Fibonacci breakout still my favorite system right now. On this post I want to show you how this system works pretty well on AUDUSD 13 September 2013 on M15 time frame. In order to open BUY position, I have to wait the price made a fresh lower low. If this condition does not met, I do not enter the trade. See the setup below
I draw the fibonacci from the highest point after lower low is made. When price move up and break the 100 Fibo level, I open Long/Buy. The target will be the 161.8 Fibonacci level. If you see the image above, after I open Long position, the price move down to retrace and then move up again to hit my target.
There are two options on this strategy. We open immediately on breakout and the risk is a drawdown / floating minus. Or we wait for the retracement completed and we open buy. But, in many cases, price move up immediately after the breakout without retrace. And if we choose the second options, we will missed the train.
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