This video explains how the Fibonacci retracement tool can be used to trade successfully. The process is simple: wait for price retracements, pull out the Fibonacci retracement, wait for signs of consolidation, and enter for a buy/sell position. The video also provides examples of how to use the tool effectively.

Using Fibonacci Retracement in Trading: My Personal Approach

Introduction

In the previous video, I covered the basics of Fibonacci Retracement, including how to use and apply it. In this video, I will dive deep into my personal approach to using Fibonacci Retracement in trading. This will enable you to implement it into your own trading journey successfully.

Fibonacci Retracement – The most important tool

Fibonacci Retracement is the most important tool that I use in my trading. It is a powerful tool that has never failed me in my trades. While it may have failed me a few times, I still rely on this tool, and I will explain why.

Understanding Fibonacci Retracement

Many traders think that Fibonacci Retracement is a complex tool and difficult to use. However, it is simple to use, and I will break it down in the following steps.

When to Use Fibonacci Retracement?

You should pull out your Fibonacci Retracement when the price starts to retrace. When you notice that the price is already high, it is not advisable to enter at the current price. Waiting for the price to retrace enables you to identify the most suitable point to enter.

How to Use Fibonacci Retracement?

Pull out your Fibonacci Retracement from the lowest point before the major push phase all the way up to the highest point before price starts retracing. Once you have done this, you have your Fibonacci Retracement.

Retracement Levels

Fibonacci Retracement has different levels, including 38.2%, 50%, 61.8%, and 78.6%. Expect the price to retrace to any of these levels. Note that if the price breaks through the 78.6% level and goes back down, it might be an indication of reversal. Always watch out for the signs.

Waiting for the Signs

Once you have identified the retracement level, wait for the signs that indicate that the price has finished retracing and is ready to continue heading back up. The signs may include bullish engulfing candlesticks, market consolidation, and long wicks, among others.

The ABCD Pattern

This pattern enables you to identify the ideal entry and exit points in your trading. The pattern involves identifying the A, B, C, and D points. Once you have the retracement level (C wave), wait for the signs that indicate that the price is about to hit back up before entering a position. Once the price starts heading back up, enter for a buy position. Your take profit level will be at the extension level, which is the D wave.

Mastering Fibonacci Retracement

To master Fibonacci Retracement, you should analyze several examples, as seen in the video. Analyzing the examples enables you to identify the common patterns and signs that indicate a suitable entry and exit point. With time, you will master the use of Fibonacci Retracement and use it to get high win-rate trade opportunities.

Conclusion

Fibonacci Retracement is a powerful tool that can enhance your trading success. By following my personal approach, you can successfully implement Fibonacci Retracement into your trading journey. Remember to always watch out for the signs and trends before entering a position. Cheers to successful trading!