Thread on fibs:
Part 1 - Fib extensions:
The way I use fibs and extensions differ from conventional textbook methods.
Fib extensions are ratios beyond 1 used to project targets for profit booking.
(1/n)
Part 1 - Fib extensions:
The way I use fibs and extensions differ from conventional textbook methods.
Fib extensions are ratios beyond 1 used to project targets for profit booking.
(1/n)
The main purpose of fib extensions is to forecast probable (emphasis on both words) areas of profit booking/correction in a script trading in unchartered waters (ATHs and lifetime lows)
(2/n)
(2/n)
Basically, they are used to find Ghost supports/resistances.
Fibonacci is a price based and a relative time based tool.
Meaning, the proper way to use this tool largely depends on the swing markers you use relative to the TF of your analysis and trading.
(3/n)
Fibonacci is a price based and a relative time based tool.
Meaning, the proper way to use this tool largely depends on the swing markers you use relative to the TF of your analysis and trading.
(3/n)
The primary ratios I use as part of extensions are 1.382 and 1.618.
Example 1 for broader price range swing:
(4/n)
Example 1 for broader price range swing:
(4/n)
Example for minor swing:
(5/n)
(5/n)
How to validate a price zone as swing high?
Not every ATH or high can be termed as swing high.
For a high to be validated as swing high and used in fibs, price SHOULD start its retracement from the level.
Else, it is a high which cannot be used for fibonacci trading.
(6/n)
Not every ATH or high can be termed as swing high.
For a high to be validated as swing high and used in fibs, price SHOULD start its retracement from the level.
Else, it is a high which cannot be used for fibonacci trading.
(6/n)
Same applies for swing lows.
Imp points to be noted:
1. Fib extensions are probable zones which need to be confirmed by price before you begin booking out.
(7/n)
Imp points to be noted:
1. Fib extensions are probable zones which need to be confirmed by price before you begin booking out.
(7/n)
2. Not every time price respects extension levels as they are JUST mathematically calculated levels but not market proven levels until validated by supply/demand
(8/n)
(8/n)
Fibs is a very very deep and extensive topic.
Upcoming threads:
1. How I use fib retracements to guage the strength of a breakout of a swing high/ATH?
2. How to use extensions beyond 1.618?
3. How to use fib extensions to trade Nifty intraday at all time highs?
(9/n)
Upcoming threads:
1. How I use fib retracements to guage the strength of a breakout of a swing high/ATH?
2. How to use extensions beyond 1.618?
3. How to use fib extensions to trade Nifty intraday at all time highs?
(9/n)
If you found what I shared informative, please like and re-tweet. Queries are welcome.
As promised, started to share my unique style of using fibs @anand_luhar
#StockMarket #trading #nifty50
As promised, started to share my unique style of using fibs @anand_luhar
#StockMarket #trading #nifty50
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