MACFIBOver1_1

8/2/2019 MACFIBOver1_1

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Macfibo system edition 1.1

In the first version (raw and basic version) of Macfibo System, the following have been covered :

a) General Setup (Pairs, Timeframe)b) Technical Tools (Indicators, MAs used)c) Macfibo Trade Setup (Entry, Exit, TP-ing)

Those who havent read and tried the basic version, it is important that you do. Without reading and

understanding the first one, reading this guide will be a waste of time. And I do not want you to

waste your time.. so now go to first page of Macfibo System thread and download the first guide.

The following stuff will be explained in this second guide :

a) Macfibo Trade Entry 2 (with Macfibo Filters)b) Backtesting Macfibo

MACFIBO TRADE ENTRY

The basic rule of entering the trade is still the same. When 5ema cross 20sma, then thats a valid

entry signal. You set TP @ 161.8 Ive shown that in the first guide. Thats the most basic Macfibo

setup. Now I will add something to this with Macfibo Filters.

What is Macfibo Filters? :

A set of rule that will determine how the trader will act on the valid signal. A set of rule that the

trader will choose in the following actions :

a) To TP it at 127.2 instead of 161.8b) Not to trade the signal at allc) Trade the signal with smaller lot than usual

Before I discuss to trade Macfibo with Macfio Filters application, firstly you need to know what are

the filters and how to identify it. So read the next section multiple times, practise identifying several

times. Oh by the way, the two Macfibo Filters are :

a) Significant S/R Linesb) News Candle


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HOW TO IDENTIFY THE FILTERS : SIGNIFICANT S/R LINES

A Every new trading day, you go to H1 chart (make sure you put PERIOD SEPARATORS on so the

process will be easy), you go back atleast 3 previous trading days (the more the better, I went as far

as 12 trading days). Then you mark the days highest price and lowestprices ZONE, not exact price

but ZONES (Minus 5-15 pips of the exact price). For charts clarity, I just show up to previous 3 days as

an example.

B- Once you mark the S/R Lines, then you see if those lines/zones have been obeyed atleast twice

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C- Now any S/R Lines been tested twice or more, then thats your Significant S/R Line and should

stay in your chart. You keep the other S/R Lines in your chart as well but you might want to color it

differently so you can differenciate which one is significant and which is.. well for now, not. For this

particular example, the significant S/R lines is colored Red and others as Green.

What qualifies as S/R Line obedience?

This is simple than you think. When price touches the zone and unable to continue to break it and

price reverses 2 to 3 candles upon touching it, then that qualifies as S/R Line Obedience. I will

show some charts to show you what I mean

S/R Line Obedience Example 1

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HOW TO IDENTIFY THE FILTERS : NEWS/BIG CANDLE

Just by using your own eye ( visual analysis) , you can identify that one candle that is bigger than

others. It is usually caused by economic data release, political news, disasters and sometimes just

caused by some unannounced statement from certain people that caused reaction from the market.

Examples :


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MACFIBO TRADE ENTRY 2 (WITH MACFIBO FILTERS)

In the first guide, I only show you the entry setup but without filtering rule (Macfibo Filter). In this

guide, not only I will explain to you how to apply Macfibo Filters with the main entry (5ema cross

20sma) but also I will explain to you second type of Macfibo trade signal (ofcourse applying Macfibo

filters with it as well). I wil subdivide this section into two :

a) Macfibo Main Signal with Filtersb) Macfibo Secondary Signal (more popularly known as Macfibo Re-Entries) with Filters

MACFIBO Main Signal With Filters

Very important to understand this : The entry signal is the same as basic signal. When 5ema cross

20sma to the upside, it is a buy signal. You pull down your Macfibo extension levels. When 5ema

cross 20sma to the downside, it is a sell signal. You pull up your Macfibo extension levels.

Entry Setup

In the first version, we focused on 1.618 as the TP level without any further analysis or filters. Now

you have a simple checklist to go through when a Main Signal occur.

1) Is the activating candle (PT A) a news/big candle?IF YES : TP @ 127.2

IF NO : Go to Checklist #2

2) Look at 100.0 level, is it more or less equal Significant S/R Line?IF YES : Ignore Signal


3) Look at Significant S/R Line, is 127.2 Level more or less equal to S/R line?IF YES : TP @ 127.2

IF NO : TP @ 161.8 OR Significant S/R Line

Cut-Loss Setup

a) Set SL @ 38.2 Macfibo level especially when news coming upb) When 5ema recross 8sma before hitting 38.2, EXIT the trade


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MACFIBO Secondary Signal With Filters

Basic Secondary Buy Signal

5ema cross 8sma to the upside while price are above 20sma

Basic Secondary Sell Signal

5ema cross 8sma to the downside while price are below 20sma


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Entry Setup With Filters

Whilst price are above/b 20sma, 5ema cross 8sma to the upside OR whilst price are below

20sma,5ema cross 8sma to the downside, you go through the following checklist :

Checklist #1

Is the activating candle a news/big candle?

IF YES : Ignore signal


Checklist #2

Is the activating candles CLOSE more or less equal to Significant S/R Line?

IF YES : Ignore Signal

IF NO : TP according to conditions below

TP Conditions :1) If activation candles CLOSE is between 100.0 and 127.2 : TP @ 161.8 or next S/R Line

2) If activation candles CLOSE is between 127.2 and 161.8 : TP @ 261.8 or next S/R Line

3) If activation candles close above 161.8 : TP @ 300.0 or next S/R Line

Exit Setup

When 5ema recross before hitting your TP, just exit.

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HOW I BACKTEST MACFIBO

One important stage in your trading is to test the system you decide you want to trade. This just not

apply to Macfibo but any system. This is how I backtest Macfibo back in the days and I still do it now.

You can add few things here as long as it serves the objective of doing this -> Obtain data/statistics

that allow you to analyse objectively how your system perform in a specific pair and in a specific

timeframe and in a specific trading rules. The following are just guides how I do my Macfibo

backtest. One piece of warning before you backtest... BACKTEST IS HELL!! My standard of backtest

sample size is minimum 700 trades. So if you find yourself during backtesting having bad results after

100 trades.. dont stop there. Carry on doing it until youve reached 350 trades then analyze and do

it again.

Choose ONE pair that you want to test Choose ONE timeframe you want to test

Define/Understand the Entry rules, Exit Rules, Conditions etc of the Macfibo System you use

(set SL? No fixed SL? No re-entries? No filters? Etc etc). Then write it down and put it

somewhere you can see when you do your backtest

Go back as far as my trading platform allows me to, as far as you can go. Create a new spreadsheet and create the following variables :

a) Trade Number

b) Date

c) Pips Wond) Pips Loss

e) Drawdown (biggest reversal pips before hitting TP or SL)

f) Total No. Of Pips Won after Consecutive Wins

g) Total No. Of Pips Lost after Consecutive Losses

h) Notes (very important you record anything you noticed in the particular trade)

Ask someone who is good at using your spreadsheet program and set it in a way thateverytime you log your trade (with all the variables youve created), the following

statistics/data will be calculated automatically for you :

Total Pips Won

Total Pips Lost

Net Profit (in Pips)

Average Wins

Average Loss

Biggest Drawdown

Average Drawdown

Average Consecutive Wins (In Pips)

Average Consecutive Loss (In Pips)


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Few things before I go :

1) I highly recommend if you only trade between Asian Session until London Close2) Ignore any trading signal on Monday Asian Session and Fridays late London Session3) For GBPUSD and EURUSD, the most profitable Macfibo trade is during London Session4) If the range between 100.0 and 127.2 is more or less equal to average pip win, then you TP

at 127.2 only (say today the avg pip win is 35 pips, then the range 100.0 to 127.2 in a new

signal is 32 pips, then I will just TP it at 127.2)

5) Do not trade USDCHF and EURUSD simultaneously6) Keep everything simple and according to the rule/guide for now

7) Dont just forward test, do your Backtest as well!

MACFIBOver1_1

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