How To Modify The Fibonacci Tool To Reflect R-Multiples And Help Us Plan And Manage Forex Trades

If you’ve been going over my course, one thing should be clear… I focus on risk to reward levels.

I prefer to track my trade performance in terms of R-Multiples. Basically, R is the amount of risk on the trade (1R).  And I look at profit in terms of R-Multiples (1R, 1.5R, 3R, etc.)

For a more in-depth discussion on this topic, go to this post: Why Smart Forex Traders Focus On Risk To Reward Rather Than Win Rate To Achieve Jaw Dropping Profits Without The Stress Of Winning All The Time

Since this is such a big part of my trading approach, I’ve figured out how to modify the Fibonacci tool on MT4 to reflect R-Multiples rather than Fibonacci levels.

Here is what the new version of the Fibonacci tool looks like:

Keep in mind, the number of R-Multiple levels you program into the tool will depend on your take profit targets you are using.

Here is a video on how to modify the Fibo tool. (There are notes below in case you need more guidance).

Click the Fibo tool icon at the top of the chart:

Then Left-Click, Pull down and release to draw the Fibo levels anywhere on your chart.

Double-Click The Red Line so dots appear

Right-Click on one of the dots and choose Fibo Properties

Choose Fibo Levels

Delete Unnecessary levels and add levels like this:

NOTE: putting %$ in the description will put the price level on the tool, which can be helpful.

You only need to add as many R Levels as you are using as your take profit target. For example, if you are trading an account with a 5R take profit target, only fill in the tool to the 5R level.

I use this modified version of the Fibonacci tool to help me set up my trades and manage the trades after they are placed. Having these levels on my charts gives some perspective as to how the trade is progressing.

Once you get accustomed to having these modified levels on your chart, I’m sure you’ll find it as helpful as I do.