fibonacci’s: hidden support & resistance...asset's original move in price. fibonacci...

Fibonacci’s: Hidden Support & Resistance

WWW.ACTIVETRENDTRADING.COM

DENNIS W. WILBORN, SR.

[email protected]

http://www.activetrendtrading.com/

DisclaimerU.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION

FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALS O LARGE

POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN

ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS.

DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION

NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION I S BEING MADE

THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE

DISCUSSED IN THIS TRAINING. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR

METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN

LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESU LTS DO NOT

REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN E XECUTED, THE

RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN

MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PRO GRAMS IN

GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF

HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY

TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

ALL MATERIALS PRESENTED ARE FOR TRAINING PURPOSES ONLY . TRADERS SHOULD PAPER

TRADE ANY NEW METHOD PRIOR TO RISK OF PERSONAL CAPITAL.

Fibonacci Numbers: From Bunnies to Wall Street

1202ish: Leonardo Fibonacci studied mathematical formula and discovered a

series of numbers that acts like a natural harmonic function.

One of the early uses was an attempt to solve for the propagation ability of

rabbits which gave birth to the system of numbers that Fibonacci is known for

today. This became known as the Golden Ratio around the irrational number

Phi: 1.618

It seemed that humans subconsciously react around the multiples of the

Fibonacci.

Charles Dow first observed that stocks tend to retrace 1/3 to 2/3’s of trending

moves. Turns out that what Dow observed was price reacting around the

Fibonacci retracement numbers of 0.382, 0.50, 0.618

Copyright 2007-2015 Active Trend Trading

Fibonacci Numbers: Types of Indicators

Time: Fibonacci times zones provide general changes in the trend areas in relation to

time. Time zones are most appropriate to a long-dated analysis of price variation and

are very likely to be of limited value while studying short-dated charts.

Arcs and Fans: The Fibonacci fan is a three-line guide originating from the Fibonacci

number series. It can assist in identifying the next areas of support and resistance. The

zones, indicated by the fan, can forecast areas of retraction in market trends.

Retracement: The Fibonacci retracement is the potential retracement of a financial

asset's original move in price. Fibonacci retracements use horizontal lines to indicate

areas of support or resistance at the key Fibonacci levels before it continues in the

original direction.

Extensions: Levels used in Fibonacci retracement to forecast areas of support or

resistance. Extensions consist of all levels drawn beyond the standard 100% level and

are used by many traders to determine areas where they will wish to take profits.



Time: Fibonacci times zones provide general changes in the trend areas in

relation to time. Time zones are most appropriate to a long-dated analysis of

price variation and are very likely to be of limited value while studying short-

dated charts.



Arcs and Fans: The Fibonacci fan is a three-line guide originating from the

Fibonacci number series. It can assist in identifying the next areas of support

and resistance. The zones, indicated by the fan, can forecast areas of

retraction in market trends.


Fibonacci Numbers: Types of IndicatorsRetracement: The Fibonacci retracement is the potential retracement of a financial

asset's original move in price. Fibonacci retracements use horizontal lines to indicate

areas of support or resistance at the key Fibonacci levels before it continues in the

original direction.


Fibonacci Numbers: Types of IndicatorsRetracement:


Fibonacci Numbers: Types of IndicatorsExtensions: Levels used in Fibonacci retracement to forecast areas of support or

resistance. Extensions consist of all levels drawn beyond the standard 100% level and

are used by many traders to determine areas where they will wish to take profits.


Fibonacci Numbers: Types of IndicatorsExtensions:


Fibonacci Numbers: Using Retracements & Extensions

1. Provides unseen levels of support or resistance

2. Tends to identify where traders react

3. Should be used with other clues

4. Failure of a level increases the probability that price will reach the next

level

5. Definable targets and stops

Live Examples:




Week Ending 7-17



Monday


1. Designing Trades


Monday July 20th

1. Put or Short Trade Dropping

below 125.74 by 10¢

2. T1 = Either 50% or 61.8%

3. Stop moving back above

$125.74

125.74

50%

61.8%

The End


Clarify, Simplify & Multiply

This has been the Motto of Active Trend Trading from the beginning!

We continuously work to Clarify & Simplify through refinements to the system to make it objective and easy to both learn and use.

The purpose of all presentations is to provide our fellow Active Trend Trader Members a jump start to accelerate progress up the Learning Curve.

We welcome suggestions on how to improve the learning process!

Trade Wisely & Profitably,

Dennis W. Wilborn

Founder & Lead Technical Analyst

fibonacci’s: hidden support & resistance...asset's original move in price. fibonacci...

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