Fibonacci levels in trading information for beginners
fuck today I want to introduce you to an interesting tool, Fibonacci levels - Fibonacci levels are mainly used to determine support and resistance levels. This is exactly what a newbie should know.
The Fibonacci sequence has many interesting mathematical properties. This number series is found in all living nature - from the arrangement of leaves on trees to spiral galaxies. The apparent chaos in the foreign exchange market is also subject to regularities. In the article, we will discuss how Fibonacci levels are used in trading and analyze a working trading strategy.
In view of you up to date about what we will talk with you today.
Content:
What are Fibonacci levels in trading?
Instructions for use,
Trading strategy with examples,
indicators,
Pros and cons,
Rubric "Question-Answer".
What is Fibonacci
The Fibonacci sequence consists of an infinite number of numbers. Each is the sum of a pair of previous ones. Starting from the fifth, they increase according to the principle of the golden section. Any next number is greater than 1.618 times. The number series itself looks like this: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc.
In addition to the key 1.618, there are several more similar ones. They are obtained by dividing any number from the series by the number located two and three positions to the right. Thus, three important ratios are obtained that operate throughout the entire number series - 61.8%, 38.2% and 23.6%. To work with charts, traders add a few more values - 0, 50, 100.
These numbers reflect patterns that apply to everything around. Accordingly, to price fluctuations in the market. By drawing lines across these values, traders get bands that act as standard support and resistance. The difference from the usual ones is that they are built on the principle of the golden section.
Fibo levels are called corrective. They are put on the chart for a reason. For calculation, a strong trend movement is chosen, which is divided into segments according to established ratios. Lines are obtained where the price is corrected after the trend movement. In these places, it will slow down, and a breakdown or rebound will occur.
Fobonacci levels in trading
Fibo is usually not used as an independent strategy. This is an auxiliary analysis method that helps to find correction zones. The approach of quotes to the line is not a signal to open a deal.
Fibo levels are multifunctional, they are used for different purposes:
as support and resistance for trading classic breakout or rebound strategies;
as target zones for placing stop-loss and take-profit;
additional confirmation of signals received using other methods;
to look for potential reversal zones.
As you can see, the technique provides many areas of application. Therefore, Fibo levels are actively used as an auxiliary technique in many strategies.
How to use
There is nothing complicated in adding an algorithm to a chart. It is included by default in all known trading terminals, including Metatrader. You don't need to download and install yourself. The problem is to find a specific area to stretch the mesh.
To determine the place of correction, you must first detect the trend. Difficulties arise at this stage.
The first thing to do is to determine the situation in the market. If quotes move sideways, there is no point in using Fibo.
visually. You can zoom out a little and try to notice strong fluctuations. The method is subjective, but this is how most work (example below)
After that, on the chart, you need to click on the selected extremum and, without releasing the button, stretch the grid from left to right.
Adjust the tool if necessary. Lines are selected by double-clicking and then right-clicking to bring up a menu.
Let's move on to the highlights of Fibonacci
Signal to open a buy trade
Here comes the combination with indicators
-price crosses the moving average upwards;
-stochastic comes out of the oversold zone;
- the grid is stretched along the last wave, and the price and the moving average cross at one of the Fibo levels.
Stop loss and take profit are set depending on where the position was opened. As a standard, they are placed near the next line. It is not necessary to set orders clearly on a level with a significant band. Quotes do not always reach exactly to a specific value. It is better to place a stop a little further than the level, and a take a little earlier.
Sales rules are mirrored. This strategy is very simple and can be used by all traders regardless of their level of experience. It is important that the indicators in it are easy to replace without losing the efficiency of the system. The main thing is to observe the basic ratio. Be sure to use levels, a trend indicator and an oscillator. Let's take a look at how this strategy works in practice.
Ask your questions in the comments and put likes!
The Fibonacci sequence has many interesting mathematical properties. This number series is found in all living nature - from the arrangement of leaves on trees to spiral galaxies. The apparent chaos in the foreign exchange market is also subject to regularities. In the article, we will discuss how Fibonacci levels are used in trading and analyze a working trading strategy.
In view of you up to date about what we will talk with you today.
Content:
What are Fibonacci levels in trading?
Instructions for use,
Trading strategy with examples,
indicators,
Pros and cons,
Rubric "Question-Answer".
What is Fibonacci
The Fibonacci sequence consists of an infinite number of numbers. Each is the sum of a pair of previous ones. Starting from the fifth, they increase according to the principle of the golden section. Any next number is greater than 1.618 times. The number series itself looks like this: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc.
In addition to the key 1.618, there are several more similar ones. They are obtained by dividing any number from the series by the number located two and three positions to the right. Thus, three important ratios are obtained that operate throughout the entire number series - 61.8%, 38.2% and 23.6%. To work with charts, traders add a few more values - 0, 50, 100.
These numbers reflect patterns that apply to everything around. Accordingly, to price fluctuations in the market. By drawing lines across these values, traders get bands that act as standard support and resistance. The difference from the usual ones is that they are built on the principle of the golden section.
Fibo levels are called corrective. They are put on the chart for a reason. For calculation, a strong trend movement is chosen, which is divided into segments according to established ratios. Lines are obtained where the price is corrected after the trend movement. In these places, it will slow down, and a breakdown or rebound will occur.
Fobonacci levels in trading
Fibo is usually not used as an independent strategy. This is an auxiliary analysis method that helps to find correction zones. The approach of quotes to the line is not a signal to open a deal.
Fibo levels are multifunctional, they are used for different purposes:
as support and resistance for trading classic breakout or rebound strategies;
as target zones for placing stop-loss and take-profit;
additional confirmation of signals received using other methods;
to look for potential reversal zones.
As you can see, the technique provides many areas of application. Therefore, Fibo levels are actively used as an auxiliary technique in many strategies.
How to use
There is nothing complicated in adding an algorithm to a chart. It is included by default in all known trading terminals, including Metatrader. You don't need to download and install yourself. The problem is to find a specific area to stretch the mesh.
To determine the place of correction, you must first detect the trend. Difficulties arise at this stage.
The first thing to do is to determine the situation in the market. If quotes move sideways, there is no point in using Fibo.
visually. You can zoom out a little and try to notice strong fluctuations. The method is subjective, but this is how most work (example below)
After that, on the chart, you need to click on the selected extremum and, without releasing the button, stretch the grid from left to right.
Adjust the tool if necessary. Lines are selected by double-clicking and then right-clicking to bring up a menu.
Let's move on to the highlights of Fibonacci
Signal to open a buy trade
Here comes the combination with indicators
-price crosses the moving average upwards;
-stochastic comes out of the oversold zone;
- the grid is stretched along the last wave, and the price and the moving average cross at one of the Fibo levels.
Stop loss and take profit are set depending on where the position was opened. As a standard, they are placed near the next line. It is not necessary to set orders clearly on a level with a significant band. Quotes do not always reach exactly to a specific value. It is better to place a stop a little further than the level, and a take a little earlier.
Sales rules are mirrored. This strategy is very simple and can be used by all traders regardless of their level of experience. It is important that the indicators in it are easy to replace without losing the efficiency of the system. The main thing is to observe the basic ratio. Be sure to use levels, a trend indicator and an oscillator. Let's take a look at how this strategy works in practice.
Ask your questions in the comments and put likes!
관련 발행물
면책사항
이 정보와 게시물은 TradingView에서 제공하거나 보증하는 금융, 투자, 거래 또는 기타 유형의 조언이나 권고 사항을 의미하거나 구성하지 않습니다. 자세한 내용은 이용 약관을 참고하세요.