Fibonacci (golden section) callback line describes the relationship between market trend and counter trend: the counter trend always turns back to 365,438+0.8%, 50% and 665,438+0.8% of the main trend, which enables us to use this percentage to predict the magnitude of the counter trend (callback and rebound), regardless of the market trend (ups and downs). These rules, the following summarizes some skills of using Fibonacci (golden section) callback line, hoping to provide some help in your transaction:
First ascent/first failure
The first rise/first failure on your favorite time chart marks the first 100% retracement. After hitting a new high or a new low, give an early reversal warning. 100% retracement goes against the main price direction, ending its correction trend. Starting from this price level, if the price exceeds the old 38% level, the old trend may be re-established. Usually, traders use this price level to establish low-risk positions that are contrary to the original trend.
Second, look for parabola.
In all trends, parabolic motion usually occurs at 0%-38% and 62%- 100% Fibonacci water level. These trends provide traders with powerful tools to find big fluctuations. Observe that the price is squeezed at the level of 38% or 62%. When the price crosses this water level, use a simple upward or downward breakthrough strategy. The next price push may be very fast, and the price moves like a magnetic field, pushing the price to the high or low point of the old trend. Of course, this strategy can only work if you can find these water levels in advance.
Third, the extension of the persistent gap
By using persistent gaps as Fibonacci expansion tools, you can find out whether a specific price regression or selling is over. Find the gap through the vacuum center of the vertical price band, and then draw a grid at the beginning of the trend, and extend the grid so that the gap is below the 50% retracement line, and the grid will extend to the end of price regression or selling.
Fourth, overnight grid.
Look for an active stock and draw a grid from the highest point (or lowest point) of the last hour. Extend the grid to the low point (or high point) of the first hour of the next morning at the other end. In this way, a specific price band is found, which traders can use to find the turning point and breakthrough point of intraday trading. The overnight grid also gives a way to trade in the morning gap. This gap can usually cross the key callback water level, which is a low-risk callback entry point.
Verb (abbreviation for verb) second high/low point
Many traders can't find where to start Fibonacci Sanger. Here's a little trick to help you. In the process of price fluctuation, absolute low price or high price is usually not a good starting point for Fibonacci Sanger. Instead, we should look for a small double bottom or double top in the price-intensive area where the trend begins. Put the endpoint of the grid at the second high point (or low point) instead of the first one. This can capture a specific Elliott wave to determine the trend you want to trade.