I’ve been trying to work it out but it is really confusing.
What are the conditions to use it? I read somewhere that it only works when you have a trend (down/up) and you need 2 lower highs and 2 higher lows or w/e. (What does that even mean?)
The videos/examples I’ve seen, there’s usually a region (usually between 38.2/50/61.8) where the price tests that region then goes the opposite direction (usually placing your order a bit further from those levels to ensure the levels are maintained),
but whenever I tried it (as in the photo below), it only goes down a little and then disrupts the trend…
So how does it work? Can somebody provide a good explanation? The school program on here doesn’t really explain it in a way that you could really learn how to use it.
This is just one example of a failed attempt, I’ve tried it on several other timeframes and currency pairs, and it only worked about 30% of the time for me… (I know it should be tried on larger timeframe for better accuracy, I use H1, H4 and Daily for it)
Fibs area a great tool, but work best as confluence. This means that you want to use them with something(s) else. I like knowing all the following 23, 38, 50, 61, 70, 78, 87, 100, 113, 127, 138, 141, 161, 205. but for retracements, 61-79 is umm “Optimal” for “Trade” “Entry.” You can very often get entries into moves when a high or low is exceeded at an extension or use extensions to take profit, like 127, 141, 161, 205. Look at a chart for GBP. I am bullish this week foreign currencies against the USD, and I know that the London Open and US open each will provide a trading opportunity. Take a fib from the low made on Monday (the weekly low) to high before todays moves: 1.5170 to 1.5375. 61.8give or take and a huge move up. Please note that for this to work with consistency it takes other confluence. Today we also had prior structure and a mid-pivot in a buying area.
When it comes to technical analysis never just rely on one indicator. Fibs can be a great tool if used properly which can come with time. Lose enough money and you may learn how to use them properly. View it as paying tuition for a semester or two.
