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Chapter 10, Part VIII. Advanced view on Fibonacci Extensions. Page 2

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

    Aug 28, 2009
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    2. If some (down) Fib extension level coincides with opposite Fib retracement (supports from up move) – this fact creates an area of coincidence, that DiNapoli calls “Agreement” and this area is stronger than just a single Fib level. Also, a single area could be an Agreement and Confluence area simultaneously:

    Chart #2 GBP/USD Weekly – here you can see retracement from an up move and extension from down move coincide in relatively tight range – this is Agreement.

    Let’s say, you take a look at this chart at point “A”. You see a nice thrust up and search for possibility to enter Long – in continuation of this initial swing up. Then you find an area of Confluence support (1.5461-1.5505) and intend to enter long from this level. But if you take a close look to down move from “A” point at 1.6295 – you’ll see, that it has initial swing AB, then retracement from it BC and expansion. And the 0.618 target of this expansion almost coincides with the Confluence support area – this is Agreement. Agreement also could appear with just single level, and it should not necessarily be 0.382 or 0.618. It could be 0.5, 0.786 or 0.886 as well. 1.0, 1.618 and others Extensions are also could create an Agreement. So, how to apply it – if you trade on weekly time frame – this will be an area to enter Long. If you trade on daily time frame, and have entered short in, say, “C” point – then this will be an area to close your position. Because of coincidence of two different Fib tools creates much stronger area.
    #1 Sive Morten, Dec 16, 2013
    Lasted edited by : Mar 6, 2016
    Hamza Samiullah and fran alvarez like this.
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