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Chapter 10, Part VIII. Advanced view on Fibonacci Extensions. Page 3

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 16, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    3. The example above on chart #2 could let you understand - was some particular Fib retracement level been broken already or not. On the chart we clearly see, that the 0.618 Fib extension target from the ABC down move is slightly below that weekly confluence support. It tells us, that although Confluence support was penetrated and that the market has even shown a single close below it – this Confluence support is still valid, because market just accomplished 0.618 target – that’s all. Here is the rule:



    If you see, that market stands a bit lower that Fib retracement level, you should drop your time frame and find out – is any ABC patterns has a target (any of them 0.618, 1.0 or 1.618) that is lightly lower or higher (depending on direction) than this level. If it does, then, possibly retracement level is still valid – the market just accomplishes an ABC target.


    But, if the market suddenly continues its move down – lower than the area of Agreement, then this level probably has been broken.

    4. If market accelerates after C point directly from 0.618 to 1.0 or even to 1.272, i.e. passes 0.618 target without any respect – then there is a solid probability that it could reach 1.618 expansion;

    5. The shallower the BC retracement, the greater the probability that the market will reach the 1.272 or even the 1.618 Fib expansion – usually it should not be deeper than 0.5 for that purpose;

    6. If the CD leg is faster than AB, then probably the market could reach 1.272 or 1.618 expansion;

    7. If market shows strong long bars or even gaps near 0.618 or 1.0 extension targets in the direction of extension – the more probable it is that it will continue it’s move to 1.272 or 1.618;

    8. If retracement on BC leg is 0.786 or deeper, then probably market will not move farther than 1.0 extension target.

    9. If AB and CD legs are very harmonic and symmetrical, then there is a solid probability that in 1.0 extension target (D point) we will meet solid resistance/support or even reversal;

    10. If the market is really strong, it should not show deep retracement after reaching of 0.618 Fib extension target.
     
    #1 Sive Morten, Dec 16, 2013
    Lasted edited by : Mar 6, 2016
    Hamza Samiullah and fran alvarez like this.
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