Making a trend line could be a good method to define Resistance and support levels when a main trend of the market is occur. Even though trendlines give so many questions when we want to looking for entry levels, generally when the market price in extended moves. In the image below a currency pair gives a trading example. This pair is in a bearish trend, and a good entry levels still unknown. To assist define these entry level you can take a look at reversal strategy that we could put entry trading level based on support and resistance levels using trendline and fibonacci indicator. In this article we are going to discuss about it.
Lets have a little talk about fibonacci indicator before we use it on out trading chart. Fibonacci trading system is a method used in relation with the market price action to get levels of support and resistance on our metatrader 4 trading chart pattern. Fibonacci indicator makes this with formulating the distance between valley and the peak on our trading chart platform, and then calculating a percentage of the market price reversals from these levels on the chart.
When the indicator price is plotted, visually these levels are showed on the trading chart by lines which can represent support and resistance levels. Generally, foreign exchange traders can start to find for the market price to trade from these levels reverse into the direction of the market trend. In other words the fibonacci indicator can work so good in relation with a trendline.
How to determine the market price trading levels using fibonacci indicator
Let's see what is the correlation between the trendline and fibonacci. I think right now you already know what the fibonacci is, and the you should bear in your mind that this system traded to define entry level with the market trend is to determine a relation of either resistance in bearish trend or support level in bullish trend. So, with this trading system you can understand that trendline and fibonacci indicator can be combined on any trading chart and any time frames. The main principle is to get a trading level where the two lines connect and then we can use it to define support and resistance to analyze an entry level. The reversal point will gives us when the market price has traded half way between the last high and current low, by analyzing the distance between valley and peak. And after we made a trendline then we can use it to determine support and resistance as a potential entry level into the market.
Lets have a little talk about fibonacci indicator before we use it on out trading chart. Fibonacci trading system is a method used in relation with the market price action to get levels of support and resistance on our metatrader 4 trading chart pattern. Fibonacci indicator makes this with formulating the distance between valley and the peak on our trading chart platform, and then calculating a percentage of the market price reversals from these levels on the chart.
When the indicator price is plotted, visually these levels are showed on the trading chart by lines which can represent support and resistance levels. Generally, foreign exchange traders can start to find for the market price to trade from these levels reverse into the direction of the market trend. In other words the fibonacci indicator can work so good in relation with a trendline.
Let's see what is the correlation between the trendline and fibonacci. I think right now you already know what the fibonacci is, and the you should bear in your mind that this system traded to define entry level with the market trend is to determine a relation of either resistance in bearish trend or support level in bullish trend. So, with this trading system you can understand that trendline and fibonacci indicator can be combined on any trading chart and any time frames. The main principle is to get a trading level where the two lines connect and then we can use it to define support and resistance to analyze an entry level. The reversal point will gives us when the market price has traded half way between the last high and current low, by analyzing the distance between valley and peak. And after we made a trendline then we can use it to determine support and resistance as a potential entry level into the market.
