📌Fibonacci & FIBO retracement❗
✳️The author of the Fibonacci series of numbers was the Italian mathematician Leonardo Pisano. The series has been known for centuries for this series of numbers: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89 and so on until infinity. The number is calculated by the sum of the two previous numbers.
This numerical relationship has also been used on the financial markets for a century.The number Phi is of particular importance. Phi was created from the golden ratio. The golden ratio is the ratio of two numbers, the higher number is the numerator and the lower number is the denominator. The result is always around 1.618. Below is an example:
a = 0.618
b = 0.382
0.618/0.382 = 1.618
Golden Ratio: 0.618 + 0.382 = 1,000
🔶🔷It's all about resistance and support:
The Fibonacci retracement is a method of finding potential resistance and support zones in an underlying asset. It is based on the idea that a predetermined portion of a move from a price will bounce back. After that, the price will continue in the “real” direction. Often a correction corrects a Fibonacci percentage of a previous wave. From experience, the most common retracement levels are 38.2%, 50%, and 61.8%. These levels are watched by most analysts because they represent potential market reversal points.
🔴As an example, this chart depicts the rally of BITCOIN towards its ATH . The price drops right back to the 23.6%, after which the price stabilizes and continues in the uptrend
🔵The next chart shows the ETHUSDT on the 4H chart. As we see, the price is going back to the 23.6% and then 38.2% zone, but it failed to stabilize and falls to the next 50% retracement level and returned . Prices recovered and made a new high, continuing the previous uptrend.
⚪Fibonacci Analysis allows you to determine the support and resistance levels of a price correction and more importantly helps you find price targets and potential reversal points Almost in any market
for instance in the past rally for ADAUSDT, I used Fibonacci to determine the possible targets, and it exactly worked:🎯🏹
🔰How to draw Fibonacci retracements on the chart:
It is best to use candlestick shadows so that the analysis includes the extremes of market sentiment. Most of the time the difference is not significant, but sometimes it is crucial. The example below shows how the Fibonacci retracement was drawn to the shadows of the candlesticks from the trend low to high.
The measurement should be in the same direction as the price movement. After the measurement, the horizontal lines can be seen in the chart. These lines are potential support and resistance levels.
🔰Fibonacci retracement as part of trading strategy:
Fibonacci retracements can be very efficient for timing a trend. This method is often used by traders as part of trend strategy. With this strategy, traders monitor key price levels within a trend. This means they buy when the market is going up and sell when it is going down. Traders try to place orders in the same direction as the original trend (less risk). In this scenario, you assume that the price has a certain probability of bouncing off the Fibonacci levels and moving back in the direction of the main trend. In our example, the price dropped to the 38.2% level before correcting again. The probability of a turning point in the market increases sharply,
🔰Powerful and sometimes useful:
Fibonacci retracement is a powerful tool and useful because it often marks reversal points with uncanny accuracy. Because of this, it should be used in conjunction with other indicators to identify potential trading opportunities. also There are five types of trading tools that are based on Fibonacci's discovery: arcs, fans, retracements, extensions, and time zones and .... The lines created by these Fibonacci studies are believed to signal changes in trends as the prices draw near them.
This numerical relationship has also been used on the financial markets for a century.The number Phi is of particular importance. Phi was created from the golden ratio. The golden ratio is the ratio of two numbers, the higher number is the numerator and the lower number is the denominator. The result is always around 1.618. Below is an example:
a = 0.618
b = 0.382
0.618/0.382 = 1.618
Golden Ratio: 0.618 + 0.382 = 1,000
🔶🔷It's all about resistance and support:
The Fibonacci retracement is a method of finding potential resistance and support zones in an underlying asset. It is based on the idea that a predetermined portion of a move from a price will bounce back. After that, the price will continue in the “real” direction. Often a correction corrects a Fibonacci percentage of a previous wave. From experience, the most common retracement levels are 38.2%, 50%, and 61.8%. These levels are watched by most analysts because they represent potential market reversal points.
🔴As an example, this chart depicts the rally of BITCOIN towards its ATH . The price drops right back to the 23.6%, after which the price stabilizes and continues in the uptrend
🔵The next chart shows the ETHUSDT on the 4H chart. As we see, the price is going back to the 23.6% and then 38.2% zone, but it failed to stabilize and falls to the next 50% retracement level and returned . Prices recovered and made a new high, continuing the previous uptrend.
⚪Fibonacci Analysis allows you to determine the support and resistance levels of a price correction and more importantly helps you find price targets and potential reversal points Almost in any market
for instance in the past rally for ADAUSDT, I used Fibonacci to determine the possible targets, and it exactly worked:🎯🏹
🔰How to draw Fibonacci retracements on the chart:
It is best to use candlestick shadows so that the analysis includes the extremes of market sentiment. Most of the time the difference is not significant, but sometimes it is crucial. The example below shows how the Fibonacci retracement was drawn to the shadows of the candlesticks from the trend low to high.
The measurement should be in the same direction as the price movement. After the measurement, the horizontal lines can be seen in the chart. These lines are potential support and resistance levels.
🔰Fibonacci retracement as part of trading strategy:
Fibonacci retracements can be very efficient for timing a trend. This method is often used by traders as part of trend strategy. With this strategy, traders monitor key price levels within a trend. This means they buy when the market is going up and sell when it is going down. Traders try to place orders in the same direction as the original trend (less risk). In this scenario, you assume that the price has a certain probability of bouncing off the Fibonacci levels and moving back in the direction of the main trend. In our example, the price dropped to the 38.2% level before correcting again. The probability of a turning point in the market increases sharply,
🔰Powerful and sometimes useful:
Fibonacci retracement is a powerful tool and useful because it often marks reversal points with uncanny accuracy. Because of this, it should be used in conjunction with other indicators to identify potential trading opportunities. also There are five types of trading tools that are based on Fibonacci's discovery: arcs, fans, retracements, extensions, and time zones and .... The lines created by these Fibonacci studies are believed to signal changes in trends as the prices draw near them.
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