Hello. Welcome to elementary lecture.
Are you keeping with this class well?
There is a long way to go yet.
There are many things you have to know, and things you need to acquire on your own.
But if you trade continuously, you will finally find your style.
And that will be the answer.
There is no answer in my lecture.
I can introduce many methods, but it can be the answer when it suits to you.
There is no method that makes someone rich in a moment.
Of course there are some high level strategies,
but it can maximize profits and minimize losses only in skillful hands.
In that process, an expert is born.
Beginners make a big loss and earn a little money, even if they use same skills.
So you first need to make your basic skills strong.
Today I will talk about Fibonacci strategy.
It’s name comes from the name of mathematician.
Fibonacci is mathematical index.
Many of you who is good at math will be confident, and who is poor at math will worry.
But computer will calculate automatically.
Fibonacci strategy is common in North America.
All of the country have their own trends.
Candlestick chart is common in Asia,
but some people who trade in Japan use bar chart also.
Candlestick chart is popular in China and Korea.
People who trade in Europe use candlestick chart and bar chart.
You can choose what you want.
Candlestick chart and bar chart are not that different, but the informations we can get from them are slightly different.
Of course it will be good to know both of them.
I will make a video about bar chart, if I have a chance.
Advantage for using both charts is we can get some information that we can’t see in candlestick chart from bar chart.
When these informations are gathered, there will be a great result. We can’t ignore even a little information.
If there is a person who gets large gains with a secondary data, look at his records of transactions.
Sometimes he earns greatly, but sometimes he losses seriously
Then he will loss all in a moment.
Don’t take example by them, focus on stable business.
It’s important to make a great returns properly even if you make a small loss 10 times.
What if you earn profits 10 times and loss everything at once? It seems wrong.
That’s why basic is important.
I will explain.
There are two kind of Fibonacci strategy, Fibonacci expansion and Fibonacci retracement.
First, Fibonacci strategy.
And second, Fibonacci retracement. It means literally retracement.
Fibonacci retracement is retracement, and Fibonacci expansion is expansion.
When you click the right button of mouse on this part of MT4, and click Customize,
a window that allows you to put some analysis tools additionally will pop up.
There will be Fibonacci expansion and Fibonacci retracement on list.
Choose it and click the insert button.
And close the window, then you will see a button.
Today I will explain Fibonacci expansion and Fibonacci retracement.
There is a data that fits with Fibonacci.
It is 180 moving average line.
It shows long-term trend over 6 months.
There are many kinds of moving average lines including 480, 240, 200, and 360,
but 180 moving average and Fibonacci have a synergy.
There is a line for MACD also.
Like this, Fibonacci’s effect is maximized with 180 moving average.
Let’s see what that synergy is.
First, I will talk about Fibonacci retracement.
Click the Fibonacci retracement.
Then shape of mouse cursor is changed.
Like this, you can set it freely.
Can you see it?
I will set it properly and let you see.
To set Fibonacci retracement, we need to find the swing low.
Swing low.
If there is no more trough after the trough is made during recent trades, that part is swing low.
Take the candlestick that is positioned on the lowest part of the chart among the candles you have traded recently, including its tail.
Move your mouse cursor, pressing the left button of the mouse on the tail, like this.
Drag this to swing high.
Swing high includes the tail of candle at peak among all the candles you can see.
Part of the candle at peak can be swing high.
Set Fibonacci retracement from swing low to swing high.
Then a red line is made.
You can change the color.
A retracement line is made.
A black line is made on the basis of mathematical calculation.
If the candlestick is above the 180 moving average line, we can say the market tends upward.
In the other words, it’s good time to use Fibonacci retracement.
If the candlestick is near this 180 moving average line, we can think it is flat market.
If the candlestick is near this 180 moving average line, we can think it is flat market.
We also call it ‘Fear zone’.
Even experts feels difficult to trade in this situation.
It is stupid to trade at this zone.
Why? It’s very difficult, mentally.
There is no big change even if you wait 10 hours.
No profit, no loss, and sometimes that status lasts for a day.
Let’s see Fibonacci retracement again.
We can see 0.0 here.
Look at the red circle.
There is 0.0, 23.6 is under that, and 38.2, 50.0, 61.8, and 100.0.
What do they mean?
We call 50.0 section as golden ratio.
If we buy shares at here, it returns to 0.0 section.
It means that the cost will be recovered reaching to 0.0 section.
We can see the power that is trying to go down.
But it eventually reaches to 0.0 section.
This is Fibonacci retracement.
The cost stays at 61.8, 50.0, 38.2 section and goes to 0.0 section.
When the cost is at 50.00, it’s time when power to return is most strong.
Then buying shares at 50.00 will be the favorable trade.
But it doesn’t mean that the cost will must rise.
We have to consider additional information.
Fibonacci retracement is one of the secondary data.
There is no absolute data.
On the other hand, we can apply Fibonacci retracement to the case that the cost falls.
I drew a line from swing low to swing high.
This time, I will draw a line from swing high to swing low.
Swing high is the top point among recent trades.
Swing low is the lowest point among recent trades.
It is a case that the line is under the 180 moving average line.
If we set like this, we can see movement to return to 0.0 section.
Even if it goes to 100.00 section, it tries to return.
I will explain it with circles at the cost point reaching to 61.8 and 50.0.
After it reaches to 100.00, it returns to 61.8, 50.0, 38.2, and 23.6.
Finally it reaches to the point near the 0.0.
It falls short of 0.0 under 23.6, but it is almost near 0.0.
Fibonacci retracement is a data using a fact that the cost have power to return.
But the cost don’t always return.
It is to predict about at which point the cost will return by mathematical calculation.
People who invest for the long term generally use Fibonacci.
But if candlestick is below the 180 moving average line, set a line from swing high to swing low.
If you use Fibonacci with 180 moving average line, it becomes more trusty.
If there is no 180 moving average line, it’s hard to know whether it is uptrend or downtrend.
When the candlestick was below the 180 moving average line just before, we set a line from swing high to swing low.
But if the candlestick is above 180 moving average line, you must not set a line in same way.
So you need to check if the candle is above 180 moving average line or below it before you use Fibonacci.
Then I will explain Fibonacci expansion.
Fibonacci expantion is a data about how the cost will bounce back when the cost rise.
It’s also based on the mathematical calculation.
Setup is simple.
Draw a line from swing low to swing high.
What is this? Can you answer it?
It is to predict that the cost will bounce back to here.
Swing low and swing high always include the tails of candlesticks.
Because tails do have meanings.
But they are losers.
The tail means that one side of people, buying or selling the shares, are lose.
Winners become a candle, like this.
So we can calculate accurately when we set up including the tail of candle.
Look at the chart. There is a mark on part where the cost bounced back to.
I prefer Fibonacci expansion to Fibonacci retracement.
The reason is, the cost of FX always bounces back.
Normal people can’t calculate the accurate figure.
We can’t know to which point the cost will fall only with trend line.
But with Fibonacci expansion, we can get a hint about that.
Look at here. I set a line from swing low to swing high, and it shows the cost will bounce back to here.
The cost repeats this.
If the cost is decreasing, it works in the opposite way.
When we set the line from swing high to swing low including the candlestick, the program calculates automatically and shows the result.
It calculates to which point the cost bounce will bounce back.
Fibonacci expansion is amazing.
However, Korean trader don’t introduce this usually.
I prefer this data very much, and I think it is a data that must not be ignored.
Because it uses the mathematical calculation unlike other data.
Other secondary data are based on patterns of the past.
But Fibonacci is based on mathematical calculation, so it is different from other secondary data.
That is why I use this, and it can be used to get additional information when you read charts.
Most of traders in Europe market use this.
And I will let you know the information for long-term traders.
Check the high chart such as 1 hour chart or 4 hour chart, and set the Fibonacci.
From swing low to swing high.
Then it shows that the cost will bounce back to this point.
From here to this point.
Then let’s suppose that we will trade at here.
We are at here.
We are at here.
Then what should we do?
There is a mathematical calculation that the cost will bounce back to here.
Then we can think the market will be downturn for a while.
Analyzing the chart with the methods that you learned before,
you have to think the market will be on a downturn.
Don’t judge things only by Fibonacci.
I hope you to get more information and raise your trade success rate with better analyze.
Trading with one secondary data is dangerous.
Then let’s suppose that the cost will rebound to this point.
Then when we trade at here, which will be better, selling or buying?
It’s a simple question.
Of course, selling the share is more advantageous.
Since we have information that the cost will rebound to this point.
Then we have to analyze the low chart to know perfect time to sell the shares.
If the same time is pointed out as good time for selling the shares, we can enter the market more doughtily.
You have to consider many conditions including volume and moving average line, when you trade.
But Fibonacci can be useful for trade since it gives hints through mathematical calculation.
Today I talked about Fibonacci.
See you at next lecture. Thank you.
