What is The Best Golden Box Forex Strategy?

Do you want to know more about Fibonacci retracements and the Golden Box forex strategy? Watch now our video to learn the best forex strategies and get profitable trading results!

Get profitable trading results with the Golden Box forex strategy

One of the most common tools used for trading is the Fibonacci retracement tool. It is based on a complicated mathematical formula that is well known to see repeating patterns in nature. Without delving into the mathematics of the formula, suffice it to say that traders often look for buying opportunities near a 50% pullback of recent gains or losses, as well as the 61.8% pullback level. The Golden Box strategy uses this phenomenon to its benefit.

To begin with, you need to have some type of impulsive move, and the longer the timeframe, the better. We know that over time, traders tend to be attracted to these 2 levels. So, by using that knowledge, we can place orders to get into the marketplace at both the 50% retrace, and the 61.8% retrace. This allows us to take advantage of this phenomenon in a “set and forget” type of situation.

While this doesn’t always work, this puts you on the same side of the overall trend, assuming that you are following it. This strategy does not tend to work in countertrend moves as well, and it is much more suited to people who work full-time, and don’t have the ability to sit in front of the charts all day. By its very nature, it tends to favor swing trading.

Looking at the EUR/AUD pair on the daily timeframe, you can see where the initial entry at the 50% retracement worked out quite nicely. You also could take advantage of the 61.8% Fibonacci retracement level if we do pull back from there. Generally, if we break down below the 61.8% Fibonacci retracement, the trend is going to fail. Because of this, you have the ability to take advantage of these moves. This can be seen on the move lower in the USD/CHF pair. You can see clearly that the 61.8% Fibonacci level was also hit, and that means that you have 2 positions moving down towards the original 0% Fibonacci level, which is your target.