Technical Analysis Workshop Series Session Seven Fibonacci Trading Part 1

Transcription

1 Technical Analysis Workshop Series Session Seven Fibonacci Trading Part 1

2 DISCLOSURES & DISCLAIMERS This research material has been prepared by NUS Invest. NUS Invest specifically prohibits the redistribution of this material in whole or in part without the written permission of NUS Invest. The research officer(s) primarily responsible for the content of this research material, in whole or in part, certifies that their views are accurately expressed and they will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this research material.

3 DISCLOSURES & DISCLAIMERS Nothing in this research material constitutes a representation that any investment strategy or recommendation contained herein is suitable or appropriate to a recipient s individual circumstances or otherwise constitutes a personal recommendation. It is published solely for information purposes, it does not constitute an advertisement and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. The research material should not be regarded by recipients as a substitute for the exercise of their own judgement. Any opinions expressed in this research material are subject to change without notice.

4 Agenda Profile Introduction Who is Fibonacci and How He Can Help You with Your Trading? How the Ratios (Golden Ratio) Are Derived From? Fibonacci Projections and Retracements The Relationship among the Retracement & Extension Levels Types of Fibonacci Price projections Fibonacci Analysis is a Leading Indicator

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6 Profile Active member of TASS Graduated from NTU in years of experience Runs Investor s Educational Aids, a private investors club Part-time Lecturer of NUS Extra-mural Studies Dept(1988 to 1994) for Forexand Derivative Products Investment Courses FM FIBONACCI & BC MODEL SEQUENCE PROJECTION DOW AND THEORY

7 Introduction Tothe Technical Trader, the chart is nothing more than what an x- ray is to a Doctor. It shows high probably of the next move in the market. The main reason most traders lose money in the market is they have no idea how to make sense of all that price movement: Where should I get in? Where is the safest place? How much can I afford to risk? How much will I gain? Should I wait a little longer? FM FIBONACCI & BC MODEL SEQUENCE PROJECTION DOW AND THEORY

8 FIBONACCI TRADING TECHNICAL ANALYSIS

9 Who is Fibonacci and How He Can Help You with Your Trading? Great mathematician Wrote "Libre Abaci (Book of Calculation) Introduced the numerical numbers to the Romans Fibonacci Series: Each number is the result of adding together the previous two numbers in the sequence. TECHNICAL ANALYSIS

10 Fibonacci Series The Fibonacci Series goes like this... 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, etc. all the way to infinity. As you can see: each number is the result of adding together the previous two numbers in the sequence. 1+1=2, 1+2=3, 2+3=5, 3+5=8, 5+8=13, 8+13=21, 13+21=34, etc. all the way to infinity.

11 How the Ratios (Golden Ratio) Are Derived From? Prev/ Last Fibonacci Series Last / Prev

12 FIBONACCI

13 Fibonacci Projections and Retracements Fibonacci price projection and retracement methodologies will give you foresight into the potential upcoming moves in time and price in the market you are currently trading whether you trade a daily chart or five-minute bars.

14 Fibonacci Projections and Retracements To predict where the market may go in the future. To determine turning points in advance is important for every trader. Fibonacci ratios are common in almost everything in nature from flowers, to the human body, seashells etc. Fibonacci ratios are easy to use and just as easy to calculate. You take the range from one pivot to the next and add or subtract the ratios. The important fact or phenomena is, the market moves in a Fibonacci Series of ratio price movements. There are rallies, retracements and extensions as well as dips, retracements and extensions. Ratios for Price Retracement Levels: 0.236, 0.382,0.50,0.618, and Ratios for Price Extension Levels: 1.272, 1.414, 1.618, 2.00, and

15 The Relationship among the Retracement & Extension Levels Reciprocal Square Root

16 The Relationship among the Retracement & Extension Levels Reciprocal Square Root

17 The Relationship among the Retracement & Extension Levels 1. Retracement 2. Extension 3. Expansion 4. Alternate

18 The Relationship among the Retracement & Extension Levels Retracementstake the distance from one pivot to the next. Preferably a #1 to a #2 pivot and take a portion of that range that is generally 100% or less. Common ratios to calculate retracements are 0.236, 0.382, 0.500,.0.618, and and

19 The Relationship among the Retracement & Extension Levels Extensionstake the range from point #1 to Point #2 and multiplying that distance by a Fibonacci number, add the two numbers together and project into the future where a possible turning point could be.

20 The Relationship among the Retracement & Extension Levels

21 The Relationship among the Retracement & Extension Levels Expansionstake the distance from the # 3 pivot to the #2 pivot and then multiply that distance by Fibonacci numbers and add that range to the #3 pivot

22 The Relationship among the Retracement & Extension Levels

23 The Relationship among the Retracement & Extension Levels Alternatestake the distance between point #1 and point #2 and adding that distance to point #3 to give you another type of projection into the future.

24 The Relationship among the Retracement & Extension Levels

25 Fibonacci Analysis is a Leading Indicator How to calculate probable future turning points. Extensions and expansions for taking profits. Entry and exit levels, and stop placement levels. Where buyers are likely to support the market. Where sellers should be taking profits. Where the high probability trades are. Which Fibonacci levels are more likely to turn the market. Fibonacci use from intra-day to longer-term trading and all markets.

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27 THANK YOU!