Tips for Using Fibonacci Retracements

One of the popular tools among forex or commodity traders is able to provide support or resistance information that other forex indicators do not have.

The Fibonacci indicator will focus on areas where the pullback can reverse towards the trend, then help confirm entry points. In general, Fibonacci will help isolate pullbacks when they are about to end or finish, so traders will get an estimated entry point to immediately take trading opportunities. The calculation of these ratios will produce numbers that can help traders determine entry and exit levels. Basically the Fibonacci indicator can be combined with other types of indicators to give the best results. Here are tips on using Fibonacci retracements:

Tips for Using Fibonacci Treatment

Through Fibonacci, traders can determine the range of potential support and resistance areas quite easily. Fibonacci retreatment can be put to good use when the market is in a trending state, either in an uptrend or downtrend. However, this tool is less effective when the market is in a sideways condition. To find retracement levels, traders need to find significant swing highs and swing lows. When there is an uptrend, traders only need to pull the Fibonacci Retracement from swing low to swing high.

Conversely, when there is a price movement to a downtrend, traders need to pull the Fibonacci Retracement from swing high to swing low. The six Fibonacci retracement levels are:


0.0%


23.6%


38.2%


50%


61.8%


100%

These levels will then be used as a reference or reference for traders in determining support and resistance areas. The three most popular levels are 38.2%, 50%, and 61.8%. From these 3 levels, buy or sell signals often appear with a fairly high level of accuracy.

So in general, the basic concept of using Fibonacci Retracement is to look for buying opportunities when the price is in the support range. And look for selling opportunities when the price is in the resistance range of the Fibonacci Retracement.

This is a review regarding Fibonacci Retracement in forex trading. An indicator that can be used to maximize the trading strategy carried out.


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