SimpleTradeForex 25

In the examples above, I show you the safest setting of
SL and TP. With experience, you will be able to increase
your TP to catch bigger moves, or you will learn to enter
positions from smaller timframes which will give you
more Risk: Reward

Each strategy is different and the most important thing

is that you should adapt a given strategy to yourself so
that you enjoy it. There is no need to get tired of playing
like the others. Before I got here, I went through dozens
of strategies.So don't worry if you want to add
something to this strategy.By experimenting and
spending hours with the chart, we understand the
market better, so I hope I can help you understand it
more in this book.

Copyright © 2021 SimpleTradeForex 26

 Trades examples
Trade 1

Entry after PA
confirmation(bullish
Here moved SL to BE
Rejected as engulfing candle)
resistance

Here i took
50% of profits

I noticed resistance at the 0.618 fibonacci level, so if

this level would be rejected, I expected a further down
move.The higher timeframe trend was bearish, so I was
looking for sell positions.

I entered when price rejected the 0.618 fibonacci level

and the green candle closed below the red one, creating
a bullish engulfing pattern.
Beginners should enter after a candle has closed.
Entering with a candle still open is a risky move that
needs practice.
*For expirienced*
If you want to take entry earlier to catch a better RR,
you can change your timeframe to lower to spot a
possible reversal.

Copyright © 2021 SimpleTradeForex 27

 Trade 2

#1 #2

I moved SL to BE when
price broke last lower high

#1 In this example we see 2 zones that are at levels 0.5 and

0.618. In point number 1, we have a nice move down to
the ALMOST 0.5 zone and a bullish engulfing candle
(good entry if it touched the 0.5 level). I did not enter
this trade because a few pips were missing to the
fibonacci zone. It is better to wait until all entry
conditions are met.

#2 As we can see further, the price went down to the

second zone(0.618), so at this point I was waiting for
Price Action confirmation. When the third green candle
closed above the high of the last candle, I opened a buy
position with a stop loss below the low and TP at the
last high. In this trade i did not take partial becouse of
strong bullish momentum.RR of this trade was 1:6

Copyright © 2021 SimpleTradeForex 28

 Trade 3

Here we have an example of a BAD trade. First of all, the higher

timframe trend was bearish, so it would be against the trend
(remember that trend is your friend and always look at the
bigger timframe trend). Second, the RR on this trade was very
low 1:1.3 .You should look for trades with at least a 1:2 RR.

Trade 4
Bearish candles were very
Rejected as
weak, almost like doji candles.
resistance Candles like this show us
indecision in the market.

Rejected as
support

Here, all conditions are met except Price Action confirmations. As

we can see after reaching the S/R zone and 0.618 fibonacci, the
strength of the bears was very weak and there was no signal to take
a sell position, as you can see, No Price Action confitmation=No
entry.
Copyright © 2021 SimpleTradeForex 29
 Trade 5

This candle closed above high of last

candle, good sign to take a buy position.

Rejected as resistance

Rejected as support Wick rejections suggest that buyers

stepping. Sing that level is respected and
another confluence to take a buy position.

Observed the price's bullish movement, identified the

S/R zone precisely on the 0.618 Fibonacci level, and
expected the price to rise further if it rejected that level.

Long wicks suggest that the zone is respected, so we

should look to take a buy position. I took a buy position
when the second green candle closed above the high of
the previous candle. 1:2.5 RR

Copyright © 2021 SimpleTradeForex 30

 Trade 6 This bullish candle
confirms the strength of the
bulls, so I took the position.

This long wick showing us

that buyers are strong

As I said before, it's not a 100% win ratio strategy. Sometimes the
analysis is good, but the price can do everything. We got a nice dip
into the S/R zone, wick rejection from the 0.618 fib level and a
bullish candle that closed above the last high candle. SL hits. BUT...

Trade 7

Here I moved
SL to BE

Resistance

Entry point

Price closed above high

This is tweezer bottom
of last two candles.
pattern, that indicate a
shift in trend direction
Wick rejection
form S/R zone.
But we got another zone above 0.786 level where we can look for
re-entry. I moved SL to BE when price has reached posibble
resistance. RR 1:5.

Copyright © 2021 SimpleTradeForex 31

 Trade 8

This candle shows that sellers

still got the power so here i
closed 50% of my position

Entry

Choppy price like this shows

indecision on the market

This trade was a risky one, so I closed 50% of my position near

entry. Why? because I protected my capital.

Look at the candles, sellers and buyers,they both show strength. I

entered when green candle closed above the last two candles. Of
course, I could have entered one candle earlier to catch a better RR,
but I wanted to wait for a better confirmation. After the # 1 big red
candle, I closed 50% of my position near the entry point because it
shows that sellers still had power and there was indecision in the
market. TP hit, but only with 50% of my position. Still good.

Such action may "assist" you in losing less at times and "assist" you
in winning less at other times.
Because the market will always be there, you should always
protect your capital.

Copyright © 2021 SimpleTradeForex 32

 Trade 9
Chart explanation

Wntry here (bearish

engulfing candle)

Nicely rejected
0.618 fib level

Trade 10
Chart explanation
When the price
reached this level i
moved SL to BE

Entry after this green

candle closed above
bodies of 2 last candels

Long wick shows

that buyers stepping
in, let's wait for
beter confirmation

Copyright © 2021 SimpleTradeForex 33

 Trade 11

This trade was spotted on H1 timframe

Here is mine Swing Trade,sometimes I make such transactions to take a

break from forex. We can see a nice uptrend (in this trend, as you look
at, you could've entered and take a long position a few times, thanks to
this strategy). The price went up a lot without any corrections, so I
waited for a correction to the s/r zone and 0.618 fibonacci. It so
happened that the price has additionally reached the trend line, so we
have 4 confirmations to take a position. And great
RR 1:6.5

Wick rejection
from Trendline

Entry after this big

bullish engulfing
candle that closed
above last 4 candles

A close-up photo so you can see what I saw when I took my position

Copyright © 2021 SimpleTradeForex 34

 Trade 12

When the price reached

25% of its target, I
moved SL to BE SL moved to entry point (BE)

25%

50%

When the price reached

50% of its target, I
cashed half of it.

Another swing trade, this time on the H4 timeframe. That was a

nice trade with RR 1:9. The price here was very bearish. I marked
the fibonacci area after the price dropped, and as usual, I marked
the S/R zone. As you can see, there was a huge imbalance in price,
so I expect that it will be filled and the price will go further down.
My RR was this high because I spotted it on H4 but entered a sell
position on H1 (That's why multi-timframe analysis is very
important!). When the trade reached 50% of my target, I took 50%
of my profits and moved SL to BE.

Of course, this position could be taken without changing the

timeframe and staying on H4. On H4 there are also nice
confirmations like long wick rejection and evening star pattern,
but then I would probably have 50% profit and the position would
hit BE.
This trade should show you the potential of that strategy.

Copyright © 2021 SimpleTradeForex 35

 Trade 13

Putting the stoploss a

little higher can save Wick rejection from
your trade 0.618 fib level

Entry after candle closed

below the low of the last
candle.

I remember this trade. Good entry but I was a little bit greedy. I
like having tight stops, and even though my stop loss was
above the last high, it wasn't enough. I could put the stoploss
above the high of the candle that broke the zone to the
downside (look # 1). Sometimes if you put a stoploss like in the
example above, it's way safer, but you've got a smaller RR. I
still prefer putting stops above the last high. But you, as a
beginner, should try with bigger stops and, in time, gain
experience and adapt it to yourself.

Losses are part of the game because there is no strategy with a

100% win ratio.Keep that in mind

Copyright © 2021 SimpleTradeForex 36

 Trade 14

#2 stoploss

#1 stoploss

Entry
Wick rejection

Here, as you can see, trade was taken with a trend, a

beauty rally up, an imbalance in price has been made,
and a clear S/R zone. There were nice confluences. The
huge wick rejection from the 0.618 fib level and S/R
zone, bullish engulfing, and big spike down created
another imbalance that indicates that price may fill
this imbalance. I entered after bullish engulfing
canndle.
Trailing stoploss has been used here to secure my
capital.
RR 1:2.5

Copyright © 2021 SimpleTradeForex 37

 Trade 15

Long bearish wicks

and huge spikes down

Strong
Long bullish
Indecision
wick

Now, remembering the earlier mistake and too thight stoploss,

seeing that the strength of bears is high when reaching our
zone of interest, I remembered that my SL should be a bit
bigger. So I put it under the last low before breaking out of the
S/R zone.
Entry was taken after green candle closed above red candle.
Overall, it was quite a risky trade. As a beginner, you should
wait out such positions or play them on a demo account for
experience. What was wrong? There were very large price
fluctuations, which speak of indecision in the market.
Remember that entering such positions is risky, but when you
do, you must secure your capital.
In the above trade, I showed you moments that show large
price fluctuations.
Sometimes it's better to observe than force trades.

Copyright © 2021 SimpleTradeForex 38

 Trade 16

I didn't re-enter because the price

movement was too dynamic.

Entry after this big red candle

closed below the last 3 candles. It
shows strong bearish momentum. SL to BE

50% of TP

At this level, I took 50% of my

Strong accumulation. profits and moved SL to BE.
A strong S/R zone has been created.

This trade teaches us to take part of the profits.

We have 2 zones of interest (S/R zones) where we will be
looking for a reaction to this level. If the price reacts at any of
these levels and we have sufficient confirmations to take sell
positions, we enter. Of course, you see a bullish engulfing
candle here, and you are correct.I mentioned that it closed
below the last 3 candles because it is a stronger signal to take a
position (it shows strong bearish momentum).
After such a drop, I cashed half my profits because we were
approaching a zone where a reversal may have occurred.And
yeah, the price reversed and hit BE. But i took my 25%
profits(25% because it was 50% of 50%).
You can see a similar reaction for the second zone, only that
the price has reached TP. Unfortunately, I did not take this
position.

Copyright © 2021 SimpleTradeForex 39

 Trade 17
Chart explanation

Rejected as Entry after this 3 red candles(3

resistance black crows pattern) that closed
below last low.

Rejected as
support

RR 1:5.5

Trade 18
Chart explanation

Rejected as
resistance

Strong wick rejecion and closing below

last candle. Good sign for sell.
Rejected as
resistance Entry after red candle
closed below last one.
Rejected as
support

Rejected as
support

And again imbalance may indicate that price is likely to fill

it, so it's another confluence(confirmation)

Copyright © 2021 SimpleTradeForex 40

 Trade 19

#1 TP

#2 TP

In this example, I want to show that you can use this

strategy against the trend, but then it is more risky.
Above we have a nice rally up, so I expected some healthy
correction.The price dropped really well. I drew a fibonacci
and marked the S/R zone. After the wick rejection from the
0.618 fib level, I was looking for entry. I took entry after the
second red candle closed below the last candle's low.
I anticipated that the price would fall further, so I split this
trade for two targets.I took 60% of the position at 1st TP and
the rest of it at 2nd TP.

Copyright © 2021 SimpleTradeForex 41

 Trade 20

Chart above i'm leaving for you for your own analysis.
Let's check if you have learned something :D
If you're curious of this analysis just DM me.

So, as you noticed, this strategy is no golden grail, it is not

a 100% win ratio. You have rules that you must follow in
order to be profitable. Trading is not only "buy" and "sell",
it is also discipline, endurance and consitency. I hope that
my view of the market and describing this strategy to you
helped you see the market a little better. With a little
practice, you can get a lot more out of this strategy :)

Now you see methodology so let's jump to Multi-

timeframe analysis :)

Copyright © 2021 SimpleTradeForex 42

 Multi-timeframe analysis
EURJPY 1h-5m
1H

Break of Structure
BoS

BoS

In this chapter we will take care of the analysis and entries starting
from a higher interval and going down to a lower one in order to get
the best Risk-to-Reward ratio and to make the analysis as clear as
possible.
In the example above we have the EUR/JPY pair on the H1 iterval.
I think you can see everything correctly, broken structure, where to
mark the s/r zone, draw fibonacci and trendline.

1H
Break of Structure

POI

Everything is marked on the H1 interval. The POI (Point of Intrest) is

clearly visible, so when the price is close we change to a smaller
interval and wait for the price to go down to our zone(POI).
Tip: If you don't want to watch the pair just pin an alert near the zone.

Copyright © 2021 SimpleTradeForex 43

5min

Resistance

Break of Structure

Support

Everything is marked, so I changed to the M5 interval. On this

timeframe, the bounces from the s/r zone are much more visible, so if
you cannot precisely identify the s/r on the higher interval, just go to
the lower one.
I think some of you have noticed additional entries from the M5
interval. I will mark them in color...

5min

Long wicks
Long wicks

Small body mean lose of bearish momentum

As we can see, the price went down to our POI and not far from this
zone we can see the bulls' pushing force. Long wicks near the zone,
mean a fight between bulls and bears, very good sign.
At the bottom of the s/r zone we can see the momentum stopping at
the trend line. Long upward wicks shows the sellers losing their
strength. This is the moment where we wait for Price Action
confirmation to enter buy position.

Copyright © 2021 SimpleTradeForex 44

 5min

Green candle closed

above 2 pevious

There it is, a nice long green candle which completely covers the
previous 2 candles with wicks. A very good signal to take a buy
position after the close of this candle. And traditionally we set SL
below the last low and TP at the height at the top of this move.

5min

I would take some

profits over here

The trade reached the TP, but on the way had a lot of indecision
caused by the psychological barrier that I marked on the picture.
Knowing this, we can secure the positions and take 50% of the profit
near the price of 130.00 in order to still got some profit if the price
decides to reverse on that level.
Thanks to the multi-timeframe analysis I was able to achieve a RR of
1:7, which would not be possible if I entered the position from H1 or
M15.

Copyright © 2021 SimpleTradeForex 45

 Same trade different timeframes
15min

Here we got the same trade on the M15 timeframe, the price is
moving too dynamically to take positions meeting our entry
conditions. Risk-to-Reward is also not very good at 1:1.3

H1

The H1 interval is shown above, the RR is a little better, 1:1.4, but it is

still not enough to meet the entry conditions.
Remember that confirmations from lower intervals are weaker than
from higher ones, but sometimes confirmation from higher interval
is impossible or unprofitable.

Copyright © 2021 SimpleTradeForex 46

 Unable to set EURJPY 4h-1h
a new high

BoS
BoS
H4

BoS

Bullish
Structure Bearish
Structure

BoS
BoS

This example is for the higher H4 interval, it

shows a beautiful structure shift, if you look
closely, fibonacci could have been used earlier too.

H4

BoS
BoS

As usual, we mark the zone where the price

rebounded, draw a fibonacci retracement of
the last longer move and wait for the price to
approach the POI. Two breaks of structure are a
good sign for continuation downside. At the
POI, we change to a lower timeframe to have a
closer look on the price movement.

Copyright © 2021 SimpleTradeForex 47

 H1

Price closed
BoS
below last 2
candles

The H1 interval gives us a very good confirmation with the first

reversal candle as it covers 2 previous green candles.Also imbalance
left at the bottom. so we got here very good entry confirmations.

H1

Such price behavior is quite a good signal to take a position and catch
a RR of 1:6, which would not be possible with a higher interval
analysis.
Copyright © 2021 SimpleTradeForex 48
 Same trade different timeframe

H4

Here we have the same trade and how it would look if we did not
change the timeframe. Remember that just because I change the time
frame doesn't mean that there is a rule and everyone has to do it, you
can check what suits you best, everyone is different and despite
having the same eyes we may see things differently.

Copyright © 2021 SimpleTradeForex 49

 NZDJPY 1h-15m-1m

H1
Here is resistance
area BoS

BoS

BoS

Here we have a textbook uptrend, however we cannot see perfectly

how the price reacts at resistance, so I changed to a 15M timframe to
be able to analyze it better.

Textbook supply
rally-base-drop
15min

Resistance

Support

Now we can see the price behavior and mark the s/r zone more
precisely. In addition, we see the supply zone rally-base-drop, and
this place should be our first TP when entering the position.

Copyright © 2021 SimpleTradeForex 50

15min

The price went down to the POI level leaving behind an imbalance in
price which is a good sign that the price will turn back to fill these
levels. This is a good time to change a timeframe to 1M.

1min

Sellers are losing

Bulls stepping in
their strenght
(one candle
(each candle
Indecision on the covers 5 previous)
smaller)
market (doji candle)
When the price is at the POI, I look for a confirmation to take a
position, in this case we see a strenght loss of downward momentum
and a long upward candle covering the others five. Remember that
entry from low intervals is much riskier. I prefer entries from
5/10/15min.
Copyright © 2021 SimpleTradeForex 51
 Same trade different timeframes
1min
I would take some
profits on that area

RR 1:12

15min
I would take some
profits on that area

Still good trade

RR 1:3.5

H1 On this timeframe we
don't even see detailed
price movement RR 1:2.1

Copyright © 2021 SimpleTradeForex 52

As you can see, the analysis of several time intervals is very helpful in
determining the zones and for better entries into the position.
However, it is important to remember that confirmations on lower
intervals are usually weaker than those on higher ones, and
sometimes on higher ones the price is too dynamic to do anything. It
is also important to set key zones by looking on timeframes like H4 or
D1, then you can see at which levels the price turned back or did not
react at all. By setting these levels, trading becomes simpler and
clearer.
For example USD/CAD goes down to 1.2000 level which was
respected and the price turned back 3 times after reaching this point
during the last month, this means that this level is very important
and when the price bounces back and goes up again we can look for
buy positions and catch a good profit.
I know it can be confusing at first but you have to master it, you have
to determine the levels at which the trend reversal can occur and
when you notice it sooner then you have the advantage.
I think further examples will help you understand what I mean.

Copyright © 2021 SimpleTradeForex 53

 Fibonacci Extension
Example #1
15min

Break of Structure

BoS

BoS

Double bottom+ H4 Resistance

In this example I caught a reversal move (if you are a beginner then
focus trend continuation). What does the price movement tell us
here? At the resistance of the timeframe H4 we have a strong bullish
attack, it is shortly after suppressed by the sellers and the price
suddenly drops to the support level H4, but the bears were not strong
enough to pull the price further down and make a new low.With the
exhaustion of their strength and strong buyers' reaction again, the
price rise and formed double bottom and broke the bearish structure.
The price started to form HH(Higher highs) and HL(Higher lows)
which is a very good sign to look for buys.

Copyright © 2021 SimpleTradeForex 54

 Break of Structure

15min

BoS

BoS

So where do we go next with the knowledge we already have? To find

probable zones at which it would be attractive to enter into positions.
As it happens, at the level of 0.618 fibonacci we have a clear S/R Zone
and Psychological level 0.71000

5min

Candle closed above

last 3 candles

Wick rejection from s/r zone

and psychological level (good
long confirmation)

I change the interval to 5min and wait for confirmations to take a

position. We see a rebound from the S/R zone and fibonacci. The long
wick suggests that there was quite a strong reaction to this level.

Copyright © 2021 SimpleTradeForex 55

The price tried to go back to this zone, but the bulls were stronger and
the green candle covered all 4 remaining candles. A good moment to
take a buy position
If you're reading it all at one, this is sign to take a break :D
.
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Like in trading you can't overtrade and you have to rest sometimes ;)

Copyright © 2021 SimpleTradeForex 56

This is where the Fibonacci Extension comes in, which can help us
determine the TP. It adds the levels -0.618 ; -0.276 to the settings.

15min

Break of Structure

BoS

BoS

Now with these levels we can stretch the target, but it's not like "set a
TP at -0.618 and the price will magically come that way", so don't use
it like a magic wand. 70-90% of the profit should be taken at the level
of 0 or earlier. Then leave the rest for the next targets.

Copyright © 2021 SimpleTradeForex 57

 15min

Break of Structure

BoS

BoS

The price reached the last level, but in the next example I will show
you why, because to determine the TP you also need some
confirmation and not just fibonacci extension.

30min

0.71000 I expected buyers

will come here again

I changed the timeframe and zoomed out the chart to show the zone
where "the most action" took place. Knowing such a zone, we can
expect that the price will reach it and will rebound or will continue
the movement. Knowing this, the rest of the position which we left to
grow should be taken out at this level.
PS. Do you see how the price reacted at the level of 0.71000 earlier?
Very aggressive rebound, that is why I decided take this setup.
Copyright © 2021 SimpleTradeForex 58
 Example #2
30min

I think this example reminds you of something. Yes, this is a

continuation of the move from the previous example. Where we had
a TP the price turned back so we can again use our strategy to take
another position but this time WITHIN THE TREND!

30min

In this case I have marked 2 zones that interest me, one at 0.5 and the
other at 0.618 (you can also mark one big zone and try to play
positions in it until it is broken through).

Copyright © 2021 SimpleTradeForex 59

 15min

Of course I changed the interval to catch the best position. And here
is an example of a position "on the border". It meets all the conditions
for entry, but only on "millimeters", barely touched the level of 0.5,
an average rebound from this level and a rather lazy reaction of bulls.
But if you have a trading plan, stick to it.

15min

As we can see, the price went slightly on the profit but eventually hit
the SL. But it went deeper to 0.618 fibonacci and rebounded leaving a
long wick and the price covered the previous red candle, so I took a
second position this time more confident in this setup.

Copyright © 2021 SimpleTradeForex 60

15min

TP #3
(depends on dynamic
of the price)

TP #2

TP #1

This time I'm showing you the chart zoomed out to show you where I
would place the TP. The first would definitely be at the 0 level, the
second above the -0.276 level at the key level where the price turned
around several times and the third TP at the -0.618 level or if the
price was dynamic I would wait until the psychological level of
0.72000.

15min

You can see how dynamically the price moved. Seeing this I would
take out 50% of the position at 0 and then use a trailing stoploss (will
be explained in the next chapter) to maximize profits.

Copyright © 2021 SimpleTradeForex 61

 Example #3

H1

Here we will trade again using the psychological level. We can see
how the price tries to break through the resistance several times, but
without success. Finally, it succeeds, but not for long, as it breaks
above the 82,000 level for a while and then turns back with a huge
bearish momentum creating a new low and breaking the structure of
all previous lows. Such a dynamic price movement shows in which
direction the market wants to go.

H1 This wick shows

how much strenght
bears still have

We draw on chart chart the S/R zone, fibonacci and wait for price to
reach the POI. Along the way, we see the bearish strength is shown by
that long last wick. We can see how much strength they have left. So
we change the timeframe and wait for confirmation at our zone.

Copyright © 2021 SimpleTradeForex 62

 Evening star pattern

30min

We have a very strong reaction (Evening star pattern) with a deep

entry into the fibonacci levels, a good setup. I take a position.

30min

But the market lives its own life and decided to turn around and hit
the SL (it happens). But the price is still in the zone so I am still
interested in a sell position if I have confirmation. And I get it, 3 red
candles that close under the others and under our zone. I take the
position once again.

Copyright © 2021 SimpleTradeForex 63

 H1

I use Fibonacci Extension but in this case the chart from the past does
not show interesting zones at these levels. And you can see for
yourself that it barely reached the level of -0.276 and turned back
strongly. With this example I want to make you aware that this tool
is not a magic wand and that you need other confirmations to go
along with the fibonacci extension.
It is true that the price later reached these zones, but I would have
already closed the position if I had noticed the indecision above the
-0.276 level. Alternatively I would have left 10%. If the price is
undecided, there is no need to stress. Just get out, take what the
market gives you and be happy.
Additionally, if you want to use this tool, use it preferably with a
trailing stoploss. Capital protection is the most important thing in
trading and you have to be aware of it. No strategy will help you if
you don't manage your risk properly.
Over the years I have noticed that most of the available strategies
make money BUT you must have discipline, manage the risk and
protect your capital, the strategy really comes last.

IT IS UP TO YOU TO MAKE MONEY NOT THE STRATEGY.

Copyright © 2021 SimpleTradeForex 64

 Trailing stoploss

5min

As you can see, the price is moving

upwards after reaching 100% of our
target,if you see such strong
momentum, it's a good idea to use a
trailing stoploss.

A trailing stop loss is a form of day trading order that allows you to
specify a maximum loss amount or percentage on a transaction.
When the price of a pair or stock rises or falls in your favor, the stop
price rises or falls with it.
The stop remains in place whether the asset price increases or falls
against you.
In the above case, the price goes up in a strong trend and we move the
stoploss after each new pullback. This way, you can protect your
position against a sudden drop and still have a profit despite the
sudden drop. However, this method works best in strong trends
because when the price is very indecisive, you will not earn as much
as you could.
In the previous examples, you saw that there were moments when
the price was undecided. So if we had used this method, we would not
have made any money.
Therefore, I recommend using this at moments when the price has
reached 100% of our TP, then after we can leave about 20%-50%
(depends of dyniamic of the price) of the position for further price
continuation and adjust the trailing stoploss in our favor.This is the
way to maximize our profits, but it requires more attention and
observation of the pair.
Copyright © 2021 SimpleTradeForex 65
 H1

In this case, if we moved the SL every pullback we would hit the SL

just above the 0 level, but seeing the recent high we would expect
that level to be retested. Knowing this we can avoid such situations.
Trailing stoplosses should also be used wisely if you expect higher
profits.

Taken out here

However, there are trades in which use of trailing stoploss will make
the position hit SL faster. If you are playing a setup and the price is
undecided, it is best not to use a trailing stoploss.
Copyright © 2021 SimpleTradeForex 66
 Useful links
TradingView
This is the site you see in my stories, the site I use for analysis
because of its transparency, the variety of tools and the possibility of
a pleasant "backtesting" of currency pairs. You can really find
everything here
You can use it absolutely for free, the premium package has more
possibilities, if you ever want to buy it, here's a link that will give you
$30 when you buy it.

https://www.tradingview.com/gopro/?
share_your_love=simpletradeforex

Risk calculator
I personally don't use it because I have most of it in my head, but if
you are new to this you may need help to determine the risk, so I am
providing a link so you can use it if you want.

https://www.myfxbook.com/forex-calculators/position-size

Economic caledar
This will help you check upcoming news or events that may shake up
the market. I advise you to avoid playing on a currency of a country
where there are some important events on the same day, the price
will then become more unexpected.

https://www.myfxbook.com/forex-economic-calendar

Copyright © 2021 SimpleTradeForex 67

 Rules for risk management
Don't trade with more than 2% of your capital for one trade,
and don't trade with money you can't afford to lose.
If you do this, you will end up trading emotionally, which
will almost always result in losses.

Set your TP in a realistic manner(min. 1:2).

It makes no sense to employ a 1:25 R:R because it just looks
great.

REMEMBER NOT TO OVERTRADE!

Limit yourself to a specific amount of transactions each day,
such as 3-6 or whatever number seems right to you.

After three straight losses, end your trading day,rest.

Whenever possible, secure your profits.

When the price reaches some profits or you can shut some
partial profits, move your stop loss to BE(entry point).

Recognize when trades are available.

That is to say, you should know how much time you should
spend in front of the charts, and if you don't find any
transactions throughout that time, it implies there were no
deals for that day.
Staying ahead of the charts as much as possible should not
be complicated. You don't have to trade every day.

Re-examine your trades to determine if you made any

mistakes. Start your trading journal.

Don't become a FOMO investor (Fear Of Missing Out)

It's very important to control your reactions/emotions.

Copyright © 2021 SimpleTradeForex 68

 Disclaimer
Please keep in mind that trading in the forex, stock,
futures, and options markets entails a high level of
risk and is not appropriate for all traders/investors.
Don't put money into something you can't afford to
lose.
The only aim of this approach is to educate and assist
you as a trader.
Keep in mind that I am not liable for any losses you
may incur in the markets.
I don't advise individuals to invest in a certain
market.
This ebook's content is only intended for educational
purposes.

Only act on the information if you have a strong

personal conviction!
There is no assurance of financial benefit.

Copyright © 2021 SimpleTradeForex 69