Breakout Levels: Historic Crashes, 1930
An example of fibs being useful for support/resistance in historic market crashes. Dow Jones 1930's.
Shown in red and blue are the areas where a sell signal is generated when the support level is broken. To bottom when a buy signal is generated when the support holds at the bottom. Once it got through this level price did not make a new high until it's made the low of the full move. So by selling short in this area and taking profit on the second support level we’d have had a great trade. The market dropped 75% in the following three years.
Shown in red and blue are the areas where a sell signal is generated when the support level is broken. To bottom when a buy signal is generated when the support holds at the bottom. Once it got through this level price did not make a new high until it's made the low of the full move. So by selling short in this area and taking profit on the second support level we’d have had a great trade. The market dropped 75% in the following three years.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.