Hi,
i have a questions about the fibo swings,Maybe the questions already been ask for many times but i’d still don’t get the right answers.So here it goes.
The chart is NZD/USD 4H TF
Firstly i have checked the daily TF and the chart shows the uptrend,so i decided to place my order in 4H TF BUT i have to WAIT for the exact point of the retracement,The issues that im facing is confusing.
I wanted to place my fibo point and yes i know the point for the fibo is swing highs & lows,What makes me confuse is the candlestick ‘distraction’.
If there was a swing lows with the bull candlestick,should i place my fibo point on it?same goes if the swing high is a bear candles.What if the only candle that end up high is bears and the low are bulls?Should i still refer to that point?Hoping someone could clarify this for me.
And welcome to the first of many problems you’re going to encounter with the application of Fib levels, namely the discretionary element. There’s no hard and fast rules with how it should be used, which makes it quite difficult to quantify - you’ll probably see many people here agree that you can draw a fib and every trade looks profitable? It’s a great ‘in hindsight’ tool, in my opinion, however a self-fulfilling prophecy when used in real time.
Ironically, you’ve no doubt seen the many number of ‘apparent’ tutors trying to sell their courses, pulling in the crowed and drumming up attention, right? Does it come as a no surprise that they do this by all using Fib levels as there main tool, following this up with comments such as “and look, if you entered here, or here, or here…”
“I could take a crap on a chart and show you how priced moved around it”
I’m not sure I understand your question, but I’ll take a stab at it.
Here’s what I do understand:
On your NZD/USD chart, you have correctly identified a major swing (from a swing low at 0.72621 to a swing high at 0.75575), and you have correctly drawn a Fibonacci retracement from low to high. This has given you 4 potential levels to which price might retrace and react (pause or reverse). Price has retraced to the 50% level (almost to the pip), and has bounced off it. In other words, the 50% Fib appears to have reversed the price retracement. But, you don’t yet know that for sure.
So, it’s too early to say whether the turning point which has occurred at the 50% Fib level is a significant swing low. Clearly, it fits the definition of a swing low, because it is surrounded by two higher lows on each side (left and right).
Therefore, it would be premature to pull a Fib from the high at 0.75575 to this newly formed low at 0.74098 (if that’s what you’re asking me).
But, if you are looking for a signal to enter LONG after the 50% retracement from the high, your Fib has given you that signal.
