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Using the Fibonacci to up your trading accuracy and confidence.
This is my first educational thread, so please feel free to retweet and give me your comments! I'm gonna illustrate two detailed charts also to better understand the concept, the $BTC, and $ETH charts.
Let's start!
This is my first educational thread, so please feel free to retweet and give me your comments! I'm gonna illustrate two detailed charts also to better understand the concept, the $BTC, and $ETH charts.
Let's start!
History and cultural view
Knowledge of the Fibonacci sequence was traced back to as early as 450 BC, although unconfirmed.
The Fibonacci sequence is often associated with the golden ratio, the 0.618, which is often seen across nature and art
Knowledge of the Fibonacci sequence was traced back to as early as 450 BC, although unconfirmed.
The Fibonacci sequence is often associated with the golden ratio, the 0.618, which is often seen across nature and art
Mathematical Reasoning (1)
Without going deep into its math, The Fibonacci sequence is a sequence where each number is the sum of the two preceding ones, starting from 0 and 1.
Without going deep into its math, The Fibonacci sequence is a sequence where each number is the sum of the two preceding ones, starting from 0 and 1.
Mathematical Reasoning (2)
That is,
For F(0)= 0 and F(1) = 1,
And F(n) = F(n-1) + F(n-2) for n>1
The beginning of the sequence is: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, … and so forth.
That is,
For F(0)= 0 and F(1) = 1,
And F(n) = F(n-1) + F(n-2) for n>1
The beginning of the sequence is: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, … and so forth.
Fibonacci retracement and Fibonacci sequence (1)
How does this relate to the Fibonacci retracement you often see and use in trading? Well, for starter, all of these numbers (0.618, 0.5, etc..) are calculated by dividing the Fibonacci sequence numbers or deriving it from them.
How does this relate to the Fibonacci retracement you often see and use in trading? Well, for starter, all of these numbers (0.618, 0.5, etc..) are calculated by dividing the Fibonacci sequence numbers or deriving it from them.
Fibonacci retracement and Fibonacci sequence (2)
Hence:
- 13/55 = 0.236
- 13/34 = 0.382
- 0.5: mid point
- 13/21 = 0.618
- 0.786 = square root of 0.618
- 0.886 = square root of 0.7864
And the list goes on.
Hence:
- 13/55 = 0.236
- 13/34 = 0.382
- 0.5: mid point
- 13/21 = 0.618
- 0.786 = square root of 0.618
- 0.886 = square root of 0.7864
And the list goes on.
What, when, and how to use the Fibonacci retracement levels? (1)
Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur, and they can be used to place entry orders, determine stop-loss levels, or set price targets.
Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur, and they can be used to place entry orders, determine stop-loss levels, or set price targets.
What, when, and how to use the Fibonacci retracement levels? (2)
How do you use them? Well, you connect any two points that you view as relevant, typically a high point and a low point, and you go on from there.
How do you use them? Well, you connect any two points that you view as relevant, typically a high point and a low point, and you go on from there.
What, when, and how to use the Fibonacci retracement levels? (3)
Let's take a few examples, specifically the #eth and #btc
weekly charts.
Let's take a few examples, specifically the #eth and #btc
weekly charts.
The above concepts can be really applied to any time frame. BUT, caution is warranted when using them. As it doesn't necessarily mean that the price will reach the levels you're eyeing. The Fibonacci retracement should be used in confluence with other confirmations.
References:
Investopedia: https://www.investopedia.com/terms/f/fibonacciretracement.asp
Trading Strategy Guides: https://tradingstrategyguides.com/10-things-you-need-to-know-about-fibonacci/
DarkMatter_CO
Investopedia: https://www.investopedia.com/terms/f/fibonacciretracement.asp
Trading Strategy Guides: https://tradingstrategyguides.com/10-things-you-need-to-know-about-fibonacci/
DarkMatter_CO
