The Fibo Dynamic Channel Strategy for MT4 works as the basic technical trading strategy with dynamic lines and dynamic pivot points. Getting trading positions by focusing on support and resistance levels as obstacles is not a new concept as these levels act obstructively to the price movement. Where prices may start to retreat or continue after taking a short break, this trading system is a visual representation of these levels (generated by the Fibonacci series) or could be considered a new model for traditional usage of the Pivot Point and Support & Resistance levels.
The Fibo Dynamic Channel Strategy For MT4
This strategy is based on Pivot Points, support, and resistance levels known as demand and supply zone for an asset. We all know about the economic model of price movement related to the asset’s demand and supply at a specific time.
This law of supply and demand explains the interaction between the “sellers” and “buyers” of the asset at a specific time. As the demand increases with changeless supply, it leads the asset price higher and when supply increases but demand remains unchanged it causes the asset price to fall.
Identifying trading positions through support resistance levels is a very familiar and effective way that has been used by traders for many years and this trading system could be called a combination of dynamic pivots, supports, and resistance levels (generated by Fibonacci Series). When the market shifts, these levels move with it by making a channel in which price moves.
List of tools/Indicators and conditions:
- Currency pairs: All currency pairs ( major or minor), commodities, and stocks.
- Time Frames: 15 min or higher.
- Dynamic Fibo Exp 1
- Dynamic Fibo Exp 2
- Dynamic Fibo Main 1
- Dynamic Fibo Main 2
- PH CCI Woodie Panel Heart v3
After applying all these custom-made indicators to the MetaTrader 4 platform the chart:
This strategy uses 4 indicators to identify dynamic pivot (DP), support, and resistance levels at the chart that is visualized at an independent window named PH CCI Woodie Panel Heart v3. To see all indicators at once may require opening a window greater than the daily timeframe and the magic of this trading system could be visualized easily at a medium (1 hour or 4 hours chart) that might create a lot of opportunities to have winning trading positions.
In the image above, we can see Two dynamic indicators (Dynamic Fibo Exp 1 and Dynamic Fibo Exp 2) at time frames higher than daily with a central pivot. Price basically moves between Dynamic Fibo Exp 1 (upside) and Dynamic Fibo Exp 2 (downside), where a central dynamic pivot line moves with the price at the center of these two indicators.
The other two dynamic indicators (Dynamic Fibo Main 1 and Dynamic Fibo Main 2) used in the Fibo Dynamic Channel Strategy remain with the price movement with support and resistance levels that price touches more than the first two (Dynamic Fibo Exp 1 and Dynamic Fibo Exp 2).
Generally, when it’s an uptrend market movement, the price remains at Dynamic Fibo Main 1 channel and for downtrend movement, it may remain at Dynamic Fibo Main 2 channel.
The PH CCI Woodie Panel Heart v3 indicator is a modified CCI (commodity channel index) indicator that tracks the market movement and shows buy or sell signals (at different time frames signals could be different). For an uptrend market, this indicator shows buy signals by creating blue bars above the middle (0.0) line of the window and for a downtrend market, there are red colour bars below it (0.0 line).
This trading strategy is a very unique way of trading because it represents dynamic pivot, support and resistance level, volatility, and market direction (trend) at once. The dynamic lines show where the price is trying to reach (uptrend or downtrend). It is the best advantage of having dynamic support and resistance lines rather than fixed.
If you are keen to know the latest market analysis and signal follow our Signal Page
Bullish Trading Strategy
When the price remains at the upper channel (Dynamic Fibo Main 1) and CCI creates blue bars (at the upper (daily) chart) it is an uptrend market movement and traders must detect buy positions from a suitable pullback or rejection level (at 1 or 4-hour chart).
Bullish trading conditions
- Price remains at the upper channel.
- PH CCI Woodie Panel Heart v3 creating blue bars (above 0.0 line).
At the upper channel when the price touches any dynamic level at the upside and starts to pull back to the direction where it comes from that’s the entry level for traders.
Wait until the closing of the bull candle followed by bearish candles then takes entry at a suitable price.
Initial stop loss will be below the dynamic level line or below the current or previous swing low.
Initial exit or take profit area will be 2-3 pips below the first upside dynamic support or resistance level (could extend to the next level if price movement remains unchanged after reaching any level) and when price touches Dynamic Fibo Exp 1 level reversal may nearby, so it’s better to close positions here.as possible.
Bearish Trading Strategy
When the price remains at the lower channel (Dynamic Fibo Main 2) and CCI creates red bars (at the upper (daily) chart) it is a downtrend market movement and traders must detect sell positions from a suitable pullback or rejection level (at 1 or 4-hour chart).
Bearish trading conditions:
- Price remains at the lower channel.
- PH CCI Woodie Panel Heart v3 creating red bars (below 0.0 line).
At the lower channel when the price touches any dynamic level at the downside and starts to pull back to the direction where it comes from that’s the entry level for traders. Wait until the closing of the bearish candle followed by bull candles then take entry at a suitable price.
Initial stop loss will be above the dynamic level line or above the current or previous swing high.
Initial exit or take profit area will be 2-3 pips above the first downside dynamic support or resistance level (could extend to the next level if price movement remains unchanged after reaching any level) and when price touches Dynamic Fibo Exp 2 level a possible reversal may nearby so it’s better to close positions here.
It is not obvious that the price will reverse or take a break at every dynamic level of the chart by this trading system. Therefore, enter after confirmation or verify position by analyzing multi-timeframe windows and be careful to trade at major economic events that might cause an unstable price movement for a certain time.