If you would ask the professional traders out there, which tool do they prefer the most for continuation entries. Most of them would say Fibonacci retracement.
Fibonacci retracement is even my personal favorite tool for spotting continuation entries.
The level of clarity it gives you is just mindblowing and I do not think any other tool or indicator is even close to it.
Trust me, I am not bragging about its achievement and what it can do but this tool is a gamechanger.
You just need to be able to understand what it does and how to use it precisely.
And this video is all about it.
Hi guys, welcome to forex monopoly, my name is Daksh, and today we are gonna talk about Fibonacci retracement.
So, there is a very simple reason for the high win rate we get with Fibonacci.
And it is the way the price moves.
The price always moves in a particular pattern or wave called impulse and correction.
If you are not aware of what impulse and correction are, I have added a video to it. You can check it out by clicking the I button.
Now just a quick recap of impulse and correction.
Whenever the price moves up or down it doesn't move in a straight line.
It moves in a form of highs and lows and these highs and lows are formed in a certain pattern or waves called impulse and correction.
The price is said to be impulsive when the price moves powerfully in any one direction.
And Whenever the price moves very slowly sideways, it is called a correction.
So, let us assume the market is up-trending and the price is moving up.
So, it will move something like this,
It will move up with an impulse then it will correct then if the trend is strong the price will again move up in the same direction.
And the price will continue to do the same,
Now many of you must be wondering why I am telling you this AND HOW IS IT EVEN RELATED TO FIBONACCI.
Well, it is totally related to Fibonacci.
Imagine if you could actually find out when a correction is going to end a new impulse is going to start?
Wouldn't it be helpful for you?
Wouldn't you be able to win trades?
Absolutely, you will win trade like a trading god.
The thing is correction and retracement are the same things and the Fibonacci retracement is used to find out when a correction or retracement is going to end and when a new impulse would begin.
So, a Fibonacci retracement has certain levels to it and traders believe when the price reaches those particular levels the price will reverse or the retracement will end and a new impulse will start.
So, this is a Fibonacci retracement tool.
It has different levels to it like, 0.236 0.382 0.5, etc.
Out of all these levels, 0.382 0.5, and 0.618 are the most used levels and most of the time the price corrects to these levels and then gives an impulse.
