When do you consider a FIBONACCI LEVEL INVALID?

Beginner Questions
1

Hi there everyone…i have been reading about fibonacci level and have read DAEDALUS thread regarding fibonacci trading. But i am still very lost on certain things and do not understand something.

(1) When do you consider a Fibonacci level invaild and redraw a new fibonacci?? Does the candle need to close above or below certain fib level to consider it to be invaild??

(2) And do you usaully draw the new fib on the LASTEST SWING even if no need swing high or swing low is form OR do you jus leave it until a new swing high or swing low is form??

Hope the experience trader could help me regarding this ?? any feedback is welcome as i am still learning.

Sorry for my bad english =)

2

To Ruian:

First of all it depends what time frame you are trading with. Is it 1 hour, 4 hour or daily chart

To answer your question. If a candle closes across the fib line or level. I would wait for the next full candle to close above/ below the previous candle.

This is with experience. If the fib level for Eur/ Usd was 1.4000 and candle closed across and above that value example: 1.4081. The next candle could reverse on you. Personally, I would wait for next candle to complete and then enter the trade. this is why if you are trading on daily chart then look at weekly chart for clear trend direction. especially the 20 sma. This is where the price reverses with long term charts and fib levels.

3

The fib level becomes invalid once the swing high or low(0 or 100) is broken. Then you would need to adjust/add a new fibs once a retracement starts.

4

I often also have more than one Fib drawn on my chart, anyway - often there exist minor swings within the wider move. Confluence between these Fib lines is a powerful tool in predicting S&R levels, I find. I query a level as soon as we get a close through it.