I did alot of research on this all day and just wanna see if I retained some information. If I am out of wack, please kindly tell me Im out of wack and tell me what is wrong with it. I understand that this should be taken into account with other indicators, but I just wanna see if I got the concept of it down. Also, I am really confused on whether if 0 or 100 should be oin the bottom or top of an upwards and downwards trend. Fibonacci Retracement: Downwards https://www.tradingview.com/x/BbMSW27c/ The dip went up above 50%. came down but did not pass 38%, wait, jumps to 62%. Indicating a good trend. Upwards https://www.tradingview.com/x/P7pdxJyG/ Dip did not go pass 38% and passing above 23%. Wait for confirmation of a bullish trend, sees it goes above original resistance. Indicating it will be going up. Fibonacci Extension Same concept but more current? Downwards: https://www.tradingview.com/x/MThBegZC/ Upwards: https://www.tradingview.com/x/wLH87ToB/
I use them as guides to resistance and support on a trend. While not perfect, they are useful. On the downtrend measuring from high point to low point on a trend it shows potential areas of resistance which can help in figuring out a target price on a swing. Drawing from low point to high point on an uptrend they show areas of support which I use to get a posture on how low a stock could drop. They are most accurate on indexes and ETF's but are helpful on individual stocks as well. I use Fibonacci every day on the S&P If tracing a down trend, start at the top and pull to the low point and on an uptrend start at the low point and pull up to the high point. I should also mention that what you look for is a bounce of each of the lines you see. It the trend passes through a line it is likely to go to the next line or is at least free to do so. The bounce off the line helps confirm it is acting as support or resistence.
No, sorry if I wasn't clear. your start and end points were off. If you are retracing a downtrend for upward movement you start at the high point and pull down to the low point. To retrace an uptrend for potential downside start at low point of the trend and pull to the high point...
Additional Info. I looked this up at Investopedia and they have a 2 minute video and one page explanation that is better than what I posted. http://www.investopedia.com/ask/ans...dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
ok got it. So Im guessing the trend based fib extension would be the same? 1 on top and 0 on bottom if downwards trend. 1 on bottom and 0 on top if an upwards trend?
sorry my link did show what I intended to show. here is a link hope http://www.swing-trade-stocks.com/fibonacci-retracements.html
