Fibonacci

22 авг.Fibonacci

📐 One of my favorite tools for making buy or sell decisions in the markets is Fibonacci, as it highlights key levels that are very difficult to spot just by looking at the chart without it.

🧮 What’s most impressive is how the price reacts strongly when it hits these key levels, remember, fibonacci is based on a numerical pattern where each number is the sum of the two previous ones, starting with 0 and 1, this sequence is fascinating because it shows up in nature, art, and finance, which makes it even more amazing to me.

🧠 With Fibonacci, you can create strategies to identify strong supports and resistances on large time frames, such as H4 or daily, in addition, it allows you to see if the price is touching or close to its take profit, or if it is at levels where you could place your stop loss or take profit.

📐 fibonacci retracement

📊 One thing investors really pay attention to is the Fibonacci retracement, when prices start dropping in an uptrend, levels like 38.2%, 50.0%, 61.8%, and 78.6% often act as support.

▪️ Why? Because traders are keeping an eye on these levels and reacting to them it’s like a prophecy, if enough people believe the price will bounce at 38.2%, it’s more likely to happen just because everyone’s expecting it.

▪️Over time, Fibonacci levels have shown they’re pretty handy for spotting market pullbacks and surges, which is why they’ve become so popular.

🤔 How to use it?

📊 First, we need to identify whether the trend on our chart is bullish or bearish, if it’s bullish, we find the lowest point and mark it as point "A", then we extend Fibonacci to the highest point, which becomes our point "B" this way, the levels are almost exactly aligned, and we can fine tune them to match the prices better, typically round numbers are the most important to consider.

⚖️ Levels

🔹 Take profit
-61.8%
-27.0%

🔹 Point “B” end of extension of fibonacci
0.0%

🔹 Consolidation zone or possible continuation
23.6%

🔹 Validation zones
38.2%
50.0%
61.8%
78.6%

🔹 Extension point “A” of fibonacci
100.0%

🔹 Stop loss
110.0%
120.0%

🏦 In the following example, we’re looking at JPM on a 4-hour timeframe, when it touches the 61.8% level, it shows strong upward movements, respecting that level quite well, now, it’s at point “B” of the extension, and if it breaks this level, it could head towards the -27% Fibonacci, which is very close to a round number $225 i think that’s a very likely target.