Holiday From Home and The Magic of Fibonacci
Ever since my little precious born to this beautiful world 2 years ago, my holidays converted from gaming and outing to babysitting and parenting. However, since the pandemic outbreak in last year Feb, everything changed. For the last whole year, my baby had no chance to play in playground, running on the field, or building sandcastle on beach during my holidays![]()
He is bored with all the toys he had, and thus I was thinking why not I DIY some toys for him, and I had spent 2 days of my weekend which resulted this mini NBA basketball game for him! The game helped him to coordinate his concentration, accuracy and controlling. He was excited when having this new toy and he can’t stop playing it for weeks!! ![]()
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Besides playing, I also encourage him to start reading. He has his own story books, and most of the time when I was reading, he will be reading together with me too! Of course, I will expose him to stock markets when he grow up so he could accumulate his own wealth through the correct mindset of investing in stock markets.
I’m so glad that my holidays was able to spend more quality moment with him. The pandemic is still severe in my country, I will spend more time with my family, and hopefully come out more exciting DIY games for him, hehehe. If you guys have any ideas do comment below ![]()
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After the pandemic strike, since I spent more time at home, so I try to polish my technical analysis skill on stock markets. I came across this magical indicator called Fibonacci retracement which I found it very useful and high accuracy. I don’t want to write a long thesis-like about the history and what is Fibonacci Retracement, you can actually go to Investopedia.com to study about it in details. Here what I’m going to share is HOW TO DRAW AND APPLY FIBONACCI RETRACMENT IN STOCK MARKET.
Alright, so to draw a Fibonacci Retracement level, obviously we need a chart. What I do is for short term trading, I will use a 1 YEAR period for a particular counter, let say $American Airlines(AAL.US$ here. So here are the steps I used:
1: Click on 1Y to show the latest 1Y chart.
2: Find the lowest point (including the wick).
3. Find the highest point (including the wick).
4. Draw the Fibonacci Retracement line connecting lowest and highest point.
Alright, so to draw a Fibonacci Retracement level, obviously we need a chart. What I do is for short term trading, I will use a 1 YEAR period for a particular counter, let say $American Airlines(AAL.US$ here. So here are the steps I used:
1: Click on 1Y to show the latest 1Y chart.
2: Find the lowest point (including the wick).
3. Find the highest point (including the wick).
4. Draw the Fibonacci Retracement line connecting lowest and highest point.
AND THAT’S IT. The Fibonacci Retracement level is shown on your chart.
Now, how do we interpret the chart? Fibonacci Retracement is made up of several levels which indicate SUPPORT and RESISTANCE of a chart. Here you can see at arrow a, the correction reach the 0.382 line as support level and it rebound. For the next few days it fluctuate in between 0.382 and 0.236 level which act as resistance. Once it breakthrough 0.236 level resistance (arrow b), the price go up to 0 level (arrow c). Now 0.236 changed from resistance and became support. After touched level 0, the price retraced and it broke 0.236 support line (arrow d). For the next few days, it tested the 0.236 level but it couldn’t breakthrough it so the price go back down.
REMEMBER THIS: A Resistance will become a Support after break up, and Support will become Resistance after break down. They are interchangeable so please be very FLEXIBLE ya.
Now, how do we use Fibonacci Retracement in our trade? Below are 4 general ways of using Fibonacci Retracement:
1. When the price near to support, we buy.
2. When the price near to resistance, we sell.
3. When the price break up resistance, we buy.
4. When the price break down support, we sell.
2. When the price near to resistance, we sell.
3. When the price break up resistance, we buy.
4. When the price break down support, we sell.
This is just a very general concepts of using Fibonacci Retracement, there are many factors affecting the price and may need some other indicators as reference too.
I hope this trade idea would be useful for you guys and for myself personally, I love this indicator.![]()
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I hope this trade idea would be useful for you guys and for myself personally, I love this indicator.
Feel free to share your opinions on this indicator and let exchange skills to make our trades better.
Thank you @moomoo Event for this wonderful event for me to learn with other mooers in this community.![]()
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Disclaimer: All the information shared above is served solely as the purpose of education and sharing. Please be informed that the information shared is not investment advice and I do not recommend any buy/sell calls. Please consult your financial advisor prior making any investment decision.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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ZS19 : Thank you for the intro of fibonacci! It looks interesting!!
AlphaEdgeOP ZS19: Just my humble opinion. Any opinions exchange are welcome
Hown : Thank you for the intro of fibonacci! It looks interesting!!
AlphaEdgeOP Hown: Most welcome. Let us grow together.
Jackosen :
AlphaEdgeOP Jackosen:
student otg : how about using fibonacci on daily charts..above or below..if the body of the candle is at least 36.2% above the wick price should rise and the opposite is true for price to fall
AlphaEdgeOP student otg: Its a very good question. For my practice, because the wick also composed by volume, there are volume in the wick, so I choose to take in the wick to draw the High and Low point. While for body part, normally I will look at the previous closing price to determine. Meaning that if the closing price is above let say 0.382 support, then its a good support for me, eventhough during trading the price might fall below 0.382 but end up it go back up and stay above 0.382. Same to the resistance too.
In short, I take in the wicks because to include the volume traded. To determine support/resistance I will look at the body closing price. I find that with this the S/R are more reliable to be a reference.
student otg AlphaEdgeOP: I misspoke it's 38.2 % as you stated but check out this since this is where I learned of the method https://youtu.be/eynxyoKgpng Skip to about 44 minutes in
CST Lets get It : Glad to have the opportunity, this is a new learning experience , and every little bit helps
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