Tips for Using the Minimum 88.6% Retracement with Fibonacci Pattern in Forex Trading
When you seek the Fibonacci trading, there are 3 main patterns:
1. The usage of multiple setbacks and extensions for identifying price levels in different Fibonacci levels that overlap for producing “clusters.”
2. The use of multiple indicators like MACD in different Fibonacci levels.
3. The use of Fibonacci levels as a part in a larger graphic pattern, like in the case of “head and shoulders” pattern.
Here, you would find information on a specific Fibonacci level with focus on trade and mostly in seclusion. It is the decline of 88.6%. For summarization, this level, which was reached after using 0.618, the Golden Ratio, the square root and the square to achieve 0886.
When it is exclaimed that it is achieved by making retracement of Fibonacci, it means the retracement to 88.6% tells the range of the original characters. Therefore, if the starting step involved 100 pips up retracing to 88.6, the grains are going to decline. The unique thing about Fibonacci levels is that they are not influenced by a specific time. They feature the same importance as wanted in a weekly long-term chart, or else they have an graphic instant five minutes.
The first price achieved high Point X 1.1967 on 8th March, 2009. Then, it came down to .9909 on the Y-Point on 22nd November 2009. Therefore, the price came down to 2058 points in 37 weeks. The Z price point comes to 1.1730 on 30th May, 2010, which is 28 weeks post Y point. When the figures and diagrams are examined, they were at 2 points with the retracement level being 88.6%. This is unbelievable, as the price was up thousands of points for many weeks already, which is the precise matching with the main Fibonacci levels.
When this level is identified, you would find a spotless hit giving a trader over a 1000 pips, when the trader chooses to stay put once the price retracement ends Point-Z. This was accompanied with the long-term decline in USD / CHF, which can be experienced even today. Else, finding that an important Fibonacci level was clean and tested with success, an operator is capable of making several trades in short-span chart, even in 1 hour, seeking items for selling USD/CHF. Use a long-term plan while entering shorter-term time frames, keeping higher risk-reward ratios and tight stop-loss in your trade.
One of the possible targets in your trades can be either the beginning of the retracement, expanding 100% of the starting movement, or Point Y, with starting point being a little out of Point Y.