Crypto Academy / Season 3 / Week 2 - Homework Post for @yohan2on -FIBONACCI RETRACEMENT LEVEL

FIBONACCI RETRACEMENT LEVEL
In every movement in the statistical prediction chart there are always percent or ratio change so as it implies either desired or undesired movement along the chart. Sometimes the downward movement might be to ones decision and vice versa.

The term Fibonacci is a tool that is used to either determining or predicting the price on stock market, growth and declining of a particular distribution, or even value chain of assets such as Gold, Silver, Crypto assets and lots more. With this brought us to what Fibonacci Retracement Level is.

Fibonacci Retracement can be seen as a technical or mathematical analysis used in determining either the support or resistance level of a chart watch list. Fibonacci Retracement level (FRL) are parallel line that shows the meeting point of support and resistance are closely tend to happen. In every level either downward or upward in fibonacci Retracement level it is calculated in percentage.

Fibonacci retracement level only helps a trader to indicate at which point to going and at what part one needs to set take profit or even otherwise stop loss, you either can calculate this in ratio or in percentage, regarding to this statement, Fibonacci retracement level doesn’t guarantee you a 100% win over your prediction as the name prediction implies, hence it only helps you read percentage or ratio change in trends. As it is not the only tool needed for trading as we have candle stick pattern as well. In calculating the percentage rate at wheelchair an asset move , one need to understand the following mathematical logic. 1+1 is 2, 1+2 is 3, 2+3 is 5, 5+3 is 8 and so on. As it could be done also in percentage. That is adding the preceding value to the number to get the forth time value, some might be wondering why is 4, 6 and 9 not included, well the mathematics seems to be clear if well pay attention to. We can also have it calculated in percentage as 23.6% + 38.2% is 61.8%, 38.2%+61.8 is 100% and so on too.

UPWARD MOVEMENT:
The upward movement indicates the positive movement of asset. Sometimes it might be to bullish or normal market trading volume effect.

DOWNWARD MOVEMENT:
This movement doesn’t determine poor trend of asset on its exchange volume but as law of gravity implies, what ever goes up must come down, but in trading things makes value of asset drops, therefore those are norms in trading....
The red and blue arrow was shown so as to understand the 2 types of movement on an asset trading chart...
In setting a Fibonacci Retracement Level for a trade, there are some features one need to consider and give a very close attention to as it is very important so as to monitor the trade session even if one is away from the reach of his phone or trading device, those features are listed and as discussed below:

ENTRY POINT
As the name implies Entry point, this signifies the stage or level of value of asset which one is placing or trading on, for example trading on ethereum, the value at which Ethereum is as at the time one is placing his trade is called the entry point.

STOP LOSS
Stop loss is added when trading in short term though it can also be used in longterm trading as well, this implies that even if an asset would depreciate extremely it shouldn’t go beyond excessive loss. For example, buying Ethereum at the entry point of $2400 and the and the target is at $2700 meaning the stop loss shouldn’t be less than $2300 so as to minimize loss.

TAKE PROFIT
This is the point which every trader likes there trade to always result to, as it implies taking profit, that is this is the point where target for an asset is met.

TRADING AND INTERPRETATION
The screenshots in this chapters shows both the trading page and the chart representation of the trade actions carried out on Binance. All indications are also shown in the pictures. As to the entry point while the take profit is also not in doubt and also the stop loss was also set to mark the full OCO trade.

The picture above shows the entry point of trade of Ethereum which is merged to USDT. The entry point is at $2,385,22 while the Take profit which is said to be Limit or target here is at $2,500 and lastly the Stop Loss was also set at $2,230. That is, reading from the chart, the stop loss shouldn’t go down below $2230.

This is the chart representation of the above trade

CONCLUSION
Fibbonacci Retracement Level is not a perfect tool for trading for its predictions might be wrong sometimes, but it is also important when reading trends of an asset before trading on it as it shows past movement trends about the said asset. Note: Trade only with a disposable income, don’t borrow funds to trade or seek investment from people to trade for no one is 100% sure of the outcome.