fibonacci’s: hidden time & price resistance and support · fibonacci tools: types of...

Fibonacci’s: Hidden Time & Price Resistance and Support

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DENNIS W. WILBORN, SR.

[email protected]

http://www.activetrendtrading.com/

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Trade Wisely & Profitably,

Dennis W. Wilborn

Founder & Lead Technical Analyst

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.

Extension values which may tend to attract price moves 100.00, 127.2 and 161.8

Copyright 2007-2019 Active Trend Trading

Fibonacci Tools: Types of Indicators

Looking for Symmetry!

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 Tools: 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:


50% Retracement

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. Key Levels are 127.2, 161.8 & 261.8


Fibonacci Numbers: Types of IndicatorsExtensions 1:


Extension of Past Move

Fibonacci Numbers: Types of IndicatorsExtensions 2:


Extension of most recent swing


Time: Fibonacci times zones provide general changes in the trend areas in relation to time. Time Ratios and Extensions can highlight symmetry zones when trending prices may hit Time Resistance.



Time: Time Ratios – Not Used Much!



Time: Extensions


Symmetry

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: TSLA


Fibonacci Numbers: Using Retracements, Extensions & Time


Convergence of Clues



Price Extension



Time Resistance



Time & Price: Extensions Windows

Time & Price Target Windows

The End


fibonacci’s: hidden time & price resistance and support · fibonacci tools: types of...

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