Power of Phi: We banked +37%!
In forex trading, the Fibonacci sequence can also be applied to market behavior to find high-probability trading setups on a wide range of timeframes. Fibonacci retracement is based on the idea that markets will retrace a predictable portion of a move, after which they will continue to move in the original direction. Fibonacci retracement is created by taking two extreme points on a chart and dividing the vertical distance by the key Fibonacci ratios. 0.0% is considered to be the start of the retracement, while 100.0% is a complete reversal to the original part of the move. Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels
The following is a list of key Fibonacci retracement levels to look out for:
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The following is a list of key Fibonacci retracement levels to look out for:
- Retracement level: 38.2% Fast and aggressive pullback bounce.
Retracement level: 50% Medium pullback bounce.
Retracement level: 61.8% Golden Number pullback bounce.
Retracement level: 78.6% Stop-loss level to be placed, 10 PIPs.
Extension levels: -61.8% and -27% Target area for trend continuation.
Copyright 2019 © Alchemy FX All rights reserved.
No part of this book may be reproduced or used in any manner without written permission of the copyright owners except for the use of quotations in a book review.
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