Hi All,
For the past two days I have been studying on how to apply Fibonacci retracements properly. I can see that quite a few traders, when they apply the Fibonacci retracements their Fibonacci Reference Points are not chosen at a great reference level. Candles cut through resistance levels as if they don't exist.
I am not saying that I am good at identifying the perfect Fib Reference Point. In fact, I am not good at it at all. And that is why I am trying to improve in this area.
On the graph, you can see that I have identified 4x Fibonacci reference points (2x yellow & 2x red) . If you look closely at the 2x yellow Fib reference points, once I fit the Fib retracements to the price level, there were a total of 12x 4hr candles (Block 1) that were just bouncing between the fib retrace 0.236 & 0.618. Then, a breakdown ensue, dropped all the way down to just below the 1.414 fib retrace (Block 2). This seems to be valid reference points (tick). Then, applying the same set up to the second set of Fib retrace (red), you can see Block 3 can be expected. In fact, if you look at the RSI, it is currently a bit oversold at the moment, so a small retrace can be expected, to around $0.598 - $0.608. Then a further drop could ensue to the 1.272 - 1.618 retrace. The fact that XRP pierced through the 1.414 retrace in the first set of Fib retrace could mean that it will probably happen again in the second set. Hence, I would expect the lowest XRP could drop to, in the short term, is right below the 1.414 retrace @ $0.56054.
Please let me know if I have mentioned anything that is misleading. Any constructive feedback is welcomed.
Taiwan Bear
For the past two days I have been studying on how to apply Fibonacci retracements properly. I can see that quite a few traders, when they apply the Fibonacci retracements their Fibonacci Reference Points are not chosen at a great reference level. Candles cut through resistance levels as if they don't exist.
I am not saying that I am good at identifying the perfect Fib Reference Point. In fact, I am not good at it at all. And that is why I am trying to improve in this area.
On the graph, you can see that I have identified 4x Fibonacci reference points (2x yellow & 2x red) . If you look closely at the 2x yellow Fib reference points, once I fit the Fib retracements to the price level, there were a total of 12x 4hr candles (Block 1) that were just bouncing between the fib retrace 0.236 & 0.618. Then, a breakdown ensue, dropped all the way down to just below the 1.414 fib retrace (Block 2). This seems to be valid reference points (tick). Then, applying the same set up to the second set of Fib retrace (red), you can see Block 3 can be expected. In fact, if you look at the RSI, it is currently a bit oversold at the moment, so a small retrace can be expected, to around $0.598 - $0.608. Then a further drop could ensue to the 1.272 - 1.618 retrace. The fact that XRP pierced through the 1.414 retrace in the first set of Fib retrace could mean that it will probably happen again in the second set. Hence, I would expect the lowest XRP could drop to, in the short term, is right below the 1.414 retrace @ $0.56054.
Please let me know if I have mentioned anything that is misleading. Any constructive feedback is welcomed.
Taiwan Bear
