DiNapoli Levels

DiNapoli Levels

DiNapoli Levels

What do you know about the DiNapoli trading strategy in the Forex market? If absolutely nothing, then this material will shed light on this little-known tactics of trading in the foreign exchange market. In particular, below we will tell you about the DiNapoli levels and how to use them correctly in profitable Forex trading.

Just note that the DiNapoli trading system is based on the Fibonacci numbers. This is a trending Forex strategy, so all trades are opened strictly in the direction of the trend, and not Vice versa. TS got its name from its founder, trader Joe DiNapoli, who published more than one printed publication about trading, where he told readers about the practical experience of trading in the financial market.

After the success of was assigned to ten-year-old practice of trading (intraday, too) Joe DiNapoli took up teaching. In addition, it is impossible not to say about the colossal efficiency of this person. He has been President of Coast Investment Software, Inc.for 25 years.

Once again, the DiNapoli trading system is based on the Fibonacci numbers. In this case, only horizontal levels are used, not arcs or fans, which did not find any application in his method. This is emphasized by DiNapoli himself. As part of the construction of Fibo markings, traders do not stop arguing about which points should be considered as reference points. There are many variations on this issue on the Internet. In its publication, DiNapoli notes only the extremes (maximum and minimum), but not the closing price or average values.
What do DiNapoli levels look like?

Note that trading using DiNapoli levels starts with the fact that you need to correctly build a Fibonacci grid. This is not difficult to do. Using the example below, we showed how to build a Fibonacci markup, and how it can be incorrectly stretched on the price chart:
In other words, it would be more correct to draw the grid exclusively on the price shadows, and not on the bodies of Japanese candlesticks.

In his book, DiNapoli calls the trend a " market sweep." In order to understand how to read and trade DiNapoli levels in the future, we will provide an explanation of some terms:

"Reaction number" – extremes in the technical analysis of the trend.
"Focus" – the lowest price in a bearish wave and the highest price in a bullish one. As a result, correction levels will be built from them.
"Fibo node" – Fibo levels. The DiNapoli method involves analyzing two main relationships within the market scope. We are talking about the levels of 38.2%, 61.8%.
“Target point” at this level, DiNapoli recommends taking profits. It is calculated using the Fibo tension.
"Cluster" – an area or price level where a number of nodes coincide. The cluster of nodes should be considered only between the correction levels of 61.8% and 38.2%.

Not every novice builds Fibonacci levels correctly, so their trading results for DiNapoli levels will differ significantly from those who do it correctly.

Build Fibonacci levels in the MT4 terminal should only be in the direction of price movement from left to right, and not otherwise. Below we have shown what the classic DiNapoli levels look like:


Important: in order to find out the price movement goals, you need to build an extended Fibonacci. This is easy to do. Select the tool in MT 4 " Drawing Fibonacci lines” From the top of the price, we pull the grid to the lower local extreme. That is, in our case, from right to left. Thus, the main targets 161.8, 261.8 and 423.6 appear on the price chart.

The author of DiNapoli, in his next Chapter, pays special attention to market swings and focus numbers. These models are good to use within the flat market or at a time when there is no pronounced trend in the market.

Before considering examples where it is appropriate to apply DiNapoli levels, let's summarize the results of Forex trading using this method:

This strategy was created by an experienced trader-Manager.
The DiNapoli strategy is based on working with Fibonacci levels.
DiNapoli levels can be safely used not only in the stock and commodity markets, but also in the currency markets.
There is also a separate indicator of DiNapoli levels.

Briefly about the disadvantages of trading on the DiNapoli strategy

Like any trading system for the Forex market, the DiNapoli system through the prism of the author's writing also has some disadvantages. For example, DiNapoli uses specific concepts instead of the usual terms: its trend is "market scope”," focal point " is an extreme, and so on. What's the point of using abbreviations to refer to target levels: "fit" and "extended". But this is the first and second goal.
We use DiNapoli levels in trading

The Creator of the strategy of the same name suggests using 4 types of strategies. Two of them: "Bushes"and " bonsai".
If you look at these two strategies, it becomes obvious that the entry points are determined to rebound from the 61.8 Fibo level behind the trend. Differ only in the value of the Stop Loss.

Let's talk about another strategy in which it is advisable to use the DiNapoli level indicator-the "Minesweeper" trading strategy. It is of two types: A and B. It involves building an additional correction by Fibonacci – this will be an additional filter for entering the market. After the first correction is formed, the price does not show a rebound from the Fibo level.
If we talk about the "Sapper B" strategy, it is built exactly on the same type as its twin “Sapper A”. The only difference is that the market is entered after the third correction. Regarding the limit of losses, namely Stop Loss, it should be set at the zero level of the Fibonacci levels or slightly lower. Although some put a Stop Loss much further than zero Fibo. It all depends on the risk / goal ratio.

There is a separate indicator of DiNapoli levels. It looks like this on the chart:
In addition, DiNapoli levels on Forex can be built using various indicators, which can save a lot of time both in terms of finding entry points and calculating stop losses. In this example, we can see that the price initially rushed up, breaking through the level of 61.8, you can open a BUY deal, but the next candle was absorbed, which indicates the opposite SELL signal. All entry points are confirmed by the “Alert”sound system. This indicates the potential direction of the pair's movement. So it will be quite difficult to make a mistake when entering the market.

The indicator is relevant for all timeframes. Its numbers are constantly changing as soon as the price changes.

We hope that trading on DiNapoli levels will be effective for You after long testing on a demo account. If you use the “three elder screens " strategy together with the DiNapoli levels, you can achieve the maximum accuracy of entering the market. After all, trading in the direction of a global trend will increase the trader's chances of winning. Experiment with the settings of the DiNapoli indicator and success will definitely come.

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