Hubert Senters here.
Let’s take a look at a short Fibonacci potential setup in the future. So in yesterday’s video, we were discussing what is a Fib? And kind of use them and I showed you a quick example of a decent long on Apple.
So let’s do another example. But in this case let’s use a short because a lot of people struggle to drawl stag on months. This is coffee. If you’ve never traded coffee before. It is a violent futures contract that will reap your face off.
If you don’t know how to trade it, it will steal all your money. If you do know how to trade it, it’s crazy. It’s a neat instrument to trade but it is very violent. In this case scenario, we’re going to do a short.
In yesterday’s video, if I want to go long this creature I would do this just as a recap. I would drawl from the low up to the high. And then in this case, we’re going to wait until it got right here and we’re going to try to buy it and we’d lost money because this is in a downtrend instead of an uptrend.
What we’re going to do is we’re going to reverse those rules. What I’m going to do is I’m going to grab my handy Fib tool. I’m going to drawl from the top to the bottom and then I want coffee to bounce back up to $120 so I can short it.
Now, that may take a while so what I can do is I’m just going to go down a four so in other words this is another little swing point so I can go right here and go pull this down right here.
If it bounces up to $116 I could short it there. I can also see if I can find another little swing point. I could go right here another level down. In this example, same thing we went from point one, point two, point three from this high to this low.
Coffee bounces up at $105.76. I could short that with the good risk reward expectation and hopefully it will fall over and roll into a death roll and make you some money so that’s how you use Fibonacci for both longs and shorts.
If you want to go long drawl from the bottom to the top. If you want to go short drawl from the top and then the bottom.
Good luck. Hope it helps. See you on the next video.