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The ULTIMATE Fibonacci Retracement Tool Guide - Best Tips & Tricks
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The ULTIMATE Fibonacci Retracement Tool Guide - Best Tips & Tricks

Introduction to Fibonacci Retracement

In this section, the speaker introduces the Fibonacci sequence and its prevalence in nature. The speaker then poses the question of whether it can be used in trading to predict markets.

What is the Fibonacci Sequence?

  • The Fibonacci sequence is a simple pattern found in nature.
  • It appears to be a built-in numbering system in nature.
  • Charts often show higher highs and higher lows due to this pattern.

Using Fibonacci Retracements for Trading

  • Fibonacci retracements are key levels that can help find a reversal of a pullback.
  • Traders wait for pullbacks as they are usually at a cheap price and often indicate a change in price will happen.
  • Key levels acting as both support and resistance can indicate where there is a high chance of bouncing off and creating new higher highs.
  • The Fibonacci retracement tool helps identify key levels for reversals when there aren't any previous key levels of support or resistance.

How to Use the Fibonacci Retracement Tool

In this section, the speaker explains how to use the Fibonacci retracement tool correctly, including common mistakes traders make while using it.

Best Settings for the Tool

  • Uncheck 0.382 and all other boxes after 1.
  • Uncheck background and prices, change levels from values to percentages.

Reading Levels on the Tool

  • There are six levels: 0% level is starting point, other five are pullback levels.
  • If price hits a pullback level and respects it, there is a high chance of it going up to the next highest level or even higher.
  • The most common levels for this are 23.60, 50, and 61.80.
  • If the price breaks below the 100 line, it will likely fall and start a downtrend.
  • Treat these levels as areas rather than solid lines since the price may not always respect the exact level where the line is.

Fibonacci Retracement Trading Strategy

In this section, the speaker explains how to use the Fibonacci retracement tool in trading and emphasizes the importance of waiting for confirmation before entering a trade.

Identifying Trend and Selecting Levels

  • Identify trend by finding swing low and swing high.
  • Use Fibonacci retracement tool from swing low's wick to swing high's wick.
  • Wait for price to retest 0% level after breaking through it.

Entering Trade and Taking Profits

  • Enter trade when price respects 23.60% level after retesting 0% level.
  • Set stop loss below 23.60% line and sell half shares at 0% line.
  • Sell remaining shares when price reaches target profit level.

Importance of Confirmation

  • Only enter trade after seeing confirmation that price is respecting a certain level.
  • Consolidation periods are not good times to enter trades as price can go in either direction.

Short Trade Example Using Fibonacci Retracement Tool

In this section, the speaker provides an example of using the Fibonacci retracement tool in a short trade.

Identifying Trend and Selecting Levels

  • Identify trend by finding swing low and swing high.
  • Wait for confirmation candle after price breaks through resistance levels.

Entering Trade and Taking Profits

  • Enter short trade when price respects resistance levels after confirming with a candlestick pattern.
  • Sell percentage of shares at each level that gets hit for guaranteed profit.

Importance of Confirmation

  • Only enter trade after seeing confirmation that price is respecting a certain level.
  • Consolidation periods are not good times to enter trades as price can go in either direction.

Trading Tips for Fibonacci Retracement Tool

In this section, the speaker discusses how to use the Fibonacci retracement tool in trading and shares some tips on how to maximize its potential.

Key Takeaways

  • When using the Fibonacci retracement tool, treat the levels as areas rather than solid lines.
  • Wait for confirmation before entering a trade and sell a percentage of your position for every level that is hit.
  • If you find an area with strong daily support and a Fibonacci level, there is a greater chance that price will respect that level.

Using Fibonacci Retracement Tool

  • Keep the last of the money in the trade for high return gains.
  • Look for a Fibonacci level where it matches up with a key level of support.
  • Place fibonnaci levels near key levels of support or resistance.

Final Thoughts

  • Watch this video to learn more about using the Fibonacci retracement tool to grow a small-sized stock account efficiently.
Video description

The Fibonacci retracement tool can be a very great guide for finding important levels if used right. In this video, I tell you how to use the Fibonacci retracement tool, a common mistake people make while using it, and how to find the right place to sell. Enjoy! If you learned something new, leave a like. ► TradingView (Chart Software I Use): https://www.tradingview.com/?offer_id=10&aff_id=28566 ► Get 2 FREE stocks valued up to $1850 (when you deposit $100): https://act.webull.com/on/A6BoDyk5xy2A/zbk/inviteUs/main ► Get up to $250 in Crypto Currency: https://blockfi.com/?ref=ca9f3260 🔴 Subscribe for more videos just like this: https://www.youtube.com/channel/UCCbv0qixG-cyokxEY3kELtg?sub_confirmation=1 Follow TradingLab: =============================== 📸 - IG: https://www.instagram.com/tradinglabofficial/ ⏱️ Timestamps 00:00 - The Fibonacci Sequence 00:58 - Why You Should Be Using The Fibonacci Retracement Tool 02:16 - Best Fibonacci Settings 02:54 - How to Use The Fibonacci Retracement Tool 05:06 - Example One (Long Example) 07:45 - Example Two (Short Example) 11:04 - Fibonacci Retracement Tool Tip *None of this is meant to be construed as investment advice, it's for entertainment purposes only. The links above include affiliate commissions or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.