I talk to a lot of traders who have some weird ideas about what moving averages and fib levels represent. I asked some of the more popular 'top recognized' traders here, and found that most of them were clueless about the topic. I got responses about structure and price action, yet when I posed the simple question, "what do MAs and Fibs actually do?" The answer they gave me was almost always incorrect.
So what do moving averages and fib ratios actually represent? Are you ready? The answer is simple: levels of SUPPORT AND RESISTANCE.
I rarely use either, because I can look at the candles and know where levels of support and resistance were formed.
I often get a lot of egotistical traders that like to argue about MAs and Fibs, and their uses. If you are using these indicators for any other purpose, you are using them incorrectly.
I suspect that I will have to make a post explaining how support and resistance actually form/work (maybe later).
Directing your attention to the chart, I've highlighted areas of consolidation where fib levels and moving averages are in the same vicinity, and denote a temporary reversal in price action.
So what do moving averages and fib ratios actually represent? Are you ready? The answer is simple: levels of SUPPORT AND RESISTANCE.
I rarely use either, because I can look at the candles and know where levels of support and resistance were formed.
I often get a lot of egotistical traders that like to argue about MAs and Fibs, and their uses. If you are using these indicators for any other purpose, you are using them incorrectly.
I suspect that I will have to make a post explaining how support and resistance actually form/work (maybe later).
Directing your attention to the chart, I've highlighted areas of consolidation where fib levels and moving averages are in the same vicinity, and denote a temporary reversal in price action.