Article How to use Fibonacci Retracement Levels

T2W Bot

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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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ForexTraderProfit

Newbie
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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.
 

lplate

Active member
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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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