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Trading with the Fibonacci Tool

Trading with the Fibonacci Tool

Richard Krivo, Trading Instructor

Instructor's Response:

In general, you have the right idea here...however...

The Fib line that was drawn began around the beginning of July and finished around the first of November.  But the trade that was entered took place around mid-September... before the existing Fib line could have been drawn in its entirety.

Take a look at the first chart below...

chart 12 23 09

Trades employing Fibonacci Retracement levels need to take place as a result of a retracement that occurs after the Fib line has been drawn.

Take a look at the second chart below for clarification....

chart 12 23 09 a

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