The topic of this week’s Forex video will be on how to use Fibonacci to find profit targets. Last week I posted a video on how to use MACD in a new way to find trading opportunities. You can view last week’s post here. The opportunity in Usd/Cad has started to move in the direction that was expected. The question now is, do you know how to find target areas?
How To Use Fibonacci to Find Profit Targets
The first currency pair that I will use Fibonacci to find a profit target will be on the Usd/Cad. Step one is to use our Fibonacci retracement tool. Step two is to start at the swing high and drag the tool down to the swing low. The three main Fibonacci levels that use are the 38.2%, 61.8%, and the 78.6% levels. Step three is look left for prior support as it is likely to act as resistance in the future. Now I look for support or resistance around these three Fibonacci levels.
First Target Level Using Fibonacci
The first level I like to target is the 38.2% Fibonacci level. When I trade multiple positions I will use the 38.2% level as my first take profit level. Next, I protect the rest of my position by moving my stop loss to break even or break even plus a few pips. At this point, you can either trail your stops until your stop loss is hit or wait and see if the 61.8% or 78.6% level can be reached for extended targets. The best way to see what fits your trading style is to backtest. By backtesting, you will find what fits you best.
Using Fibonacci To Find Profit Targets Video
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