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fibonacci extensions / retracements - how to and where to apply

Education
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Fibonacci tools are in general a method of technical analysis for determining probable support and resistance levels calculated using ratios (23.6%, 38.2%, 61.8%, and 78.6%) that are derived from Fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13, 21, …). Fibonacci levels are presented in variety of forums, such as horizontal lines, vertical lines, trend channels, fans, arcs, circles, even a spiral. Fibonacci levels also arise in other ways within technical analysis , for example, one of the best known and widely used Elliott Wave theory

In this article we will have a closer look to Fibonacci Extensions and Fibonacci Retracements

Fibonacci Retracement and Fibonacci Extension levels are in the form of horizontal lines and are calculated in almost similar manner with slight difference. Even tough they look like similar to each other they are quite different and serve for different purpose.

  👉 Fibonacci retracement levels indicate how deep a retracement could be, that is, aims to measure the pullbacks within a trend

  👉 Fibonacci extension levels indicate how far the next price wave could move following a pullback, that is, aims to measure the impulse waves in the direction of the trend


How to apply Fibonacci Retracement and Fibonacci Extension


These levels should not be relied on exclusively,Reversals can be confirmed with candlesticks , momentum indicators, volume or chart patterns.

Here are the links of educational posts and indicator versions of the Fibonacci Tools that I made, you are kindly invited to check

Auto Fib Channels, besides Auto Fib Channels this study include Auto Fib Retracement, Auto Fib Extension and Auto ZigZag indicator

Auto Pitchfork , is advised due to its similarities with Auto Fib Channels and also it includes Auto Fib Retracement and Auto ZigZag indicator

Auto Fib Speed and Resistance Fans, is an important tool to identify probable support and resistance and especially a powerful tool to identify reversals and retracement levels. The study presents an alternative approach of drawing the fans which enables a visualization quite similar to Gann Box . Auto Fib Retracement and Auto ZigZag indicator is also available

Related educational posts that presents a quick guide of the drawing tools as well as introductions for their automatic indicator versions

how to apply pitchfork and auto pitchfork study : how to apply fibonacci fans and auto FibFans study : how to apply fib channels and auto fib channels study :

Comments

Wow, you are just amazing. This is top content helping other traders. Thank you so very much!
200 coins
+1 Reply
dgtrd Ether2020
@Ether2020, 😀 thank You 🙏

Below in the comments or under my profile you may find other educational posts related with fibonacci fans, fibonacci channels, pitchfork, volume and others

educational posts : https://www.tradingview.com/u/dgtrd/
indicator studies : https://www.tradingview.com/u/dgtrd/#published-scripts
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100 coins
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dgtrd Patel_dharmesh
@Patel_dharmesh, thank You 🙏
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Fibonacci Retracements are no longer drawn from one extreme to the next - they are drawn from one extreme to the strong bar of the move. This changed almost 15 years ago as a standard by the CMT (Chartered Market Technicians Association).
+2 Reply
dgtrd captainquenta
@captainquenta, thank you very much for the info, much appreciated.

for better visualization and to be a good guide for me and readers of this post, would it be possible to share an example snapshot with the way you draw them (the CMT standard), thnaks and thanks for your valuable comment
+2 Reply
I'm new to Trading view. I've been looking for Fib extension/ retrace and Elliott wave tools to use . How can I find them on trading view ?
+2 Reply
dgtrd phl4206
@phl4206, please check the links below including my indicotros (alos listed in the description part)

Auto Fib Channels, besides Auto Fib Channels this study include Auto Fib Retracement, Auto Fib Extension and Auto ZigZag indicator


Auto Pitchfork , is advised due to its similarities with Auto Fib Channels and also it includes Auto Fib Retracement and Auto ZigZag indicator


Auto Fib Speed and Resistance Fans, is an important tool to identify probable support and resistance and especially a powerful tool to identify reversals and retracement levels. The study presents an alternative approach of drawing the fans which enables a visualization quite similar to Gann Box . Auto Fib Retracement and Auto ZigZag indicator is also available


Elliott Wave Oscillator Signals, it is not wave counter but helps with identifying wave 3 and wave 5. it also includes a simple bactesting framework that i believe traders enjoy a lot
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phl4206 phl4206
@phl4206, thank you for the reply. one quick question, do the auto Fib tools allow for manual placement ?
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dgtrd phl4206
@phl4206, no they do not :) they allow you to check higher time frame, historical ones but no manual placement
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