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Fibonacci Retracement

Every trader can find his own unique answer, which would correspond with personal preferences, in order to add confidence in trading. We can see stuck long positions in point 3 in the cluster chart and exhaustion of sells in point 4. Let’s have a look what advantages a trader gets when he combines footprint and Fibonacci retracement levels. Here we have again a 10-minute E-micro Gold futures chart. Gold futures as an example in this article, but you can, as well, apply Fibonacci retracement levels in any other market with any timeframe. We used the 61.8% Fibonacci level in all the charts we used as examples.

Fibonacci followers provide arguments that the market is a natural phenomenon. There is a level again in point 5, but now it is a resistance level, formed by coinciding POCs. This level is a bit above the standard Fibonacci correction level.

What Is a Fibonacci Retracement Level?

When these indicators are applied to a chart, the user chooses two points. Once those two points are chosen, the lines are drawn at percentages of that move. If there are ratings of the most popular instruments for analysis, Fibonacci retracement levels are in all of them. Recently, we even discussed a Forex trading strategy based on Fibonacci numbers and Elliott waves.

Once these trading patterns​ are identified, horizontal lines can be drawn and then used to identify possible support and resistance levels. https://www.bigshotrading.info/ levels often mark retracement reversal points with surprising accuracy. The retracement levels are a powerful tool that can be applied to all timeframes, including day trading​ and long-term investing.

Learn Forex Trading

To learn more about how to add this annotation to your charts, check out our Support Center article on ChartNotes’ Line Study Tools. You can use our ChartNotes annotation tool to add Fibonacci Retracement Lines to your charts. Below, you’ll find an example of a chart annotated with Fibonacci Retracement Lines. Fibonacci Arcs are half circles that extend out from a trend line drawn between two extreme points. These countertrend moves tend to fall into certain parameters, which are often the Fibonacci Retracement levels. For short term trading, I personally prefer 9 or 21 day data points. Are you referring to the prior trend up move or down move?

Fibonacci Retracement

When evaluating online brokers, always consult the broker’s website. Commodity.com makes no warranty that its content will be accurate, timely, useful, or reliable. We also distinguish the difference between Fibonacci retracements from Fibonacci extensions. The first type means additional levels, where the price may reverse. The second type means the zone between additional levels, inside which the price may stop and reverse.

2 – Fibonacci Retracement construction

The Fibonacci sequence is a series of numbers where the next number is simply the sum of the two preceding numbers. So for example, it would run 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on, with the sequence continuing indefinitely. This analysis is for you if you want to get out of DOT or if you want to buy DOT. I think we can definitely reach at least the 0.382 FIB retracement of this downtrend wave.

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