How i use Fibonacci retracement tools

[sebfr]

First, some words about fibonacci retracement :

Fibonacci Numbers The Fibonacci number sequence (1,2,3,5,8,13,21,34,55,89,144,...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next number is 61.8 percent, which is a popular Fibonacci retracement number. The inverse of 61.8 percent is 38.2 percent, also used as a Fibonacci retracement number. It is the ratio of the Fibonacci sequence that is important and valuable, not the actual numbers in the sequence.

I use first number of 61.8%...

I placed orders only if two conditions are effective :

1. Candelstick : bullish pattern (Cf. book of Steve Nison or stock charts)

2. "Support and resistance" : I need a good support..

Look at SIRI (doc word)
By this topic i hope you never buy method thta costs a lot !

[domination]

hey man good post

[snowcat]

Here's some cool fibs stuff.

You see, the special ratio Fibonacci discovered is in the proportion of everything from the tiniest building block of all—atoms—to quite literally...the universe of heaven and earth. It's nature's wisdom to maintain balance and order.

Scientists know it. So do naturalists and mathematicians. But it isn't just the sequence of the numbers, it's the actual ratio (sometimes called the "golden ratio" or "divine proportion") that is so stunningly accurate. Fact is, the universe is smarter than all of us and doesn't make mistakes.

The beautiful complexity is this. The golden ratio of 1.618 has a fundamental function everywhere in nature!

Here's what I mean...

Take the common sunflower for example. Have you noticed its opposing spirals of seeds? There's a 1.618 ratio between the diameter of each rotation.

A peek into a beehive would show you that the number of female bees divided by the male bees would be 1.618.

Need something easier to measure then a swarm of angry bees? Try this and discover how you measure up. First measure head to toe. Then divide by the distance from belly button to feet. And if that's still not enough for you, measure from shoulder to fingertips. Then divide that number by the length from your elbow to fingertips.

You'll quickly see the fascinating truth emerge over and over. The timeless "divine proportion" in the area of 1.618 seems to be unavoidable.

And the truly jaw-dropping fact you need to realize is...this very same golden ratio applies to the financial world as well.

Now you may be able to immediately accelerate your profitable trading cycles to make more profitable trades.

Fibs...not just for devine bee-keepers any more.  (for more, read the DaVinci Code)

[Deadb440]

Sebfr -  Thanks for the refresher on Fibs.  I agree they're an excellent tool especially to indicate support and resistance.  I don't use them enough though generally getting a sense myself from my own trend lines. but the Fibs. don't lie.  I'll get back into them.  Thanks.... Dead

[ScottishTrader]

Here's a potential fib bouncer - GNTA has retraced to the 38.2% line after the large move it made at the beginning of the year.  Looks like it could have bottomed and has filled the upside gap, though still showing weakness.  Lets see if it respects thsi retracement level

[akclide]

Here's a potential fib bouncer - GNTA has retraced to the 38.2% line after the large move it made at the beginning of the year.  Looks like it could have bottomed and has filled the upside gap, though still showing weakness.  Lets see if it respects thsi retracement level

Hey scottishtrader It looks like you have flip floped the retracement levels.I believe price levels coming down will hit 38.2% first.Still looks good if it bounces up from these levels.

[ScottishTrader]

oh yeah, my bad

[KCScott]

Question for the board:

Do you measure the Fibonacci from the last advance to the high or as the current price?

Example:

If a stock went from $1 to $2 the advance would be $1
and a 38.2% retracement of that advance would be a price of $1.618

If you use that method, what price point do you use start measuring the advance?

If you use the retracement of the total $2 price, the price would $1.236

Which is correct?

Thanks!

[ScottishTrader]

The fib retracement stretches for the length of a recent move, from a particular breakout or base, to the last recent high.  As with anything in charting, it depends on how you perceive it.  For example, in the AVNX chart below, the fib levels could either stretch for the length of the entire move, off the last major reversal point, 1, or from the last recent siginifcant low, 2, or from the recent breakout, at 3.  I suppose it really depends on the chart and the time frames that you are intertested in. 

For me, at least in this chart, I would measure it form the breakout at 1.48, and as we can see, it has just hit the 61.8% retracement level yesterday at 2.25, so it will be interesting to see whether it bounces from this level.  Interestingly (and this seems to happen quite often), the fibs from the last recent low of .92 line up quite nicely with the fibs from the breakout, with a 50% retracement level of 2.23.

Again, it is really up to you to decide where you want to measure them from, some charts have more obvious moves than others.  However, what is always important is to look for confirmation that any particular fib retraccement level really has shown support before jumping in on the expectation that it "should"

Happy trading