If the market makes a move up, you need to plot your Fibonacci tool onto that original move up and then wait for the price to retrace back down to one of the retracement levels in expectation that the market will start to go long on that currency again from one of these levels.
Here is an example:
You can see here in this example that the Fibonacci is drawn from a swing low (point A) all the way up to swing high (Point B) and it’s always drawn from the left hand side over to the right hand side of the price chart.
Then you will see the retracement levels appear onto the price chart, it is these levels that you expect to act as support.
If the market makes a move down you need to plot your Fibonacci tool onto that original move down and then wait for the price to retrace back up to one of the retracement levels in expectation that the market will start to go short on that currency again from one of these levels.
Here is an example:
You can see here in this example that the Fibonacci is drawn from the swing high (point A) all the way down to the swing low (Point B), and it’s always drawn from the left hand side over to the right hand side of the price chart, just the same as for longs.
Then you will see the retracement levels appear onto the price chart, it is these levels that you expect to act as Resistance.
Now you may already know all of that information but what you probably don’t know already is how to work out which Fibonacci level is going to be the one that actually holds and repels the retracing price.
Well this course is all about getting you trade-ready so I’m actually going to show you the stuff you really need to know and apply in order to make money from your trading.