Fibo thoughts:
I want to share some insights on how i use the .382 Fibo as support in a downtrend (continuation confirmation if broken) and as a support in uptrend (continuation confirmation if broken).
Let's say we have the price @ "X", then the price falls to "Y", then it retraces exactly .618 @ price "Z" (as it can be seen in the picture below) In this case math dictates that Fibo .382 (X-Y) = Fibo .382 (Y-Z) This gives us a confluence zone that can act as S/R as described above - breaking the .382 gives us confirmation of continuation of the prevailing trend, while the break of .618 gives us confirmation of continuation of the counter trend.
For those who want to check the math, here it is:
Z = Y+(X-Y)0.618
Fibo .382 (X-Y) =Y+(X-Y)0.382
Fibo .382 (Y-Z) = Z-(Z-Y)0.382
substitute Z in and it should solve itself out
with all being said, in the image above, i'm looking for a break of the 0.382 in EUR to go long DAX
hope it helps,
I want to share some insights on how i use the .382 Fibo as support in a downtrend (continuation confirmation if broken) and as a support in uptrend (continuation confirmation if broken).
Let's say we have the price @ "X", then the price falls to "Y", then it retraces exactly .618 @ price "Z" (as it can be seen in the picture below) In this case math dictates that Fibo .382 (X-Y) = Fibo .382 (Y-Z) This gives us a confluence zone that can act as S/R as described above - breaking the .382 gives us confirmation of continuation of the prevailing trend, while the break of .618 gives us confirmation of continuation of the counter trend.
For those who want to check the math, here it is:
Z = Y+(X-Y)0.618
Fibo .382 (X-Y) =Y+(X-Y)0.382
Fibo .382 (Y-Z) = Z-(Z-Y)0.382
substitute Z in and it should solve itself out
with all being said, in the image above, i'm looking for a break of the 0.382 in EUR to go long DAX
hope it helps,