Although it was discouraging, the finding held the potential for improvement. How, you might wonder? The answer lies in Fibonacci retracement. In this article, I will elucidate this tool’s history, the theory behind it and its application in trading scenarios to help readers like you understand how to use the Fibonacci retracement to manage your trades.
It is frustrating to be stopped out of a trade, even for an experienced trader like me. There are numerous occasions where I find myself stopped out of a trade before I could realise my profits due to inconsistent trade management.
As good practice for any trader, I did a comprehensive review of my trading history and found that 20% of my trades were attempted when the market did not move in my favour, resulting in immediate stop-outs. Conversely, another 20% of my trades reached the target profit I had set. On the remaining occasions, the trades initially moved in my favour before ultimately hitting the stop-loss.
