Ok guys, this explanation could be the simplest fibonacci lesson you've ever read, but hey..at least I did my job. The key fibonacci levels that most traders follow are 0.382, 0.50 and 0.618. There are also what we called the fib extension ratios 1.382 and 1.618. The classic way to apply the fib ratios is to draw a trendline from the absolute swing low to the absolute swing high in an uptrend (reverse in a downtrend). The idea is that prices will correct and retrace by these levels as these are natural support and resistance levels.
Sunday, April 29, 2007
How To Apply Fibonacci Ratios..(The Fibs).
Ok guys, this explanation could be the simplest fibonacci lesson you've ever read, but hey..at least I did my job. The key fibonacci levels that most traders follow are 0.382, 0.50 and 0.618. There are also what we called the fib extension ratios 1.382 and 1.618. The classic way to apply the fib ratios is to draw a trendline from the absolute swing low to the absolute swing high in an uptrend (reverse in a downtrend). The idea is that prices will correct and retrace by these levels as these are natural support and resistance levels.
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