Fibonacci Channel Trade

Entry Logic

• Exact Entry Trigger: Price pulls back to one of the lines in a Fibonacci channel.
• Confirmation: A bounce off the channel line with a confirmation candle.
• Timeframe: Any.
• Location Context: The channel is drawn based on a trend.
• Market Condition: A trending market.

Exit Logic

• Profit Target(s): The other side of the channel.
• Scaling Out: None.
• Trailing Stop: Trail the stop outside the channel.
• Exit on Signal Failure: A close outside the channel.
• Exit on Opposite Signal: A break of the trend.
• Exit on Time Expiration: None.
• Exit on Momentum Loss: Divergence.

Stop Loss Structure

• Hard Stop: Outside the channel.
• Soft Stop: A close outside the channel.
• 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: Ranging markets.
• Specific Setups Required: A clear trend.
• Instrument Requirements: Any.
• Time of Day Restrictions: None.
• Chop/News Avoidance: Be aware of news.

Context Framework

• Trend Direction: With the trend.
• VWAP Relationship: Varies.
• Moving Average Relationship: Varies.
• Range Location: Not for 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 bounce off the lower/upper channel line with strong confirmation.
• A Setup: A bounce off a middle channel line.
• B Setup: A weak bounce.
• C Setup: No bounce.

Market Selection Criteria

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

Statistical Edge Metrics

• Expected Win Rate: 55-65%
• Average Win: 2R
• Average Loss: 1R
• Profit Factor: 1.22-1.86
• Expectancy Per Trade: +0.22-0.86R

Failure Conditions

• Market Conditions: A trend reversal.
• Specific Scenarios: A news event.

Psychological Rules

• Mental Discipline: The ability to trade within a channel.

Advanced Components

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

Location

• Where Strongest: In a well-defined, orderly trend.
• Where Weakest: In a chaotic or parabolic trend.