A little help with Fibs please? =D

Beginner Questions
1

Hi everyone,

Thanks for taking the time to read my post >_<

I often see in the forums that experienced traders make use of Fibs to project profit targets or support/resistance levels but there is something that I cannot seem to find an answer to - How do you determine if the Fib percentage will hold or it will break through?

I did some testing myself and whenever I draw a Fib (from the previous high to the current low in the example a descent in price), it reaches the first Fib level, and it continues to break into the next level and so on.

Another question is how do you project profit targets using Fibs? And how do you confirm if the Fib is holding as a resistance, or it will continue to break through it?

I apologize for my questions, even after buying a book(and read it) on Fibs I do not understand how it works.

Thanks much! :7:

2

Fibonacci is just a tool, not an absolute. Watch how price reacts around the ratios. Just because some ratios seem to be more popular than others, I would never place an order if price hits the mark. Rather, I’ll wait to see how it reacts around the ratio.

Read up on Candlestick patterns. That can help you better identify price direction with Fibs.

3

Hi mastergunner99,

Thank you for your reply, I’ll read up on Candlestick patterns.

4

I think a common mistake for newbies with Fibs is to try and fit them in a narrow range, I don’t normally take notice of a Fib unless it covers at least 50 PIPS.