As with many things in life, timing is everything. The same applies with trading, hence why we always wait for the setup to come to us.
In trading, we respect the timing of our setups, because it adds to our risk management as well as taking profits.
For example, in an uptrend, many traders will panic buy at the top of a swing, set a tight stop loss, only for the market to retrace 10% before continuing up.
Even though they were correct about the trend and the continuation, they were off with their timing and thus they get stopped out in a loss.
Fibonacci Time Zones are produced using the Trend-Based Fib Time tool on Tradingview, this tool can be used to determine if and when a correction/impulsive move may end.
The tool itself will produce time zones defined by the same levels we use in the Fibonacci Retracement Tool.
This tool is particularly useful to compliment Elliot Wave Counts and Harmonic Patterns.
Time Stamps
3:05 – ENG Previous COTW (DO NOT TRADE THIS)
- The last upwards movement before the selloff (bullish OB)
- When you have this zone that offers no resistance on the way up then when you come back to the level you expect it to hold as support
14:35 – FIBONACCI TIME
- Correction should take longer than the impulse
- Time is very important. You can use TA to work out the direction but if you don’t know the correct time to enter you can be right in your analysis but wrong in timing and you lose money (SL …)
- Very good in confluence with harmonic patterns and EW
- Corrections are at least 1-1 but usually 2-3 times longer than the impulse
35:33 – HARMONICS + FIB TIME
- Relationships Daniel likes to see between ABCD in harmonic patterns are 1-1 and 1.618). ABCD is the most important to be symmetrical like this.
NOTE:
If correction happens too fast it is more likely that it is only one leg of correction, meaning it will likely go sideways after that for a longer time
1:11:50 – COMMENTS AND Q&A
- Time fib can be used on any time frame but as always, the higher the time frame the more profitable (4H+ TF)
- You do not use Fib time just on impulsive moves but you can also pull fib time from the start of the correction (high) to the end of the correction (low) to the next top (next LH).
- EXAMPLE:
- You have the high (5) – first pivot, low (W) – second pivot, next (lower) high (X) – third pivot, so (Y) is likely to be 1-1 extension. It is important to click on the exact day of the high/low!
- Also, to get a price target you can pull fib extension from the high (5) – first pivot, low (W) – second pivot, next (lower) high (X) – third pivot, and also target 1-1. Altogether now you get the approximate date and approximate price target.