Fibonacci Retracement
Fibonacci Retracement They are based on the key numbers identified by mathematician
Leonardo Fibonacci in the 13th century. Fibonacci's sequence of numbers is not as
important as the mathematical relationships, expressed as ratios, between the numbers
in the series.
The sequence of numbers, starting with zero and one, is created by adding the previous
two numbers. For example, the early part of the sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21,
34, 55, 89,144, 233, 377, and so on
What Are Fibonacci Retracement Levels?
Fibonacci Retracement levels are horizontal lines that indicate
where Support and Resistance are likely to occur. They are based on Fibonacci numbers. Each
level is associated with a percentage. The percentage is how much of a prior move the price
has retraced. The Fibonacci retracement levels are 23.6%, 38.2%, 61.8%, and 78.6%. While not
officially a Fibonacci ratio, 50% is also used.
Fibonacci retracement levels connect any two points that the trader views as relevant, typically a
high point and a low point.
The percentage levels provided are are
as where the price could stall or reverse.
The most commonly used ratios include 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
Trend
Uptrend draw Fibonacci Low to High Swing ( Low too swing high )
Downtrend Draw Fibonacci High to Low (Swing Low too Swing high)
HH
LL
Example Uptrend Fibonacci Retracement
Example of Downtrend Fibonacci Retracement
Chart Example Fibonacci
Retraced before moved up
Example of Downtrend Fibonacci Retracement
Retraced before moved downside
Fibonacci Extensions
What are Fibonacci Extensions?
Fibonacci extensions are a tool that traders can use to establish Profits Targets
or estimate how far a price may travel after a retracement/Pullback is finished.
Extension levels are also possible areas where the price may reverse.
Common Fibonacci extension levels are 61.8%, 100%, 161.8%, 200%, and 261.8%.++
The Fibonacci extensions show how far the next Price wave could move following a pullback.
For Using Fibonacci Extensions
Uptrend-:
1st select Fibonacci extensions Click Low (swing low) then Click recent high then Retracement Level in
uptrend for upcoming Target
Downtrend-: Select Fibonacci Extensions Click High (swing High) then Click Low Level then
Click Retracement Level in downtrend for upcoming Target
Uptrend
Let’s start with an example in an uptrend
First, click on a significant Swing Low, then drag your cursor and click on the most recent Swing High.
Finally, drag your cursor back down and click on any of the retracement levels.
Example In Uptrend Market Fibonacci extensions for Target
let’s take a look at an example of using Fibonacci extension levels in a downtrend.
Example in downtrend
Example Chart in Uptrend
Example of Downtrend chart
