Fibonacci Arc Trade

Entry Logic

• Exact Entry Trigger: Price interacts with a Fibonacci arc, which acts as a dynamic support or resistance level.
• Confirmation: A rejection of the arc with a reversal candle.
• Timeframe: Any.
• Location Context: The arcs are drawn between two major price points.
• Market Condition: Any.

Exit Logic

• Profit Target(s): The next Fibonacci arc.
• Scaling Out: None.
• Trailing Stop: Trail the stop on the other side of the arc.
• Exit on Signal Failure: A close through the arc.
• Exit on Opposite Signal: A reversal signal.
• Exit on Time Expiration: None.
• Exit on Momentum Loss: Divergence.

Stop Loss Structure

• Hard Stop: On the other side of the arc.
• Soft Stop: A close through the arc.
• Maximum Dollar Loss: Varies.
• Maximum Percent Loss: Varies.
• Structural Stop: Behind a structural level.

Risk Management Framework

• Risk Per Trade: Varies.
• Maximum Daily Loss Limit: Varies.
• Maximum Weekly Loss Limit: Varies.
• Maximum Drawdown: Varies.
• Risk-Reward Ratio: Minimum 1:2.

Position Sizing Model

• Sizing Approach: Varies.
• Volatility-Based Adjustment: Yes.
• Conviction-Based Sizing: Yes.
• Scaling In: No.
• Scaling Out: No.

Trade Filtering

• Market Conditions to Avoid: None.
• Specific Setups Required: A clear interaction with a Fibonacci arc.
• Instrument Requirements: Any.
• Time of Day Restrictions: None.
• Chop/News Avoidance: Be aware of news.

Context Framework

• Trend Direction: Varies.
• VWAP Relationship: Varies.
• Moving Average Relationship: Varies.
• Range Location: Can be used in ranges.
• Higher Timeframe Alignment: Recommended.

Trade Management Rules

• Breakeven: After 1R.
• Scale Out: No.
• Add Size: No.
• Fast vs. Slow Moves: Adjust accordingly.

Time Rules

• Optimal Trading Window: Any.
• Times to Avoid: None.
• Session-Specific Notes: None.

Setup Classification

• A+ Setup: A rejection of a major arc with strong confirmation.
• A Setup: A rejection of a minor arc with good confirmation.
• B Setup: A weak rejection.
• C Setup: No rejection.

Market Selection Criteria

• Instrument Requirements: Any.
• Volume/Liquidity: Good.
• Volatility: Moderate.

Statistical Edge Metrics

• Expected Win Rate: 50-60%
• Average Win: 2.5R
• Average Loss: 1R
• Profit Factor: 1.25-1.5
• Expectancy Per Trade: +0.25-0.5R

Failure Conditions

• Market Conditions: A strong trend that ignores the arcs.
• Specific Scenarios: A news event.

Psychological Rules

• Mental Discipline: The ability to trade off of curved lines, which can be subjective.

Advanced Components

• Market Regime Detection: None.
• Volatility/Liquidity Filters: None.
• Correlation Filters: None.
• Multi-Timeframe Alignment: Recommended.

Location

• Where Strongest: In markets that are moving in a parabolic fashion.
• Where Weakest: In markets that are moving in a linear fashion.