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Combining Fibonacci with support and resistance

Combining Fibonacci with support and resistance

As we explained in the previous article, Fibonacci Ratios in Trading, the use of Fibonacci levels can be highly dependent on one’s mindset. However, there are ways to help you take chances. While the Fibonacci tool is very useful, it should not be used alone.


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It’s a bit like comparing it to Kobe Bryant, the superstar of the National Basketball Association. Kobe is one of the best players of all time, but even he could not win those positions alone, he needs a little support.

Similarly, the Fibonacci tool should be used in combination with other tools. In this section, let us take what you have learned so far and try to combine them to help ourselves identify some of the most desirable Chinese commercial introductions. Are you fully prepared? Let’s get started!

The best way is to combine Fibonacci with support and resistance

One of the best ways to use the Fibonacci tool is to identify potential support and resistance levels and see if they align with the corrective Fibonacci levels.

If the Fibonacci level is already a support and resistance level and you combine them with other price areas that many other traders are watching, then the chances of a price increase in these areas are much higher.

Let’s look at this example of how you can combine support and resistance levels with Fibonacci levels. Below is the daily chart of the US Dollar – Swiss Franc.

 

As you can see, it has been on an upward trend lately. Look at all those green candles. You are the one who decides that you want to take advantage of the long USDCHF. You will use January 11 for low volatility and the price ceiling at 1.0899 on February 19 for high volatility. Now your chart looks so beautiful with all these Fibonacci levels.

 

Now that we have a framework to increase the likelihood of finding integrated input, we can answer the question (Where should you log in?). If you look back, you will see that the price of 1.0510 is a good resistance level in the past and happens to be in line with the 50% correction level. Now that it is broken, it can become a support and a good place to buy.

 

You will be very satisfied if you order somewhere around the 50% Fibonacci level. There may be some tense moments, especially in the second test of the support level on April 1st. Price tried to cross the support level. But it fails to get close below it. Eventually, the pair broke the previous high volatility and continued their upward trend.

You can also make the same settings for the downtrend. The point is, you should look for price levels that have been considered in the past. If you think about it, there is a better chance that the price will rise above the levels. Why? First, as we discussed earlier in Category 1, previous support and resistance levels are good areas to buy or sell because other traders, like the Eagle, are eyeing these levels.

Secondly, as we know, many traders also use Fibonacci tools. They may be looking for opportunities to jump on these Fibonacci levels.

While there is no guarantee that prices will rise above those levels, you can at least be more confident about your business. Finally, there is a certain power in these numbers.

Remember that business is all about the possibilities. If you belong to those trades that are more likely, then in the long run you will have a better chance of getting ahead.


Labels: Order to build a Forex robot , Build a stock trading robot , Build a trading robot , Trader robot design , Free Forex Robot , Forex robot programming , Forex Expert Making Tutorial , Build a trading robot with Python , Download Forex Trading Robot , Buy Forex Trader Robot , Automated Forex Robot , Free stock trading robot ,  Learn how to build a Forex trading robot , Alpari trading robot , Forex robot for Android ,  MetaTrader robot design , MetaTrader robot programming , Forex robot design , Forex robot programming , Automated trading