[Christian Harris]

Here’s an XRP trade I’m currently in to demonstrate a trade setup using one of my favourite technical analysis tools, Fibonacci retracement.

Trade Setup

• 1-day timeframe for a swing trade
• Fibonacci retracement level hit 0.618% ($2.1518)
• I’m bullish on XRP, so I entered a long (buy) position
• I set my take profit at a key Fibonacci level ($2.4135)
• I set my stop loss at a key Fibonacci level ($1.7280)
• I am risking -19.70% to make +12.16%

Advanced Risk Management

• I could adjust my stop-loss as the trade moves in my favour

Alternative Trade Setup

• I could have entered multiple long positions to target multiple Fibonacci levels, but this would have increased my risk. As a conservative trader, I prefer to enter only one position per price level in case my analysis is wrong.

Disclaimer: This example is for informational and educational purposes only and should not be considered financial advice or a recommendation to buy or sell any security. Trading involves significant risk, and past performance does not guarantee future results. Conduct your own research and consult with a financial professional. The information discussed here is personal to the author and may not be suitable for all traders.

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[John J]

Thanks foer sharing this post.

One question if I may, which is that I see that your risk-reward ratio for this trade is slightly below 1:1, with a potential loss of 19.70% versus a gain of 12.16%. How do you justify taking a trade with a less ideal risk/reward setup? Do you have high confidence in the Fibonacci 0.618 level holding as strong support?

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[Christian Harris]

I often take a negative risk-to-reward trade (where potential loss is greater than potential profit) if the trade is highly likely to succeed.

In this example, I believed the Fibonacci 0.618 level would be strong support, even though price dropped further and tested the 0.786 level.

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[Christian Harris]

✅ Boom!

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