Support and Resistance Levels
To start your education on technical analysis, let's begin with the basics: support and resistance!
- Fibonacci Trading
- How to Use Fibonacci Retracement to Enter a Trade
- Fibonacci Retracements are NOT Foolproof
- How to Use Fibonacci Retracement with Support and Resistance
- How to Use Fibonacci Retracement with Trend Lines
- How to Use Fibonacci Retracement with Japanese Candlesticks
- Using Fibonacci Extensions to know when to take Profit
- Using Fibonacci Extensions to determine the stop to lose Less Money
- Summary: Fibonacci Trading
Popular Chart Indicators
- How to Use Bollinger Bands?
- HOW TO USE THE MACD INDICATOR
- How to Use Parabolic SAR
- How to Use the Stochastic Indicator
- How to Use RSI (Relative Strength Index)
- How to Use ADX (Average Directional Index)
- Ichimoku Kinko Hyo
- Trading with Multiple Chart Indicators
- What is the Best Technical Indicator in Forex?
- Summary: Popular Chart Indicators
Using Fibonacci Extensions to determine the stop to lose Less Money
To comprehend the use of Fibonacci Extensions to where to place trade stop to prevent loss apart
from solely depending on the Fib levels, we must understand a few time tested methods.
Technique 1: The right place for Stop is next to Fib
Suppose you are planning to enter at = 38.2% (Fib Level)
Then stop should be at= 50.0%
If you are confident about 50.0% level, then feel free to set it at 61.8% and keep changing depending
on your trust.
Do you remember the 4 hour chart (EUR/USED) of Fibonacci retracement article?
Let’s get a look again:
This method is all about believing that a certain percentage level would hold as a resistance point.
Technique 2: Place Stop Past Current Fluctuation of High/Low
This technique is a bit safer way. It means when you are in a long trade you can place the stop loss
beneath the recent Swing low to get the support level. But the price should be in an uptrend during
And during the downtrend, place stop loss higher than Swing high, but it is only valid if you are in a
How to choose the right way?
The fact is you need to blend your experience, understand about the tools, ongoing market analysis
to get the right Stop Loss point for you. Don’t rely blindly on Fibonacci levels as the foundation of
stop loss placement because it’s not a sure thing.
Combine all the available tools and turn it in your favour.