In this class Roberto Moro explains to our traders how to use Fibonacci to foresee where prices can go and thus improve trading operations. Do you want to learn more about technical analysis? Don't miss the entire class at the TRADER CLUB: If you have not yet subscribed, we strongly encourage you to do so, it is free 😉.

Video transcription

To try to predict where the price may go, what is the best tool? The Fibonacci. Once it goes above 0.618, for me, it is the origin of the movement. For me the most important tool in technical analysis is Fibonacci. I am unable to draw any graph or start analyzing it without my 2.3 Fibonacci, at leas...

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To try to predict where the price may go, what is the best tool? The Fibonacci. Once it goes above 0.618, for me, it is the origin of the movement. For me the most important tool in technical analysis is Fibonacci. I am unable to draw any graph or start analyzing it without my 2.3 Fibonacci, at least. When I started with this, the attention that I say began to draw so much attention: how is it possible and especially the golden ratio, the golden ratio: that 0.618. How is it possible that it is present in so many elements of nature? In all! You look at a broccoli and I think that you even end up with your eyes looking at it carefully. Have you done it you have a lelo face ... you start to see the internal structure and you see that everything also obeys 0.618. You throw a stone in a pond and the concentric waves, each time higher, are beating 1,618 times the previous one. The very dimensions of the human body, of which we are well made, of course.

Let's see how I apply Fibonacci in trading. We are going to March 2009; that is, at that moment when we say: well I think this is going to be bullish, but how far? To try to predict or know where the price may go, once I understand that this is more than a rebound, what is the best tool? Fibonacci. Why ?, because in principle I want to know is that of this great fall how much you want to correct and I have no other tool than Fibonacci. Then I take my Fibonacci, I trace it, that sometimes you have to have a pulse to steal tambourines, because I have already set the objectives: the first one I have on the horizon is 038.2, the next 0.5 and the next the 0.618. I have eliminated, but that is up to me, whoever is perfect, 0.236 and 0.764. So: 0.38 2, 0.50, 0.618. In other graphical tools, by default, 0.236 and 0.764 are also parameterized. In the rebound correction, how much did you correct? practically 0.618, I am missing 1%, but of course something that rises from 6,700 to 12,200, which is practically doubling the price, an increase of 100% 100, which fails me by 1% is relative; that is to say, for me it has nailed it. When you start to have evidence because there is a pattern of candles that tells me that this is going to turn downwards again or for whatever reason, you want to know, if at some point this had to show me that this is just a rebound, What better time than when reaching 0.618 and not being able to do it. I can not with 0.618, if I could, the only objective would have been the origin of the movement and historical highs. But I cannot, because now we are going to correct how much? We take the Fibonacci and what we want to know now from this rise how much it wants to correct, and we plot the Fibonacci. That was what he did? Correct Where did the first part of the correction stop? because it fell in a zigzag: a, b and c, at 0.38 with 0.61. If this is going to continue falling later I already know that, at least, it will go to 0.5 or 0.618. In this rise that is an arrest within the correction, have you sought us, regarding what the first fall was? I nail 0.618. I am looking for 0.618, of what had been the first part of the fall, then everything is fitting me, for the moment. At the end where it stops at 0.618, he nails it. In closing prices it nailed it again, this was an intraday dilation. At closing prices I nail 0.618. We are in them again. If at some point this had told me or wanted to tell me that it will continue to fall and, therefore, all this has been nothing more than a rebound, great rebound, but only a rebound, what better time than when facing 0.618 and if it could have gone below the origin, or below, but how it stops at 0.618 and pulls up, and again: my Fibonacci. Now what I want to know is in this rise, how much do you want to correct what the fall was, and there you have it: nail 0.618.

More or less we have seen how to use Fibonacci in trading or how to apply it, to see this logically, seen everyone ready, we are all ready, but it works. This is the Dow Jones chart and this is 2009 when everything started to go up. The first time that the market corrected in a serious way, but we know that later, because this was also a relatively serious correction, but the most serious was this: look at everything that was the first great impulse that was corrected by pinning the 0.382. The graphic speaks to you again, they speak to me and we do it in perfect Spanish. It speaks to you and says: I am correcting you so that you know that I am Fibonacci, but I am correcting you the least, because I have extraordinary strength and, indeed, up.

Now we continue to see how to use fibonacci in trading. This was where the supposed wave 3 was born, right. After correction. And here again there was another important correction, in a zigzag. Complying with the parameters of the alternation, wave 4 also corrective, it had to be different and in fact it was a flat wave, you see? Corrected in a flat waveform, but for what proportionality ratio? Let's see it. From the maximum to the origin of the supposed 0.382 nail wave and it is making me talk again. He is saying to me again: I am going to correct you. That thing that told you that Americans are this illustrative and they say: I am going to make them all academic and orthodox for you to see. Also, you are going to freak out with me, it corrects the 0.382 and up. He is telling you: I have extraordinary strength; however, something that corrects in its highest Fibonacci proportionality is 0.618. This bearish force is subtracting a lot, a lot of inertia. In this case it was the IBEX and I just succumbed. This was later below, the less something corrects us, the greater strength in favor of the previous trend.


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