Forex Fibonacci Strategy for Swing Traders

The forex Fibonacci retracement strategy for swing traders traders is used to determine possible entry levels where the up or downtrend might resume. In this particular case, we use a daily chart to draw fib levels and a hourly chart to pinpoint entry levels in the overall direction of the trend.

We use the same trading rules as seen on the 38.2% forex fibonacci retracement strategy for daytraders page.

Download: Download the Fibonacci Retracements MT4 Indicator

Getting started

We draw the Fibonacci retracement from it’s low in April 2009 up to it’s swing high in May 2009. The 38.2% retracement level of the recent uptrend is located at 1.3770.


Is it save to buy at 1.3770? No, we need confirmation first in order to increase the odds in our favor.

How? We will be using a slightly modificated version of the SMA-Laquerre Forex Trend Strategy (written by Jeff Walker) to spot valid long entry signals in the vicinity of 1.3770 (38.2% fib level).


A valid buy signal appears at 1.3791 (see picture above). Stop loss is placed 3 pips below the 38.2% fib level at 1.3767.

Trading risk: Buy price- Stop loss price = 24 pips

Exit Strategy: I typically use risk to reward ratio: 1:3 or at least 150 pips profit target for swing trades (whatever comes first exits the trade)

How did the euro/dollar buy trade work out?


The euro/us dollar rose more than 900 pips from our entry level. The trade was exited at 1.3941 for a gain of 150 pips.

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