The tool can be applied to any time frame, from tick charts all up to daily or monthly charts; no matter what time frame you trade on the application of the tool is the same.Use the Fibonacci extensions tool to provide profit targets on trending trades. For slowing or weak trends, the 61.8 level tends to work best. For medium trends, the 100 level, and for stronger trends the 161.8 or higher targets are acceptable. Apply the Fibonacci extension tool to multiple waves, and even different time frames to be aware of different levels which may affect the price of an asset.
Proponents of Fibonacci assert that each price wave has a mathematical relationship to waves that occur before and after it. This relationship is based on the “Golden Ratio” and a series of “Fibonacci Numbers” which help define the numerical relationship of one thing to another. The “Golden Ratio” is derived from this sequence. As the sequence progresses, if a number is divided by the prior number it produces a ratio: 3/2 is 1.5, 13/8 is 1.625. As the numbers progress the relationship reaches the Golden Ratio of 1.618.
The Fibonacci Extension tool is applied to one wave of a price move, which in turn helps to predict where future waves in that trend will go to, and possibly reverse.These are commonly used Fibonacci extension levels:61.8%, 100%, 138.2%, 161.8%, 200%, 238.2%, 261.8%. These Fibonacci Expansion levels are attained by finding relationships between the numbers in the Fibonacci sequence, discussed above, through various calculations. The level the price stops at will vary depending on the strength of the trend. Most often we see the price pause or reverse at 61.8 (weaker trend), 100 (medium trend), or 161.8 (strong trend). Once the reversal occurs we can then draw another Fibonacci extension, but we will keep the old one(s) on the chart as well, since down the road there are additional levels which can still be used such as the 200, 238.2, 261.8 and 300.
Use the Fibonacci Expansion tool in all markets and on all time frames. It is a trend following tool and helps isolate potential profit targets for trades. It is also used to spot areas where the price could reverse, although using it to predict reversals isn’t encouraged. The price may not stop exactly at a Fibonacci level, rather Fibonacci levels are just zones. We also don’t know if the price will reverse off a Fibonacci level, just stall or only pullback slightly. Sometimes the price will completely disregard Fibonacci levels, especially when major news occurs. In conclusion: Noted on daily GBPUSD is an Fibonacci Extension tool with a target/reversely at 161.8 (golden ratio)- up to 235 pips in profit on this swing trading. Risk management is always #1 when trading Forex.
Proponents of Fibonacci assert that each price wave has a mathematical relationship to waves that occur before and after it. This relationship is based on the “Golden Ratio” and a series of “Fibonacci Numbers” which help define the numerical relationship of one thing to another. The “Golden Ratio” is derived from this sequence. As the sequence progresses, if a number is divided by the prior number it produces a ratio: 3/2 is 1.5, 13/8 is 1.625. As the numbers progress the relationship reaches the Golden Ratio of 1.618.
The Fibonacci Extension tool is applied to one wave of a price move, which in turn helps to predict where future waves in that trend will go to, and possibly reverse.These are commonly used Fibonacci extension levels:61.8%, 100%, 138.2%, 161.8%, 200%, 238.2%, 261.8%. These Fibonacci Expansion levels are attained by finding relationships between the numbers in the Fibonacci sequence, discussed above, through various calculations. The level the price stops at will vary depending on the strength of the trend. Most often we see the price pause or reverse at 61.8 (weaker trend), 100 (medium trend), or 161.8 (strong trend). Once the reversal occurs we can then draw another Fibonacci extension, but we will keep the old one(s) on the chart as well, since down the road there are additional levels which can still be used such as the 200, 238.2, 261.8 and 300.
Use the Fibonacci Expansion tool in all markets and on all time frames. It is a trend following tool and helps isolate potential profit targets for trades. It is also used to spot areas where the price could reverse, although using it to predict reversals isn’t encouraged. The price may not stop exactly at a Fibonacci level, rather Fibonacci levels are just zones. We also don’t know if the price will reverse off a Fibonacci level, just stall or only pullback slightly. Sometimes the price will completely disregard Fibonacci levels, especially when major news occurs. In conclusion: Noted on daily GBPUSD is an Fibonacci Extension tool with a target/reversely at 161.8 (golden ratio)- up to 235 pips in profit on this swing trading. Risk management is always #1 when trading Forex.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.