TRND
  • 👋ABOUT TRND
    • Home Page
    • Product Showcase & FAQs
    • Billing and Subscription Management
    • Customer Support
  • 💬DISCORD
    • TRND Community
    • TRND Discord Roles
    • All Market Scanners
  • Setup Guide
    • Getting Started
    • Learn how to create or log into your TradingView account
    • Learn how to create or log into your Discord account
    • Account Portal Setup: Linking Your Discord and TradingView Usernames
    • Set Up TB Pro and TO Panel for Your Desktop
    • Set Up TB Pro and TO Panel for Your Mobile Device
    • Customize the Appearance of Your Tradingview Chart
  • 💡HOW TO
    • How to Use TRND Pro
      • How to Enable Additional Indicators and Filters
      • BUY & SELL Signals
      • Sensitivity and Settings
      • AI Mode
      • Color Schemes
      • EQ Cloud
      • Reversal Cloud
      • Dynamic Support & Resistance
      • Harmonic Zag
      • Tunnel Vision
      • Volatility Support & Resistance
      • Safety Mode
      • TRND Dashboard
      • TRND Panel
        • Momentum
        • Divergences
        • Pressure Lines
        • Squeeze Indicator
        • TRND Oscillator Pro Panel Dashboard
    • How to Set up Alerts
  • 📖TRND TRAINER
    • TRND Trainer
    • Intro to Charting and Technical Analysis
      • Introduction to Charting
        • Types of Charts
        • Support and Resistance
          • Identifying Support and Resistance
            • Horizontal Support and Resistance
            • Trendline Support and Resistance
            • Moving Average Support and Resistance (EQ Cloud)
            • Fibonacci Retracement
          • Breakouts
            • Continuation Breakouts
            • Reversal breakouts
      • Trends
        • Trend Lines
      • Chart Patterns
        • Trend Channel
          • Ascending Channel
          • Descending Channel
          • Horizontal Channel
    • Trading Styles
      • Scalping
      • Day trading
      • Swing trading
    • Timeframes
      • What Time Frame Is Best for Trading?
        • Multi-timeframe Analysis
        • FAQ On Time Frames
    • The Different Markets
      • Stocks
        • Options Trading
          • Options Fundamentals
          • All About Trading Setups
          • Options Trading Strategies
          • What Are Calls and Puts?
          • How Do Debit Spreads Work?
          • What Is A Put Credit Spread?
          • How To Use Butterfly Option Strategy?
          • How To Place An Options Trade
          • The Psychology of Options Trading
        • Best Time To Trade Stock Market
        • Commonly Traded US Stocks
      • Cryptocurrency
        • Commonly Traded Crypto
        • Best Time to Trade Crypto Market
      • Forex
        • Forex Trading
          • Understanding Currency Pairs
          • Market Participants and Trading Sessions
          • Factors Influencing Exchange Rates
          • Risk Management Strategies
        • Best Time to Trade Forex Market
      • Futures
        • Futures Contracts
        • Commonly Traded Futures Commodities
        • Best Time to Trade Futures Market
    • Market Holidays
    • The Role of Psychology in Successful Trading
      • Cognitive Biases and Decision-Making
      • Emotional Biases and Their Impact
      • Behavioral Finance Insights
      • Overcoming Psychological Barriers
      • Conclusion
    • Trading Plan
      • Trading Plan Example
    • Intro to Economics
      • Interest Rates
      • Inflation and Deflation
      • Gross Domestic Product (GDP)
      • Unemployment
      • Trade Wars and Tariffs
    • Trading Terminology
    • Brokers for Beginners
      • Stock / Options Brokers
      • Forex Brokers
      • Futures Brokers
      • Crypto Brokers
  • 🎓TRND Masterclass
    • TRND Masterclass
  • Useful Links
    • TRND Pro Website
    • TRND Account Portal
    • TRND Masterclass
    • TRND Discord
    • TradingView
    • TRND TERMS & CONDITIONS
Powered by GitBook
LogoLogo
On this page

Was this helpful?

  1. TRND TRAINER
  2. Intro to Charting and Technical Analysis
  3. Introduction to Charting
  4. Support and Resistance
  5. Identifying Support and Resistance

Fibonacci Retracement

Fibonacci retracement is a powerful tool for identifying potential support and resistance levels. Let’s explore the key aspects:

  1. Fibonacci Sequence Basics:

    • Derived from the Fibonacci sequence, a series of numbers where each number is the sum of the previous two (e.g., 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, …).

    • These numbers have mathematical significance and appear in various natural phenomena.

  2. Fibonacci Retracement Levels:

    • Calculation: Take two extreme points on a price chart (usually a swing high and a swing low).

    • Divide the vertical distance by key Fibonacci ratios:

      • 23.6%, 38.2%, 50%, 61.8%, and 100%.

    • These ratios guide the retracement levels.

  3. Drawing Fibonacci Retracement:

    • Identify the swing high (highest point) and swing low (lowest point) on the chart.

    • Use your charting software’s Fibonacci retracement tool to draw the levels.

  4. Support and Resistance Significance:

    • 38.2% and 61.8% levels are particularly important.

    • These levels often act as strong areas of support and resistance.

Remember, Fibonacci retracement enhances technical analysis by pinpointing critical price levels!

Fibonacci Retracement: In the chart below, you can see that the price of the AUD/USD currency pair has retraced to the 23.6% Fibonacci level, which is a key level of support.

It's important to note that Fibonacci retracement levels should not be used in isolation and should be used in conjunction with other technical analysis tools and indicators to confirm potential levels of support and resistance. Additionally, Fibonacci retracement levels may not always be accurate, and should be used in combination with other analysis techniques to increase the probability of success.

PreviousMoving Average Support and Resistance (EQ Cloud)NextBreakouts

Last updated 1 year ago

Was this helpful?

📖