#wyckoff supply and demand price#fibonaccisequence

1. Fibonacci Retracement

Select starting and ending points: Significant highs and lows on the chart need to be identified. In an uptrend, choose the low point as the starting point and the high point as the end point; in a downtrend, the opposite is true.

Draw Fibonacci retracement levels: Use the Fibonacci retracement tool in the charting software to pull from the starting point to the end point and automatically generate Fibonacci proportion levels (commonly 23.6%, 38.2%, 50%, 61.8% and 100%).

Identify Support and Resistance Levels: When prices pull back, these Fibonacci levels may act as support or resistance levels. For example, if BTC rose from $10,000 to $15,000 and then began to pull back, traders would look at levels such as 61.8% ($12,920) to see if the price would find support at these levels.

Develop a trading strategy: Develop entry and exit strategies based on how price reacts to these Fibonacci levels. For example, if the price finds support at the 61.8% level and displays a buy signal (such as a pattern reversal signal), you can consider buying at this level.

Key positions in Fibonacci retracements

61.8% level:

This is the most famous Fibonacci retracement level and is known as the "Golden Ratio". Price often reverses after reaching this level, so it is considered a strong support (in an uptrend) or resistance (in a downtrend).

38.2% level:

Although not as famous as the 61.8% level, the 38.2% level is also a common point for market reversals. It is often considered the second most important retracement level.

50% level:

Although not technically part of the Fibonacci sequence, the 50% retracement level is widely used for its psychological effects. The market often reverses around this level, making it another key location.

2. Fibonacci Extension

Choose three points: Fibonacci extensions require three points: the start point, the end point, and the end of the retracement. In an upward trend, the starting point is the beginning of the rise, the end point is the peak of the rise, and the end point of the callback is the lowest point after the callback.

Draw Fibonacci extension levels: Use the Fibonacci extension tool in your charting software to first pull from the starting point to the end point, and then to the end point of the retracement. The software will automatically generate the expansion level (such as 161.8%, 261.8%, 423.6%).

Set Price Targets: Fibonacci extension levels can serve as potential price targets. For example, if BTC finds support at $12,920 and resumes its gains, traders can target the 161.8% extension level, possibly $18,070, as a sell target.

Develop a trading strategy: Using these expansion levels, traders can plan to sell based on price movement. For example, if the price approaches the 161.8% extension level and a sell signal occurs, consider selling at or before this level.

Key Positions in Fibonacci Extensions

161.8% level:

This expansion level is often used as a price target on a trend continuation. The 161.8% level could provide a potential exit point or profit target if the market breaks out in one direction.

261.8% and 423.6% levels:

These higher extension levels are used to predict further targets within a strong trend. They are especially useful during times of extreme market strength or weakness.