According to most prominent and successful traders the increasing of the profit and decreasing of the losses are the most important parts of trading. Fibonacci e Elliot · Accurate Forex Signals: Elliot Waves free learning course – Lesson3 #ElliottWaveTheory Simples, Coisa. Elliott Wave Theory. Fibonacci Retracement in technical analysis and Elliott Wave Theory refers to a market correction (counter trend) which is expected to end at the areas of. FOREX TRADING WITHOUT INVESTMENT IN URDU Fortunately, this and based pages with. You can You the image a the. It enabling worth to Family.
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Elliott Wave attempts to identify recurring price movements within financial markets. These repetitive price movements are the result of a natural rhythm of crowd psychology that exists in all markets. The Elliott Wave rules and guidelines help recognize a price swing and the correct waves.
It also used to classify them into a set of meaningful patterns, which can become a reliable tool for future price predictions. The underlying principle is that price-action unfolds via an endless alternation between trending impulsive, motive, or momentum and corrective correction cycles, while producing this effect on any relative timescale Fractal. We need to review some basics around price movement before moving into the exact mechanics of the Elliott Wave Theory.
Each price chart has three basic types of price action phases. Elliott Wave EW price patterns are divided into: impulsive, corrective, and consolidation. An impulsive wave is price movement that initiates progress in one direction, which is called the trend. Price usually moves more distance in pips and quicker less time when trending. This makes trending moves more appealing for trade setups.
The waves are split into 5 impulsive waves with the trend and 3 corrective waves against the trend see below. Corrective waves are against the trend price movements that are reactionary in relation to the previous trend-setting move. They essentially attempt to revert or undo the movement that was initiated by the preceding motive wave.
Price usually moves less distance in pips and slower more time , although fast corrections can occur as well zigzags. This makes corrective moves less appealing for trade setups. If the trend is bullish, then the correction of the trend would be bearish. If the trend is bearish, then the correction of the trend would be bullish. Ralph Elliott discovered a very important pattern in the markets in the early 20th century. His Elliott Wave Theory will now be explained in the following guide.
The Elliott Wave Principle has three core rules. Your wave analysis must match these Elliott Wave rules, otherwise the wave count is incorrect. Here is an overview of the three Elliott Wave rules: 1. Wave 3 cannot be the shortest of the three impulse waves, namely waves 1, 3, and 5. Wave 4 does not overlap with the price territory of wave 1, except in the rare case of a diagonal triangle formation.
The Elliott Wave Theory also has many guidelines per wave pattern. This guide will explain all of the sub rules and guidelines for each and every wave. These sub rules and guidelines are extra information though. There are only 3 main Elliott Wave rules which always remain valid see above for each wave count and analysis. This EW reference guide provides an idealized drawing for each EW pattern, including a visualization of the most important internal wave size relationships.
It also includes an overview of the Elliott Wave rules. The images highlight the most common Elliott wave retracement levels and extension targets in red, followed by the next most common targets in orange, followed by the least common targets in grey. Note: The percentages in the above for Fibonacci extension targets are drawn from the start of the wave, but the ratios are based on the size of the preceding motive wave i.
Elliott Wave and Fibonacci Retracement with Extension Guidelines: Refer to image for key retracements and extension targets. Note: The percentages in the above for Fibonacci extension targets are drawn from the start of the wave, but the ratios are based on the size of the preceding wave of the same direction i.
Note: The internal zigzag structure is only shown it the Contracting Triangle example in order to avoid clutteringthe drawing with too many lines. Please be aware that all waves within all triangles consist of corrective wave patterns, even if they are not shown in the image.
Please note that complex ZigZag combinations are covered under the Zigzag section earlier on. The following section only deals with complex sideways combinations. Elliott Waves are labeled in different degrees that are nested within each other due to the fractal nature of price movements. Please refer to your Elliott Wave drawing software for the appropriate names and symbols used for each officially defined degree.
Alternatively, you may simply label different degrees with different-colored labels on your chart. EW patterns have the tendency to create alternation within them. Following is a list of the main occurrences of alternation:. The time-lengthiness of wave 4 is in balance with the depth of wave 2, while the shallowness of wave 4 is in balance with the short-lived nature of wave 2, thereby creating balance through alternation. The same need for balance applies for any motive waves within a 5-wave sequence i.
The exception however will be the potentially extended wave within the sequence. Wave 1 and 5 of an impulse sequence are equal in size and duration equality , while wave 3 is extended alternation to waves 1 and 5. Alarm bells should be going off when a potential wave 4 is starting to grow out of proportion in terms of size and duration relative to the other waves of the same degree.
It is dangerous to disregard the factor of balanced proportions during wave counting. Disproportionate and misshapen patterns should be seriously questioned. The 5 waves are labelled and have the following characteristics: impulse wave 1 , correction wave 2 , impulse wave 3 , correction wave 4 , and another impulse wave 5.
The 3 waves are labelled ABC and have the following characteristics: impulse wave A , correction wave B , and impulse wave C. Impulsive and corrective waves help determine when to enter trades , and in which direction the trend is moving. The Elliott wave ABC correction is a three wave pattern. It consists of 3 price swings that go against the trend. The first step is therefore to analyse the charts and understand if 1 there is a trend and 2 what direction is the trend.
An ABC correction can take place either a within the trend as part of a wave 2 or wave 4 or b after the 5 waves with the trend have been completed. The wave A is against the trend. The wave B with the trend. And the wave C is again against the trend. The ABC correction can take place in different formations, such as ABC zigzags quick correction in wave formation and ABC flat corrections slower correction in wave formation , which then generate different ABC correction fib levels.
Traders can use the past price swings to understand their character and direction. They can then label the price swings based on the Elliott Wave Theory. Once traders understand the previous waves, they can use the rules and guidelines of the Elliott Wave Theory to estimate the current wave and future waves.
This estimate is a Elliott Wave prediction. Wave predictions will eventually become confirmed correct or invalidated incorrect. Each wave pattern has confirmation levels breakout beyond support or resistance and patterns certain price movement like a bull flag for instance. Each wave also has invalidation levels breaking an opposite level and patterns an opposite pattern.
Traders can use these levels and patterns to update their wave analysis in real-time as they receive more information about the chart. Wave analysis is based on the concept that price charts and financial markets follow specific patterns called waves, which are based on Elliott Wave EW Theory.
How can traders apply wave analysis? Secondly, traders can label those price swings with numbers and letters A-C according to the Elliott Wave Theory. Thirdly, traders can read the sequence of swings and labels to understand the story of the waves patterns and understand the expected direction, character, and wave label of the current and next price swings.
The Elliott Wave in the Forex market is best used by understanding price swings and price patterns, which are supported by using 1 moving averages and 2 concepts of impulsive quick price and corrective slow price price swings.
Traders can ride and trade the waves without counting the waves by understanding how price moves in relation to moving averages MAs , MAs vs MAs, and the Fractal indicator vs MAs. My SWAT course 2. Yes, Elliott wave works but more experience is often required and desired. Elliott Waves EW are an excellent tool for analysing the markets and for understanding the price movements.
These tools help traders digest the price swings in a more systematic method. It is important that traders implement a consistent and rules based method for reading and understanding the price swings before they trade the waves. Waves are always visible on the chart. In fact, they never disappear. All candles belong to a price swing. And each price swing is some type of wave. Price swings and waves eventually do finish and new price swings start.
This can be best determined by using an oscillator such as the ecs. But there are many other useful tactics such as identifying impulsive versus corrective price action. Impulsive waves are usually completed quicker whereas corrective waves develop longer in time. The main trading tools are based on moving averages, Fibonacci, and Fractals. Often trend traders buy in wave B but their trades get trapped as a larger retracement against the trend takes place in wave C. The Elliott Wave abc correction Fibonacci can break into a number of different internal patterns.
The ABC correction can take place in different formations, such as ABC zigzags quick correction in wave formation and ABC flat corrections slower correction in wave formation. Wave patterns are identified by the Elliott Wave Theory.
The Elliott Wave has rules and guidelines to help recognize a price swing and the correct wave. The waves are split into 5 impulsive waves with the trend and 3 corrective waves against the trend. The 3 waves are labeled ABC and have the following characteristics: impulse wave A , correction wave B , and impulse wave C. Elliott Wave can be used to understand the flow of price action and the market psychology in general.
For instance, let us assume that there are 5 waves up that formed, followed by an ABC down. The bullish price action is against the previous downtrend. This could indicate a wave pattern. What is the next Elliott Wave? A wave 3! This is an example of an Elliott Wave prediction. Traders can use these Eliott wave Fibonacci levels and patterns to update their wave analysis in real-time as they receive more information about the chart. EW offers a method to understand the psychology of the price action and price patterns.
My SWAT course explains how to use these tools and concepts correctly to analyse and trade wave patterns. Although the Elliott Wave Theory offers traders rules and guidelines for using waves on Forex charts, it is often difficult to implement ideas on live charts and without sufficient experience.
Yes Elliott wave works but more experience is often required and desired. Elliott Waves EW are an excellent tool for analysing the markets and for understanding the price movements and market psychology. The EW patterns work much better as a supportive tool. I also tell traders to focus on wave patterns that are simple to breakdown.
Unfortunately not many systems use EW principles. Trading Elliott Waves is difficult and requires a lot of experience. The best way to trade Elliott Waves is by using price indicators such as moving averages, Fibonacci, Fractals, and the MACD or Awesome Oscillator in combination with candlestick patterns plus impulsive and corrective price swings. Elliott Waves and Fibonacci are usually the go-to.
The danger of trading waves blindly no indicators or price patterns is that traders often lack the experience to accurately evaluate the correct wave formation. Trading Elliott Waves is best done after traders can correctly analyze the price movements, using MAs, Fibs, candlestick patterns and other tools. Trading Elliott Waves is not recommended for beginners. Beginning traders should first learn to analyse waves before active trading Elliott Waves.
The first step to analysing waves is understanding price swings and the character of price swings. Price indicators, candlestick patterns, and impulse quick and correction slow concepts help determine those price swings. Elliott Wave EW is a reliable tool for analysing price movements and financial markets. But experience is required to translate that analysis into trade ideas. The benefit of the Elliott Wave Theory is simple — it allows you to understand the psychology of price movement in the Forex, CFD and other financial markets.
By understanding the psychology between the market waves, an Elliott wave analyst can successfully predict price movements. The Elliott Wave Theory explains how and why price moves as it does — with momentum and correction besides up, down and sideways.
Traders can use past and current price swings and wave patterns to analyse future price movement. The problem is that traders often complain to me about the difficulty of implementing the Elliott Waves correctly when trading. To solve their problem, we advise 3 tips.
Second of all, try to understand the logic of price swings first. Price makes impulsive and corrective price swings. EW theory labels those price swings and tries to understand their sequence. Thirdly, be patient when learning EW. It takes time and the best approach is to develop your skills step by step.
To understand Elliott Wave fully, please take a look at the SWAT system which is extremely useful in approaching and trading markets with Elliott wave analysis. These numbers are important because they are used widely in nature. Like we have two legs and two is a Fibonacci number. We have 5 fingers and 5 is a Fibonacci number.
The number of petals on a flower is 8 and 8 is a Fibonacci number. That is the main reason for its importance. That is why we use the golden ratio as a technical analysis tool to predict the price. Fibonacci really works. Many traders say that it does not work but I have shown you the reason behind the golden ratio. Fibonacci tool in technical analysis works.
If it is not working for you then your method of using the Fibonacci tool will be wrong. The same is the case in technical analysis. If the Price moves pips then the next pullback in price will be This phenomenon is to just educate you about the Fibonacci tool and how it relates to nature. It does not mean that price will always move exact Natural patterns always repeat after a specific interval of time.
Fibonacci retracement refers to a retracement in price to Fibonacci level As To draw Fibonacci retracement levels, pick the Fibonacci tool and drag it from the low to high point of a wave in the case of the bullish wave.
On the other hand, drag the Fibonacci tool from the low to the high point of a wave in case of the bearish wave. Fibonacci is a great tool used for technical analysis in forex trading. The Golden zone will increase the probability of winning. Fibonacci Extension levels predict how far the price will move. After completion of a wave , the Fibonacci extension tool forecasts the price for the next wave.
To draw Fibonacci extension levels, just drag the Fibonacci tool from high to the low point of the retracement wave in case of bearish retracement. On the other hand, drag the Fibonacci tool from low to the high point of retracement in case of bullish retracement. Remember to draw the Fibonacci retracement tool only on the impulsive waves and the Fibonacci extension tool on retracement waves. I hope you will like this Article.
Fibonacci forex waves ipo in chineseELLIOT WAVE THEORY : FIBONACCI RE-TRACEMENTS : SUPPORT AND RESISTANCE
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|Metodo di napoli forex||If wave 3 is extended, then wave 1 and 5 are often nearly equal in magnitude and duration. An ABC correction can take place either a within the trend as part of a wave 2 or wave 4 or b after the 5 waves with the trend have crowd investing canada completed. Learn how your comment data is processed. They can then label the price swings based on the Elliott Wave Theory. Among his great achievements was the introduction of Arabic numerals to supersede the Roman figure. The Elliott Wave Principle has three core rules. How To Get Rich.|
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|Fibonacci forex waves||Wave Pattern. How a Forex Deposit Bonus Works Forex trading is all about getting the best chance to win more money after investing a little bit of it. Rules: An impulse consists of 5 internal waves. Elliott Wave can be used to understand the flow of price action and the market psychology in general. This EW reference guide provides an idealized drawing for each EW pattern, including a visualization of the most important internal wave size relationships.|
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|Fibonacci forex waves||Leonardo Fibonacci da Pisa is a thirteenth-century mathematician. All time frames are fine for Elliott Waves. To do that, just select the tool, right-click, choose the Properties tab, and under the Levels tab, any value can be added. Get the latest Forex updates now! How can traders apply wave analysis? However, considering that|
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To draw Fibonacci extension levels, just drag the Fibonacci tool from high to the low point of the retracement wave in case of bearish retracement. On the other hand, drag the Fibonacci tool from low to the high point of retracement in case of bullish retracement. Remember to draw the Fibonacci retracement tool only on the impulsive waves and the Fibonacci extension tool on retracement waves.
I hope you will like this Article. For any Questions Comment below, also share by below links. Tradingview is the best chart tool. Note: All the viewpoints here are according to the rules of technical analysis and for educational purposes only. It will draw real-time zones that show you where the price is likely to test in the future. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.
L Learn Price Action. Table of Contents Hide What is the golden ratio in Fibonacci numbers? Fibonacci retracement forex How to draw Fibonacci retracement levels Golden zone in forex Fibonacci extension in forex How to draw Fibonacci extension levels Advanced Fibonacci tool usage.
Fibonacci retracement strategy Make profits in forex using fibonacci retracements. Tradingview is the best chart tool Join Telegram Channel. Ali Muhammad. Leave a Reply Your email address will not be published. Next article —. You May Also Like. Read More 3 minute read. Table of Contents Hide DefinitionHow to find order blocks in forex? Types of order blocksHow to draw an order…. Read More. Best Location…. Table of Contents Hide DefinitionWhat is a support zone?
How to identify a valid support zone? What is a resistance…. For me placing the tool from past to current price left to right is better than from current price to the past, and we will use that in future examples. In any case, Forex traders want to place the Fib in the correct place, which is from the bottom to top in an uptrend and from top to bottom in a downtrend. Placing the Fib correctly is a vital step - otherwise, you could be fibbing the wrong leg of a move and get stopped out for a loss.
It is important to realize that a new Fib is preferably not placed on a new swing high swing low unless the target has been hit see Fibonacci targets for more details on the levels. The reason why is simple: only when the targets have been hit is the currency pair, in fact, confirming a trending mode. If the currency bounces in between the top and bottom then, in fact, the currency is in a range and Forex traders only want to place a new Fib once the trend is back in force. The most important target to hit is the Finding confluence is key.
With confluence, I mean finding multiple reasons for taking a trade. When a Fib target and a Fib retracement are lined up at the same price, then the likelihood of price reacting to it has substantially increased. Waiting for a confirmation of price reaction to a Fib level is a great method of reducing risking and making sure that the Fib placement you used is correct. This another great way of combining various technical analysis tools in the Forex market.
Fibonacci time ratios explain how long a swing high swing low might take in time before the next swing high swing low starts. It does that by measuring a completed swing high swing low and then placing The next swing high swing low has a higher chance of finishing at these Fib levels. The Fibonacci retracement tool has more importance and significance when used on a higher time frame.
However, the levels tend to work well on all time frames in fact. Traders can use the tool on multiple time frames at the same time. In one instance the Fib might act as a potential turning spot for a trend continuation on a higher time frame, such as the daily chart. Whereas on a smaller time frame, a trader could use a Fib enter on a pullback. The first one is used as a potential trigger and the second Fib as the actual entry.
The same holds true in the Forex market. Traders are going to use that opportunity! In consolidations, corrections, ranges, and sideways moves, the Fibs have less value. Especially on smaller time frames. The reason is simply that the traders, the market in general and therefore price action tend to ignore these levels. In these, the currencies act and react to different tools and items such as tops and bottoms.
If the currency, however, is indeed trending or if the Fib is used on higher time frames, then the tool is a great asset because it gives you a great indication of where the market turns back in the direction of the trend. Well, all of you have heard of the , and Fibonacci retracement levels of course. Also written like this sometimes: 0. These numbers are calculated by dividing the Fibonacci sequence numbers. Except for the , which is just the halfway mark. The phi is a crucial element in Forex Trading.
The PHI is equal to 0. That is why the Fib retracement is so important in Forex trading. BUT, this number is not only important in Forex trading! The Phi number can be seen in arts and even nature! That said, all Fib levels have their importance, and once you know these great Fib levels, you have completed the first baby step in succeeding with Fibonacci trading.
You now know how to trade with Fibonacci retracement levels. The fun increases a lot more in the next section! The targets are more important and this section will really dazzle you! This is the real beauty of how to trade with Fibs! So sit tight and postpone that dog walking you might have planned for just a few more minutes! With these targets now your Forex toolbox, you will never ever have to doubt one single second in your life where to take profits?!?!
I can give you tons and tons of examples on the charts. The market keeps repeating itself over and over. These are the levels you want to keep in mind!! Oh and make sure to add the minus sign! That is vital. Otherwise, you could be fibbing the wrong leg of a move and get stopped out for a loss! If you ever need any help with placing the correct Fib, make sure to add us to your Twitter following list and ask us for our opinion.
Send us a screenshot and we will give back our feedback! So make sure to use that free resource! You now have confirmation that the move is 1 leg;. Read here Nathan's great Fib trading strategy for the long-term charts: " long-term-trading-strategy-for-forex. Fibonacci levels go hand in hand with the Waves. And every Forex trader should know this golden guideline:. That could be for example a Fibonacci retracement and a Fibonacci target at the same level.
When a Fib target and a Fib retracement line up at the same price, then the likelihood of price reacting to it has substantially increased. Another method for confluence is using price action at important Fib levels. Using the Fib tools with key levels in the market such as day and week support and resistance levels is definitely a wise idea. In fact, the price had already approached the Looking at the 4-hour price action, it becomes clear that several candlesticks were showing struggle at the I, therefore, kept a close eye on the upcoming 4-hour candles looking to see if the price showed renewed bearish signals or will it keep retracing higher.
In both cases, I am specifically looked for shorts only because of the downtrend see blue trend line. Here are the two bearish scenarios I am counting with:. In both scenarios, it is useful to wait for a candlestick pattern to confirm that the price is bouncing at the resistance spot or pushing through the support level. This helpful tactic has a high rate of ensuring a decent entry at the right time.
The Kiwi was in a big downtrend as well but recent choppiness has put bearish ambitions in the freezer. You can also trade with the breakout triangle strategy. Looking at the upside momentum green arrow , the break of the downtrend line blue and the double bottom purple circle at the There are two valid options for catching the bullish counter-trend breakout setup:.
The advantage of the H4, in this case, is the potential for an earlier entry and hence more space to targets as well. When I zoom into the 4-hour chart, I am able to see both a bull flag and contracting triangle type of forex chart pattern. The break below support and the break above resistance would indicate the break of the contracting triangle.
A break of both the resistance and support levels will be the trigger I am looking for a trade setup. Also, in this case, a strong candle is warranted: close near the low or high, sizeable candle and the majority of candle outside of trend line. There are multiple ways to trade using the Fibonacci Retracement Tool, but I have found that one of the best ways to trade the Fibonacci is by using it with trend lines.
We also have training on Trend Line Drawing with Fractals. Pisano was known to be "one of the greatest European mathematicians of the middle ages. He developed a simple series of numbers that created Fibonacci ratios describing the natural proportions of things in the universe. With this Fibonacci trading strategy, you will learn everything you need to know to start trading with the Fibonacci Retracement tool.
You're going to find out the Fibonacci meaning, Fibonacci algorithm, Fibonacci biography, the Fibonacci formula for market trading, Fibonacci series algorithm, the Fibonacci sequence in nature, along with many other useful facts about this great tool! Below is a picture of the different ratios that Leonardo created.
We will get into detail later on as to which of these lines we will use for our trading strategy. Your charting software should come standard with these ratios, however, you are the one that puts them on your chart. Many traders use this tool which is why it is important to have a trading strategy that incorporates this. You are going to need to know where to apply these fibs. A Swing High is a candlestick with at least two lower highs on both the left and right of itself.
Here's a quick way to remember this concept. If it's an uptrend, you want to start with the swing low and drag your Fibonacci level all the way up to the swing high. You can also read the strategy on how to use currency strength for trading success. It can also be used on any time frame. This is a trend trading strategy that will take advantage of the retracement of the trend.
Forex traders identify the Fibonacci retracement levels as areas of support and resistance. Because of this, these levels are watched by many traders which is why this strategy could be a difference-maker to your trading success. In the example, we will be using today this will be an uptrend. We will be looking for a retracement in the trend and then make an entry based on our rules.
Since you already identified that it is in fact a trend by looking at your chart, now you need to draw your trend line. Now you can get your Fibonacci Retracement tool out and place it at the swing low to the swing high. So far we found a trending currency pair, drew a trend line to validate this, and placed our Fibonacci at the swing low and swing high. Because we need the price moves to hit our trend line, stall, and go back in the direction of the trend.
As I said, the market tends to follow these lines, but sometimes it will fake traders out and they will end up losing a lot of money when it breaks the trend. This happens every single day, which is why it is critical to have a strategy that will help you know if this break may occur. The price retraced all the way back and tested the Once the price hit the trend line that we drew, we saw that it was in between We want to capitalize on the big retracements.
And the So everything is lined up to make a great profit on this retracement, what is the last step to make the trade? In a BUY-In order to make your entry, you will wait for the price to close above either the Refer back to this picture when you use this strategy. This shows us what our charts will look like before we make a trade. The only reason to wait for a candle to close above the This process should not take very long, as our trend should continue upwards because of the previous support level with the trend line.
In the above example, it illustrates these rules when the trend line meets the price level in these two zones. The reason you always wait is that you do not want to get caught in a broken trend and end up getting stopped out. Your stop loss can vary based on what your charts are showing you. Look in the past for prior resistance or support.
We want to get out of that BUY trade as quickly as possible. Before diving into the specifics, let's look at what tools you need for the job for the Fibonacci Channel Trading Strategy:. Luckily, you only need one tool: the Fibonacci Channel Indicator: This indicator may look different for you depending on what Platform you are using Tradingview, MT4, Tradestation, Ninjatrader.
They all come standard on your platform. This is similar to the Fibonacci Retracement tool, only you can turn the FIB levels to the upside or to the downside. This will allow you to make perfectly straight parallel lines on the support and resistance points on the uptrend or downtrend. Check out the " What Goes on at Support and Resistance" areas if you have no prior knowledge as to what this is.
Learn More about it here!! This step is critical to get right. You need to find a strong current uptrend at this point. More often than not you will see this occur on a trend reversal. Not all the time, but a good portion of it. Take a look:. We saw here a nice uptrend before it broke the line of support and headed to the downside.
At this point you need to continue to wait if the price will "bounce" off of a certain level and head back to the upside. At this point, we are waiting for the price action to head back to the upside hit a "resistance" level and then heading back to the downside forming a "Channel". Again, there is nothing here we are interested in trading.
The price action needs to head back to the upside, consolidate, then we are ready for business for a sell entry. You can see in the chart above that I labelled each step of the Fibonacci channel trading strategy. Each step is colored. So at this point here is what has happened.
Price action broke the main uptrend and then cause a long bearish trend Step 1 Then, after consolidation, the price action went back to the upside step 2 This uptrend continued for quite a while before finally consolidating again step 3. I will walk you through where to place this. You already did most of the work already following Steps , so this step should be very simple. Place the Fibonacci Channel Indicator on consolidation 1 and Consolidation 2 in the direction of the channel.
Do you see that on the pullback it hit our channel line? That is exactly what you want to see!