TOTAL FIBONACCI TRADING

CLASS III: TARGETING

Class III: Targeting

Review of Lesson 1
• How Fibs puts money in our pocket
• Establish Support and Resistance to identify measurable swing ranges
• Rules for measuring ranges using Fibonacci ratios
Notes
Rules for establishing ranges:
• ALWAYS work from right to left.
• Use internal data to help bring the grid into focus.
• When possible, place gaps at the 50% ratio.
• Take note of significant moves and place at either the beginning or
middle (50%) of the range.
• Candle wicks may need to be excluded.
(Example: A shooting star wick is often truncated.)
• Often the secondary move in a new range is more accurate than the
initial break.
• Think of ranges like a sentence…locate the punctuation!

Review of Lesson 2
• Markets are consistently changing between cycles of symmetry,
expansion or contraction
• Symmetry analysis using the “Extension” tool to measure retracements
• Method for determining market cycle using cascading ranges and the
50% ratio
• Mitigate effects of market cycles using confluence

Targeting
Two Types of Targets:
• Entry targets
➡ Establish entries
➡ Determine stops
• Profit targets
➡ Calculate risk-to-reward ratio
➡ Exit trade

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CLASS III: TARGETING

Entry Targets
• Simple Fib Support/Resistance tool Goal:
• Fib Retracement (extension tool) marke Know whe
t
• Fib Confluence Entry targets should should bre the
not be e
trading or
.
Example:

Example:

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CLASS III: TARGETING

Example:

“Desire
Profit Targets point of is the star tin
• Fib Expansion – Napo all achievemen g
• Confluence Projections l e on H t.”
ill
• Success always begins with the end in sight
➡ “Desire is the starting point of all achievement.” – Napoleon Hill
• Successful trades begin with the target (“desire”) in mind

Establishing Price Targets

• Amateurs often fail to exit a trade at their established price target.
• Professionals trade to targets, never through them.

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CLASS III: TARGETING

Fibonacci Expansions
Fibonacci Expansions
• Using the Expansion tool in Trade Navigator:
➡ Set up with the ratios: 1.382, 1.500, 1.618, 2.00.
➡ Set up “internal” ratios: .382, .50, .618
➡ Draw lines across the entire screen.
➡ Follow range rules from Class 1.
➡ Bullish Extensions – keep your cursor to the right of center.
➡ Bearish Extensions – keep your cursor to the left of center.

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CLASS III: TARGETING

Fibonacci Expansions
• Advantages of Fibonacci Expansions:
➡ Quick and easy -- immediate analysis
Notes
➡ Because of its speed, some traders like it for intraday trades on faster
markets like Forex.
• Disadvantages of Expansion analysis:
➡ Only works in a symmetrical market
➡ Least reliable of price targeting methods

Confluence
Projecting Based on Confluence
• Establish your grid by using the rules for drawing Fibonacci ranges (class 1).
• Discover areas of confluence (Class 2).
• Measure from the confluence areas to:
➡ the major swing low for bullish targets.
➡ the major swing high for bearish targets.
• Duplicate your measurement and extend beyond confluence to establish
your next target.
• Subdivide your targeted range into Fibonacci ratios.

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CLASS III: TARGETING

• To target new highs, measure from the confluence areas to major swing lows.

• To target new lows, measure from the confluence areas to major swing highs.

• Duplicate your measurement and extend beyond confluence to establish your next target.

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CLASS III: TARGETING

• Subdivide your targeted range into Fibonacci ratios.

Example:

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CLASS III: TARGETING

Projecting Based on Confluence

• Advantages of confluence-based projections
➡ Working with projections of confluence helps to establish a
focused grid on your chart.
➡ Beginning with confluence factors in the mechanics of expanding
and contracting markets.
➡ Can be time-consuming and requires patience while working to
establish the initial grid.
• Disadvantages of confluence-based projections
➡ Can be time-consuming and requires patience while working to
establish the initial grid.

Homework
• Using historical data, work to find an example of an entry
target using each of the three methods mentioned:
➡ Simple Fib Support/Resistance tool
➡ Fib Retracement (extension tool)
➡ Fib Confluence Entry targets
• Using historical data, work to find an example of a profit
target using each of the three methods mentioned:
➡ Fib Expansion
➡ Confluence Projections
➡ 50% “Box” Extensions
• Begin thinking about how you can apply your three targets
in a trading plan.
➡ Entry Target
➡ Stop Target
➡ Profit Target

Next Lesson
• Fib Angles
• The X-Axis…Working with Fib time zones.

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