Long-standing trade gives more profit in the method of uptrend. But it can be achieved at the level of Fabonacci extension of price. The level of fabonacci can be determined just by three clicks of the mouse.
The first thing is to make a click on Low Swing and after that cursor will go to the high swing and click on it. At the end, go to the retracement and make a tick on some of the given levels.
We can illustrate all this with the help of an example. In this example, we can view the downtrend with the help of Fabonacci extension.
Short trade can give profit in downtrend. Even the market support can be achieved at downtrend.
We can even view the downtrend chart, which has one-hour USD/EUR.
The case, in which the rates go down from the level of Fibonacci retracement, the following things will happen.
• The support for price will be at the level of 38.2%.
• The starting support will be at the level of 50.0%/ this thing will further become as a favorable point for others.
• The level 61.8% became a point of interest, before the rate shot down to check the subsequent Low Swing.
• The level 61.8% can also be known as favorable point
• The level 100% can be used as support in extension level.
So, our rate of profit can be 38.2% as well as 50.0%. 61.8% can also help us. These levels are used as support levels. The reason for using these levels is that the dealers are noticing these levels for their profit.
With the help of the above examples, we have come to the point that the price can face minimum opposition as well as support at the level of Fabonacci extension. But it is up to us to check our point and know our profit. We have to keep in mind the risks as well.
The problems related to Fabonacci extension are also present. Here are some of the problems.
The first and foremost problem is that we do not know the accurate level of Fabonacci extension, which is going to give us resistance. There are some levels, which can perform the action of support, and others can show resistance but we are not sure about these levels.
Here you can see video about Fibonacci from Dailyfx expert :
The other major dilemma is that we do not even know which will be the exact Low Swing for Fabonacci level.
There are many ways for overcoming these problems. We can start from ending Low Swing in such a situation. There is one more way, which is to keep starting from the smallest Low swing. But still these ways are not absolute. The only thing, which can help us a lot, is practice. With the passage of time, a person can understand the condition better than others.
So, the use of Fabonacci cannot be based upon some given facts. It needs practice. You have to make decisions on your own judgment. The thing, which should be kept in mind, is the time period of the trend.