Fibonacci retracements - a Trade Talk

Fibonacci retracements - a Trade Talk

por Lúcio José Patrocínio Filho:.



Unlock the secrets of the markets with the precise Fibonacci Retracements tools.

Fibonacci retracement tools can be used to trade any assets as well as crypto currencies like Bitcoin by identifying potential levels of support and resistance during a price retracement in a trend.

But what is a trend? 

In trading, a trend refers to the general direction of a market or asset over a period of time. Trends can be classified as bullish (upward), bearish (downward), or neutral.

A bullish trend refers to a market or asset that is generally moving upward over a period of time. This is often characterized by higher highs and higher lows on a price chart.

A bearish trend refers to a market or asset that is generally moving downward over a period of time. This is often characterized by lower highs and lower lows on a price chart.

A neutral trend refers to a market or asset that is not clearly moving in either direction over a period of time. This can be characterized by a lack of clear direction in the price chart.

Trends can be short-term, intermediate-term, or long-term, and can be determined by using technical indicators such as moving averages, trendlines or momentum indicators like RSI. Traders often use trend analysis to make trade decisions, by identifying the trend and making trades in the same direction as the trend. However, it's important to note that trends can change and it's important to always monitor the market conditions. 

Here is a general process for using Fibonacci retracement tools to trade:

Identify the significant high and low points on the chart: The key is to identify the significant high and low points that mark the beginning and end of the price move you want to analyze.

Apply the Fibonacci retracement tool: Once you have identified the high and low points, you can apply the Fibonacci retracement tool to the chart. This will create horizontal lines at the key Fibonacci levels of 0.236, 0.382, 0.5, 0.618, 0.764 and/or 0.786.

Look for levels of support and resistance: Once the Fibonacci levels are applied to the chart, you can look for potential levels of support and resistance. When the price retraces to a Fibonacci level and then starts to move in the opposite direction, it can be considered a level of support or resistance.

Confirm with other indicators: Fibonacci retracement levels are just one tool to identify potential levels of support and resistance. It is recommended to use other technical analysis indicators such as moving averages, RSI, etc. to confirm the trend and the strength of the move.

Make a trade: Once you have identified a level of support or resistance, you can make a trade. If the price is approaching a level of resistance, you may consider shorting Bitcoin. If the price is approaching a level of support, you may consider buying Bitcoin.

It's worth noting that the price of bitcoin is highly volatile, therefore it's important to use a stop-loss order to minimize the risk. Also, it's always a good idea to have a clear exit strategy before making any trade.

This strange pattern: 0, 0.236, 0.382, 0.5, 0.618, 0.764 and 1 is an essential tool for any trader looking to make the most of their investments.

The Fibonacci Retracements commonly used in technical analysis are 0, 0.236, 0.382, 0.5, 0.618, and 0.764. The final level of 1 is not a Fibonacci retracement level, but rather represents the total retracement of the original move. These levels are used as potential support and resistance levels during a price retracement.

Uncovering the mystery and discovering the potential advantages it could bring to your trading strategy behind why some traders opt for the 0.764 Fibonacci retracement level instead of the commonly used 0.786, we find that it is derived from the square root of 0.618 (which is a commonly used Fibonacci retracement level) and it is considered a more accurate representation of the retracement level.

The square root of 0.618 is approximately 0.786, which is close to 0.764. This level is also considered as an important level of retracement, especially when the market is in a strong trend or a strong move.

It's worth noting that these levels are not hard rules, and traders may use different levels based on their own analysis, preferences or experience.

It is not necessarily "wrong" to use 0.764 instead of 0.786 as a Fibonacci retracement level. Both levels are derived from the Fibonacci sequence and are commonly used by traders.

The key point is that Fibonacci retracement levels are not hard rules or absolute levels, they are just reference points that traders use in conjunction with other technical analysis indicators to identify potential levels of support and resistance.

Some traders may prefer to use 0.764 because it is a commonly used level and is widely recognized. Others may prefer to use 0.786 because it is derived from the square root of 0.618 and is considered to be a more accurate representation of the retracement level.

Ultimately, it's up to the trader to decide which level they prefer to use and how they incorporate it into their trading strategy. It is important to note that 0.764 has the advantage of giving symmetry to both sides of the fibonacci chart, making it easier to superimpose fibonacci charts, because 0.764 superimpose 0.236.

Fibonacci Time Zones are a tool used in technical analysis to identify potential times when a trend may change or a significant price move may occur. The tool is based on the idea that trends and price moves often repeat in patterns that can be related to Fibonacci numbers. I use to call this tool as Heart Fibonacci, because it gives me an emotional range of the trade, starting with a ruge move, staggering along the time. This tool gives an emotional glimpse into the trade, capturing the raw energy of a huge move and mapping the ebbs and flows of the market over time. It is an emotional trading tool, still little used, perhaps underestimated, after all, the emotional coefficient of the market must be taken into account.

Here's a general process for using Fibonacci Time Zones to trade:

Identify a significant high or low point on the chart: The starting point for the Fibonacci Time Zones is a significant high or low point on the chart. This could be a peak or trough in the price, a high or low in an indicator, or some other significant event.

Draw time zones: Starting from the significant high or low point, draw vertical lines on the chart at intervals that are related to Fibonacci numbers (e.g. 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, etc.). These lines represent potential times when a trend may change or a significant price move may occur.

Look for price action near time zones: As the price approaches a Fibonacci Time Zone, look for signs of a trend change or a significant price move. This could include a change in direction of the price, a break of a key level, or a divergence between the price and an indicator.

Confirm with other indicators: As always, it's important to use other technical analysis indicators such as moving averages, RSI, etc. to confirm the trend and the strength of the move.

Make a trade: If a trend change or significant price move is indicated near a Fibonacci Time Zone, consider making a trade. For example, if the price is approaching a Fibonacci Time Zone and a trend change is indicated, you might consider shorting or going long depending on the situation.

It's important to keep in mind that Fibonacci Time Zones are not a guaranteed indicator of trend changes or significant price moves, and should be used in conjunction with other technical analysis tools. Additionally, the price of an asset can be affected by various factors such as economic events, news, and market sentiment, among others.

Fibonacci Time Zones are based on the idea that trends and price moves often repeat in patterns that can be related to Fibonacci numbers, and it is also believed that these time intervals can also correspond to emotional intervals in the market. The idea behind it is that as time passes, traders and investors may become increasingly emotional and make decisions that deviate from rational analysis.

However, it's important to note that the Fibonacci Time Zones are not a guaranteed indicator of emotional intervals, and one should not rely only on these time intervals to make decisions. Market conditions and other factors such as economic events, news, and market sentiment can also affect the price of an asset. It's important to use other technical analysis indicators and tools, as well as fundamental analysis, to make informed decisions.

It's also good to remember that the market is constantly changing, and what may have been true in the past may not be true in the present or future. Therefore, it's important to constantly monitor the market and adjust your strategy as needed.



Follow me on Twitter: twitter.com/luciojpfilho

Donation please to: paypal.me/luciopatrocinio


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