"The only way to trade with Fibonaccis" journal

No.

There are a few different ways to size/scale the hedge, but I always do it such that I cannot have a net loser if the hedge goes against me. I'll talk about some of them later when I have more time.

 

for hedge price below the price of original position using ratio of 1:1 on hedge would have net loss

using 1:2 would have profit but have a big loss with price resume in favor of direction of original position because the hedge 1 unit more is not protected

using 2:1 would have net loss with price not resuming direction of original position

either way there is a need to know the price direction in favor of original position or in favor of hedge position no matter what ratio is used for hedge price below the price of original position or you would have a net loss

quite difficult

 

I cannot believe this little rally!

SPY: $5,148
hedge: -$1,618.05

If price doesn't go back down, I'm gonna end up taking a loss on the hedge (although still net profitable on the trade). Should've closed it when it was +$5,000 but I didn't know where price was going to go and I also spent a few days moving and when I came back we were in this rally, lol.

 

7/7

SPY: $4,788
Hedge: -$1,477

 

What is your general approach with regard to hedges? Do you have rules about when to place them and when to remove them?

 

7/11:

SPY: -$1,314
Hedge: $914.55

 

7/12:

SPY: -$2,340
Hedge: $1,313.2

Depending on where price is when you enter the hedge, there are a few different ways to play it. I'll go into more detail later when I have more time.

 

7/13:

SPY: -$1,944
hedge: $1,031.80

 

7/14:

SPY: -$3,186
hedge: $1,641.50

 

7/18:

SPY: -$3,762
hedge: $1,876

It seems that SPY made a candle formation today. Doesn't that mean it should go back up?

But wait, I have some great news for the Fibonacci crew.

Did you guys notice this?

If you start at the lowest low in recent swings, and draw the line up to the recent swing high...

Are you fib lovers ready for this?

You are going to love this.

Going from the low to the recent high and drawing the fib retracements...

Todays's low (and reversal) WAS EXACTLY AT THE FIB LINE!!!!!!

See chart!!!

FIBS HAVE MAGIC PREDICTIVE POWERS!!!!!!!!!!!!!!

THE UNIVERSAL MATH OF NATURE AND SEASHELLS MAKES MONEY IN THE FINANCIAL MARKETS!!!