Fibonacci withdrawal when combined with center point trading can be a powerful combination

Fibonacci Retracement, Extension and Projections are one of the most popular technical analysis tools in the arsenal of all traders. Infact, Fibonacci Retracements are widely used by daily traders and swing traders in their trading settings. They are considered to be the leading indicators, unlike most other indicators for technical analysis, which are considered to be lagging behind in nature.

Most of us as traders are familiar with the sequence of Fibonacci numbers that is obtained by adding the last two numbers to get the next number in the sequence that starts at 0.1. And so, the Fibonacci sequence develops so 0,1,1,2,3,5,8,13,21,34,55,89, …. and so on. These ratios 0.382, 0.5,0,681,1,1,272 and 1,618 are considered very important in the formation of the different levels of correction, correction, extension and projection.

With each trend, the price action tends to recede or be tracked again. This is also known as Correction. Suppose we have an upward trend. Price action, when starting from the lowest level, will at some point tend to consolidate, going backwards or retreating upwards to a certain extent and then resuming in the initial direction. These adjustments or adjustments can be 0.382, 0.5 or 0.618 percent most of the time. So, if you have not been able to enter the uptrend at its low level, you can enter it at one of these levels.

Sometimes, however, the price action can continue to be tracked more than 100%, which means that it may exceed the initial bottom of the trend. When this happens, it is known as a Fibonacci extension. So, Fibonacci Extension is a special type of correction or correction when the price action is tracked more than 100%. This expansion can reach 1.272 or 1.618 percent.

Fibonacci projection is a concept used to determine the levels at which the trend is most likely to run out. Fibonacci predictions are considered very important in the analysis of the Elliott wave. This projection can be 1.618, 2.618 or even 3.618 percent and is used to determine the swing.

Now the Pivot Point is calculated by adding High, Low and Open for a certain period of time, then divided by 3. You can calculate two levels of pivot point support and two levels of pivot point resistance. If you are unfamiliar with turning point calculations, you should read my article on turning points.

When you trade turning points, you pull these levels of support and resistance on the chart and see if the price action breaks that support or resistance or holds it back. Suppose you trade the 30-minute chart. Draw the level of support and resistance of the pivot point. The price action rises and hits the resistance, forming a doji. Dodge is considered a band of indecision.

Now, if the price action starts to fall later, you can take it as a sell signal with a stop placed near the top of the doji. When to go out? You can download adjustment levels 0.382,0,5 and 0,618 to see where the price action will end the adjustment. This way you can maintain your emotional control and not let the trade end prematurely. Whatever it is, Fibonacci recovery in combination with turning points can be a powerful combination to master. Good luck!