How To Trade With Fibonacci Retracements
Finally we've done it, a video to show how Fib retracements can be used in trading.
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Now we have a quick question here from a new subscriber asking how they can use something like Fibonacci retracements in their trading. So, thanks for the question. There are really a lot of technical trading tools at a traders disposal, and even though something like Fib retracement's are useful, keep in mind they're not perfect, and they should never be used you know, as a crutch. You should always accompany them with other technical trading tools, like support and resistant zones, or psychological price levels, or trend lines, et cetera.
So, if you choose to build your technical trading approach by solely relying of Fib labels, that is also fine. I mean that is your prerogative as a trader, and there are certainly thousands of other traders who do the same, but as long as you know at the end of the day it's just one of the technical tools that's available, and shouldn't replace, you know, good fundamental, and other technical analysis methods.
So, after that little bit of a rant, let's quickly jump to a chart, and look at how we can use Fib retracement levels. So, the first thing to note is that there are a difference between two Fibs. You get a Fibonacci retracement level, and then you also get a Fibonacci expansion level. Now, for this video we will focus on the retracement Fibs, as I personally haven't really found much use for the expansion levels, even though there are thousands of traders out there that use it successfully.
So, let's jump to a quick chart, and see how we can apply the Fib and use it in our trading. Now, the first thing I think, to understand, on how to draw a Fib, it's very simple really, you need to ask yourself in which direction are you trading?
So are you looking for a continuation move? Are you looking for a further move to the upside, after a pull back? Are you looking for a down move? And you basically need to draw the Fib in the direction in which you want to trade in.
So, if you are trading a bullish move to the upside, for example, you need to be drawing your Fibonacci retracement from the lows to the highs, and if you're looking to trade something bearish, for example, you need to draw your Fibs from the swing highs, to the swing lows.
So let's just quickly do a practice run. So let's say we want to trade this move to the upside, we think the market is going to continue, and we want to look for a possible retracement level. So then you can just take out your Fib, and you can draw it from the swing low to the swing high, and that'll obviously give you a couple of levels.
Now let me just quickly add in some of the more traditional levels that you'll see in the Fibs, just so that it looks the same on your chart. So that is what your fib will look like.
So, this will give you a couple of possible levels to consider pullbacks to reengage this market with. So, trading it to the upside, drawing it from the low to the high, then let's say we wanted to trade this down move, for example to the downside we would draw it from the swing low to the swing high, and then we can see possible levels that we can engage the market with as possible retracements.
Now, I've done this on the H four, just to get some clearer chart moves, but you can obviously deploy the Fib on any time-frame that you are trading. So let's quickly take these away, and let's drop down to something like the M30 for example, and just show you it works the exact same way.
The question is to always ask yourself, in which direction am I trading in? If I'm trading it to the upside, I need to draw the Fib in the direction that I want to trade in, if it's a down move, it's gonna be from the swing high to the swing low. If it's an up move, it's gonna be from the swing low to the swing high, and again, don't use it in a vacuum.
Try and use additional technical methods to your advantage. Try and really and get those very best technical entries and exits for your trading. So I hope that helps, any other questions on this, please don't hesitate to let us know.
**For more detail, watch the video or visit www.forexsource.co
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://bit.ly/2HFykNd
-----
Now we have a quick question here from a new subscriber asking how they can use something like Fibonacci retracements in their trading. So, thanks for the question. There are really a lot of technical trading tools at a traders disposal, and even though something like Fib retracement's are useful, keep in mind they're not perfect, and they should never be used you know, as a crutch. You should always accompany them with other technical trading tools, like support and resistant zones, or psychological price levels, or trend lines, et cetera.
So, if you choose to build your technical trading approach by solely relying of Fib labels, that is also fine. I mean that is your prerogative as a trader, and there are certainly thousands of other traders who do the same, but as long as you know at the end of the day it's just one of the technical tools that's available, and shouldn't replace, you know, good fundamental, and other technical analysis methods.
So, after that little bit of a rant, let's quickly jump to a chart, and look at how we can use Fib retracement levels. So, the first thing to note is that there are a difference between two Fibs. You get a Fibonacci retracement level, and then you also get a Fibonacci expansion level. Now, for this video we will focus on the retracement Fibs, as I personally haven't really found much use for the expansion levels, even though there are thousands of traders out there that use it successfully.
So, let's jump to a quick chart, and see how we can apply the Fib and use it in our trading. Now, the first thing I think, to understand, on how to draw a Fib, it's very simple really, you need to ask yourself in which direction are you trading?
So are you looking for a continuation move? Are you looking for a further move to the upside, after a pull back? Are you looking for a down move? And you basically need to draw the Fib in the direction in which you want to trade in.
So, if you are trading a bullish move to the upside, for example, you need to be drawing your Fibonacci retracement from the lows to the highs, and if you're looking to trade something bearish, for example, you need to draw your Fibs from the swing highs, to the swing lows.
So let's just quickly do a practice run. So let's say we want to trade this move to the upside, we think the market is going to continue, and we want to look for a possible retracement level. So then you can just take out your Fib, and you can draw it from the swing low to the swing high, and that'll obviously give you a couple of levels.
Now let me just quickly add in some of the more traditional levels that you'll see in the Fibs, just so that it looks the same on your chart. So that is what your fib will look like.
So, this will give you a couple of possible levels to consider pullbacks to reengage this market with. So, trading it to the upside, drawing it from the low to the high, then let's say we wanted to trade this down move, for example to the downside we would draw it from the swing low to the swing high, and then we can see possible levels that we can engage the market with as possible retracements.
Now, I've done this on the H four, just to get some clearer chart moves, but you can obviously deploy the Fib on any time-frame that you are trading. So let's quickly take these away, and let's drop down to something like the M30 for example, and just show you it works the exact same way.
The question is to always ask yourself, in which direction am I trading in? If I'm trading it to the upside, I need to draw the Fib in the direction that I want to trade in, if it's a down move, it's gonna be from the swing high to the swing low. If it's an up move, it's gonna be from the swing low to the swing high, and again, don't use it in a vacuum.
Try and use additional technical methods to your advantage. Try and really and get those very best technical entries and exits for your trading. So I hope that helps, any other questions on this, please don't hesitate to let us know.
**For more detail, watch the video or visit www.forexsource.co
-----
If you find this content helpful, you’ll love Forex Source.
There’s a link below were you can learn more about it
https://bit.ly/2HFykNd
