Welcome. In today’s lesson, you will be learning about the Fibonacci tool, how it works and when you should be applying it to your trading arsenal.
The Fibonacci retracement is based on the idea that the markets will retrace a predictable portion of a move, after which they will continue to move in the original direction.
Using tradingview.com, you will find the tool at the left side of your screen. Navigate there and click fibonacci retracement.
How do you draw the Fibonacci retracement on your market chart?
Step1: Identify the move, bullish or bearish. The example I shared is a bullish example
Step 2: Draw the Fibonacci retracement from the beginning of the bullish push to the end of the push. Check picture below.
How to use the Fibonacci Retracement in Trading
I enjoy trading in the 50 and 61.8 Fibonacci zones. I look out for pinbars and engulfing candlesticks at those zones before initiating a trade. What do I mean. Check picture below.
Trading is about controlling your emotions. Most times, traders gamble because they don’t know what works. I hope this article helps you make better profits from the markets.
I’m sure you learned something, please drop your comments. I’ll attend to them asap.
Good bye and have a wonderful trading week.