The Method

The Method is a simple, profitable trading tactic. It is based on observations made

by teachers of cryptic price movement geometry. Being the very first lesson that I
released to the public, the Method introduced traders to taking on a simple position
relative to a predefined area, which is called the Method. By knowing all the aspects
of the Method, development, application and effectiveness, you will be introduced
to the beautiful world of cryptic price geometry in a simple and understandable
way. The Method works equally well in all markets such as stocks, bonds,
commodities, indices etc.

Anatomy of a developing Method

The Method is constructed of 7 points. 3 points represent the Method itself, whereas
the 4 other points are the outer limits of that Method. Points 0, 50 and 100 are the
0%, 50% and 100% of a price expansion. Zero represents the lower limit, whereas
100 represents the upper limit of this Method, and 50 defines the "Nodal Core" of
this zero-to-100 basic Fibonacci scale, or Method. This is not simply a Fib extension.
This is the anatomy to identify the bounds and levels of a Method, using Fib levels.
The other 4 points are such that they are distributed symmetrically above and below
the Method, such that:

a) 1,414 and 1,618 are the positive Fibonacci extensions assigned above the 100-Fib
level

AND
b) -0,414 and -0,618 are the negative Fibonacci extensions assigned beyond the zero
Fib level.

Downward METHOD.
Upward METHOD.

How to apply the strategy

As you learn to apply this simple, profitable trading methodology and see how
consistent it works across markets, you might become tempted to apply it to larger
and larger timeframes, seeking ever larger profits.

Instead, you should keep in mind that the Method exists in both large and small
timeframes, and that it might be most profitable for you to remain at the smaller
timeframe, where position sizing (lot sizes) and losses are manageable and money
management can be easier and more prudent. This is mostly the phycological part of
the trade, as with proper money management, regardless of the timeframe, your risk
should always be the same, 1%. However, too large of a timeframe, you're locking
margin for an extended period of time, too small of a timeframe, you're adding inherit
risk due to the volatility of the market.

In effect, a Method can exist within another Method, representing a sub-element of a

larger Method, which is in turn its own sub-element, a concept that is referred to as a
fractal.
Using this "fractal" concept of the Method, I recommend that you apply restraints and
not be tempted by a larger Method when a smaller Method would suffice to keep you
profitable! One of the basic rules we introduced at the beginning is to respect the
market and don't be greedy. A huge portion of a trade is money management.

Now, this zero-to-100 module is a determinant of future price action. In other words,
this rectangle is considered to act as the "foot size" of price, and its extent outside of
the rectangle its stride. This means that the height of the area defined by the zero-to-
100 will determine the extent to which price will "walk". Once price breaks out of
this module, you will know with greater certainty the extent to which it will move:
Typically from 1,414 to 1,618-Fib level if it breaks out of the Method above the 100-
Fib level, or -0,414 to -0,618-Fib if it breaks out of the Method beyond the zero-Fib
level.

The zero point of Fib is when the RSI is below and only below 30. The point 100 of
Fib is when the RSI is above and only above 70. When multiple, consecutive or very
closely manifested, points below 30 or above 70 exist, we call those continuous
Methods.

If the Method is upward (LONG, 30 to 70) and there are multiple 30 and 70 RSI
points, we use the last point 30 and the first point 70 to place the fib.

If the Method is downward (SHORT, 70 to 30) and there are multiple 70 and 30 RSI
points, we use the last point 70 and the first point 30 to place the fib.
The "foot size" of price.
Stride of price.

Entry into the trade and management of SL (Stop Loss) and TP (Take Profit)
Targets

The entry rules are the same whether the Method is upward or downward.

We trade precisely the candle which actively and clearly breaks the level of
zero or 100 Fib, after the complete formation of the Method.

On higher timeframes (30M and higher), you have the time to wait for the
candle that makes the break of the zero or 100 level and then enter the trade.
On smaller timeframes (1M or 5M) however, you might want to enter
probably seconds before the candle that makes the break closes, to ensure
you get the full price action advantage. This is true on smaller timeframes,
due to high volatility, especially on high volume pairs.

SL Targets (Stop Loss): Start trading in each Method, our SL is at 0,50(or

50%) of Fib. When the Method hits its first target at 1,414 or -0,414 Fib, our
SL immediately goes to BE ( Break even).

TP Targets (Take Profit): First target is at 1,414 or -0,414 Fib level. We take
80% of our profit. Second target at 1,618 or -0,618 Fib level, which is were
we take the rest 20% of our profit.
Caution: If any Method starts normally by breaking 0 or 100 levels of Fib,
doesn't hit the first target ( 1,414 or -0,414 fib) and returns to 0.50 fib level,
then this Method is invalid and we will look for another one.

Rules and pearls of the strategy

RULES
Here are the rules that are worth applying, to guide your trades and help you avoid
pitfalls:

1 - If price reached a 1,618-Fib level and retraced to below 0,50-Fib, THEN do not
assume that it will rally once more.

2 - If price reached a 1,618-Fib level and retraced to below 0,50-Fib, THEN use that
0,50-Fib extension as a significant Resistance or Support (R/S) level, if and once
price revisits that level from a 1,618-Fib reversal.

3 - If price reached the 1,618-Fib level and retraced to 0,50-Fib, THEN draw a line
highlighting that 0,50-Fib level, so that any future price revisiting that level is
expected to be met with significant reaction, as expected by a well-defined R/S level.
The 0,50-Fib level, which is yet to be acting upon price, represents a future
resistance/support level in most cases.

PEARLS
1. The first pearl here is that the Method, which is applicable in any timeframe (1-
minute on up to monthly charts) demands that you resist the greedy temptation to
reach the 1.618-Fib level. Τhe reason is simple. Τhe whole market is expecting a
reversal at 1.618-Fib or -0.618-Fib. We are leaving, with 80% of our profits already at
either the 1,414-Fib or -0,414-Fib levels!

2. The second pearl here is, which is a corollary to above first pearl, is that if price
were to climb up to the 1.618-Fib level, then simply use that level as a possible
reversal. This is not always the case, but frequently enough to consider a trading
opportunity.

3. The third pearl here is that not all markets will "walk" with the same stride. For
instance, GBPJPY tends to be exceedingly volatile, causing price to "walk" way past
1.618-Fib. In contrast, other choppier markets with smaller range will "walk" with
tinier "feet", which will modulate the stride to a much smaller range. I recommend
that you use most popular markets, such as EURUSD and other majors pairs to apply
the Method.
 Questions and Answers

Q. Is the price movement retrograde in the Method and how am I going to choose the
points for a Fib. Scale?

A. Price movement is not a retrograde to the Method. We have price extensions to

1,414 or 1,618 on the Fib scale upwards and price expansion to -0.414 or -0.618 on
the FIB scale downwards.

Q. Why didn't the price go to its target after breaking level zero or level 100?

A. The Method does not predict the movement of the price. The Method identifies an
event of price action. That is to move upwards of the value from level 30 of the RSI to
level 70 of the RSI or vice versa. Years of observations from the teachers of cryptic
geometry reveal to us that the chances for the identified price action and movement to
continue (either upward or downward) towards the Method's defined targets is 70% to
75% likely to happen and hit those targets.

Q. We have a level of price support and the Method that shows us that the price will
continue downwards. Does it not take into account this level of support?

A. The Method does not examine whether the value is at a level of resistance or
support. The Method works independently from such levels and has its own rules.

Q. What is the success rate of the Method?

A. Given the back-testing of hundreds of thousands of trades of the Method, it appears

that this strategy's success rate is between 70% and 75%. The difference in success
rate, changes based on the time frame within which the trade takes place.

Q. What is the best time frame to apply the Method?

A. The Method applies from the time frame of one minute to one month with
approximately the same 70-75% success rate yield. What differs in each time frame is
the time of completion of the Method in relation to the achievement of the targets.
The shorter the time frame, the shorter the completion time.

Q. What time frame is the most profitable to trade?

A. The shorter the time frame (15M or 30M), the smaller the gains. But you have to
think that you're risking less in those timeframes.

Q. I'm new to trading. What time frame do you suggest I apply the Method?

A. Starting with the Method, it is advisable to start with small 15M or 30M time
frames. After gaining experience with the use and behavior of the Method on those
smaller time frames, then continue through to 1H and 4H time frames. If you feel that
you can keep yourself disciplined in the fluctuations of the Method for a longer time,
without closing or altering your position in any way, then you can enter a daily or a
weekly trade. Always keep in mind the average completion time of each Method and
use that as a gauge to whether or not to enter such trades.

Q. Depending on what the price movement is, what do you mean exactly when you
say that RSI levels should be above or below 30 or above or below 70?

A. When we say that the level of RSI should be below 30 we mean that this particular
candle on the chart should close by 29.99 and not at the 30.01 level. The same applies
to the specific candle of the chart for the level above 70 (closing the candle at 70.01
and not at 69.99).

Q. I see in the chart that more than one consecutive candles have closed below level
30. Which candle do I need to choose to place the Method Fib?

A. When we have a Bullish price movement, i.e. from the RSI's 30 to the 70 and we
have more than one candle in a row that closed below 30, then we get the last candle
that closed below 30 and the first candle that closed above 70. We do the same in a
Bearish price movement, i.e. from the RSI's 70 to 30. We get the last candle that
closed above the 70s and the first candle closed below 30.

Q. I have entered an upward Method which has hit its first target and I see that the
value has formed another continuous upward Method sharing the same initial candle.
What should I do?

A. Continuous Methods with the same original candle used as a reference, can be
created either in Bullish or Bearish movement of the price. In these cases we open a
new trade for each Method individually. At this moment, I want to point out that
every time we enter a new continuous Method trade, the risk of failure increases. This
trend of the price (Bullish or Bearish) might get exhausted and reach the targets in the
first Method you identified but not in any of the continuous methods, which increases
the chances of failure on any continuous Method identified.
Q. What do we mean when we say that a decisive (clearly defined, not barely sticking
up or down) breaking of level zero or 100 is required to get into a trade?

A. The specific candle on the chart which closes above level zero or 100 of Fib is our
entry candle to Trade. More specifically, seconds before this candle closes, if it is still
above level zero or 100 depending on the price movement, we enter the trade.

Q. Do we always use the 50% Fib level as SL (stop loss)?

A. Yes, in any Method that has already formed and you entered the trade, SL is
always at 50% of Fib. Once the Method hits Fib level 1.414 or -0.414, depending on
the price movement, we immediately move this SL to the BE level (Break Even). At
the same time we get 80% of our profits and leave the remaining 20% for the target of
1,618 or -0.618.

Q. Can a Method be already invalid in one time frame and valid in another time
frame?

A. Yes, that is probable, especially in the smaller time frames (15M or 30M) where a
Method has already been cancelled e.g. invalid in 30M and be valid in 1H. In any
case, the formation of the Method should be with different candles for level 0 and 100
in the highest time frames.

Q. What is the default setting for RSI?

A. It is 14 period, close price. That is true for any time frame.