Trend Based Fib Extension (PRO HACK) SUPPORT & RESISTANCE is one of the most important key elements in trading.
Without knowing the key Support & Resistance levels, you will never have a true understanding of where the market could go to or reverse from.
One very important factor worth knowing is the markets overall, trend Support & Resistance levels. While there are a lot of different methods in finding these levels, like pivot points, previous day high and low, or monthly or yearly and so on. One of the most promising, tried and tested ways is to use a Fibonacci Tool.
Now YES, there are MANY Fibonacci Tools to choose from and use but if you need to know the fib levels for a trend, use the TREND BASED FIB EXTENSION.
Along with using the TREND BASED FIB EXTENSION, you need to know the correct time frame to actually plot this tool on.
There is no right or wrong time frame nor is there no right or wrong way in plotting this tool, BUT we need to know and understand the overall picture of the market as a whole and if you are thinking about the market as a whole, we need to use the correct time frame to show us that.
So we turn to the 12M TIME FRAME!
The 12M Time Frame is what's going to show us the OVERALL TREND of the asset we are looking at, from the start right to current time.
Now keep in mind that this can work on EVERY SINGLE ASSET.
We use the 12M time frame because we need to plot the trend base fib extension to show us our MAJOR FIBONACCI SUPPORT AND RESISTANCE LEVELS. These levels are for the OVERALL TREND OF THE GIVEN ASSET. By plotting it this way we actually have an idea as to where the market is going LONG TERM.
So head over to whichever asset you are tracking, choose the 12M time frame and make your chart large enough to fit the screen.
In order to plot this tool, you need to know your highs and lows because this tool is used from your lowest point to the first swing high and down to your next swing low, once those 3 are connected the tool will automatically plot your levels.
One easy way to find your swing highs and lows is to use a ZIGZAG with a length of either 1 or 2. That setting will give you the most accurate points.
In the drawing tool box you can you the TREND BASED FIB EXTENSION tool, once you select it and you know where your 3 points are then you plot it accordingly, you will start from your Lowest, to your Swing High and then down to your Swing Low.
To get accurate plots, use the data window and get the exact low and high prices and enter the accordingly into the fib tool settings (coordinates tab).
Adjust your settings with your style preferences, the fib levels that you want to see on your chart, and once done, lock the tool in place and BOOM, YOU NOW HAVE YOUR MAJOR ALL TIME SUPPORT AND RESISTANCE LEVELS PLOTTED ON YOUR CHART.
Now you have a full understanding on the market overall trend by knowing where the major support and resistance levels are.
You can go back to your lower time frame in which you trade from and now you will have a much clearer understanding as to where the market might stop or reverse from, according to the bigger picture.
With that in place, you can use other methods of confluence to get entries, set stops, find direction, you can even go down to lower time frames to use a Fibonacci retracement tool or the trend based fib extension to get sniper entries and set targets.
The key takeaway from this is for you to know the overall direction of the market you are trading and to know where potential areas of support and resistances are which leads to the major reversals in the market.
I do hope this publication helps you in some way or another, even if it helped just 1 person out of many, I will be glad.
HAPPY TRADING :)
==if you have any questions then please drop a comment, thanks==
