#fibonachi #KouachiSignals #TrumpVsMusk $BTC $ETH $BNB
💰🤔Why is calculating Fibonacci levels so important in trading?🚀💵
What is Fibonacci?
Fibonacci is a mathematical sequence discovered by the Italian mathematician Leonardo Fibonacci in the 13th century. This sequence is used in technical analysis to identify potential support and resistance levels in financial markets.
The chart above represents the Fibonacci levels for Bitcoin, as it was drawn from the lowest bottom the price reached to the highest peak on the hourly frame. Here, it is clear that Bitcoin is touching a strong resistance area on the hourly frame.
Key Fibonacci Levels
Fibonacci levels are based on specific ratios used to identify potential reversal points in price movement. The most important of these levels are:
23.6%
38.2%
50.0%
61.8%
78.6%
These levels are used to identify support and resistance areas where the price may stall or reverse.
How to Use Fibonacci in Trading
To use Fibonacci levels effectively:
Determine the trend: Determine the overall market trend (bullish or bearish).
Draw levels: In an uptrend, draw the Fibonacci tool from the bottom to the top; in a downtrend, from the top to the bottom.
Define entry and exit points: Use the levels to determine entry points (at support) and exit points (at resistance).
Combine with other tools: To increase accuracy, combine Fibonacci levels with other technical indicators such as the RSI and MACD.
Example: Assume that the price of BTC rises from $20,000 to $30,000. Using the Fibonacci tool:
38.2% level: at $26,180
50.0% level: at $25,000
61.8% level: at $23,820
If the price begins to decline, it may stall at these levels before resuming the uptrend.
Professional Tips
Use Different Timeframes: Check Fibonacci levels on multiple timeframes to confirm signals.
Pay Attention to Japanese Candlesticks: Look for candlestick patterns at Fibonacci levels to confirm potential reversals.
Risk Management: Set stop-loss points below/above Fibonacci levels to reduce risk.
💵💥The Importance of Fibonacci in Trading and Accurate Signals
1- Identifying support and resistance levels with high accuracy
2- Predicting future price movements with up to 80% accuracy
3- Accurately identifying entry and exit points. This, of course, enhances confidence in decision-making by utilizing various other indicators, such as pivot points, MACD, ARSI, volume, and Japanese candlestick price patterns (we will discuss these later in our explanations in future posts).
4- Determining an accurate stop-loss point to minimize losses and manage risk.
