Hi all,
where can I learn everything possible with visuals about the Fibonacci tool?
" Fibonacci retracement levels", I need videos on this.
I am a visual learner, I got one on YouTube though. I needed an explainer video
thanks
I use fibo lines as like support/resistant levels, nothing more! But, no doubt! Fibo is very much useful trading tool!
You also can use the search box; there have tons of useful threads on Fibo!
1 Like
Maybe you can try learn the below link:Online Trading Platform | Forex Trading | Trade and Invest | Top 1 Markets
A Fibonacci retracement is a key technical analysis tool that uses percentages and horizontal lines, drawn onto price charts, to identify possible areas of support and resistance. Identifying these areas is useful to traders since it can help them decide when to open and close a position, or when to apply stops and limits to their trades.
Why do traders use Fibonacci retracements?
Markets rarely move in a straight line, and often experience temporary dips – known as pullbacks or retracements. Fibonacci retracements are used by traders to identify the degree to which a market will move against its current trend.
The retracements are based on the mathematical principle of the golden ratio. The sequence for the golden ratio is 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and so on, where each number is roughly 1.618 times greater than the preceding number.
To calculate Fibonacci retracement levels, technical analysts draw six lines on an asset’s price chart. The first three are drawn at the highest point (100%), the lowest point (0%) and the average (50%). The remaining three lines are drawn at 61.8%, 38.2% and 23.6%, which are significant percentages in the Fibonacci sequence.
According to the golden ratio, these lines should indicate the points where levels of support and resistance are met.
How to use the Fibonacci tool
The Fibonacci tool provides a series of levels which measure the percentage a market has reversed between two different points. This means that within an uptrend, traders will typically use the tool to measure the amount of the last rally that has been surrendered, with a view to another leg higher before long.
The Fibonacci tool is applied by placing the two anchor points onto the prior swing high and swing low, utilising the resulting Fibonacci levels as reference points when the market begins to retrace. It is advised to use the absolute tops and bottoms of the wicks rather than the body.
Whether or not a trader believes that the ratios derived from the Fibonacci number sequence are going to provide turning points in the market is beside the point. Markets do not move in a straight line, and thus by studying the size of each pullback, it is possible to recognise where within each market a trader is likely to see each type of pullback – shallow, medium, and deep.
Pros and cons of Fibonacci retracements
Pros of Fibonacci retracements
As a means of identifying levels of support and resistance, Fibonacci retracements can be used to confirm suspicions of a market movement.
Levels of support and resistance can indicate potential upward or downward market trends and could therefore indicate to traders when is a good time to open or close a position. This means that Fibonacci retracements can be highly rewarding for traders who know when to use them properly.
Cons of Fibonacci retracements
However, Fibonacci retracements require a high level of understanding to be used effectively. Simply drawing lines on a price chart at the Fibonacci percentages will likely not yield positive results unless traders know what they are looking for. As such, beginner traders should take care when using Fibonacci retracements to be sure that a dip in an asset’s price is a temporary pullback, rather than a more permanent reversal.
Some traders feel that Fibonacci retracements are a self-fulfilling prophecy – because a lot of traders use Fibonacci retracements as a technical analysis tool, they are likely to get the same results. This means that orders tend to congregate around the same price levels, which could push the price in the desired direction.
1 Like
lovely, thanks!