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Applying MagicFibo Strategy
The MagicFibo strategy is based on the “MagicFibo Impulse Wave below.
FibTool3 is an excellent Fibonacci indicator freely available for download on the ForexFactory website.
We have prepared an indicator “set” for club members with all the relevant levels preset and keyboard shortcuts. Just email us to receive this.
"R" Levels Setup (Fibonacci Tool)
Open You Fibonacci Retracement tool and set the following settings:
|1||%$ – SWING H/L|
|0.854||%$ – MANUAL-STOP/R|
|0.618||%$ – ENTRY|
|0.382||%$ – 1R|
|0.146||%$ – 2R|
|-0.09||%$ – 3R|
|-0.326||%$ – 4R|
|-0.562||%$ – 5R|
|-0.798||%$ – 6R|
|-1.034||%$ – 7R|
|-1.27||%$ – 8R|
|-1.506||%$ – 9R|
|-1.742||%$ – 10R|
|-1.978||%$ – 11R|
|-2.204||%$ – 12R|
Note: If your are going to use the SWING H/L for your R value then the R steps would be 0.382. So R1=0.236; R2=-0.146(-ve) and so on.
MagicFibo Using Risk Reward Indicator
An example on a chart using the TMS Risk Reward Indicator would look like this.
H/L (Swing high/low)
When the H/L is input into the Risk-Reward Indicator it will calculate all the other levels.
MS/R (Manual Stop)
This is the 85.4% Impulse Wave level. This also is your Risk (R) to calculate your position sizing and targets.
PC (Previous day close/entry-level)
This is the Close price of the previous day’s trading at the New York session close. This is also referred to as our “Signal Bar”. The Risk-Reward Indicator automatically knows this price level.
T1 (Target 1)
The Risk-Reward Indicator default is R1.5
T2 (Target 2)
The Risk-Reward Indicator default is R2.5
FO (100% level on Fibo Tool)
This level can be added to your Fibonacci tool to manually set the Target levels.
The TMS Risk reward properties
MS Multiplier: This is the Manuel Stop and R-value set at 85.4% on the Inpulse Wave (0.146+0.854)=100%.
T1 Multiplier: The default setting is 1.5R which is 26.7% on the Inpulse Wave. To change this to 1R the level on the Inpulse Wave would be 38.2% and setting (1.0-0.382)= 0.618.
T2 Multiplier: The default setting is 2.5R which is 2.8% on the Inpulse Wave. To change this to 2R the level on the Inpulse Wave would be 14.6% and setting (1.0-0.146)= 0.854.