Carolyn Boroden's Strategy Selection Risk Gauge

2017-05-30 | Danielle Shay

Carolyn Boroden is a technical analyst with over 25 years of experience. She focuses on the ratio’s derived from the Fibonacci number series, and she applies these ratios on both the price and time axis of the market, to identify trade setups. She works to identify key support or resistance that you can trade against. Click here for an Introduction Video of Carolyn’s work. Beginners can learn Fibonacci from step one, and easily use it to trade stock, long calls/puts or scalp futures, while advanced traders can combine Carolyn’s levels with more advanced options & futures strategies, in addition to learning the work themselves.

How Can Fibonacci Change Your Trading – Carolyn’s Risk Gauge

If you’re looking for defined levels to trade against that are identified by one of the most highly regarded Fibonacci experts today, look no further – because that’s why we have the Fibonacci Queen. Using Fibonacci analysis is all about entering when you have an edge and exiting when the move is about to terminate. The best part about the work is that when used correctly, the trades have very defined risk. With Fibonacci, you define your risk as the area between your entry and your stop point, with your profit point at your target. You can use this to determine what risk is appropriate for your account. Never take a trade in which the distance from your entry and your stop is too large for you to handle. This makes Fibonacci conservative as well as consistent. It’s methodical and works on any timeframe. Finding confluence between Carolyn’s levels and your current triggers and setups can be especially powerful. For many traders, being able to apply a disciplined system like Fibonacci can be the difference between them buying the highs or selling the lows.

Trading Style: Conservative Day + Swing Analysis – Directional

Account Goals: Account growth over time

Overall Acceptable/Recommended Account Risk: Carolyn believes the following parameters for position sizing are acceptable:

  • New traders – don’t risk more than 0.05-2% of their account per trade
  • Intermediate traders don’t risk more than 2% per trade
  • Don’t have more positions than you can realistically handle.
  • Do not risk more than 10% of your portfolio at any given time.
  • You can earn the right to trade bigger. If you’re not doing well, you can scale back until you’re only trading 0.05% of your account per trade, until you can get your head back in the game.
  • Trade in the direction of the trend to raise your probabilities of being correct.

Strategy Use + Risk Taken Per Setup: Position size & strategy utilized per trade dependent on performance. Earn the right to trade bigger.

Methodology: Setup + Trigger = Trade entry, then you manage it, with very defined entry and exit points.

Fibonacci Quick Start Guide
 Fibonacci Quick Start Guide

Options strategies to use with Carolyn’s work

To use with CB’s buy side setups – expecting higher prices, the choices are:

  • Buy a call outright (risky unless it is a very low-priced options) (time decay can be an issue)
  • Buy a vertical call spread (DEBIT) Buy a $5 or $10 wide spread after you see a trigger, taking into account the target for the trade setup when picking strikes.
  • Sell a vertical put spread (CREDIT) Sell a $5 or $10 wide spread against the support decision after a trigger.

To use with CB’s sell side setups – expecting lower prices, the choices are:

  • Buy a put outright (risky unless it is a very low-priced option – time decay can be an issue)
  • Buy a vertical put spread (DEBIT) Buy a $5 or $10 wide spread after the trade triggers an entry
  • Sell a vertical call spread (CREDIT) Sell a $5 or $10 wide spread after the trade triggers an entry.

You can also always buy/sell stock, and buy/sell futures and commodities contracts.

If you have any questions about putting Carolyn’s work to use, email support@simplertrading.com.