Bitcoin is back in action! Here's a few examples on how Coinstreet uses that Magical Fibonacci retracement tool.
The Fibonacci retracement tool can be found in the menu under the third icon from the top.
Introduction into retracements:
Almost all waves (significant market moves) create action but also end at some point because the original buyer or seller has finished trading the current range. At this point the market will have to sustain the gained price or have sellers drop the price back down again.
How far the price moves back again (retraces) is usually measured relative to its last move. A "100% retracement" would mean the entire last move has been undone and the price is back where it started the significant move.
50% example:
Say the price if hovering around $9000 with $100 swings during a day of trading and suddenly the price moves up to $9500, we would measure the move from the lowest point before the move up to the highest point, where ~$9000 equals 0% and ~$9500 equals 100%.
Should the action quiet down a bit and let the price drop to $9250, then we can easily see that it has lost half of the recent gains of $500, so that would be a 50% retracement.
Both examples in this chart show that I have used the last point where the price dropped below the 55 MA (Moving Average) before the wave up. This is good reference point but there are many techniques you can apply using Fibonacci since its just relative to the move you measure, it always applies. In our experience, the area from 0.382 (38.2%) up to 0.618 (61.8%) is key.
For more examples you can check out my previous charts with Fibonacci channels where I explain how we draw them and several examples with accurate results over time.
Fibonacci is a great tool to learn the habits of the animal you are trying to tame.
If you have any questions, just shoot me a message.
The Fibonacci retracement tool can be found in the menu under the third icon from the top.
Introduction into retracements:
Almost all waves (significant market moves) create action but also end at some point because the original buyer or seller has finished trading the current range. At this point the market will have to sustain the gained price or have sellers drop the price back down again.
How far the price moves back again (retraces) is usually measured relative to its last move. A "100% retracement" would mean the entire last move has been undone and the price is back where it started the significant move.
50% example:
Say the price if hovering around $9000 with $100 swings during a day of trading and suddenly the price moves up to $9500, we would measure the move from the lowest point before the move up to the highest point, where ~$9000 equals 0% and ~$9500 equals 100%.
Should the action quiet down a bit and let the price drop to $9250, then we can easily see that it has lost half of the recent gains of $500, so that would be a 50% retracement.
Both examples in this chart show that I have used the last point where the price dropped below the 55 MA (Moving Average) before the wave up. This is good reference point but there are many techniques you can apply using Fibonacci since its just relative to the move you measure, it always applies. In our experience, the area from 0.382 (38.2%) up to 0.618 (61.8%) is key.
For more examples you can check out my previous charts with Fibonacci channels where I explain how we draw them and several examples with accurate results over time.
Fibonacci is a great tool to learn the habits of the animal you are trying to tame.
If you have any questions, just shoot me a message.
