Understand the Fibonacci retracement trading method in one article and gain insight into the main force's intentions
In the world of trading, the Fibonacci retracement trading method is a must-have tool for traders, and the practical application of the golden section line is the key, which is mainly reflected in the following two aspects:
- Predict price trends: By analyzing the amplitude of price pullbacks and rebounds, the future trend can be judged. In an upward market, when the price pulls back to the 0.382, 0.5, and 0.618 lines of the previous rising height, they represent different support strengths and trend changes respectively; the rebound amplitude in a falling market can also be used to judge the nature of the rebound, such as weak rebound, intermediate resistance, slowing down of decline, etc., but this method is not suitable for old coins with excessive gains in the previous period.
- Determine support and pressure areas: In an upward market, the golden section line can be used to divide the pressure-free area, strong support area, last support area, and no support area. Different areas have different support and pressure effects on prices, providing important references for investors' decision-making. For example, the pressure-free zone helps to hold positions for rising prices and buy on dips; the strong support zone is an important callback support area and decision-making area; the last support area can determine the direction of the rising market; the no support area requires holding coins and waiting.
However, the market is complex and changeable, and unexpected situations often occur. Fibonacci retracement levels should be used in combination with other indicators, and on-chain data analysis, macroeconomic and political factors should be comprehensively considered to avoid relying solely on technical analysis to improve the accuracy and reliability of trading decisions, better identify the intentions of the main traders, and seize trading opportunities.
