Support and Resistance Bounce Trading with Fibonacci Exits

Summary

This strategy seeks reversals at automatically detected support and resistance, while using the relationship between 20-period and 50-period EMAs to filter entries by trend. A long setup requires price to approach support within a stated tolerance and close back above it while the fast EMA is above the slow EMA; short conditions reverse these checks. Pivot points and recent highs and lows are used to estimate levels.

Exits combine a two-times-ATR stop with a close if the EMAs indicate a trend reversal. Profits are taken in three portions at Fibonacci fractions of the move toward a target level. The document describes a 10% equity allocation, one concurrent position, and a signal cooldown, and suggests using the approach on trending assets and higher chart intervals. It reports stronger backtest win rates in trending conditions than sideways ones, but gives no underlying trade series or detailed test methodology. Its claims of improved accuracy and returns are not substantiated in the supplied material; results are historical and may not generalize.

Key ideas

• EMA alignment filters support or resistance bounce entries for the prevailing trend.
• Pivot-based levels and recent price extremes provide a systematic alternative to manually drawn zones.
• The exit plan combines an ATR-based stop, trend reversal exit, and staged Fibonacci profit targets.
• The strategy recommends limiting position size and avoiding repeated entries through a cooldown.
• Reported results vary by market regime and do not establish future performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.