Article How to use Fibonacci Retracement Levels

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Fibonacci analysis leaped into the technical mainstream late in the 1990s. Futures traders had been quietly using this charting tool for several decades when Net-based, real-time software ported it to the equity markets. Its popularity exploded as at-home traders experimented with the arcane math and discovered its many virtues.
Leonardo of Pisa (c. 1170-1250), also known as Fibonacci, studied math among the Arabs and introduced algebra to Europe, as well as a numerical sequence that appears throughout nature. The core logic of his discovery is simple: beginning with 1+1, the sum of the last two numbers that precede it creates the next value in a Fibonacci progression.
So with this math in hand, the starting Fibonacci sequence looks like this: 1+1=2, 1+2=3, 2+3=5, 3+5=8, 5+8=13, 8+13=21, 13+21=34, 21+34=55. And so on to infinity.
Commonly observed market retracement levels of 38%, 50% and 62% are derived from ratios of this logical number series. Traders apply Fibonacci levels to...

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Re: How to Use Fibonacci Retracement Levels

Good article. However, I think it is also important to advocate for the application of additional confirmations such as candle formations and Elliott wave analysis in determining when to enter a trade to avoind immediate losses which may cause you to lock up capital while waiting for the market to revert back in the anticipated direction. But again, good article.


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Overnight Grid

In case you are puzzled, I think on this chart only the first circle is properly a fib trade; the other two are just s/r levels.
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