![]() ![]() In other words, if you are short, you need to see the AO closing a bar above zero. It is enough to see the AO bars cross the zero level in order to exit the market. Here, I recommend you not to over complicate things. Since we now discussed how to set entry points with Fibonacci extensions and AO we now need to determine trade exit rules. Some of these are double top, double bottom, triple top, triple bottom, head and shoulders, triangles, etc. In this manner, if an AO trend is broken, it gives a long or short signal, depending on the direction of the trend and the breakout. Trend lines could be placed on the awesome oscillator. At the same time, the bearish saucer has two green bars, where the second one is lower, followed by a red bar. A bullish saucer occurs when there are two red bars, where the second one is lower, followed by a higher green bar. Saucers are specific formations on the AO indicator itself. This is when the bars of the awesome oscillator move from positive to negative territory and vice versa. The methodology behind this trading strategy is to confirm breakouts above or below Fibonacci extensions with the awesome oscillator (AO). #1 – Fibonacci Extension Breakout + Awesome Oscillator Remember, the stock has exceeded previous swing highs and could very well start an impulsive move. Traders will have to fight this urge and wait to see how the stock reacts at these fibonacci extension levels. The first inclination is to immediately close your position at the next fibonacci level. The last part of the fibonacci extension equation, is what to do when the asset hits the respective target. Once PBKS exceeded this prior swing high, the stock began an impulsive move up that would not face any real resistance until achieving its 261.8% retracement level.įibonacci Extensions Trading at Fibonacci Extensions As you can see, the stock was able to exceed its high of $18.76. In the below example we will be reviewing the fibonacci extension levels for Provident Bankshares (PBKS). These point should be in relation to both your current timeframe and length of trend. The first step in drawing fibonacci extension levels is to identify two clear swing points. The levels for fibonacci extensions are calculated by taking the standard fibonacci levels and adding them to 100%. Fibonacci extensions provide price targets that go beyond a 100% retracement of a prior move. The next question we have to ask ourselves as traders, is what happens when price exceeds the very swing points we use to calculate our fibonacci levels? At what point do we look to exit our position? The key to these questions are fibonacci extensions. These levels are calculated by analyzing the retracement levels between two swing points. Which Fibonacci Extension Trading Strategy is the best?įibonacci levels are a standard measure for support and resistance levels within the market.#2 – Fibonacci Extension Breakout + Know Sure Thing Indicator (KST).#1 – Fibonacci Extension Breakout + Awesome Oscillator. ![]()
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