Simple and effective use of Fibonacci correction levels Hello, Traders!
Today I will explain how to use a trading strategy based on correctional Fibonacci levels as simple and rational as possible.
Using the ZIL example, we will highlight the period from November 4 to 25, where the price has entered an uptrend.
Our task is to stretch the Fib retracement from the beginning of $0.01666 until the end of the uptrend of $0.03681.
We place 4 buy orders at correctional Fibonacci levels :
0.382 (0.02911) - 10% of the transaction amount
0.50 (0.02674) - 20% of the transaction amount
0.618 (0.2436) - 30% of the transaction amount
0.786 (0.2097) - 40% of the transaction amount
SL should be placed under the level 0.786. In our case, it is 0.01921 $.
The average price of entering the transaction, in this case, will be $ 0.2396. Thus, the stronger the price is corrected, the less the drop will be relative to the average entry price.
The correction levels of Fibonacci from 0.618 to 0.0 of upward movement will be the targets.
As a rule, after the correction, the price bounces from the levels and we will have an opportunity to close a deal at least without losses, and at best make a good profit.
This is a very simple and effective strategy that has proven itself not only on a daily timeframe, it can also be used on shorter price movements. It can also be used on other price movements like H4 or H1 timeframes.
Leave your feedback below and good luck!
