Simple and Effective Strategy for Beginners in Trading: Fibonacci + RSI + CHoCH + BOS
This strategy is simple, practical, and easy to understand, ideal for any trader, especially if you are just starting. The key is to correctly identify the trend, wait for confirmations, and trade with patience. It is a strategy I have developed over time, and if you follow it closely, it can have a good success rate. Remember: success in trading lies in knowing how to wait for the best opportunities.
Initial Analysis: Identify the Market Structure
Before entering a trade, follow these steps to determine if the market is trending or ranging:
1. Uptrend:
The price is forming higher highs (HH) and higher lows (HL).
Look for key support zones and buying opportunities on retracements.
2. Downtrend:
The price is forming lower lows (LL) and lower highs (LH).
Identify key resistance zones and selling opportunities on retracements.
3. Sideways Range:
If the price is oscillating between a support and a resistance without breaking important levels, avoid trading until there is a clear breakout.
> Golden Rule: Only trade if you have a clear structure (broken trend or range). If you are not sure, do not trade.
2-Step Strategy: Fibonacci + RSI + CHoCH/BOS
Step 1: Use Fibonacci and RSI to Identify Key Zones
1. Draw Fibonacci:
In an uptrend: From the last significant low (swing low) to the high (swing high).
In a downtrend: From the last significant high (swing high) to the low (swing low).
2. Identify important retracement zones:
The 50% and 61.8% Fibonacci levels are the most relevant.
Enter these zones only if there is additional confirmation.
3. Confirm with RSI:
Buy (long): If the RSI is near or below 30 in a key Fibonacci zone.
Sell (short): If the RSI is near or above 70 in a key Fibonacci zone.
Look for divergences as an additional signal (optional).
Step 2: Confirm with CHoCH and BOS
1. CHoCH (Change of Structure):
Look for a change in the direction of the price.
Example: In a downtrend, the price breaks a local maximum → bullish CHoCH.
2. BOS (Break of Structure):
Once the price touches a Fibonacci zone and confirms with RSI:
Buy (long): If the price breaks a recent maximum.
Sell (short): If the price breaks a recent minimum.
3. Entries:
Enter in the direction of the BOS after confirmations.
Example Buy (long): Price retraces to the 61.8% Fibonacci level, RSI below 30, and breaks a local maximum.
Example Sell (short): Price retraces to the 61.8% Fibonacci level, RSI above 70, and breaks a local minimum.
4. Stop Loss and Take Profit:
Stop Loss: Place it just below (for buys) or above (for sells) the last relevant swing.
Take Profit: Use Fibonacci extensions (127.2% and 161.8%) to define targets.
Key Points
1. Always wait for confirmations (Fibonacci + RSI + CHoCH/BOS).
2. Do not force trades. The market always offers opportunities, be patient.
3. Manage your risk: Do not risk more than 1%-2% of your capital per trade.
4. Practice on a demo account before trading live.
Conclusion
This strategy is a personal strategy, more than investment advice. I only try to share ways and methods that I believe can help people when they start, as I was not helped. I would have liked to find someone who could share this type of information and guide me.
Remember, this is not investment advice, these are just ideas and tools based on my experience to facilitate your path in trading.
Greetings and have a great day!
