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MartialChartsFX FiReZ Strategy

Strategy

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0% found this document useful (0 votes)
84 views36 pages

MartialChartsFX FiReZ Strategy

Strategy

Uploaded by

Ontiretse Ngwako
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 36

Fi.Re.Z.

Strategy
by
Martial Charts FX

Copyright © 2023 MartialChartsFX.com. All Rights Reserved.


CFTC Required Risk Disclosure Statement
Short Version:
Trading Futures, Forex, CFDs and Stocks involves a risk of loss. Please consider carefully if such trading is appropriate for you. Past performance is not
indicative of future results. Information that is provided is for entertainment and informational purposes only and does not constitute investment
recommendations or advice. I have NO fiduciary responsibility to you. Investing and trading has an inherent risk of loss. Conduct your own due diligence and
seek advice from an independent licensed financial advisor that has a fiduciary responsibility to protect your financial interests before investing or trading.

Risk Warning
Trading foreign exchange, indices and commodities, on margin, carries a high level of risk and may not be suitable for all individuals. The high degree of
leverage can work against you as well as for you. Before deciding to invest in foreign exchange or other markets you should carefully consider your
investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some, or all, of your initial investment.
Therefore you should not invest money that you cannot afford to lose. In some cases, it is possible to lose more than your initial investment as it is not
always possible to exit a market at the price you intend upon doing so. There are also risks associated with utilizing an Internet-based trade execution
software application including, but not limited to, the failure of hardware and software. You should be aware of all the risks associated with investing in
foreign exchange, indices and commodities and seek advice from an independent financial advisor if you have any doubts. The information made available
on MartialChartsFX.com is for your general information and use and is not intended to address your particular requirements. In particular, the information
does not constitute any form of advice or recommendation and is not intended to be relied upon by users in making, or refraining from making, any
investment decisions. MartialChartsFX.com and its operators, will not accept liability for any loss or damage, including but without limitation to, any
financial loss, which may arise directly or indirectly from use of or reliance on such information either provided by him or others that participate in the
services provided. Please use your own good judgment and seek advice from a qualified consultant, before accepting any of the information you are given.
Past performance is not necessarily a guide to future performance.

Disclosure Statement
The risk of loss in trading Foreign Exchange (FOREX), indices and commodities can be substantial. You should therefore carefully consider whether such
trading is suitable for you in the light of your financial condition. In considering whether to trade or to authorize someone else to trade for you, you should
be aware of the following:

If you purchase a commodity option, you may sustain a total loss of the premium and all of the transaction cost. If you purchase or sell a commodity future
or sell a commodity option, you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or
maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional
margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be
liquidated at a loss, and you will be liable for any resulting deficit in your account.

Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit
move”.

The placement of contingent orders by you or your trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the
intended amount, since the market conditions may make it impossible to execute such orders.

The high degree of leverage that is obtainable through, for example, futures trading, options trading, Spread Betting, Binary Betting and CFD trading can
work against you as well as for you. The use of leverage can lead to large losses as well as gains. This brief statement can’t disclose all the risks and other
significant aspects of the commodity markets, including trading shares, currencies, and stock indices. You should therefore carefully study financial trading
before you enter the financial markets with the view of buying and selling, including shorting, securities in the marketplace.

CFTC Rule 4.41


These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual
performance record, these results do not represent actual trading. Also, because these trades have not actually been executed, these results may have
under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general
are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve
profits or losses similar to these being shown.

Disclaimer
MartialChartsFX.com and its operators may discuss some of the strategies used to trade the markets. Past performance is not a guarantee of future results.
No guarantee is being made that any individual will be able to replicate hypothetical performance results. There are certain factors that can cause a sharp
difference between the price that is read off the chart and the price that is actually achieved when a trader attempts to enter or exit a position. Such factors
include but are not limited to, the effect of slippage on stop orders or the failure of an individual’s broker to fill orders at a requested price.

The services are sold as information services for investors and traders and are not recommendations to buy or sell securities, nor an offer to buy or sell
securities. None of the services or information provided by MartialChartsFX.com and its operators constitutes a solicitation to trade any investment or
security of any kind.
Table of Contents
Introduction ..................................................................................................................................................................... 1
What You Will Need ......................................................................................................................................................... 2
Required Price Action....................................................................................................................................................... 2
Impulsive Waves and Retracement Waves ....................................................................................................................... 3
Valid Retracements .......................................................................................................................................................... 4
Trends and Ranges ........................................................................................................................................................... 6
Market Structure Range ................................................................................................................................................... 7
Imbalance ........................................................................................................................................................................ 8
Break of Structure ............................................................................................................................................................ 9
Break of Structure out of the Retracement Zone .............................................................................................................10
Breakout Expectancy Levels ............................................................................................................................................11
Change of Character .......................................................................................................................................................12
Change of Character out of the Retracement Zone..........................................................................................................13
Breakouts and Breakdowns .............................................................................................................................................15
Fibonacci Retracement Tool ............................................................................................................................................17
Measuring The Retracement Zone ..................................................................................................................................19
Fibonacci Retracement Zone ...........................................................................................................................................19
Traditional Fibonacci Retracement ..................................................................................................................................21
Criteria For A Trade Setup ...............................................................................................................................................24
Entry Methods ................................................................................................................................................................24
High Risk Entry Method (Entering From The Fibonacci Retracement Zone) ..................................................................25
Lower Risk Entry Method (Entering From The Secondary Breakout) ............................................................................26
Stochastic RSI Confluence ...............................................................................................................................................27
Stochastic RSI Settings.................................................................................................................................................27
Divergence ..................................................................................................................................................................27
Stochastic RSI Overbought or Oversold .......................................................................................................................29
About Stochastic RSI and Indicators ............................................................................................................................29
The 8 Step Trade Process ................................................................................................................................................30
Strategy Videos ...............................................................................................................................................................30
Martial Charts FX Trading Discord ...................................................................................................................................31
Before You Go .................................................................................................................................................................32
Martial Charts FX Trading: FiReZ Strategy

Fibonacci Retracement Zone Strategy


Introduction
Thank you for downloading my guide for the Fibonacci Retracement Zone Strategy. This strategy is the result of years of
study, back testing, and trial and error to boil trading down to a simple and repeatable formula that still takes advantage
of advanced concepts.

The Fibonacci Retracement Zone Strategy is a rules based and repeatable strategy with easy to identify and frequently
occurring trade setups. This strategy is a shortcut to Supply & Demand trading based on Market Structure, Order Flow,
and Fibonacci Retracements. Follow the strategy rules and the built in concepts will take care of themselves.

Whether you are seasoned or new to trading, I advise you not to skip anything in this book because this is a new way to
trade with Fibonacci and for finding high probability POIs algorithmically.

This strategy can be used on a variety of instruments such as Forex, Futures, Stocks, Indices, Metals, Commodities, and
Crypto.

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Martial Charts FX Trading: FiReZ Strategy

This strategy can be used on any timeframe. Lower timeframes will present more opportunities, but with a lower
probability of success. Higher timeframes will have fewer opportunities, but will have a higher probability of success due
to greater stability of market structure and price action.

What You Will Need


 Fibonacci Retracement Tool
 Rectangle drawing tool
 Horizontal line drawing tool
 An oscillating lower indicator for divergence (Stochastic RSI, Stochastic, RSI, MACD, etc.)
 A Forex Broker with Tight Spreads such as LQDFX. Sign up here: https://bit.ly/join_LQDFX

Before we get into the strategy, let’s define the price action components that are required for a valid setup. A trade
setup that is missing any one of the following components is NOT a tradable setup. All these components will be
explained in detail in this text.

Required Price Action


 A Valid Retracement Zone or Range Zone
 Break of Structure (BOS) or Change of Character (CHoCH) from a Valid Retracement Zone
 Imbalance created by the BOS or CHoCH
 Return to the untested Fibonacci Retracement Zone
 Hidden Divergence (Hidden Bullish if Buying; Hidden Bearish if Selling)
 Entry Signal within or adjacent to the Fibonacci Retracement Zone or Candle Close beyond the Lower Risk
Breakout Entry Level

Before we get into the strategy, we’ll review the market structure and price action components that we must be able to
identify.

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Martial Charts FX Trading: FiReZ Strategy

Impulsive Waves and Retracement Waves


Impulsive Waves are strong price movements in line with the trend. Retracement Waves are minor counter trend price
moves in between the Impulsive Waves.

Impulsive and Retracement Waves in an Uptrend

Impulsive and Retracement Waves in a Downtrend

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Martial Charts FX Trading: FiReZ Strategy

Valid Retracements
A valid retracement must not be confused with sideways price action. In an uptrend a valid retracement will break a low.
In a downtrend a valid retracement will break a high. This is a requirement in order to select actual and valid
retracements. If the retracement is not a correction of the impulsive move, it is a continuation of the impulsive move.
The best retracements are followed immediately by a strong impulsive wave that breaks structure and creates
imbalance. Where a valid retracement ends defines the market structure.

Valid and Invalid Retracements

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Martial Charts FX Trading: FiReZ Strategy

Retracements that are at least 38.2% depth and do not cause a reversal can considered valid retracements as a rule of
thumb.

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Martial Charts FX Trading: FiReZ Strategy

Trends and Ranges

An Uptrend is defined by a series of Higher Lows and Higher Highs. The emphasis on the uptrend is the creating of
subsequent Higher Lows. If price makes a Low that is lower than the previous Higher Low the uptrend is considered to
be invalid. A Higher Low is validated as a strong level of support if it leads to a Higher High. Price can make Equal Highs
or a Lower High while maintaining the Higher Lows and still be considered an uptrend until a reversal or range is
confirmed.

A Downtrend is defined by a series of Lower Highs and Lower Lows. The emphasis on the downtrend is the creating of
subsequent Lower Highs. If price makes a High that is higher than the previous Lower High the downtrend is considered
to be invalid. A Lower High is validated as a strong level of resistance if it leads to a Lower Low. Price can make Equal
Lows or a Higher Low while maintaining Lower Highs and still be considered a downtrend until a reversal or range is
confirmed.

A Range is defined as a series of Equal Highs and Equal Lows, or price failing to make Higher Highs or Lower Lows. In a
range price moves between defined levels of support and resistance until a Break of Structure occurs followed by the
creation of a Higher Low (bullish BOS) or a Lower High (bearish BOS).

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Martial Charts FX Trading: FiReZ Strategy

Market Structure Range


The market structure range is the distance between the most recent low and high of the impulsive wave (wave that
created a Break of Structure). Within this trading range is where a retracement will occur or a ranging market condition
may form.

Market Structure Trading Range

As long as price stays within this range on the given time frame, the current structure is intact on that time frame. Price
may retrace to the extremes of the range without being considered a reversal. Price may also create Equal Highs and
Equal Lows within the current structure without being considered a reversal.

Structure ranges can be found on every time frame. The most recent market structure range created by an impulsive
wave is the structure that should be analyzed and traded within starting at higher time frame structures and working
down to the lower time frames.

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Martial Charts FX Trading: FiReZ Strategy

Imbalance
Imbalance is inefficient price action where price moves so rapidly that buyers and sellers are unable to fully participate
in the market. This is represented on the chart where there is a candle that has a candle to its left and a candle to its
right that do not have touching or overlapping prices.

Bullish Imbalance: Inefficient price action in a bullish candle (usually a large body candle) that does not have overlapping
price action by the candles to its left and right.

Bearish Imbalance: Inefficient price action in a bearish candle (usually a large body candle) that does not have
overlapping price action by the candles to its left and right.

Imbalance is important because it shows momentum of price and the intent of the banks, which is why it is requisite
price action for a trade setup.

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Martial Charts FX Trading: FiReZ Strategy

Break of Structure
A Break of Structure (BOS) occurs when the market structure range is broken in a continuation of the trend resulting in
the establishment of a new market structure range. The Break of Structure is required in order to define the
Retracement Zone. Retracements Do Not Break Structure. Only Impulsive Waves Can Break Structure. The Break of
Structure must create Imbalance.

Bullish Break of Structure: The last Higher High is exceeded (broken) by a new Higher High in an uptrend.

Bearish Break of Structure: The last Lower Low is exceeded (broken) by a new Lower Low in a downtrend.

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Martial Charts FX Trading: FiReZ Strategy

Break of Structure out of the Retracement Zone


The Retracement Zone is defined by the height of the last retracement that was broken out of. Minor retracements that
occur within a retracement zone are ignored. There must a breakout for the retracement zone to be defined and active.
A retracement zone is pending (not yet active) until it has a Break of Structure to validate the retracement. Since the top
of the Retracement Zone is also the high of the Market Structure Range, the breakout of the Retracement Zone is also a
Break of Structure out of the Market Structure Range. You can trade Retracement Zones but we will refine these later.

Uptrend Scenario

Downtrend Scenario

The Break of Structure must occur with at least 2 consecutive candle bodies closing above the broken Higher High (for a
Bullish BOS) or below the broken Lower Low (for a Bearish BOS).

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Martial Charts FX Trading: FiReZ Strategy

Breakout Expectancy Levels


The violation of a support or resistance level is sign of a Break of Structure (BOS) also known as a breakout or
breakdown. Pay close attention to the distance that price rallies on the initial breakout above Resistance or the distance
that price drops on the initial breakdown below Support. These breakouts and breakdowns provide valuable information
about how far price is willing to go when that level of Support or Resistance is violated. This distance is the breakout or
breakdown expectancy and the expectancy is defined from the point of breakout to the highest point or point of
breakdown to the lowest point before a retracement occurs.

Height of the initial breakout above the resistance is the expectancy of future breakouts

If trading a breakout or breakdown, it is not advisable to trade the initial breakout or breakdown. It is best to wait for a
breakout or breakdown to occur to show how far price can rally or drop after breaking out from the level. To enter a
trade on a secondary break of the level (referred to as the Lower Risk Entry Method later in this text), wait for price to
have a candle close above Resistance or below Support and target the high of the initial breakout (if buying) or the low
of the initial breakdown (if selling).

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Martial Charts FX Trading: FiReZ Strategy

Change of Character
A Change of Character (CHoCH) is a type of Break of Structure but it only occurs in a reversal. It occurs when the market
structure range is broken out of in a reversal resulting in the establishment of a new market structure range. The Change
of Character will cause a retracement zone flip and requires special attention in order to define the prior retracement
zone. The Change of Character must create Imbalance.

Bullish Change of Character: The last Lower High is exceeded (broken) by a new Higher High in a reversal of a
downtrend.

Bearish Change of Character: The last Higher Low is exceeded (broken) by a new Lower Low in a reversal of an uptrend.

Change of Character variations that are also valid:

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Martial Charts FX Trading: FiReZ Strategy

Change of Character out of the Retracement Zone


A Change of Character occurs when the retracement zone and then the market structure range are broken in a reversal
of the trend resulting in the establishment of a new market structure range. This behavior is a failure of the retracement
zone to continue the trend and reject price when retested. The Change of Character is unconfirmed when only the
retracement zone is violated. The Change of Character is confirmed when both the retracement zone is violated and the
market structure range is broken.

Bearish Change of Character with Shift of Market Structure

Bullish Change of Character with Shift of Market Structure

Bullish Change of Character with Shift of Market Structure

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Martial Charts FX Trading: FiReZ Strategy

Bearish Change of Character with Stop Hunt and Zone Flip (Zone Failure)

Bullish Change of Character with Stop Hunt and Zone Flip (Zone Failure)

Bullish Change of Character with Stop Hunt and Zone Flip (Zone Failure)

Like the Break of Structure, a Change of Character cannot occur with a wick BOS. The Change of Character must occur
with at least 2 consecutive candles closing above the broken Lower Highs (Bullish CHoCH) or below the broken Higher
Lows (Bearish CHoCH).

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Martial Charts FX Trading: FiReZ Strategy

Breakouts and Breakdowns


The final type of Break of Structure is a Breakout of a ranging market where price has been failing to make Higher Highs
and failing to make Lower Lows. As opposed to the BOS and CHoCH, the zone for a range is defined by the Market
Range prior to the breakout or breakdown, instead of a retracement. The Breakout/Breakdown must create Imbalance.

Bullish Breakout: The high of the range is broken by a Higher High and a new market structure range is established.

Bearish Breakdown: The low of the range is broken by a Lower Low and a new market structure range is established.

Like the Break of Structure and Change of Character, a Bullish Breakout or Bearish Breakdown cannot occur with a wick
BOS. The Breakout or Breakdown must occur with at least 2 consecutive candles closing above the Range Highs (Bullish
Breakout) or below the Range Lows (Bearish Breakdown).

Range zones, like retracement zones, require a BOS or CHoCH in order to be defined as a zone.

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Martial Charts FX Trading: FiReZ Strategy

The illustration above is a failed range zone (sideways price between the CHoCH and Stop Hunt levels). Price broke down
below the range and then violated the range on retest (range zone failure), then the role reversed to bullish after the
breakout and retest of the range zone

In order of easiest to most difficult to trade:


1. Break of Structure (Continuations) setups
2. Change of Character (Reversals) setups
3. Breakout/Breakdown (Range Breakouts) setups

It is best to stick with Break of Structure (trend continuation) setups until you are proficient before attempting to trade
Change of Character (trend reversal) or Breakout/Breakdown (range breakout) setups. Your account balance will thank
you.

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Martial Charts FX Trading: FiReZ Strategy

Fibonacci Retracement Tool


With this strategy you will use the Fibonacci Retracement Tool in two distinct ways. One way is to measure the height of
retracement zones to identify levels within the zone. The second way is the traditional use for measuring the depth of
retracement to find an area of value. You will be able to use a single Fibonacci retracement tool for both tasks.

The Fibonacci Retracement Tool is used to gauge the depth of a retracement by measuring the most recent impulsive
wave that breaks structure (BOS) or Change of Character (CHoCH).

The Fibonacci Retracement tool can give the trader non-discretionary trade entries and exits based on where a zone falls
within the framework of Fibonacci.

For this strategy you will need the following Fibonacci Retracement Levels:

0.0 (0%) – End of the impulsive wave and TP3/TP4 dependent on Entry method
0.118 (11.8%) – TP2/TP3 dependent on Entry method.
0.236 (23.6%) – TP1/TP2 dependent on Entry method.
0.382 (38.2%) – TP1 is using High Risk Entry method.
0.5 (50%) – Start of minimum trade zone
0.618 (61.8%) – Start of preferred trade zone
0.702 (70.2%) – Midpoint of 61.8% and 78.6%
0.786 (78.6%) – End of preferred trade zone
0.886 (88.6%) – Stop Loss level for High Risk Entry model. Optional
1.0 (100%) – Start of the impulsive wave and Stop Loss Level for High Risk Entry model

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Martial Charts FX Trading: FiReZ Strategy

The Fibonacci Retracement Tool is set by dragging from the swing low (Point A) to the swing high (Point B) in an uptrend
and from the swing high (Point A) to the swing low (Point B) in a downtrend. The 100% level (Point A) is always at the
start of the impulsive wave and the 0% (Point B) is always at the end.

A-B-C-D Pattern with the Fibonacci Retracement Tool

Point A: Start of the impulsive wave


Point B: End of the impulsive wave / Start of the retracement
Point C: End of the retracement / Start of the next impulsive wave (where we want to enter a trade)
Point D: End of the impulsive wave / Start of the next retracement (where we want to exit our trade)

Example Traditional Fibonacci Retracement placement on an impulsive wave in an uptrend

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Martial Charts FX Trading: FiReZ Strategy

Measuring The Retracement Zone


To measure the Retracement Zone we keep the Fibonacci Tool in the correct orientation as shown below. When
measuring a bearish retracement zone in between bullish impulsive waves the lower numbers are at the top and when
measuring a bullish retracement zone in between bearish impulsive waves the higher numbers are at the top.

Fibonacci Retracement Zone


The Fibonacci Retracement Zone (FRZ) is a Point of Interest (POI) refinement of the Retracement Zone. We can trade
based off the Retracement Zone but the FRZ gives a better risk vs reward based on a smaller stop loss needed to cover
the zone.

While we still are measuring the Retracement Zone with the Fibonacci tool, we need to place a horizontal line at the
50% level to identify the equilibrium of the Retracement Zone as shown below. This line will be used for determining
confluence later.

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Martial Charts FX Trading: FiReZ Strategy

After having the equilibrium line in place draw a rectangle zone that captures 11.8% to 61.8% of the Retracement Zone.
This will be the ‘start’ of the Fibonacci Retracement Zone.

Measuring the Retracement Zone

Once the Fibonacci Retracement Zone and Equilibrium are in place, we move onto measuring the Traditional Fibonacci
Retracement.

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Martial Charts FX Trading: FiReZ Strategy

Traditional Fibonacci Retracement


After the height of the retracement zone is measured, move the 0% of the Fibonacci tool to the end of the impulsive
wave that broke structure as shown below. The Equilibrium Line needs to be within the Fibonacci zone of 50% - 78.6%
(61.8% - 78.6% preferred).

Measuring the impulsive wave to gauge the depth of the retracement (Traditional Fibonacci Use)

If there is Fibonacci Retracement Zone that extends beyond 50% going towards 38.2%, you adjust the Fibonacci
Retracement Zone to be at 50%. You are not taking a trade from any place on the traditional Fibonacci retracement
that is less than 50%.

Fibonacci Retracement Zone 50% Refinement

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Martial Charts FX Trading: FiReZ Strategy

If the Fibonacci Retracement Zone doesn’t touch overlap the 50% Fib level, as in the following example, there is no need
to adjust the zone any further.

High Probability Setup with Traditional Fibonacci over Fibonacci Retracement Zone and Equilibrium Line

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Martial Charts FX Trading: FiReZ Strategy

Hidden Bullish Divergence Confluence At Retest of Fibonacci Retracement Zone

Trusted ECN Forex Broker with tight spreads and fast execution

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Martial Charts FX Trading: FiReZ Strategy

Criteria For A Trade Setup


For a trade setup you will need to ensure that the following are present:
1. A Valid Retracement Zone or Range Zone as defined by the most recent Break of Structure.
2. A Break of Structure (or CHoCH, Breakout/Breakdown) with Imbalance out of the retracement or range zone.
3. Fibonacci Retracement Zone and Equilibrium has confluence with 50% - 78.6% of the traditional Fibonacci
Retracement Tool placement
4. The Fibonacci Retracement Zone has not been tested since the Break of Structure or Change of Character with
Imbalance.
5. Hidden Divergence formed when price returns to the Fibonacci Retracement Zone.

Note: If price is overall bullish, your best setups will come from a BOS that is also bullish and vice versa when price is
overall bearish.

Entry Methods
Depending on your trading style and risk tolerance, there are 2 options for taking entries in the FiReZ Strategy. Those
include High Risk Entries and Lower Risk Entries. Every trade has inherent risk so there is not a ‘No Risk’ entry option.
With a Lower Risk Entry, you are accepting a lower reward for lower risk. With a High Risk Entry you are accepting
greater risk for a greater reward.

Do Not Take High Risk Entries Without Confirmation.

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Martial Charts FX Trading: FiReZ Strategy

High Risk Entry Method (Entering From The Fibonacci Retracement Zone)
 Once the setup is identified with a valid Retracement Zone, wait for price to trade into your Fibonacci Retracement
Zone. If price goes beyond the Fibonacci Retracement Zone, price must have a candle close back inside the Fibonacci
Retracement Zone.
 The candle that enters the zone needs to close with a wick at or inside of the zone. The body may close inside of the
zone but there must be a wick showing rejection. Patience is key. The deeper you allow price to go in the zone
before entering the more you save in potential drawdown and risk.
 Wait for a candle to show signs of reversal by not trading beyond the wick of the first candle inside the zone.
 Scale down to a lower timeframe to verify that bullish structure is forming at the Fibonacci Retracement Zone
 Enter your trade before price crosses back over the Traditional 50% Retracement level, if practical.
 Place your stop loss beyond the recent low/high that tested the Fibonacci Retracement Zone and beyond the
Fibonacci Retracement Zone.
 Target the Fibonacci 11.8% or Fibonacci 0% levels as your Take Profit.
 Warning: The Fibonacci Retracement Zones are high probability when properly identified. Price may touch and
immediately reverse without giving any confirmation at the zone.

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Martial Charts FX Trading: FiReZ Strategy

Lower Risk Entry Method (Entering From The Secondary Breakout)


 Once the setup is identified with a valid Retracement Zone, wait for price to trade into your Fibonacci Retracement
Zone and reject away from the Fibonacci Retracement Zone in the direction of your intended trade. We aren’t
entering from the zone so price action at the zone is not important.
 The original BOS level (also the Breakout of the Retracement Zone) is the Breakout Entry Level. The entry signal is
price crossing back over this original BOS level with a candle close on the setup time frame. The candle body must
close beyond the breakout level to be a valid entry signal. Example: If your setup up is based on the 1 Hour chart and
1 Hour structure, you need to see a 1 Hour candle body close across the breakout level.
 Place your stop loss beyond the recent low/high that tested the Fibonacci Retracement Zone, beyond the
equilibrium line, or beyond the Fibonacci Retracement Zone.
 Target the Fibonacci 0% level as your Take Profit. Target 11.8% only if it allows for a greater reward than risk.
 Note: You can always use the Lower Risk Entry Method even when there is confirmation to enter at the Fibonacci
Retracement Zone.
 If your trade setup is in any way questionable, it is advised that you use a Lower Risk Entry.

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Martial Charts FX Trading: FiReZ Strategy

Stochastic RSI Confluence


We can use Stochastic RSI or Stochastic for confluence when entering a trade. The 2 types of confluences are divergence
and overbought/oversold when price reaches a zone. If Stochastic RSI is not available, Stochastic can be used instead.

Stochastic RSI Settings

Divergence
Note to make divergence easier to spot, I disable the %D signal line on Stochastic RSI and use only %K which is the actual
stochastic line.

Hidden Divergence usually signals a trend continuation

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Martial Charts FX Trading: FiReZ Strategy

Plotting Divergence
1. Connect highs or lows on the chart following the same rules as drawing an ordinary trend line. In a downtrend
connect lower highs, in an uptrend connect higher lows. You are connecting the end points where a retracement
ends and the impulsive wave begins.

2. Connect the corresponding values on the Stochastic RSI. It’s acceptable when drawing the trend line on
Stochastic to draw through the Stochastic peaks and valleys since we are only measuring the difference in
Stochastic values for the corresponding highs or lows of price.

Hidden Bearish Divergence. Vertical lines used as a guide for matching the trendlines.

Hidden Bullish Divergence

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Martial Charts FX Trading: FiReZ Strategy

Stochastic RSI Overbought or Oversold


When price reaches a zone we want to see the following on Stochastic RSI:
Price At Buy Zone: Stochastic RSI Oversold (20 or lower)
Price At Sell Zone: Stochastic RSI Overbought (80 or higher)

A zone has a higher probability of holding if these overbought or oversold conditions are met when price reaches a zone.

Stochastic RSI Oversold when price is at the zone

About Stochastic RSI and Indicators


Stochastic RSI is an indicator that may provide confluence and support what price action and market structure are
showing, it does not dictate the trade on its own. If there is a discrepancy between price and the indicator, follow price.

You will not always see divergence that supports your trade setup. That doesn’t mean that the trade won’t work out in
your favor, it means that you have less confluence and a lower probability setup. Your higher probability setups will have
Hidden Bullish Divergence form at the zone when buying and Hidden Bearish Divergence form at the zone when selling.
You should avoid trading when there is divergence that is contrary to your setup, for example if you are buying and
there is bearish divergence it is probably best to wait for another opportunity.

Stochastic RSI may not always be overbought or oversold when price reaches your zone. This doesn’t necessarily
disqualify a trade, but it does reduce the confluence for the trade.

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Martial Charts FX Trading: FiReZ Strategy

The 8 Step Trade Process


1. Find the most recent BOS or CHoCH with imbalance
2. Look left to find the valid and untested retracement zone that the impulsive wave broke out from
3. Measure the retracement to identify the Equilibrium and Fibonacci Retracement Zone within the retracement zone.
4. Once the current impulsive wave if complete, measure the impulsive wave with the Fibonacci Retracement Tool as
traditionally used.
5. Verify that the Equilibrium line and Fibonacci Retracement Zone has confluence with the traditional Fibonacci 50%-
78.6% retracement levels.
6. After price retests the Fibonacci Retracement Zone, verify that Hidden Divergence is present.
7. Use the High Risk Entry or Lower Risk Entry Method.
8. Set Stop Loss and Take Profits based on the type of Entry Method used.

Strategy Videos

FiReZ Strategy Video - https://youtu.be/HYQBeaF00v0 [26:55]

Live Trading on GBPCAD 5 Second Chart - https://youtu.be/VJDm__XhHg0 [4:01]

30
Martial Charts FX Trading: FiReZ Strategy

Martial Charts FX Trading Discord

Need Extra Help With This Strategy?

Join My Discord Where The Community Focus is Trading with FiReZ.

https://discord.gg/DDrrwwVUnx

https://discord.gg/DDrrwwVUnx

31
Martial Charts FX Trading: FiReZ Strategy

Before You Go
This strategy, if applied correctly, can be consistently profitable. Please back test to improve your proficiency in
identifying and validating zones. Forward test on demo before considering trading in a live market environment.

This strategy is a simplified way to trade and includes some ‘smart money concepts’ which are built into the rules so that
beginners can focus on a specific set of variables to find and execute setups without the distractions of ‘smart money
concepts’.

There is much more to price action, market structure, order flow and Fibonacci than what is in this book since this was
designed for the beginner trader that seeks consistency or for the experienced trader that wishes to expand their
repertoire.

If you want to learn more advanced concepts, I recommend checking out my other content The Smart Fibonacci
Method. The Smart Fibonacci Method is a Fibonacci based framework for trading with Supply and Demand, Price
Action, Market Structure, and Smart Money Concepts.

Course: Interactive online course with 60+ videos (14+ hours of runtime) and reading material.

Book: Paperback book format available on Amazon.com.

Interactive Course or Self-Study Book

Visit MartialChartsFX.com to learn more.


The link above will take you to: https://martialchartsfx.com/the_smart_fibonacci_method

32
Martial Charts FX Trading: FiReZ Strategy

Stochastic RSI+ by MartialChartsFX


Get an improved version of the Stochastic RSI under the name Stochastic RSI+ by MartialChartsFX.
Stochastic RSI+ includes strength calculation and divergence detection. Get Stochastic RSI+ here:
https://www.tradingview.com/script/hun08ydg-Stochastic-RSI-by-MartialChartsFX/

https://martialchartsfx.com
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Forex Analysis Breakdowns, Strategies, and Trading Tips

https://www.youtube.com/@MartialChartsFX

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33

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