While there have been countless books and articles written on the use of Fibonacci in technical analysis, the basics are simple. On the price scale, these ratios, and several others related to the Fibonacci sequence, often indicate levels at which strong resistance and support will be found. Many times, markets tend to reverse right at levels that coincide with the Fibonacci ratios. On the time scale Fibonacci ratios are one method of identifying potential market turning points. When Fibonacci levels of price and time coincide you have high probability entry points. In the next few pages I will talk about how I use the two most common applications of Fibonacci: Price Retracements – A strategy for quality entry points, • Price Extensions – An approach to determining how far price will run Then after we have covered the basics we will talk about bringing it all together and using both Fibonacci Retracements. And Fibonacci Extensions at same time and how clustering of these ratios increases the probability of profit.
Source: Finex Groups
Source: Finex Groups
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