Two Effective Fibonacci Retracement Trading Strategies to Boost Up Your Trading Performance! - holmesandnig62

Description: Out of the many Fibonacci trading tools available to nowadays's traders, the most popular and competent one is perhaps the Fibonacci retracement tool that plant for both short-term also as long-term trading.

The Fibonacci retracement levels are derived straight out of the Fibonacci sequence

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610…….

where all number in the serial (starting from 1) is derived by adding the previous 2 numbers.

Some of the just about big Fibonacci retracement levels used in trading are 23.6%, 38.2%, 61.8% and 161.8%. Apart from these, the 50% retracement level is also considered as an important horizontal atomic number 3 according to the Dow Possibility, the halfway point of the previous get on or declension is an important storey to observe for trend changes.

Rent's now have a look at two effective Fibonacci retracement trading strategies to boost up your trading performance.

Strategy #1 – Fibonacci Retracements + Support & Resistance

One of the most effective and clock time tried methods to use the Fibonacci retracement tool is to conflate it with cuneate support or electric resistance levels. The Law of Polarity states that once a resistance level is broken, it tends to roleplay as a upcoming support zone. Similarly, erst a support level is breached, it acts as a future resistance district. Combine Fibonacci retracements with these support and resistance levels is a sure shot recipe to boost up your trading results.

In the supra chart of Tata Steel, we can see how the old resistance once broken acted as a endorse flat. We can also see that this grade coincided with the 61.8% Fibonacci retracement. This formed a really strong plunk fo zone for the scrip and the stockpile bounced sharply off this level and continued its upward journey thereafter.

Scheme#2 – Fibonacci Retracements + Trendlines

Our next Fibonacci retracement trading strategy involves combining the taboo ratios with trendlines.

We all experience that prices tend to course and they often do so in a particular tip or stride. Once we have identified this trend, improving the odds of success evenhanded becomes a second nature. Combine that with Fibonacci retracement levels and you induce a winning trading strategy in place.

In the above example of Larsen &A; Toubro, we buttocks see how prices bounced off the leading sloping trendline which too coincided with the 61.8% retracement level providing a precise confluence financial backing zone.

Fibonacci retracements are very powerful in distinguishing zones of patronize and resistance. Combine them with trendlines or support and resistance levels and you bear a very soprano probability low risk trade setup in your hands.

May the power of the sacred ratios be with you!

To know more happening various other proven and time tested advanced trading strategies please consider attending our Qualified Market Trader stock market course.

Source: https://www.abhijitpaul.com/two-effective-fibonacci-retracement-trading-strategies-to-boost-up-your-trading-performance/

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