Fibonacci levels are commonly used in trading to identify important price points and potential areas of support or resistance. These levels are derived from the Fibonacci sequence, a series of numbers in which each is the sum of the previous two numbers.
There are several different Fibonacci levels that can be useful for traders, including the 88.6% level, which represents the price level derived from the golden ratio.
When trading with Fibonacci levels, it’s important to keep an eye on these key price points and monitor for any potential reactions at these levels. When prices reach one of these key levels, there may be a strong buying or selling opportunity, depending on whether prices have been trending up or down before reaching that level.
All Fibonacci Retracement levels are 23.6%, 38.2%, 50%, 61.8%, 78.6%, 100% while expansion levels are 161.8%, 261.8%, and 423.6%. Additionally, some traders use Fibonacci levels derived from the golden ratio, such as 88.6% and 94.1%.
Overall, Fibonacci levels are an important tool for traders to use in their analysis and decision-making process when entering and exiting trades. By understanding how these price points work and reacting appropriately to them during trading, traders can potentially generate better returns over time by taking advantage of these key price points in the markets they trade.
In theory, fib. Extreme retracement after 88.6 is not a critical level. However, based on several case studies, the price oscillates around 88.6 to 100% Fib. Retracement very often before rejection or breakout moment.
Is 88.6% fibonacci retracement level?
88.6 Fib. the level represents the price level derived from the golden ratio (0.618 x 0.618=0.786, 0.786 x 0.786 = 0.886= 88.6%). Fibonacci Retracement Levels of 88.6% and 78.6% can be important in some cases, so traders need to monitor these levels and check if there are price reactions in this area. The best practice is to draw Fib. Retracements levels and Fibonacci expansion levels and analyze all price levels during the trading.
88.6% price level is derived by squaring (or multiplying by itself) from the Golden Ratio, 0.618:
0.618 x 0.618 = 0.786 (78.6%)
0.786 x 0.786 = 0.886 (88.6%)
0.886 x 0.886 = 0.941 (94.1%)
Learn more, in detail, articles about Fibonacci expansion levels.
Tips for Using the Minimum 88.6% Retracement with Fibonacci Pattern in Forex Trading
When you seek Fibonacci trading, there are three main patterns:
1. The use of multiple setbacks and extensions to identify price levels in different Fibonacci levels that overlap to produce “clusters.”
2. The use of multiple indicators like MACD in different Fibonacci levels.
3. The use of Fibonacci levels as a part of a larger graphic pattern, like in the “head and shoulders” pattern.
Here, you would find information on a specific Fibonacci level focusing on trade and mostly in seclusion. It is a decline of 88.6%. This level was reached for summarization 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 Fibonacci retracement, it means the retracement to 88.6% tells the range of the original characters. Therefore, the grains would decline if the starting step involved 100 pips up, retracing to 88.6. 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 have a graphic instant five minutes.
The first price achieved a 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 reached 1.1730 on 30th May 2010, 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 precisely matches the primary Fibonacci levels.
When this level is identified, you will find a spotless hit giving a trader over 1000 pips when the trader chooses to stay put once the price retracement ends Point-Z. This was accompanied by the long-term decline in USD / CHF, which can be experienced even today. Else, finding that a basic Fibonacci level was clean and tested with success, an operator can make several trades in a 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 the starting point being a little out of Point Y.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
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