Forex Forums | ForexLasers.com


Go Back   Forex Lasers Forum > FOREX TRAINING > Forex Articles


How to Use Fibonacci Retracement with Trend Lines

Forex Articles


Reply
 
LinkBack Thread Tools Search this Thread
  #1  
Old 24-04-2015, 13:18
Moderator
 
Join Date: Mar 2014
Posts: 979
Default How to Use Fibonacci Retracement with Trend Lines

Another good tool to combine with the Fibonacci retracement tool is trend line analysis. After all, Fibonacci retracement levels work best when the market is trending, so this makes a lot of sense!

Remember that whenever a pair is in a downtrend or uptrend, traders use Fibonacci retracement levels as a way to get in on the trend. So why not look for levels where Fib levels line up right smack with the trend?

Hereís a 1-hour chart of AUD/JPY. As you can see, price has been respecting a short term rising trend line over the past couple of days.


You think to yourself, ďHmm, thatís a sweet uptrend right there. I wanna buy AUD/JPY, even if itís just for a short term trade. I think Iíll buy once the pair hits the trend line again.Ē

Before you do that though, why donít you reach for your forex toolbox and get that Fibonacci retracement tool out? Letís see if we can get a more exact entry price.


Here we plotted the Fibonacci retracement levels by using the Swing low at 82.61 and the Swing High at 83.84.

Notice how the 50.0% and 61.8% Fib levels are intersected by the rising trend line.

Could these levels serve as potential support levels? Thereís only one way to find out!


Guess what? The 61.8% Fibonacci retracement level held, as price bounced there before heading back up. If you had set some orders at that level, you would have had a perfect entry!

A couple of hours after touching the trend line, price zoomed up like Astro Boy on Red Bull, bursting through the Swing High.

Arenít you glad youíve got this in your forex toolbox now?

As you can see, it does pay to make use of the Fibonacci retracement tool, even if youíre planning to enter on a retest of the trend line. The combination of both a diagonal and a horizontal support or resistance level could mean that other traders are eying those levels as well.

Take note though, as with other drawing tools, drawing trend lines can also get pretty subjective.

You donít know exactly how other traders are drawing them, but you can count on one thing Ė that thereís a trend!

If you see that a trend is developing, you should be looking for ways to go long to give you a better chance of a profitable trade. You can use the Fibonacci retracement tool to help you find potential entry points.


Reply With Quote
  #2  
Old 30-03-2016, 15:34
mocharifin's Avatar
Level IV Lasers Member
 
Join Date: May 2013
Location: some place in peace
Posts: 101
Send a message via Yahoo to mocharifin
Default Re: How to Use Fibonacci Retracement with Trend Lines

If drawing market while the market is stop, it is very easy, it would be different if our market volatile
Reply With Quote
  #3  
Old 15-04-2016, 05:57
Level IV Lasers Member
 
Join Date: Apr 2016
Posts: 250
Default Re: How to Use Fibonacci Retracement with Trend Lines

It is the same post i have read on babypips. So i have read it twice. Good article about Fibonacci Retracement. Thanks for sharing.
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fibonacci ForexArticles Forex Articles 0 15-03-2015 16:11
GMI - Trend EA msmr Expert Advisors / Robots 35 03-01-2014 13:20
Fx-trend.com profit 6-8% keldysh Broker Talk 22 28-12-2012 22:45
Dynamic trend yan7181 Forex Systems 1 09-11-2009 16:27
PW-TREND INDICATOR manus168 Indicators Discussion 1 17-09-2009 04:01


All times are GMT. The time now is 05:01.


Powered by vBulletin® Version 3.8.10
Copyright ©2000 - 2021, vBulletin Solutions, Inc.