Fibonacci TA for Litecoin

The fibonacci retracement is a useful technical analysis tool for day/swing trading most often used for when you buy something on a heavy a dip and want to retrace back to the top to know what levels to sell.

I'd like to exemplify another use, nothing groundbreaking, just less common than the former utility. Take litecoin for example, it recently had a run up from 50$ to roughly 400$. But what if you missed the rally and want to buy the dip? Well catching a falling knife just perfectly is difficult, but we can use the fibonacci tool as a guide for what levels to add a position in litecoin.

In the binance chart, we peaked at .0196 btc, as as you can see the price is falling. The fibonacci tool displays waves you can add your position in litecoin, so rather than trying to time the dip perfectly and get in at the very bottom, you can minimize risk by buying at multiple price points on the way down, outlined by the fibonacci. The number outside the parenthesis indicates the percentage the price has fallen, so the second price point from the top, in red, is .236, indicating it has fallen by 23.6%.

Now it's up to you and your risk/reward profile as to which price points to buy - the least risky would be to allocate however much you want to put in litecoin equally at each price point until we hit a full retracement. However, generally speaking if we see a dramatic quick run up, I don't like to buy until we hit at least a 50% retracement, which would be .0144 btc according to these levels. Typically 3-4 price levels are used when buying based on fib levels. I think the 50%, 61%, and 78% would be reasonable in this scenario, as with the way the market has been going I'm not sure we will see a full retracement downwards. Just food for thought, not specific advise.

-best