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Fibonacci

Sticking to stop loss is a must to do when ((BUYING the DIP))Opening a position without setting a stop loss is a big mistake and it can be disastrous when buying the dip ! Here, we show a tempting setup to open a long position in rectangle (1) . It is of course OK to go long in this setup in the hope of catching possible up coming up going wave shown in green. But without setting a stop loss? Not at all ! Followings are just two simple possible scenario which may happen: Rectangle (2) shows a scenario which may happen if lucky. Although it will bring us profit, believe me it bothers all the traders a lot emotionally. Lots of hopes and fears which makes us nervous. This not only ruin our current trade but also has a powerful negative impact on our next trades. Rectangle (3) shows a terrifying scenario which can whip out all our capital ! Please keep it in mind that " Preserving capital is a first rule of trading ". If you think this is an unrealistic scenario just take a look at ETSY, SHOP, SQ and ROKU. Be aware my friends : what we consider a possible abc form of correction can just be waves 1,2 and 3 of a larger degree wave 1 or A . This concept is shown on the rectangle (3) scenario. It is worth to note what is labeled as wave 1 or A in this rectangle is not end of down side move .There will be another at least same size down side move after a wave 2 or B counter trend correction. See the charts carefully to find out what is next after waves 1 or A. There are 4 major rules in trading : 1. preserving the capital 2. preserving the capital 3. preserving the capital and if successful then: 4. making profit. Hope to be helpful and good luck.
NASDAQ:TSLAEducation
by SaeedSajedi
12
Market Structure: The analysis we use to skip (and we shouldn't)Hi traders, today we want to explain why market structure analysis is as important as a good entry signal strategy. Note: For this article, we differentiate the entry signal from the market structure analysis. In some cases, the entry signal considers also the market structure but in these cases, we could easily split the set of rules into rules to define the market structure, and the rules to enter the market (entry signal). So we will consider it as two steps or phases. One of the most common mistakes (which I did a lot in my trading early years) is that traders tend to focus on finding the best entry signal, the SL level, and the target, which is great but is only half of the work. Only with this part and with proper risk management, you can be profitable. However, this is only the mechanical part of the trading strategy which, in most cases and especially if the entry signal is based on indicators, could perfectly be automated as these are only a set of rules (based on indicators or other technical analysis tools) that trigger the entry signal. What it is as important as the SET (Stop, Entry & Target) is the analysis of the market structure of each asset. By that we mean that we should know: - What is the current cycle of the asset? Where did the cycle start? - Is it bullish or bearish? - Is it impulsive or corrective? - When and at what level this cycle is expected to end? - Which structure this cycle has? - and so on… This is the part that was tougher for me to learn, and it is the part that requires more time and experience. Detect the subtle difference that very similar market structures can have and differentiating them will take you time. Do not misunderstand me, it is not rocket science, but it can be tricky. The market does not use to move on perfect defined structures we can easily identify, most of the time it can be difficult to detect these structures. We use the Elliot Wave principle mainly (but not only) to help us “find” the right market structure of each asset. How we see the Elliott Wave principle (EWP) in one sentence would be: It is a set of rules that help us to divide the market in impulse and corrections to know where and when each of these cycles has started and also to forecast when AND WHERE it is expected the cycle will end. It can sound not too much but believe me it is a lot. Even though the Elliot Wave principle (EWP) rules are perfectly defined, to apply them on the chart would be not 100% objective and, therefore, the same rules can be applied differently by each trader on the chart. This is why it takes more time to identify the right way to interpret and apply the EWP rules to the chart and this is the reason why it is the part that used to take more time for the trader to be proficient in. We see and use the EWP as a guideline or a map structure of the asset we are analyzing, (VERY IMPORTANT) we do not use EWP alone to enter the trade. We use it to know the structure of the asset and to infer the most probable direction that the price will take in the future. With EWP as the base of our trading strategy, we will use other analysis tools like the correlation between the different asset groups or the market dynamics to refine the assets that give us the maximum options of having a winning trade (after applying the entry signal strategy). Another very important point we want to make clear from the beginning is that we should be flexible in our predictions. We do have a clear view of the structure that we think the market is having at this moment for each asset. However, we need to be prepared to be wrong, by that we mean that we need to know and be aware of what are (if any) the other potential structure the cycle we are analyzing can have. This is why we will not enter a trade based on the wave count only and we need the other tools we mentioned before. Therefore, and to wrap it up for this lesson, EWP gives us a lot of crucial information that is the base of all our trading strategies. To summarize it and make clear how we use the EWP, we use EWP to: - Know the Right side of the market for each asset (Long or Short) - Detect whether the asset is in an impulsive or on a corrective cycle and its internal structure - Project the zone where the asset is expected to end the correction (to apply there the entry signal strategy) - Project the level where the impulse wave is expected to end (which would be different depending on the wave we are in) (Target) All these will help us to find zones where we can apply our S.E.T. (Stop-Entry-Target) rules to maximize the overall return of our strategy as it will increase a lot our Winning percentage. Have an amazing and successful trading day TRS team
Education
by TradingtheRightSide
3 FIBONACCI TOOLS YOU MUST KNOW 💡 Hey traders, In this article, we will discuss 3 classic Fibonacci tools you must know. 1️⃣Fibonacci Retracement Fib.Retracement is my favorite fib.tool. It is aimed to identify strong horizontal support and resistance levels within the impulse leg. We draw this tool based on the high and low of the impulse (from wick to wick) and it shows us POTENTIALLY strong structure levels determined by Fibonacci numbers. Common Fib.Retracement levels are: 0.382, 0.5, 0.618, 0.786. Once one of the levels is reached, wait for a confirmation before you open a trading positions. 2️⃣Fibonacci Extension Fib.Extension indicates strong horizontal support and resistance levels beyond the impulse. Similar to Fib.Retracement tool, Fib.Extension is drawn relying on impulse's high and low (from wick to wick) and it shows POTENTIALLY strong structure levels where the consequent impulses may complete based on Fibonacci number. Common Fib.Extension levels are: 1.272, 1.414, 1.618. Once one of the levels is reached, wait for a confirmation before you open a trading positions. 3️⃣Fibonacci Channel Fib.Channel shows strong vertical supports and resistances (trend lines) within the channel. The tool is drawn based on the trend line of a valid parallel channel (based on wicks) and it shows POTENTIALLY strong trend lines from where the market may retrace. The trend lines within Fib.Channel rest on 0.382, 0.5, 0.618, 0.786 Fib.Levels. Once one of the levels is reached, wait for a confirmation before you open a trading positions. Remember that Fibonacci's are simply tools in a toolbox. In order to use them properly, you need to build a trading system around them, test it and confirm its efficiency. ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
Jumping S-curvesIn this post, I will explain what jumping S-curves means and how you can identify potential S-curves before they jump . First, let's begin with the chart above (also copied below). This is a yearly chart of McKesson Corporation (MCK), a medical supplies company. As you can see in the chart below, this stock has been soaring over the past year despite most other stocks being significantly lower. Here is the performance of the S&P 500 over the same time period. Whenever I see something highly unusual in a chart, such as extreme outperformance, I check the higher timeframes to see what's driving price on a technical level. Below is the yearly chart for MCK. When I examine price action over a long time period, I always log adjust my chart. Below is the log-adjusted chart. Upon seeing this chart I immediately knew what was going on: the stock price jumped S-curves. I will try to illustrate below how I reached this conclusion. To begin, I drew Fibonacci levels from the last reaction low to the last reaction high on the yearly timeframe. The previous reaction low was the bottom of 2008 because that bottom was a Fibonacci retracement of some earlier reaction high, the reaction high is the top in 2015 because price did not surpass that high without first undergoing a Fibonacci retracement (to the golden ratio). As you can see above, from 2015 to 2018 the price retraced down to the golden ratio (0.618) on the yearly chart. It is often from this retracement level that the base of the second S-curve is created. (For simplicity, I only included the 0.618 Fibonacci level on the chart). Some may say that this pattern is merely a bull flag or pennant. (See chart below) Indeed, bull flags and pennants can be another way to visualize S-curve jumps. Whereas, on a deeper, more mathematical level, S-curve jumps are logarithmic spirals (approximated as Fibonacci spirals or Golden spirals). If you wish to delve deeper into logarithmic spirals, including the Golden spiral, you can check out this Wikipedia page: en.wikipedia.org These Fibonacci or Golden spirals are present on mostly every chart and they appear on mostly every timeframe (hence they are fractal ). One of the best charts you can use to visualize these spirals is the chart of Bitcoin. Below are charts of Bitcoin which attempt to show the endless fractal nature of Fibonacci spirals (or "S-curve jumps"). I've only illustrated a few of the spirals, but indeed there are numerous spirals. (I tried to do my best using the tools on Trading View to draw these spirals, but it can be quite hard to manipulate the curves perfectly to price action.) One may ask what about when price falls? That is obviously not an S-curve jump since the price is falling. Actually, when price is crashing it is usually just an S-curve jump, or Fibonacci spiral, on the inverted chart. Although I have not tested it with scientific rigor, I do hypothesize that Bitcoin's price movement is a series of infinitely fractal and competing Fibonacci spirals on various timeframes, including Fibonacci spirals on inverted scales. Price movement can be thought of as an infinite series of S-curve dilemmas where infinitely fractal S-curves, including those of which are inverse S-curves, compete to govern the next price move. Each dilemma is resolved when an S-curve reaches its inflection point, such that it governs price movement and price moves rapidly in that direction until it approaches capacity and faces its next dilemma. Those who know Calculus may recognize this chart. Indeed this is the graph of a logistic function. The mathematical terminology for an "S-curve" is sigmoid function . Here are some more interesting charts of S-curves (none of which is intended to be investment advice) Meridian Bioscience (VIVO) jumps S-curves on its yearly chart The U.S. Dollar Index jumps S-curves on its yearly chart The entire price action of Chinese EV Company (NIO) is an S-curve that just completed a perfect golden ratio retracement Japan's faces a population S-curve dilemma Citigroup underwent S-curve growth up until the Great Recession. Then it crashed or underwent S-curve growth on the inverted chart. In summary, price movement involves an endless series of S-curves or Fibonacci spirals. Identifying an S-curve on a high time frame before it reaches its inflection point and breaks out can lead to tremendous gains (among the most lucrative gains one can realistically make in the financial markets).
NYSE:MCKEducation
by SpyMasterTrades
22
FibonacciHello, Let us talk about 'Fibonacci.' On this chart: You will read about where it came from? Why do we use it, and where does it help us. Before we dive in to talk about Fibonacci Retracement levels and their use in trading, Let us talk about the origin of Fibonacci : It all started with rabbits. Yes, Rabbits! Fibonacci became interested in a strange issue in 1202. He wanted to know the outcome if he had a pair of male and female rabbits and defined behavior for their offspring. The assumptions were as follows: We have a pair of male and female rabbits that have just been born. Rabbits mature after one month. The gestation period of rabbits is one month. When a female rabbit reaches puberty, she must become pregnant. At each pregnancy, the female rabbit gives birth to one male rabbit and one female rabbit. Rabbits never die. Calculate how many pairs of this type of rabbit we will have after n months? In mathematics, the Fibonacci sequence or series is the following infinite sequence of natural numbers: 0,1,1,2,3,5,8,13,21,34,55,89,144,233,377,610,987,1597,... Take a look at this GIF, to get an idea of this infinite sequence: drive.google.com The Fibonacci spiral: an estimate of the golden spiral generated by drawing circular arcs attaching the facing corners of the squares adjusted to the values ​​of the sequence; by successively attaching squares of side 0, 1, 1, 2, 3, 5, 8, 13, 21 and 34. The sequence begins with the numbers 0 and 1; "each term is the total of the past two" is the recurrence relation that defines it. The elements of this sequence are called Fibonacci children. Leonardo de Pisa described this sequence in Europe, a 13th-century Italian mathematician also known as Fibonacci. It has numerous applications in computer science, mathematics, and game theory. It also appears in biological configurations, such as in the branches of trees, in the arrangement of leaves on the stem, in the flowers of artichokes and sunflowers, in the inflorescences of Romanesco broccoli, in the configuration of coniferous conifers. In the reproduction of rabbits and in how DNA encodes the growth of complex organic forms. Similarly, it is found in the spiral structure of the shell of some mollusks, such as the nautilus. Leonardo Pisano, Leonardo de Pisa, or Leonardo Bigollo, also known as Fibonacci, was born in 1170 and died in 1240. Long before being known in the West, the Fibonacci sequence was already described in mathematics in India in connection with the Sanskrit prosody. Susantha Goonatilake notes that the development of the Fibonacci sequence "is attributed in part to Pingala (year 200), later associated with Virahanka (about 700), Gopāla (about 1135) and Hemachandra (about 1150)". Parmanand Singh cites Pingala (around 450) as a forerunner in the discovery of the sequence. Now let us talk about Fibonacci in the finance world. You might use it too, as Fibonacci Retracement Levels. (As you see on the chart) The second law of technical analysis indicates that values move in trends, bullish or bearish. Once a trend has given sufficient signs of termination, either by breaking its trend line, confirmation of a trend reversal figure or any other valid factor according to technical analysis theory, the analyst contemplates the possibility of a setback. A pullback represents, in simple terms, a move in the opposite direction to the past trend. It can take the form of a crash in price after a bullish move or a rebound in price after a downtrend. Although the first could properly be called a retracement and the second rebound or rally, technically, the term retracement includes both. Within technical analysis, Fibonacci retracements refer to the possibility that the price of a financial asset will retrace a considerable portion of the original movement and find support or resistance levels at the levels set by the Fibonacci numbers before continuing. The above address. These levels are constructed by drawing a trend line between the extreme points of the movement in question and applying the critical percentages of 23%, 38.2%, 61.8%, 76.8%, and 100% to the vertical distance. Fibonacci retracements are used to confirm suspicions of a market movement. Levels of support and resistance can indicate possible bullish or bearish market trends and indicate to people when is the best time to open long or short positions. This means that Fibonacci retracements can be highly fulfilling for people who know when to use them correctly. Upon confirmation of rejection in the price, we will try to calculate the probable magnitude of the movement. In order to achieve this, specific percentages collected from the Fibonacci series are applied to the total magnitude of the previous trend. The percentages used are as follows: 61.8%: Also recognized as the Golden Ratio, or golden number, it is the limit of the result obtained from the division of an element of the Fibonacci series by the following number, as the series tends to infinity. 38.2%: It is obtained by subtracting 61.8% from the unit (1.000 - 0.618) 100.%: Equivalent to the total magnitude of the primary trend. Reversal percentages should be calculated after the end of a trend has been confirmed, never while the trend continues. Considering that trends are always part of a longer-term trend and, in turn, are made up of shorter-term trends, the question on which of these trends should be calculated as setbacks? There might not be a simple answer. We must calculate the setbacks on that trend that has given clear signs of termination in general terms. A weak trend may have a 31.8% retracement, while a powerful trend may have a 61.8% retracement before returning to its original direction. Some sources mention a critical zone of 33 to 38.2% and 61.8 to 67% instead of specific levels. Fibonacci retracements form an essential part of the Elliott Wave Theory. The most scathing criticisms against Fibonacci retracements are based on the random walk theory, arguing that there is no justification for assuming that price action has any reason to respect predetermined retracement levels. However, it is not suitable to use Fibonacci retracement all the time. There are a few downsides too: Fibonacci retracement shows only static price levels. It is unlikely to say that a specific cryptocurrency price will not pass or stay below predicted levels. Many external factors determine the price of a coin. They have to be taken into account when determining trading decisions. Fibonacci retracement levels are close to each other, so it is challenging for a professional trader to determine the accuracy from which to predict the value of a particular coin in the future. Suppose you're interested in using this great indicator. In that case, you can simply go on your TradingView chart and the dashboard, click on 'Indicators & Strategies' and search for Fibonacci and find the best one suited for you. Have you ever used this indicator? What do you think the pros and cons are? Let me know your ideas. Good luck.
Education
by ShawnMCR
19
Need something to learn? ✅Hello, Let's stop reading the charts for a while and instead learn how to read them. There are many indicators and strategies which we can use to get better readings and understand the market better. Under this post, please leave comments and tell us which indicators or strategies you want to know about more. Which ones are more helpful? Which ones aren't accurate at all? Let us know the title, and we will publish an educational idea about it. Thank you.
Education
by ShawnMCR
60
Elliott Wave Cheat SheetAlthough Elliott Wave Theory is vast subject and needs in depth study, I'm sharing a cheat sheet for those who have started to learn about the same. This should help them in understanding things better. Also, try to correlate the cheat sheet with Nifty50 daily chart and be amazed to see how nicely the Elliott wave principles were followed there in the recent wave. At the same time, please use discretion while following this cheat sheet as this sheet covers only the basic aspects of Elliott Wave principles. Keep (l)earning and keep sharing!!
NSE:NIFTYEducation
by WaveTattva
3
⁉️ How to use Fibonacci Retracement?‼️ Forex traders use Fibonacci retracements to pinpoint where to place orders for market entry, taking profits and stop-loss orders. Fibonacci levels are commonly used in forex trading to identify and trade off support and resistance levels. After a significant price movement up or down, the new support and resistance levels are often at or near these trend lines . Usually the price retracts to 50% or untile OTE (0.62, 0.705, 0.79) before another impulse movement occurs.
OANDA:XAUUSDEducation
by Snick3rSD
Fibonacci Analysis - Part 1 A. Fibonacci Series 01. The Fibonacci series is a sequence of numbers starting from zero arranged so that the value of any number in the series is the sum of the previous two numbers. 02. The Fibonacci sequence is as follows: 0 , 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, … B. Properties Of The Fibonacci Series 03. The series extends to infinity. 04. Divide any number in the series by the previous number; the ratio is always approximately 1.618. For example: 610/377 = 1.618 377/233 = 1.618 233/144 = 1.618 05. The ratio of 1.618 is considered as the Golden Ratio. 06. Further into the ratio properties, one can find remarkable consistency when a number in the Fibonacci series is divided by its immediate succeeding number. For example: 89/144 = 0.618 144/233 = 0.618 377/610 = 0.618 07. Similar consistency can be found when any number in the Fibonacci series is divided by a number two places higher. For example: 13/34 = 0.382 21/55 = 0.382 34/89 = 0.382 08. Also, consistency is when a number in the Fibonacci series is divided by a number 3 places higher. For example: 13/55 = 0.236 21/89 = 0.236 34/144 = 0.236 55/233 = 0.236 C. Fibonacci Retracement 09. Fibonacci analysis can be applied when there is a noticeable up-move or down-move in prices. 10. Whenever the stock moves either upwards or downwards sharply, it usually tends to retrace back before its next move. 11. ‘The retracement level forecast’ is a technique that can identify up to which level retracement can happen. 12. Fibonacci retracements are movements in the chart that go against the trend. 13. In finance, Fibonacci retracement is a method of technical analysis for determining support and resistance levels. It is named after the Fibonacci sequence of numbers, whose ratios provide price levels to which markets tend to retrace a portion of a move before a trend continues in the original direction. 14. A Fibonacci retracement forecast is created by taking two extreme points on a chart and dividing the vertical distance by important Fibonacci ratios. 15. 0% is considered to be the start of the retracement, while 100% is a complete reversal to the original price before the move. 16. Horizontal lines are drawn in the chart for these price levels to provide support and resistance levels. 17. Unlike moving averages, Fibonacci retracement levels are static prices. They do not change. 18. Because these levels are inflection points, traders expect some type of price action, either a break or a rejection. 19. The 0.618 Fibonacci retracement that is often used by stock analysts approximates to the "golden ratio". D. How should you use the Fibonacci retracement levels? 20. Think of a situation where you wanted to buy a particular stock, but you have not been able to do so because of a sharp run-up in the stock. 21. The most prudent action to take would be to wait for a retracement in the stock in such a situation. 22. Fibonacci retracement levels such as 61.8%, 38.2%, and 23.6% act as a potential level up to which a stock can correct. YASER RAHMATI
Education
by yaser_rahmati
What is Potential Reversal zone and how to make it?How can we find a Potential Reversal Zone? Is it enough to just make a simple Retracement or we can make our support zone narrower? how can we be more confident about our possible supports? What are Fibonacci levels for different types of Fibonacci and what are typical ones among them? How can we implement different wave degrees to make our PRZ even stronger? You can find answers to all above questions in this video. I hope you to enjoy this video and wish you all the best.
NASDAQ:TSLAEducation
by SaeedSajedi
13
FIBONACCI TOOL | common reversal levels📊 ⚠️Fibonacci levels are one of the most popular tools for analysis. These are price levels that are located in certain parts of the movement corresponding to the mathematical Fibonacci numbers. ✅What are Fibonacci numbers? 🟢In the XIII century, the famous scientist Leonardo of Pisa lived in the Republic of Pisa – the first major medieval mathematician in Europe. On the cover of one of his most famous works was attributed filius Bonacci (son of Bonacci). Hence the nickname Fibonacci. 🟢The Fibonacci numbers are a sequence of numbers derived from Leonardo's experiment on rabbits. The Pisan mathematician decided to find out how many pairs of rabbits will be in a fenced pen a year after the start of breeding (provided that there will be only one pair in the pen in the first month). In the third month, the cuts began to multiply recurrently – each subsequent number was equal to the sum of the previous two (1, 2, 3, 5, 8, 13, etc.). 🟢If any number from the sequence is divided by the previous one, you get a number tending to 1.61803398875… This number is the "golden ratio". In algebra, such a number is called the Greek letter phi. When dividing any number from the sequence by the following, the inverse of phi 0.618 is obtained. When dividing any number from the sequence by the number following one, 0.382 is obtained. In this form, Fibonacci numbers are much more familiar to traders. ✅Correction levels 🟢Correction (retracement) - movement against an existing trend. The correction "absorbs" part of the trend movement. Of the Fibonacci numbers, 38.2 are mainly used for correction levels (from the previous trend movement), 50%, 61,8%, 78,6%. 🟢Correction levels are based on candle wicks, in other words, on their maximum or minimum points. To build a correction level, you need to find a trend. Fibo levels can be asymmetrical, so it is especially important to pay attention to where the beginning and end of the wave on which the level is being built are located. 🟢On a downtrend, 0% at the bottom, 100% at the top. When ascending, the opposite is true. The most significant correction level is 61.8. When a breakdown of this level occurs, a new trend in the opposite direction usually begins. After that, it is necessary to build a new corrective level. 🟢Correction pattern – movement between minor correction levels. After such a move, the price usually moves to the key level of 61.8. 4 patterns are depending on which levels of correction the price concerns. ❗️Even if the skills of analyzing the state of the market by Fibonacci levels will not be a big advantage in trading, then in any case it is a great (and to some extent integral) experience of technical analysis. Fibo levels can be combined with a footprint, deltas, and other tools. The trader will understand only in practice if it is possible to benefit from this or not. ❤️ Please, support our work with like & comment! ❤️
OANDA:XAUUSDEducation
by UnitedSignals
4
Discount/ premium pricing - SMC📉 We use the Fibonacci retracements for spotting discount and premium levels in a range. 📝 We draw the Fibonacci tool from the bottom to the top in an uptrend, and from the top to the bottom in a downtrend. Terminologies: EQL: equilibrium = a state of physical balance (50%). Discount: we buy from Premium: we sell from To make it more approachable, we can compare using the fib tool as a scanner when you go to the supermarket. You won't buy the product when it's expensive, but only buy when it's cheap. Beside that - if we want to sell a product to a supermarket, we want to get the highest price as possible. Combining it with order blocks You can basically increase the probability of order blocks with the fib tool. Order blocks that are not in discount you won't buy from, and order blocks that are not in premium you won't sell from.
OANDA:XAUUSDEducation
by vuetratrading
6