3. How to use Fibonacci for trading?
If you can understand the above tweets, how can we trade to achieve stable profits?
Answer: Find structures in large cycles, set trends, find signals in small cycles.
Left-side trading: Overlapping area, bullish expectations.
Everyone knows that the win rate of left-side trading is low, but our method completely avoids the issue of low win rates. By finding overlapping areas, the overlapping areas have dual expectations, and it is highly likely that reactions will occur. React promptly to stop loss, lock in profits, and leave positions for speculation. This greatly improves the win rate of left-side trading.
Today I will share two of the most commonly used left-side trading methods. More trading methods will be shared daily in subsequent practical sessions.
Example 1. When a large cycle shows a bullish structure (the black ABCD in the picture), this structure has not been completed (D has not achieved 2-2.618), and a small bearish structure appears in a small cycle. We use Fibonacci to draw the target area of the small bearish structure (2-2.618) marked with a green box. If this area overlaps with the neckline position of the bullish structure ABCD, consider entering long.
Reason 1. The small bearish structure target area has been achieved, with rebound expectations.
Reason 2. The neckline position of the large bullish structure has a support effect.
Left-side trading, if two reasons for going long are satisfied, it can be done.
Example 2. The bullish structure ABCD has completed (2-2.618 achieved), we will treat point D as the new point B (considering ABCD as a segment of AB upward), draw Fibonacci, and mark the pullback range 0.382-0.618 in purple. If a small bearish structure appears above, the target area of the bearish structure (2-2.618) overlaps with the purple area. Consider entering long.
Reason 1. The pullback range 0.382-0.618 has rebound expectations.
Reason 2. The target area of the bearish structure has been achieved, with rebound expectations.
Left-side trading, if two reasons for going long are satisfied, it can be done.
The same applies to bearish structures. If you don't understand, leave a message, and I will reply to all.
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