How to Use Stock Indices Fibonacci Retracement Levels
The Fibonacci retracement levels are explained below: traders should use this Fibonacci Retracement Levels stock indices indicator to determine where to open a trade whether a buy indices trade in a indices up trend and a sell indices trade in a downward trend.
How Do I Use Fibo Retracement Levels for Day Trading?
How Do I Use Fibo Retracement Levels for Day Trading?
Fibonacci Retracement Tool Described
Fibonacci Retracement Tool Described
How Do I Use Stock Indices Trading Fibonacci Retracement?
In the technical analysis example explained and illustrated below the stock indices price is moving up between chart point 1 and chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then stock indices price continues moving up in the original upward trend. Note that this stock indices retracement technical indicator is plotted from point 1 to point 2 in direction of the trend (Upward Direction).
Analysis of How to Use Fib Retracement in an Up Indices Trend
Analysis of How to Use Fib Retracement in an Up Indices Trend
Once the stock indices price hit the 50.00% retracement level, this retracement level provided a lot of support for indices price, & afterward the stock indices market then resumed the original upward trend & continued to move upward.
For this technical analysis example, the stock indices price retracement reached the 50.0% retracement level, but most of the time the stock indices trading market will retrace up to 38.2% retracement level and therefore most of the time indices traders set their buy limit orders at the 38.2% Fibo retracement level, while at same time placing a stop just below 61.8% Fibo retracement level.
How Do I Use Stock Indices Trading Fib Retracement?
In the Indices Retracement Strategy example explained and illustrated below the stock indices trading market is heading down between chart point 1 & chart point 2, then after chart point 2 the stock indices price then retraces up to 38.2% retracement level then it continues moving downwards in original downwards trend. Note that this stock indices retracement technical indicator is plotted from point 1 to point 2 in direction of the trend (Downward Direction).
Analysis of How to Use Fib Retracement in a Down Indices Trend
Analysis of How to Use Fib Retracement in a Down Indices Trend
The above technical analysis example is a stock indices retracement trading setup where the stock indices price retraces immediately after touching the 38.20% Stock Indices Chart Fibonacci Retracement Level.
In this technical analysis example the retracement of stock indices price reached 38.20% retracement level and did not get to 50.0% retracement level. It is always good to use 38.2% retracement level because most times the stock indices price retracement does not always get to 50.00% retracement level.
This Indices Retracement level provided a lot of resistance for the stock indices price retracement, this was the best place for a trader to place a sell limit order as the stock indices trading market quickly moved down after hitting this stock indices price retracement area.
