Tag: fibonacci extension

Simple calculation for 61.80%

Many traders are saying that they can not use a Fibonacci extension tool on trading platform. But do not worry about because we can use any calculator to produce 61.80% value.

Below chart shows three white troops pattern and the high and the low point of each waveform continuously increase.

1st up wave : S-A-1
2nd up wave : 1-B-2
3rd up wave : 2-C-3

We will produce 61.80% of each up wave. Formulation is 61.80% = (High – Low) * 0.618 + Middle and result are like following.

And draw the 61.80% value line to the chart. Here red colored lines are 61.80%s of each wave.

Obviously, if a stock rises, it will not go down below 61.80% level of 3rd up wave. Because that point is a final support level on move up. Here 1458.

This is Amazon stock and progressing like this after three white troops formed. Today this met 1715.94/423.60% of 1st up wave.

So we are OK without Fibonacci extension function on our trading. Just use any simple calculator to find where are 61.80%s. Please apply this approach to your interesting stocks. This will help you to understand how stock form rising set up at initial phase.

If the practice of finding 61.80% continues, there will be no entry into falling stocks, nor will there be any catching up of stocks that have risen too much.
Just find where are optimal entry point using 61.80% and aggressively attack such target point!

Thanks!

Where is the start point of Fibonacci extension and fan lines

The most difficult thing about the stock chart analysis is that the results vary greatly depending on the reference point. Because the stock signals are very delicate, misapplication of the reference point can lead to large errors in interpretation. Good standards can give good results. However, bad or ambiguous standards only add to the pain of analysis. Many stock traders have spent a tremendous amount of time and effort trying to find those standards. As one of them, I also spent a lot of time in standardizing the Fibonacci technical analysis. I am working to increase the certainty of the analysis.

Generally speaking, the starting point of Fibonacci extension is to use the lowest point of the chart regardless of time frame. And one more thing, the ideal lowest point is starting from under SMA20, SMA100 and SMA200 curves. If the lowest point on the screen is placed above the SMA lines, try not to create a Fibonacci extension. Charts on the screen you use vary greatly in time frame. For example, from the 5 Min/Day to the 1 Mon/10years. If we start anywhere from the lowest point on the chart, we will see a lot of extensions, and the screen will be really dizzy in our view.

The chart below shows the Fibonacci targets by linking the minimum and maximum values of each stock wave ​​from the last 10 years to the last year 2017 in yearly base. This is so complicated that no body like this.

apple chart

Let’s see that start at the point under SMAs. The following chart is the past five years.

From this below chart, we can get an idea that the maximum value from this extension is 229.96. And we can find another dip point on February 2018. Let’s make related Fibonacci extensions for this.

We can get an idea that the bottomed line of Fibo fan can be a defense point to the recent falling. In this way, it is much simpler to do Fibonacci analysis on any time line chart using the start point under the SMA curves. Even small time frame like 1 Min or 5 Min chart, we can apply this concept to those chart and this may better than any starting point which is placed over some SMAs.

Establishing a clear standard of chart analysis is a way to win in an uncertain market.

Swing Trade – Sell at 423.60%

  1. Check fibo extension levels : 61.80% ~ 423.60%
  2. Draw fibo fan line connected low(begin) to next low(middle), 0%. * Ideal angle of fibo base line, green colored line in this image, is 8 degree.
  3. Once reached 423.60% and topped fibo fan line, blue dotted line in this image, need to sell immediately.

swing trade