$BTC
🎯 The Fibonacci Tool in Trading – The Key to Identifying Support and Resistance Areas!
Have you heard of the "Fibonacci" (Fibonacci Retracement) tool in technical analysis? 🤔
It is a powerful tool used by traders to identify potential reversal points in the market, either in an upward or downward direction.
💡 The tool is based on the famous Fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13...), from which important ratios are derived, such as:
🔹 23.6%
🔹 38.2%
🔹 50% (although it is not a true Fibonacci ratio, it is used)
🔹 61.8% (Golden Ratio!)
🔹 78.6%
📈 How do you use it?
1️⃣ Identify the clear trend (upward or downward).
2️⃣ Choose the highest peak and the lowest trough (or vice versa).
3️⃣ Use the Fibonacci tool to map the ratios between the peak and the trough.
4️⃣ Observe how the price interacts with the Fibonacci levels.
🧪 Practical Example:
✅ Let's assume a stock rose from 100 to 150:
If it starts to correct, it may bounce from the 61.8% level at approximately 118.5.
Or from the 38.2% level at a price of 130.9.
📉 The trader here is watching these levels to seize a buying opportunity from a strong reversal area.
🛑 Important Warning:
The Fibonacci tool is not "alone" a sufficient indicator for entry.
✅ It is better to combine it with other indicators such as:
Japanese Candles
RSI
Trend Lines
Trading Volume
