Fibonacci retracements are technical analysis tools that help identify potential support and resistance levels.

We use horizontal lines based on Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, and 78.6%).

Key Trading Applications

1. Trend Reversal Points

– Identify high – probability reversal zones, especially with the 38.2% & 61.8%
– Using multiple timeframe analysis with Fibonacci levels – I use the 1 hour & 4 hour charts, as well as the daily chart.
– Combining with support/resistance zones – I use trend lines & moving averages

2. Risk Management

– Set stop-loss levels using Fibonacci ratios – place stop loss just outside of the Fibonacci level – if the level is broken you do not want to stay in the trade.
– Position sizing based on retracement levels – Calculate your risk according to the size of your stop loss to control risk.
– Managing trailing stops using Fibonacci levels – When price moves through a Fibonacci level, trail your stop close to the other side of the Fibonacci level.

“During my 12 years on the LIFFE trading floor, I observed that the 61.8% retracement level was particularly significant in trending markets.
Professional traders would often cluster their orders around these levels, creating self-fulfilling support and resistance zones.
The key is to combine these levels with existing market structure and volume analysis.”

Common Trading Mistakes to Avoid

1. Relying solely on Fibonacci levels without considering market context – I have a system of suing trend lines, moving averages, price action & patterns combined with Fibonacci levels.
2. Using too many Fibonacci retracement levels simultaneously – don’t over complicate!
3. Not confirming reversals with additional technical indicators – I use the stochastic oscillator to help confirm a turn in the market.

Master Fibonacci Trading – Unlock Low-Risk, High-Reward Opportunities!

Discover how Fibonacci retracements and projections can revolutionize your trading strategy!
Jason Sen will teach you how to identify precise entry and exit points, maximize profits, and minimize risk—all using one of the most powerful technical analysis tools available.

Register now!