Profile Photo

Technical Analysis: When to Use Fibonacci Retracements

Bund 10 April 2018

Fibonacci retracements (Fibs) are based on the Fibonacci sequence which looks to track a progression of a number that occurs in nature (it was originally based on the reproduction of rabbits). As markets are a natural progression of people opinions of price, theoretically a Fibonacci retracement level should provide areas of support or resistance. The difficulty in using Fibs is knowing when to use them so that others are looking at the same Fibs and will be likely to trade off them.

After an initiative move, often caused by an event, it becomes very clear where the Fib retracement can be drawn from and to, increasing the likelihood that other traders will be looking at the same levels in order to execute continuation trades. A further consideration when using a Fib retracement is whether it coincides with another level – this gives multiple reasons for traders to act, as not everyone will be entering trades based on Fibs.

In this live AXIA debrief, we analyse 2 Fib Retracements comparing the merits of each, both following news events but each with varying characteristics – these important nuances are what differentiate viable trades and merely an arbitrary adherence to a strategy.

Technical analysis forms the basis if numerous Axia trade strategies and is taught in the early part of the Axia Futures 8-week Intensive Trader ​Training.

If you are looking to develop a career as a trader within a professional and successful environment, then the Axia Futures 8-week Intensive Trader ​Training is the most comprehensive in the industry based​ ​upon​ ​skill​ ​development​ ​within​ ​the​ ​proprietary​ ​futures​ ​trading​ ​environment.

© Axia Futures 2022. All rights reserved.