Again lets keep it simple and not make life complicated.No hi fi definations .
Fib is a tool for trending markets.Its again one more tool which is used for identifying a peculiar behavior of the mass crowd.
Fib has 2 dimensions
one “Retracement” and
another is “extension”.
Here also lets use our simple language.
The levels to look for retracements are 23%,38%,50% and 62%.
The levels to look for extensions ( Continuance of trend ) are 123%,138%,150% and 162%.
Now u must be knowing that “O” is the place of starting of the trend and “100%” is the place where trend started retracing.
Now further 23%,38%,50% and 62% retracements all fall below 100% levels but above “O”.
Naturally Fib extensions of 123%,138%,150% and 162%. All fall above 100%.Its a common sense.
Now comes the difficulty.How to draw ?where to start?,where is the trend? Isn’t it?The problem is if there are 1 Lakh traders 99,999 are in trouble, they are confused.They do neither grasp simple things nor accept it. That’s a fact.
Now lets see how we draw it.
1st and 2 charts are monthly charts with retracement & extension levels respectively (One candle per one month).3rd and 4th charts are weekly charts with retracement & extension levels respectively ( One candle per one week).Now where do we start from?.
Listen – If a bar closes in green what does it suggest?.It suggests that price has moved up. In other words we had a uptrend for that particular period.Are u surpised that just one candle can represent a trend.Thats what we have to learn .The same One candle in 30 Min TF or 5 Min TF represents many candles. However we are making our work dead easy.
Now when a price moves up what will be the direction of the retracement.Naturally opposite side.i.e:downwards.Hence we take the top (high ) of the candle as starting point and draw the fib line by bringing it to the low of the candle. Now we get 62,50,38and 23%.
Similarly fib extensions as we know are above the high of candles hence the starting point is low or base of the candle and when we draw the line from base ( low) to high of the candle it automatically shows the level of extensions.
Vice versa for downtrend.
Pls google search of drawing Fib retracement and fib extensions,you would get lot of materials.
Next we will cover how do we use these 2 tools to make our trades .(Pivot and Fib combined)
Fib is a tool for trending markets.Its again one more tool which is used for identifying a peculiar behavior of the mass crowd.
Fib has 2 dimensions
one “Retracement” and
another is “extension”.
Here also lets use our simple language.
The levels to look for retracements are 23%,38%,50% and 62%.
The levels to look for extensions ( Continuance of trend ) are 123%,138%,150% and 162%.
Now u must be knowing that “O” is the place of starting of the trend and “100%” is the place where trend started retracing.
Now further 23%,38%,50% and 62% retracements all fall below 100% levels but above “O”.
Naturally Fib extensions of 123%,138%,150% and 162%. All fall above 100%.Its a common sense.
Now comes the difficulty.How to draw ?where to start?,where is the trend? Isn’t it?The problem is if there are 1 Lakh traders 99,999 are in trouble, they are confused.They do neither grasp simple things nor accept it. That’s a fact.
Now lets see how we draw it.
1st and 2 charts are monthly charts with retracement & extension levels respectively (One candle per one month).3rd and 4th charts are weekly charts with retracement & extension levels respectively ( One candle per one week).Now where do we start from?.
Listen – If a bar closes in green what does it suggest?.It suggests that price has moved up. In other words we had a uptrend for that particular period.Are u surpised that just one candle can represent a trend.Thats what we have to learn .The same One candle in 30 Min TF or 5 Min TF represents many candles. However we are making our work dead easy.
Now when a price moves up what will be the direction of the retracement.Naturally opposite side.i.e:downwards.Hence we take the top (high ) of the candle as starting point and draw the fib line by bringing it to the low of the candle. Now we get 62,50,38and 23%.
Similarly fib extensions as we know are above the high of candles hence the starting point is low or base of the candle and when we draw the line from base ( low) to high of the candle it automatically shows the level of extensions.
Vice versa for downtrend.
Pls google search of drawing Fib retracement and fib extensions,you would get lot of materials.
Next we will cover how do we use these 2 tools to make our trades .(Pivot and Fib combined)
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