Fibonacci Retracement's

This is a discussion on Fibonacci Retracement's within the Technical Analysis forums, part of the Methods category; a chart of EXPN. there are two fib calculations you can see the retracement levels on the right, one in ...

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Old Mar 31, 2013, 8:30pm   #16
 
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Re: Fibonacci Retracement's

a chart of EXPN. there are two fib calculations you can see the retracement levels on the right, one in green and the second in red
Start from the low to the high (in an uptrend), this produces the fib retracement levels. nice how the first ends on the 38% exactly and the second on the 50% retracement exactly.
I read somewhere that you have to use High low, well the close chart ive drawn clearly demonstrates otherwise
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Old May 13, 2013, 9:17pm   #17
Joined May 2013
Re: Fibonacci Retracement's

in Ensign Software the is an utility called Pesavento Pattern.

It will identify and plot all the possible retracements and sometimes multiples retracements will appear on a single pivot point.

I have a problem believing you can trust them all the time BUT Bill McCready found a clever way to use them.

If you are in a position, and suddenly a pesavento pattern is printed on your chart you get the hell out.

If you are looking to enter the market and suddenly a pesavento pattern is printed on your chart, you start looking for clues in the price action, supp/res, and other indicators to decide what will be the next best possible entry.

The way I have seen people using it is by anticipation the market "should turn" sometimes it will work remarkably well but more often that not you're screwed.

SO this approach as a warning to get out and a warning to start looking for strong evidence to enter the market makes sense to me.
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Old Jun 2, 2013, 2:47pm   #18
Joined Jun 2013
Re: Fibonacci Retracement's

I love fibs, retracements and extensions.
I find the market often respects them and they can be used to pick places to potentially get in and are especially good for picking places to get out, or to trail a stop.
For example, if I was wanting to stay in a trend, and move my stop up, I would use fibs.

They are also good for getting a idea of how strong a trend may be, if there is a shallow retrace, this implies a strong trend, so if price can only go back to the 38fib it is likely we will see it be stronger.

The psychology behind this is pretty simple, if price can not retrace far, it is showing that people are eager to snap up the lower price (in a up trend - vice versa in a down trend) and this indicates investor sentiment is still strongly bullish (again, in a up trend)

I think it is better to use them from the 1h + charts (though they do work on smaller charts)


Some people do it from the extreme high/low (shadows) but I like to use them from the high/low close.
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Old Mar 9, 2014, 2:13pm   #19
Joined Mar 2014
Love those ratios, especially when these form a zone of confluence, strong probability of support and resistance in that zone. For example, recent price action in USDJPY.
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