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Fibonacci Retracement

HOW TO USE FIBONACCI LIKE A PRO #part1Hi there! Bolu here The Fibonacci tool is one of the most popular tools on trading view and many traders use Fibonacci on their charts. FIBS are a major part of my trading system as you can see on this chart, i use it all the time, as I have to know what structure is saying on major and minor structure to aid my analysis and entry/exit confirmations. I will be sharing how I use my FIBONACCI tool in this post and you can take some notes and add to your trading plan if you want. BASICS OF FIBONACCI In mathematics, the Fibonacci sequence is a sequence in which each number is the sum of the two preceding ones. Numbers that are part of the Fibonacci sequence are known as Fibonacci numbers, commonly denoted Fn . The sequence commonly starts from 0 and 1, although some authors start the sequence from 1 and 1 or sometimes (as did Fibonacci) from 1 and 2. Starting from 0 and 1, the first few values in the sequence are: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144. The history of Fibonacci is all over the internet. My Job here is to show you how it can be used to your trading advantage. I majorly use the FIB retracement & FIB extension tool. Trading-view provides a whole lot of other types of FIBs, but they are not a part of my trading system, so i only focus on what is relevant to my Trading plan by keeping it simple. HOW TO USE THE FIBS It is imperative to understand that Fibonacci retracement is a tool used to measure the retrace of a counter trend based on the current trend.​e.g, After a downtrend formation, how far the correction would go would be measured with the FIBs​. while the Fibonacci extension tool is used to measure the 'length' of the continuation of that trend and is mostly used as Take profit levels IT CAN ONLY BE USED IN A TRENDING MARKET.​ You need a valid Uptrend point or Downtrend point to draw out your FIBd] Drawing out FIBs on the chart is a 3step process STEPS TO DRAW FIBS STEP 1 : SPOT A VALID BOS. STEP 2 : IDENTIFY POINT A – POINT B OF THE IMPULSE MOVE . STEP 3: DRAG FIB FROM THE HIGH TO THE LOW / LOW TO THE HIGH ​. I changed the default settings that the FIBS came with on Trading-view and replace the numbers and colors. Each FIB Percentage level means something unique on the charts and that helps with understanding what the trend is doing. The retracement levels are used to see how strong the pullback phase is. Understanding the strength of the pullback is one of the most important things to know in the trend . I will probably make another post on 'Trend strength Analysis'..., You can put it in the comments if you would like to study it with me. Now, back to our FIBs. Every FIB level is uniquely important and useful. The FIB Level that aligns with a key level of structure is ​High Probability. In the Part 2 of this post, i would share the 'secret sauce' of the FIB retracement levels and how they can be used in both Major and Minor Structure.
Education
by knowledgeforskills
Fibonacci Levels and How They Can Be Used in TradingGreetings, @TradingView community! This is @Vestinda, bringing you a helpful article on the topic of Fibonacci Retracements and how to effectively utilize them in your trading strategies. Fibonacci retracement levels are helpful for traders and investors in financial markets. They're horizontal lines on price charts that can show where price may reverse direction. These levels are based on the Fibonacci sequence, which is a series of numbers that occur in math and finance. Use case: The first thing to understand about the Fibonacci tool is that it is most effective when the market is trending. In an upward trending market, traders commonly use the Fibonacci retracement tool to identify potential buying opportunities on retracements to key support levels. Conversely, in a downward trending market, traders may look for opportunities to short sell when the price retraces to a Fibonacci resistance level. Fibonacci retracement levels are regarded as a predictive technical indicator because they attempt to forecast where the price will be in the future. Based on the theory, when trend direction is established, the price tends to partially return or retrace to a previous price level before continuing to move in the direction of the trend. How to Find Fibonacci Retracement Levels: Fibonacci retracement levels can be found by identifying the key Swing High and Swing Low points of an asset's price movement. Once these points are established, you can use the Fibonacci retracement tool, which calculates the potential levels of support and resistance based on the ratios between the key points. To apply the Fibonacci retracement tool, click and drag from the Swing Low to the Swing High in a downtrend, or from the Swing High to the Swing Low in an uptrend. This generates a set of horizontal lines at predetermined Fibonacci ratios, including 23.6%, 38.2%, 50%, 61.8%, and 78.6%. Are you keeping up with me? ;) Now, let's explore some examples of how Fibonacci retracement levels can be applied in cryptocurrency trading The Uptrend: In this instance, the Fibonacci retracement levels were plotted by selecting the Swing Low and Swing High points, which were observed on January 8th, 2021 at a price of $41,904. The Fibonacci retracement levels were $33,521 (23.6%), $29,197 (38.2%), $26,114 (50.0%*), $23,356 (61.8%), and $19,925 (76.4%), as shown in the chart. Traders anticipating that if BTC/USD retraces from its recent high and it will likely find support at a Fibonacci retracement level. This is due to the tendency of traders to place buy orders at these levels as the price drops, creating a potential influx of buying pressure that can drive up prices. While the 50.0% ratio is not officially recognized as a Fibonacci ratio, it has nonetheless become widely used and has persisted over time. Now, let’s look at what happened after the Swing High occurred. Price bounced through the 23.6% level and continued to fall over the next few weeks. Two times tested 38.2% but was unable to fall below it. Subsequently, around January 28th, 2021, the market continued its upward trend and surpassed the previous swing high. Entering a long position at the 38.2% Fibonacci level would have likely resulted in a profitable trade over the long run. The Downtrend Next, we will explore the application of the Fibonacci retracement tool in a downtrend scenario. Here is a 4-hour chart depicting the price action of ETH/USD. As you can see, we found our Swing High at $289 on 14 February 2020 and our Swing Low at $209 later on 27 February 2020 The retracement levels are $225 (23.6%), $236 (38.2%), $245 (50.0%), $255 (61.8%) and $269 (76.4%). In a downtrend, a retracement from a low could face resistance at a Fibonacci level due to selling pressure from traders who want to sell at better prices. Technical traders often use Fibonacci levels to identify areas of potential price resistance and adjust their trading strategies accordingly. Let’s take a look at what happened next. The market did make an attempt to rise, but it briefly halted below the 38.2% level before reaching the 50.0% barrier. The placement of orders at the 38.2% or 50.0% levels would have resulted in a profitable trade outcome. In these two instances, we can observe that price positioned itself at a Fibonacci retracement level to find some temporary support or resistance. These levels develop into self-fulfilling support and resistance levels as a result of all the people who utilize the Fibonacci tool. All those pending orders could affect the market price if enough market participants anticipate a retracement to take place close to a Fibonacci retracement level and are prepared to enter a position when the price hits that level. In conclusion: It's important to note that pricing doesn't always follow an upward trajectory from Fibonacci retracement levels. Instead, these levels should be approached as potential areas for further research and analysis. If trading were as simple as placing orders at Fibonacci retracement levels, markets wouldn't be so volatile. However, as we all know, trading is a complex and dynamic process that requires a combination of knowledge, skill, and experience to succeed. We are truly grateful for your attention and time in reading this post. If you found it insightful and beneficial, we would be thrilled if you could show your support by clicking the <> button and subscribing to our page. We are excited to share that our upcoming post will showcase what occurs when Fibonacci retracement levels do not perform as expected. Stay tuned for an informative and professional read.
INDEX:BTCUSDEducation
by Vestinda
22
Fibonacci Trick for measuring Risk to Reward RatioIf you don't use your fibb tool much, (save your settings as a template first if you do) or for just a quick check to see if there is enough reward for the risk in the trade, you can set up your Fibonacci in increments of 1 (2.5 is 1:1.5) Do this as far as you like. You can extend lines left or right to check if the R Ratio you are looking for will fit this market structure, or if you should wait for a better set up. I happen to see this in a YouTube video, and thought it was very interesting and more than useful... The settings are as follows : 0 - loss/stop loss price 1 - 1 unit of risk (100 percent) 2 - 1 unit of risk plus 1 unit of reward (1:1) 2.5 - 1 unit of risk, 1.5 unit reward (1:1.5) 3 - 1 unit of risk, 2 unit reward (1:2) ..... and so on. Then just save it as a template for quick set up later -- Example of use 6 (600 percent) is 1:5. Just subtract 1 for the risk and the remaining is the reward ratio. Each 100 percent mark is a single unit of risk (-1) In MT4 its much better to see it directly, as you can label the levels how you wish (using the same formula)
Education
by ForexStoryteller
1
Navigating the Uncertainties of Fibonacci Retracements in CryptoHello, @TradingView community! I'm @Vestinda, and I'm thrilled to share an informative article with you today about Fibonacci Retracements. While they can be useful tools for traders and investors in financial markets, it's important to note that they are not infallible and may not always produce the desired outcomes. As discussed in our previous post, Fibonacci support and resistance levels are not infallible and may occasionally break. It is essential to remain vigilant and use these levels in conjunction with other technical indicators and market analysis to make informed trading decisions. While Fibonacci retracements can be a useful tool in technical analysis, it is crucial to exercise caution and not solely rely on them as the sole basis for trading decisions. Unfortunately, Fibonacci retracements are not infallible and may not always work as expected. Let us examine a scenario where the Fibonacci retracement tool proves to be ineffective in technical analysis. To make a prudent trading decision amidst the ongoing downtrend of the pair, you make a strategic choice to leverage the Fibonacci retracement tool. With meticulous attention to detail, you designate the swing low at 3,882 and the swing high at 10,482 for precise determination of a Fibonacci retracement entry point. The BTC/USD Daily chart is shown below. Upon careful analysis, it is evident that the pair has rebounded from the 50.0% Fibonacci retracement level for multiple candles. As an astute trader, you recognize this crucial pattern and conclude that it is a viable opportunity to enter a short position. You thoughtfully consider, "This particular Fibonacci retracement level is showing remarkable resilience. It is undoubtedly a lucrative moment to short it." You may have been tempted to take a short position in anticipation of profiting from the downtrend of the pair, while simultaneously daydreaming of cruising down Rodeo Drive in a Maserati. However, if you had placed an order at that level without proper risk management, your hopes of profit would have quickly dissipated as your account balance plummeted. Observing the price action of BTC, let's examine what occurred next. Indeed, the price action of BTC demonstrates that the market is constantly evolving, and traders must be prepared to adapt to these changes. As shown in this specific case, the price not only climbed close to the Swing High level, but the Swing Low marked the bottom of the previous downtrend. This serves as a prime example of the significance of flexibility in the dynamic realm of cryptocurrency trading. What can we learn from this? In the world of cryptocurrency trading, Fibonacci retracement levels can be a useful tool to increase your chances of success. However, it's important to understand that they are not foolproof and may not always work as intended. It's possible that the price may reach levels of 50.0% or 61.8% before reversing, or that the market may surge past all Fibonacci levels. Additionally, the choice of Swing Low and Swing High to use can also be a source of confusion for traders, as everyone has their own biases, chart preferences, and timeframes. In uncertain market conditions, there is no one correct course of action, and utilizing the Fibonacci retracement tool can sometimes feel like a guessing game. To improve your chances of success, it's crucial to develop your skills and use Fibonacci retracements in conjunction with other tools in your trading toolkit. Thank you for taking the time to read our post. We sincerely appreciate your attention and hope that you found it informative and helpful. If you did, we kindly request that you show your support by clicking the "Boost" button and subscribing to our page. Your support helps us create more valuable content for our community.
INDEX:BTCUSDEducation
by Vestinda
How to use Fibonacci Retracements for Trading and InvestingIntroduction The Fibonacci sequence is a series of numbers that starts with 0 and 1, and each subsequent number is the sum of the two preceding numbers. The sequence goes like this: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, and so on. The sequence is named after Leonardo of Pisa, an Italian mathematician from the Middle Ages who was also known as Fibonacci. He introduced the sequence to the Western world in his book Liber Abaci, which he wrote in 1202. However, the sequence had already been discovered by Indian mathematicians several centuries earlier. It was used in ancient Indian mathematics to solve problems related to the breeding of rabbits, which is why the sequence is sometimes called the "rabbit sequence". The Fibonacci sequence has since become a widely studied and applied concept in mathematics, science, and finance. It is used to model a wide range of natural phenomena, including the growth patterns of plants, the breeding habits of animals, and the structure of galaxies. In trading and investing, Fibonacci retracements are used to identify potential levels of support and resistance in a market or investment. These levels are based on the percentage of a previous price movement that has been retraced. For example, if a stock price has risen from $50 to $100, and then retraces 50% of that move, the 50% retracement level is considered a potential level of support. Understanding Fibonacci retracements To create Fibonacci retracement levels, traders use the high and low points of a previous price movement. For example, if a stock has recently traded from $50 to $100, the high point is $100 and the low point is $50. Traders then draw horizontal lines at various levels between the high and low points, based on the Fibonacci sequence. The most common retracement levels are 38.2%, 50%, and 61.8%, although some traders also use 23.6% and 78.6%. Calculating Fibonacci retracements is relatively simple. To calculate the 38.2% retracement level, for example, you take the difference between the high and low points and multiply it by 0.382. You then subtract this number from the high point to get the retracement level. For the 50% retracement level, you multiply the difference by 0.5, and for the 61.8% retracement level, you multiply by 0.618. Using Fibonacci retracements for trading Fibonacci retracements can be used to identify potential levels of support and resistance in a market. For example, if a stock price is in an uptrend and begins to pull back, traders may look for potential support levels based on Fibonacci retracements. If the price retraces to the 38.2% level, for example, this may be seen as a potential level of support. If the price continues to fall and reaches the 50% or 61.8% level, these levels may also be seen as potential support levels. Similarly, in a downtrend, traders may use Fibonacci retracements to identify potential resistance levels. If the price is in a downtrend and begins to rally, the 38.2%, 50%, and 61.8% retracement levels may be seen as potential levels of resistance. Fibonacci retracements can also be used in range-bound markets. If a stock price is moving sideways between a support and resistance level, traders may use Fibonacci retracements to identify potential levels within the range where the price may bounce. Another way to use Fibonacci retracements for trading is in range-bound markets. In this type of market, prices may move up and down within a specific range, with no clear trend. In these cases, Fibonacci retracements can be used to identify potential areas of support and resistance within the range. Traders can use Fibonacci retracements to identify buy and sell signals at these levels. It's important to note that Fibonacci retracements should not be used in isolation, as they can produce false signals. To confirm signals generated by Fibonacci retracements, traders often use other technical indicators, such as moving averages, momentum oscillators, or volume indicators. For example, if a trader sees a retracement to a Fibonacci level and the price is also above the 50-day moving average, this could confirm a bullish signal and increase the likelihood of a successful trade. Using Fibonacci retracements for longer-term investments In addition to trading, Fibonacci retracements can also be used for investing. Long-term investors can use Fibonacci retracements to identify potential entry and exit points for their investments. For example, if a stock has experienced a significant upward trend, and then pulls back to a Fibonacci level, this could indicate a potential buying opportunity. Conversely, if a stock has reached a resistance level at a Fibonacci retracement level, this could be a signal to sell. Conclusion ibonacci retracements are a popular technical analysis tool used by traders and investors to identify potential support and resistance levels. By understanding the Fibonacci sequence and how to calculate and plot retracement levels on a chart, traders and investors can use these levels to make more informed trading and investment decisions. However, it's important to remember that Fibonacci retracements should not be used in isolation and should be used in conjunction with other technical indicators and fundamental analysis. With a thorough understanding of how to use Fibonacci retracements, traders and investors can incorporate this tool into their overall strategy to increase the likelihood of successful trades and investments.
BITSTAMP:BTCUSDEducation
by JS_TechTrading
HOW TO TRADE FIBONACCI RETRACEMENTS: THE SHORT GUIDEHey there, traders. One of the common tools we use for technical analysis are Fib retracements and a lot of you been asking on how to use them properly. Well, today is your lucky day :) Fibonacci Retracement is a technical analysis tool that is widely used by traders to identify potential levels of support and resistance in financial markets, including forex markets. The tool is based on the mathematical sequence known as the Fibonacci sequence, which is a series of numbers in which each number is the sum of the two preceding ones. The Fibonacci Retracement levels of 0.5 and 0.618 are two of the most important levels used in this tool. In this article, we will discuss how to use these levels for trading forex markets. Understanding Fibonacci Retracement Levels Before we dive into the specifics of using the 0.5 and 0.618 levels, let's briefly review the concept of Fibonacci Retracement. The tool is based on the idea that markets tend to retrace a predictable portion of a move, after which they may continue in the same direction or reverse. The retracement levels are calculated using the Fibonacci sequence, and they represent potential levels of support or resistance. The key levels are 0.236, 0.382, 0.5, 0.618, and 0.786. Using 0.5 and 0.618 Levels for Trading Forex Markets The 0.5 and 0.618 levels are particularly important because they are close to the midpoint of a move, and they are based on the golden ratio, which is a key number in mathematics and nature. The 0.5 level represents a 50% retracement of a move, while the 0.618 level represents a 61.8% retracement. To use these levels for trading forex markets, you can follow these steps: Step 1: Identify a Trend The first step is to identify a trend in the market. You can do this by analyzing the price action on a chart and looking for a series of higher highs and higher lows in an uptrend, or lower highs and lower lows in a downtrend. Step 2: Draw Fibonacci Retracement Levels Once you have identified a trend, you can draw the Fibonacci Retracement levels using a tool provided by your trading platform. You will need to identify the high and low points of the trend, and then draw the retracement levels from the high to the low in an uptrend, or from the low to the high in a downtrend. Step 3: Watch for Reversals at 0.5 and 0.618 Levels The 0.5 and 0.618 levels are potential levels of support or resistance, and they can act as turning points in a trend. If the price retraces to one of these levels, you should watch for signs of a reversal, such as a bullish or bearish candlestick pattern, or a divergence in an oscillator indicator or any other personal confirmation for potential entry. Step 4: Confirm with Other Indicators To increase the probability of a successful trade, you should confirm the potential reversal with other technical indicators, such as a moving average, a trendline, or a momentum indicator, check with the fundamentals and most importantly confirm that it aligns with your original bias regarding the pair. This will help you to avoid false signals and improve your trading accuracy. Step 5: Enter the Trade and Set Stop Loss and Take Profit Levels Since the entry was at the "Golden zone", the exit would be around the 0% Fib level. Yes, you just missed half of the trend, but it's a consistent tool that can help you get that edge over the market that you need. We hope you found this useful and please let us know on what you would want us to cover next!
BITSTAMP:BTCUSDEducation
by Investroy
11
📊 Fibonacci Trading: Extension LevelsThe Fibonacci retracement tool plots percentage retracement lines based upon the mathematical relationship within the Fibonacci sequence. These retracement levels provide support and resistance levels that can be used to target price objectives. Fibonacci Retracements are displayed by first drawing a trend line between two extreme points. A series of six horizontal lines are drawn intersecting the trend line at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50%, 61.8%, and 100%. 📍 How this indicator works The percentage retracements identify possible support or resistance areas, 23.6%, 38.2%, 50%, 61.8%, 100%. Applying these percentages to the difference between the high and low price for the period selected creates a set of price objectives. Depending on the direction of the market, up or down, prices will often retrace a significant portion of the previous trend before resuming the move in the original direction. These countertrend moves tend to fall into certain parameters, which are often the Fibonacci Retracement levels. 📍 Calculation Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, and so on. 📍 What Are Fibonacci Extensions? Fibonacci extensions are a tool that traders can use to establish profit targets or estimate how far a price may travel after a pullback is finished. Extension levels are also possible areas where the price may reverse. Drawn as connections to points on a chart, these levels are based on Fibonacci ratios (as percentages). Common Fibonacci extension levels are 61.8%, 100%, 161.8%, 200%, and 261.8%. 🔹 Because Fibonacci ratios are common in everyday life, some traders believe these common ratios may also have significance in the financial markets. 🔹 Fibonacci extensions don't have a formula. Rather, they are drawn at three points on a chart, marking price levels of possible importance. 🔹 The Fibonacci extensions show how far the next price wave could move following a pullback. 🔹 Based on Fibonacci ratios, common Fibonacci extension levels are 61.8%, 100%, 161.8%, 200%, and 261.8%. 🔹 Extension levels signal possible areas of importance, but should not be relied on exclusively. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
4
How to trade Smart Money Concepts:Smart Money Concepts is a more sophisticated way of trading price action, while taking advantage of where institutions are likely to place their orders. This makes Smart Money Concepts a usable tool whenever you are dealing with hedge funds. What you are about to read is an elaborate tutorial explaining a lot about this trading strategy, including some trading strategies (NOTE: there are many SMC indicators and the one I’ll be using is the one by LuxAlgo since I believe is the most “complete” out of all). Let's start. 1) Order Blocks: Order Blocks are, in my opinion, the most important feature in SMC trading, as it shows where these institutions are likely to place their orders. In order for an order block to form, look at where the market is consolidating, creating an area of volume price is likely to be attracted to (some order blocks are formed due to imbalances in the market). In this image, you can see how order blocks are formed right after a ranging market has been broken. Because of this unique feature, order blocks are not the same as support/resistance zones. In order for us to trade using order blocks, look for where an order block has been formed recently, as the longer an order block survives, the weaker it becomes. Buy when the candle that hit the order block closes and set your stop loss under that order block. In this example it worked since the volume wasn’t too high and the order block had formed a few candles before the retest. You can do this for shorts as well (NOTE: the more retests the order block gets, the weaker it becomes) 2) BOS & CHoCH: Supports and resistances usually apply on Price Action, but they can be applied in Smart Money Concepts as well. The difference is that in Smart Money Concepts, you these supports and resistances when the price breaks through them. However, in many occasions these signals can be false and it’s only a retest of the support/resistance. In order to understand what BOS/CHoCH means, we need to look at the graph: This is an example I made. From the graph, a BOS or a Break of Structure is whenever the price breaks the most recent support/resistance in the direction of the trend direction(bullish/bearish). A CHoCH or a Change of Character is whenever the price breaks the most recent support/resistance in the direction opposite of the trend direction. What I mean by this is that in the example I have shown, the trend was bullish until it was not. Normally a bullish trend breaks the resistances instead of the supports, and vice-versa. This is why the name Break of Structure since the price continues going the direction it wants while solving any “issue” in its path. If this “issue” is big enough to break the support/resistance maintaining the trend intact, then it’s known as a Change of Character , since it changes the character of the trend. When this happens, there is a chance for a trend reversal to happen, which is the case for the example I’ve shown. Now I’ll show how to trade BOS/CHoCH in a real graph. As you can see from the chart, there are a lot of Breakthroughs of Structure and Changes of Character, but this indicator actually shows which of these BOS/CHoCH are major. The trick is that if the indicator shows a BOS/CHoCH marked by a straight line instead of a bunch of lines, this means that it is more accurate. In this example, we ignore the smaller BOS/CHoCH and just look at the 2 important ones. We know they are important because they are marked by a straight line. You buy after the CHoCH/BOS label appears and when the candle that retested the broken resistance/new support closes and the volume doesn’t increase before that (unless the market is ranging after it broke). Same thing with shorts. You short after the BOS/CHoCH label appears when the candle that retested the broken support/new resistance and the volume doesn’t increase from the candle before that. 3) EQH/EQL: In Price Action , there are chart patterns. One of the most known ones are the double top and the double bottom . Smart Money Concepts refers to these double tops/bottoms as Equal Highs and Equal Lows (EQH/EQL for short). Here’s an example: As you can see, there is a double top (EQH) which came after an uptrend, meaning that there is a chance that the price will break the necklace (the support line made in the middle of the double tops), causing a change of character, which it did. Due to the nature of double tops and bottoms, this rarely happens. You should use this tool in confluence with other SMC tools like Order Blocks and BOS/CHoCH. Personally, I don’t use them much. I just use them to identify strong supports and resistances, as well as double tops and bottoms. They could also be used to identify trend reversals on major areas of support and resistance. 4) Premium and Discount zones: Premium and Discount zones are ranges that form in the market when a recent major support and resistance has been established. In this example, you can see when did the premium and discount zones form. The price made a major support and resistance. The equilibrium zone is the 50% line in the Fibonacci Retracement tool if you pay close attention. This means that price can react off of the Equilibrium zone, and if you pay close attention, you can see it was ranging for a while. For a trading strategy, wait for the price to reach the Premium or Discount zones, and, if the market's volume decreases, enter a trade and set your take profit at the equilibrium zone. The reason why you should set your take profit at the equilibrium zone is because there is a chance the price rejects off of the equilibrium zone. 5) Fair Value Gaps: Fair Value Gaps are imbalances that form in the market and can be good support/resistance areas. They usually form when the market is volatile and when a breakout or retest just happened. In order to identify what a fair value gap is, look for a huge candle body like the one shown in the picture, then, draw a rectangle with its base being at the highest point of the previous candle's upper wick and with its top being the lowest point of the following candle's lower wick. Now, extend the rectangle to the right and now you have a fair value gap. For a trading strategy, look for the line in the middle which is shown in the fair value gap. This line acts as a support, and the price can bounce off of it. For an entry point, wait for the price to react to the fair value gap, and, if the volume decreases while the reaction is happening, enter. 6) Liquidity Grabs: Even if you think your trading strategy is amazing, you will always have to deal with scams. No matter how good your trading strategy is, all trading strategies fail to deal with hedge funds and whales. They sometimes act when the price is very close to a support or resistance, and when the people expect a bounce, they place their stop losses under the area of confluence. These hedge funds then act, and end up manipulating the market, forcing the people to panic buy or panic sell, depending on the area of confluence. One major example of market manipulation is in the Crypto Exchange. Trading Crypto is almost like gambling. Liquidity grabs perfectly reference the scam. You can spot them if, on a ranging market, there is a sudden increase or decrease in price. Always pay attention to traps like the ones in these examples shown below: For a trading strategy, wait for the scam pump or dump to stagnate and then enter your trade in the opposite direction that the candle was going to. In conclusion, Smart Money Concepts is a fascinating trading strategy for me, and it could be for you too. There are many aspects of it, and it is another way of trading Price Action, which itself is already fantastic. This tutorial took me 3 hours to make, so please make sure to heart and comment your opinion on this. Thank you for reading through all of this.
BITSTAMP:BTCUSDEducation
by lorinstocksinvesting
15
FLSY - Anatomy of a "Good" tradeHi All, This is just to share on how I would approach a trade (as a trader). 1. Look for signs that the stock is forming a bottom (rounded bottom, inverted Head and Shoulders, Adam and Eve), rising above 200 day MA, Golden Cross etc. 2. Check out its longer term charts (ie weekly and monthly) as you will likely see a clearer picture of it's direction. 3. Wait for some triggers (eg breaking above neckline especially on strong volume). FLSY is a good example and had presented several good opportunities for several short term trades recently (could be held for longer term if one had entered earlier around 12.36 (1st Entry in chart) and didn't get stopped out. 1) On 2nd Feb (Initial Breakup), it gapped and broke up above this neckline (as well as it's 200 day MA), everything looks good except volume was just above average. Well, this initial break up failed! Yes, it happens more often than we cared for, especially during the earlier phases of the trend, hence a conservative trader would prefer to wait for a pullback and long if the neckline proved to be a support. 2) on 13 Feb (1st Entry), FSLY once again gapped above the neckline and 200 day MA, but this time the volume was HUGE. However, this was prior to earnings announcements (2 days later, AMC). There is a possibility that earnings beat had been leaked, so if one decide to enter this trade, then it would probably be wise trade small. 3) on 16 Feb (2nd Entry), the day after earnings, which beat expectations (surprise surprise...LOL), many traders will FOMO into the stock especially as it rose above the previous candle's high around 14.20. This turned out to be a very profitabe trade (intraday). Next day however, it formed a "Harami" candlestick (aka "inside bar"), showing indecision at this point. I would raise the stop to 15.30, slightly just under this "Harami" candlestick (which is already a 11% SL from its high @ 17.18). Those with a larger risk appetite could raise the stop to entry price (ie 14.20), allowing for larger volatility which could stop one out prematurely but be prepared to give back all profits if wrong. 4) FSLY had a steep pullback after all (due to poor market sentiment during the whole month of Feb) and found support only at 61.8% of it's large AB up swing. This was also within a prior "Resistance" but turned "Support" zone. It began to form small sideway candles (a signal to long if it starts to break above this "consolidation" range) 5) We had a Long trigger again last Friday (3rd Entry) as the stock started to rise decisvely above the consolidation high @ 14.20. It turned out to be a large candle day, hence I would place initial stop loss just below this large candle (ie 13.55, a 5% initial SL). There is a good chance this stop will not get hit (although nothing is guaranteed LOL). Uptrend is underway for FSLY (above 200 day MA, with the shorter MAs (20 and 50) both rising. However, it could still experience large swings along the way and one has to manage the trade and raise the stops from time to time to protect profits. Just because one is stopped out does not mean the stock is spent. Sometimes it could be just periods of consolidation (short or long periods). Keep it on your watchlist as long as the stock has not shown signs of bearishness on a higher timeframe, set alerts for the next trigger. Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
NYSE:FSLYEducation
by Juliac
1
Fibonacci RetracementFibonacci retracement is a technical analysis tool to identify potential support and resistance levels in financial markets. The tool is based on the Fibonacci series, a mathematical sequence of numbers where each is the sum of the previous two numbers. The origin of the Fibonacci sequence goes back to ancient India and the study of Sanskrit prosody. However, the series is named after Italian mathematician Leonardo Fibonacci, who introduced the sequence to the West in his book Liber Abaci, published in 1202. In contrast, the Fibonacci retracement was first used in financial markets in the 1930s. . Ralph Nelson Elliott, the famous trader, developed the Elliott wave theory. Elliott believed that market movements can be divided into waves, each with a characteristic pattern. Elliott noticed that certain retracement levels based on the Fibonacci sequence tended to act as support or resistance levels in the market. In particular, he called the levels 38.2%, 50%, and 61.8% the most important. Since then, the Fibonacci retracement has become widely used in technical analysis and is included in many trading platforms and charting programs. Traders use it to identify potential support and resistance levels and determine trades' entry and exit points. Fibonacci retracement is a popular tool among technical analysts and traders and has many uses in financial markets. Here are some common uses of Fibonacci retracement: Identifying potential support and resistance levels: The 38.2%, 50%, and 61.8% levels are often used as potential support and resistance levels in the market. When a price trend occurs, traders often consider these levels potential turning points. Identifying Entry and Exit Points: Traders often use Fibonacci retracement levels to identify potential entry and exit points for trades. For example, a trader can enter a long position on a stock when the price returns to the 50% level after a previous uptrend and then place a stop loss just below the 61.8% level. Trend Direction Confirmation: By analyzing Fibonacci retracement levels, traders can confirm the price trend direction. If the tracking levels align with the trend's direction, this can be a sign that the trend is likely to continue. Giving Price Targets: Fibonacci retracement can also be used to identify potential price targets for a trend. Traders often look for the 161.8% and 261.8% levels as possible targets for the trend when the price crosses the 100% retracement level. Summary with other technical analysis tools: Traders often use Fibonacci retracement levels in conjunction with other technical analysis tools, such as moving averages or trend lines, to strengthen trading signals and increase the probability of a successful trade. Fibonacci retracement is a widely used tool with advantages and disadvantages in technical analysis. Here are some of the main advantages and disadvantages of using Fibonacci retracement: Advantages: 1. Identifies potential support and resistance levels: Fibonacci retracement can be used to identify potential support and resistance levels, which is important for traders to identify a potential reversal. . . points in the price trend. 2. Ease of use: Fibonacci retracement is easy to use and can be applied to many financial instruments. It is readily available in most mapping software and trading platforms. It can be customized to meet the needs of individual traders. 3. Widely used: Fibonacci retracement is widely used in technical analysis and is well-known among traders and analysts. This facilitates interpretation and application in different market conditions. Cons: 1. Not always accurate: Fibonacci retracement is imperfect, and its accuracy may vary depending on the market area and period analyzed. Traders should use it with other technical analysis tools to confirm signals and reduce the risk of false signals. 2. Subjective: Like many technical analysis tools, Fibonacci retracement is quite subjective, and traders can interpret levels differently. This can lead to different business decisions and results. 3. Can be overused: Some traders may rely too much on the Fibonacci retracement method and use it as the basis for their trading decisions. This can be risky because only some tools can provide all the information needed for successful trading. Investors should use the Fibonacci retracement as part of a broader trading strategy that includes multiple indicators and factors. There are several important factors to consider when using Fibonacci retracement: 1. Choosing the appropriate pivot points: To use the Fibonacci retracement, traders must identify the appropriate swing points to calculate the level. These swing points should be significant highs and lows in the price trend and should be selected based on the analyzed time frame. 2. Understanding Levels: Traders should understand Fibonacci-rich levels and what they represent. The 38.2%, 50%, and 61.8% levels are the most commonly used and considered potential support and resistance levels. 3. Using Fibonacci retracement with other indicators: Investors should use Fibonacci retracement with other technical analysis tools, such as moving averages or trend lines, to strengthen signals and increase the probability of a successful trade. 4. Adaptation to market conditions: The accuracy of Fibonacci retracement levels can vary according to the specific market area and the period under analysis. Traders must be prepared to adjust levels based on changing market conditions and adjust their trading strategy accordingly. 5. Risk Management: As with any trading strategy, traders should properly manage their risks using the Fibonacci retracement. This may include setting stop orders at appropriate levels or limiting position sizes to minimize the impact of potential losses. Fibonacci retracements are widely used in technical analysis. Still, there are also some alternative tools that traders can use to analyze the market. Moving Averages: Moving averages are commonly used technical analysis tools that help traders identify trends and potential entry and exit points. Bollinger Bands: Bollinger Bands is a technical indicator that helps traders identify potential support and resistance levels. Ichimoku Cloud: The Ichimoku Cloud is a technical indicator that helps traders identify trends, momentum, and potential support and resistance levels. Elliott Wave Theory: Elliott Wave Theory is a technical analysis tool that helps traders identify trends and potential entry and exit points. It is based on the idea that the market moves in a series of waves and can be used on different timeframes. Thanks for reading this. What do you think the pros and cons are? Do you think I missed something? Let us know your ideas. Good luck.
Education
by MonoCoinSignal
14
Fibonacci Retracement Levels In Forex TradingBoth novice and seasoned traders use Fibonacci levels as one of the most common and universal strategies when trading forex and other markets. It is a well-known fact that market prices incline toward levels where the bulk of market orders are gathered. Such levels can be found and predicted using a variety of ways. Systems for trading are built on a variety of levels. Since traders first realized that the price fluctuations of some assets frequently followed the Fibonacci number sequence, the Fibonacci levels have been employed in trading. The standard Tradingview trading platform, which is currently the most well-known and in demand, includes the tool because of how useful it is. Leonardo Fibonacci, who was born in ancient Italy, discovered a straightforward numerical sequence that is utilized globally and is consistent with a wide range of natural occurrences. The order is as follows: 0 followed by 1, then 1 (0+1), then 2 (1+1), then 3 (1+2), followed by 5, then 8 (3+5), etc. It appears that the Fibonacci sequence is the sum of the two numbers before it. An intriguing ratio may be calculated using these numbers: 0.618 is the result of dividing the first by the second (regardless of which of the numbers in the sequence are taken). And you get 0.382 when you split the numbers by one. The "golden ratio" is this set of fractions, and it appears frequently in nature, a striking example is a spiral like the seeds in a sunflower. The following are the trading-related Fibonacci correction levels: 0.236, 0.382, 0.500, 0.618, and 0.764. Levels of expansion are 0; 0.382; 0.618; 1.000; 1.382; and 1.618. It makes no sense for traders to manually calculate any of these figures, which are all calculated from the sequence. The key is to comprehend how they operate, what they are used for, what data they offer, and how to make effective use of them when trading. Special indicators that automatically draw lines on the chart or symbols in the trading platform are used while trading with Fibonacci levels. Retracement levels can be utilized for a number of purposes, such as support and resistance, to start trades, and to set stop orders. The usage of extension levels by traders for take-profit placement. Based on swings, or candles with at least two upper highs or upper lows on the left and right, Fibonacci levels can be applied to a chart. Additionally, bear in mind that Fibonacci levels for forex are a trending technique and are not applied during periods of consolidation. When the trend is upward, the price tends to retreat from Fibonacci-based resistance levels; the opposite is true for downtrends and support. Fibonacci Levels in Forex: How to Use Them Almost all charting applications contain Fibonacci retracement levels. Fibonacci lines are regarded as the most flexible and understandable option, however others also use fan lines, arcs, and time periods as typical tools. What do you need to know about Fibonacci numbers in order to trade? Values are calculated as 23.6, 38.2, 50.0, 61.8, and 76.4% on a scale of 0 to 100. The primary signal for foreseeing likely future price fluctuations is these ratios (prices often bounce back from levels). The indicator shows levels on the price chart and allows forecasting of future price changes.If you want to manually trade using the price chart or the software, you can select to display correction levels. To do this, drag the cursor from the bottom point of the trend to the top point. There will be five horizontal lines that display 0, 38.2, 50, 61.8, and 100% (an additional line showing 23.6% can be added). Depending on whether Fibonacci is trading above or below the lines, the lines can be utilized as support or resistance levels. The levels activate more frequently as the time span becomes longer. Finding a downward trend, appropriately stretching the Fibonacci lines, waiting for confirmation, and placing an order are the essential duties of a trader. Numerous strategies for using numerical series in trading exist. How Fibonacci Levels Work And How To Use Them In Trading Trading professionals can examine the changes in asset values by using Fibonacci numbers that are displayed as lines on the chart. As a result, resistance/support levels are established, and the degree of a trend movement's already-started corrective is examined. The price typically follows the guidelines of key levels on the Fibonacci lines. Therefore, there is a strong likelihood of a price reversal at the level, for instance, if the price crosses the line. Fibonacci retracement levels are particularly helpful for discovering pullback levels, for establishing the conclusion of a pullback, and for the continuation of price movement along with the trend because pullbacks are a natural part of every trend. The key correction levels are created by the interrelations between a trend and a correction shown by Fibonacci levels, which have recovery probabilities of 38%, 50%, and 62%. It only takes placing a grid over critical spots to see that pivotal price levels frequently cross Fibonacci percentage lines. Fibonacci levels and graphical patterns can be used to coincidentally determine market entrance and exit points. Opening profitable trading positions after a collapse or rebound from a level is beneficial. Trading professionals frequently employ Fibonacci lines to place Stop-Loss and Take-Profit orders. To avoid being caught by an unintentional pullback, it is preferable to position the Stop-Loss order above the levels (for the recovery from which the trader is counting). Take-Profit levels are based on Fibonacci extension.Remember that on a price chart, the support/resistance areas that coincide with the Fibonacci net levels are viewed as further support for the lines' significance. This instrument is the foundation of many trading techniques. Beginners should be aware that there is no definitive interpretation of the Fibonacci technique; it is merely a point of reference. Trading systems frequently incorporate Fibonacci levels with other technical analysis tools because this technique can occasionally fail to corroborate the signals. Importance Of Different Fibonacci Levels Expert traders claim that not every Fibonacci level behaves the same way on a price chart. Before using the instrument for trading, some regularities should be studied. Fibonacci levels and their importance in trading: 23.6 - weak, a clear confirmation is required to use it in trading. 38.2 - an important level, the price of the asset bounces from it for further consolidation. 50 is intermediate in importance between the two previous levels and gives a high probability of trigger. 61.8 - strong, like 38.2. 76.4 - 80.9 is a strong level as well. The likelihood of a profitable trade is quite high if we consider the strength of the levels, trade in line with the trend, weed out erroneous signals using a straightforward extra indicator, and avoid using low time frames. Additionally, it's critical to remember risk management and trading psychology's fundamental principles. Advice for using 38%, 50%, and 62% levels effectively Stretched between the trend's minimum and maximum, a grid is drawn on the graph. On the charts, three to four separate time frames with longer value movements can be displayed in various colors. Numerous Fibonacci levels will be displayed on the graph, allowing for analysis. Usually several of them exactly coincide on various time scales, therefore they are regarded as significant support/resistance levels. These three can be utilized to enter positions and exit open ones because fibonacci numbers have potentially important levels. These price retreat levels by themselves are not what drives price movement; if this line doesn't have the appropriate support, it will simply go to the next. More accurate signals are produced by combining Fibonacci with other tools (such as Moving Averages, trading channels, reversal patterns, etc.). A significant resistance/support level is 62%. When it is attained, the price frequently starts to vary erratically. When the price surges past the 62% level and moves on to the 70–75% retracement level (before returning to the 62% level), you can place an order. When two to three further crossover signals are received, trades can be initiated from deep retracement levels. It is preferable to avoid entering if there are no cross confirmations. It's also a good idea to keep in mind that once the correctional movement reaches the 62% pullback level, it may go on to reach 100% in the chosen time frame and stop the trend. Fibonacci Levels: How to Use Them in Forex Trading Fibonacci levels can be used relatively easily. The most crucial levels in forex trading are 23.6% and 38.2%, 61.8% and 76.4%. They are used to identify price pullbacks; when one appears on the chart, one should wait for a favorable price before joining the impulse (enter the movement at the moment of a pullback). When there is a significant market movement, the asset's price can drop by up to 23.6%, 38.2%, or even 50%. These ranges are regarded as ideal. Price increases of 61.8% or more may signal the beginning of a trend reversal. The Fibonacci levels should be drawn correctly: -Finding the price impulse. -Plotting the grid on the chart. -The expectation of a pullback to 23.6% or 38.2% or 50% to enter the market. -When there is no pullback, the price keeps moving, updating the lows/maximums, it is worth pulling over the grid based on new local extrema. -In this case, it is important not so much to determine the levels as to understand whether the current price movement is a correction concerning the previous one or the beginning of a new trend. When Fibonacci Correction Levels Do Not Work Fibonacci levels are not 100% reliable signals; they are more like rough guidelines that give information about the movement that is likely to occur. Fibonacci levels can also be broken occasionally, just like support/resistance levels can. There are many exceptions to the rules, therefore it is advisable to check the signals with additional tools and to take the maximum precautions when opening any position. The levels need to be carefully worked, refined, and filtered on a regular basis. Sometimes levels might be crossed, and the bounce occurs at 61.8 instead of 50%; other times, the price skips levels and views essential ones as weak and unimportant ones as important. Because of all these features, it is important to be able to combine different tools in a strategy and constantly gain experience trading with the selected tools. Conclusion The suggested strategy broadens the potential uses for trading with Fibonacci levels. You can use it to your advantage so that practically any corrective movement—not just ones that conclude at 38.2% or 61.8%—will be beneficial. You must be able to accept what the market offers you since it doesn't always move that well.
Education
by FOREXN1
15
How to double your small ($250) trading account trading Bitcoin How to Double your Small ($250) Trading Account Trading Bitcoin I started a degen account with $250 and almost doubled it in 4 days making about 6 trades. This strategy is not Financial advice and I'm only illustrating what I have learnt trading this way. This is the first video in the series and I'll be continuing the series , updating you on progress, winners, losses, my trading journal and some live trading, so make sure to Sub, like comment and share. I show you how I entered my current trade, where I am looking to take profits and show you my pnl on Bybit. Not Financial Advice. DYOR. Papertrade before trading with real money. Hope you have a profitable trading day! Shawn
BYBIT:BTCUSD.PEducation
by zartraderguy
2
✅ 4 Methods to Confirm EntriesYou should make sure that your reward is bigger than your risk. It is up to you what your optimal risk to reward should be – ideally you should have a risk to reward of 1:2 or 1:3. ✔️Trendline Reversal & Break The trader should constantly monitor both the support and resistance trendlines and redraw them as the old ones break and new ones form. When an intersection of the projections happens, one of the trendlines must be broken and the other will most likely continue to hold the price. We trade in the direction of the trendline that remained unbroken with potential entries at the trendline breaks. ✔️Support & Resistance Look at the price chart and observe the support and resistance levels that you have drawn on the charts. You will look to place sell orders at the resistance levels and buy orders at the support levels. Stop loss below the support level or above the resistance level depending the call you’re on. ✔️Fibonacci Retracement Fibonacci retracement levels connect any two points that the trader views as relevant, typically a high point and a low point. The percentage levels provided are areas where the price could stall or reverse. These levels should not be relied on exclusively, so it is dangerous to assume that the price will reverse after hitting a specific Fibonacci level. ✔️Consolidations A price consolidation is a period when the price is moving sideways without any significant advancement in the upward or downward direction. A price consolidation can take any form. It could be a rectangular pattern (often called a range), any of the different types of triangle patterns, a rising or falling wedge, a pennant, or a flag. Depending the pattern that takes place, you’re gonna look for entries and stop loss bellow pattern’s invalidation. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
1
How to do accurate entries using the 50% fib levelThis strategy will require you to be able to distinguish between the impulsive move and the retracement since we only apply the fib retracement tool to the impulsive move. What you do is just lay your fib from the body to the body (not the wicks) then identify the 50% retracement level. Now if you're an aggressive trader you can set a pending order or just execute an instant entry once price reaches your 50% retracement level. On the other hand if you're a less aggressive trader, you will make a decision based on what price action will reveal at the 50% retracement level. I'll leave it to you to decide what kind of trader you are.
FXOPEN:XAUUSDEducation
by JayForexAcademy
2
The CoffeeShopCrypto Fibonacci Tool SetupWelcome to the coffee shop everybody once again. This is your host and baristo Eric and I have a number of strategies to put up for you but I realized that you guys are going to need some help with that. In a few of my previous videos you have seen me using my Fibonacci Retracement tool but the question always arises why does mine look different than yours. So I want to post this quick video so that you can have the information and the visual of what your Fibonacci tool should look like as well as being able to copy my settings into your Fibonacci tool. Make sure that at the end of applying these settings you go down to the bottom of the Fibonacci tool settings and you click save as then give it a template name because this is going to be used as a template setting so you can switch it on and switch it off. The purpose of setting your Fibonacci tool this way gives you a more clearly defined area of take profit 1 take profit two and take profit 3. So while the settings may not seem to make sense right off the bat, once you start using these strategies you'll understand more clearly what the settings are for. Fibonacci Retracement Tool Settings Trend line = on extend left / right = off Scale values: Column 1 0 GREEN 0.382 WHITE 0.5 YELLOW 0.618 YELLOW 0.764 ORANGE Column 2 0.88 RED -0.618 Green -0.25 Green 1 Light Blue Background = off Prices levels = on (values) Labels = Right / Top Font Size = 12 Fib levels based on log scale = off Under template click SAVE AS and name it "The Coffeshop"
Education
by CoffeeshopCrypto
18
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