The Complete Trading Course by Rosenbloom Corey

Author:Rosenbloom, Corey [Rosenbloom, Corey]
Language: rus
Format: epub, pdf
Publisher: John Wiley and Sons
Published: 2010-12-15T13:00:00+00:00

Another trading tool is the simple Fibonacci retracement tool, which is designed to find the end of a downward retracement into support so that traders may buy shares as price begins to rise upward from a potential support level. Traders use the 0.618 ratio and derivations of this ratio such as the popular 0.382 ratio to find potential turning points in a market. Traders use percentages such as the 61.8 percent retracement level and the 38.2 percent retracement level. The 38.2 percent level derives from the remainder or what is left over after measuring 61.8 percent of a move. In terms of ratios, think of the 0.382 as being left-over after finding the 0.618 segment, or specifically 1 minus 0.618 equals 0.382. This is why you see the 38.2 percent retracement on standard Fibonacci retracement tools. While not officially a Fibonacci ratio, almost all traders pay attention to the 50 percent retracement level in addition to the 61.8 and 38.2 percent levels, which is why most default retracement tools show three lines in the chart. Thus, the 61.8 percent, 38.2 percent, and the 50 percent retracement lines are what you can expect to see most frequently when doing any type of Fibonacci retracement analysis on the price chart.

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