[B]Student’s Question:[/B]
I’d appreciate a quick review of Fib line basics…confused…thanks.
[B]Power Course Instructor’s Response:[/B]
Sure…
We put Fib levels on a chart so a basic determination can be made as to the point which a currency pair is likely to retrace after a strong move.
Take a look at the chart below. A bullish move is shown on the chart so the Fib line would be drawn from the bottom of the move to the top of the move…the opposite would be true in a move to the downside. Having done this, the three major Fib levels will be appear on the chart. A trader will then wait to see if one of the levels holds. Should one hold, a long position can be taken (back in the direction of the original move) with a stop below the lowest wick that penetrated the Fib level that held.
