Hey fellow TA enthusiasts,
I've been experimenting with Fibonacci retracements on the 15-minute and 5-minute charts for short-term scalping, and I'm finding some surprisingly consistent entry signals, especially on highly liquid pairs like BTC/USDT and ETH/USDT.
The general idea is to identify a clear, short-term impulse move, wait for a retracement, and look for price to stall or reverse around key Fibonacci levels (38.2%, 50%, 61.8%). I usually combine this with a very tight stop-loss just below the swing low of the retracement or the 78.6% level if I'm feeling a bit more cautious.
What I've found helpful is to also watch for confluence with other indicators. For instance, if a Fib level also aligns with a previous support/resistance zone, or if the RSI shows some bullish divergence as price approaches the 50% or 61.8% level, that's a much stronger signal for me.
My typical setup looks something like this:
- Identify a quick 1-5% move on the 15m chart.
- Draw Fib retracement from the low to the high of that move.
- Wait for price to pull back to the 38.2%, 50%, or 61.8% levels.
- Look for a bullish candlestick pattern (e.g., hammer, engulfing) or RSI divergence at these levels.
- Enter long with a stop-loss just below the low of the retracement candle.
- Target the previous high or a 1:1.5 risk-reward ratio.
It's definitely not foolproof, and you need to be quick with execution and managing your trades. High slippage can eat into profits on these timeframes.
Has anyone else had success using Fibs for scalping on lower timeframes? Any specific tips or tricks you use to improve the win rate or manage risk on these very short-term trades? I'm particularly interested in how you handle false signals or quick reversals.