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The Art of Fibonacci Trading The Art of Fibonacci Trading Presented by Aditya & Gema.

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Presentation on theme: "The Art of Fibonacci Trading The Art of Fibonacci Trading Presented by Aditya & Gema."— Presentation transcript:

1 The Art of Fibonacci Trading The Art of Fibonacci Trading Presented by Aditya & Gema

2 KKnown as : Leonardo Pisanus Leonardus filius Bonacci Leonardus Bigollus ““Bigollo” – Tuscan dialect – meaning “blockhead” or “traveller” NNever referred to himself as “Fibonacci” MMedieval biographies and portraits rare: All pictures and statues of Leonardo of Pisa are only from artists’ imaginations EExact date of birth and death not known

3 Background History  Leonardo was born 2 centuries after cultural and economic slowdown in Europe known as Dark Ages  Commercial Revolution was well underway  Both local and international trade occurred  Mediterranean Sea linked regions representing different religions, political entities and cultures  Three Italian cities dominated imports and exports: Venice, Genoa and Pisa  Pisa: population of approx. 10,000 and was a “commune” – independent republic

4 More History…  His father, Giuliemo, held a diplomatic post in Bugia (North Africa)  Leonardo travelled extensively with his father: Egypt, Syria, Constantinople, Sicily, France, Greece  Leonardo acquired much knowledge of various mathematical systems and texts during his travels  Some argue he is not a true mathematician but only an author of a very successful text (Liber Abaci)  Yet, he did also compile his own techniques, theorems and facts when he published his findings  When we think of Fibonacci, we think of his introduction on the Hindu-Arabic numerals (HAN) to the Western world and the famous Fibonacci sequence

5 MORE ABOUT FIBONACCI •Fibonacci is one of general revelation from God to mankind that gave amazing contributions to science and a lot of life aspects •More about Fibonacci can be seen at

6 1. The Miracle 2. The Psychology of Golden Ratio 3. Fibonacci retracement 4. Fibonacci expansion 5. Retracement Vs Expansion 6. The power of Basic of Elliot Wave Analysis 8. Aplying Elliot Wave Analysis & Fibonacci 9. Entry & Exit Rules 10. Identifying Divergence. 11. Aplying divergence, fibonacci & wave analysis

7 Special Thanks to: •Mr. Mochammad Yusuf (Chairman Asosiasi Analis Teknikal Indonesia) •Mr. Imran S. Dalimi •Mr. Cornelius Luca (Market Technician Association)

8 Percentage retracements •All trends are subject to price retracements and reversals. •Trend analysis should help you identify trend reversals.

9 Bullish Trend -Dikatakan Bullish jika harga membentuk pola HH (higher high) dan HL (Higher Low) dimana harga selalu membuat new high. Jika terjadi koreksi/penurunan tidak pernah melampaui harga low dari koreksi sebelumnya

10 Bullish Trend HH HL

11 Bullish Reversal Point HH LH LL HL LL Reversal Point Note: Reversal point ketika harga menembus trough sebelumnya

12 Bearish Trend -Dikatakan Bearish jika harga membentuk pola LH (Lower High) dan LL (Lower low) dimana harga selalu membuat new Low. Jika terjadi koreksi/Kenaikan tidak pernah melampaui harga high dari koreksi sebelumnya

13 Bearish Trend LH LL

14 Bearish Reversal Point LL HL LH HH Reversal Point Note: Reversal point ketika harga menembus peak sebelumnya

15 Sideways HH HL Kondisi sideways biasanya ditandai dengan terbentunknya “Chart Pattern”

16 Fibonacci Ratio •Angka Fibonacci: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, …. •Didapat dari menjumlahkan 2 bilangan sebelumnya •Golden Ratio (1.618) didapat dengan membagi angka setelah deret ke 13 dengan angka sebelumnya 233/144 = 1, /233 = 1, /377 = 1,618

17 Fibonacci Sequence and Ratio 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, 4181, (etc.)

18 Golden Ratio

19 Retracement Analysis ObviousNot obvious

20 Percentage retracements Fibonacci ratios.146 = (-3√5 + 7)/2.236 = (or.618*.382) (not really) = √

21 Fibonacci Retracement Jika Market Bearish angka 0 ditempatkan di Low dan angka 100 ditempatkan di harga High. Posisi yang diambil adalah sell ketika menyentuh retracement 2/3 atau 66 Sell

22 Fibonacci Retracement Jika Market bullish angka 0 ditempatkan di high dan angka 100 ditempatkan di harga low Posisi yang diambil adalah sell ketika menyentuh retracement 2/3 atau 66 Buy

23 Applying Fibonacci Chart © 2008 Finance Chart

24 Applying Fibonacci

25 Chart © 2008 Finance Chart Applying Fibonacci

26 Chart © 2008 Finance Chart Applying Fibonacci

27 Chart © 2008 Finance Chart Applying Fibonacci

28 Chart © 2008 Finance Chart Applying Fibonacci

29 Chart © 2008 Townsend Analytics Ltd. Applying Fibonacci

30 Chart © 2008 Townsend Analytics Ltd. Applying Fibonacci

31 Chart © 2008 Finance Chart Applying Fibonacci

32 Chart © 2008 Finance Chart Applying Fibonacci

33 Chart © 2008 Finance Chart Applying Fibonacci

34 Golden ratios of multiple moves The retracements of an initial trend remain in effect for as long as the original high and low remain in effect.

35 Fibonacci retracements (monthly)

36 Fibonacci retracements (weekly)

37 Fibonacci retracements (daily)

38 Fibonacci retracements (hourly)

39 Multiple Fibonacci retracements

40 Extensions When a rebound from retracement of a previous trend exceeds the previous high (in an uptrend) or low (in a downtrend), erase the old retracements and apply extensions.

41 •Retracement ratios are equally valued for targeting prices on extensions. •In the case of the Gann ratios, the extensions will be placed at: 1.125, 1.25, 1.375, 1.5, 1.625, 1.75 and •In the case of the Fibonacci ratios, the extensions will be placed at: 1.382, 1.5 and Extensions

42 Extensions – USD/BRL

43 Extensions

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46 Fibonacci Multipliers •Fibonacci divisions are divisions of 1. •Fibonacci expansions are Fibonacci ratios, which when multiplied equal 1. –.236 * –.382 * –.5 * 2 –.618 * –.764 * 1.309

47 Fibonacci Multipliers Application •Assume B-A =.382 •Multiplier of.382 = •If B-A = 100 points, then the target becomes •Add to A •The target is very aggressive B C A

48 Fibonacci Multipliers Example

49 Extend in the Direction of Trend

50 Fibonacci Multipliers •Primary Ratios –# * –# * •Secondary Ratios –# * –# * 2 –# * 4.236

51 Extend Retracement from Pullback C to D = (B – A) *.618 or 1 or Long-term targets A A B B D D C C

52 Extend Retracement from Pullback

53 Fibonacci Multipliers •Primary Ratios –# * –# * 2 –# * •Secondary Ratios –# * –# * 0.5 –# * –# * 4.236

54 Fibonacci Time Extensions

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57 The power of retracement 2/3 (Bullish)

58 The power of retracement 2/3 (Bearish) Skenario: Sell 1 lot di retracement 66. Sell double cover (2lot) di Retracement lot di likuidasi di retracement 66 1 lot di hold sampai retracement 0 (Take profit

59 Oscillator Indicator •Relative Strength Index (RSI) •Stochastic Oscillator •Williams % R

60 Oscillator Signal •Overbought / Oversold •Crossover Signal •Convergence & Divergence

61 Overbought / Oversold

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63 Crossover Signal

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65 Divergence

66 How to Trade Divergences

67 Regular Divergence

68 Hidden Divergence

69 Rules For Trading Divergence

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77 Divergence Cheat Sheet

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79 DIVERGENCE CLASS

80 Types of Divergences Divergences, whether bullish or bearish in nature, have been classified according to their levels of strength. The strongest divergences are C CC Class A divergences; The medium are Class B divergences; and The weakest divergences are C CC Class C. The best trading opportunities are indicated by Class A divergences, while Class B and C divergences represent choppy market action and should generally be ignored.

81 CLASS A DIVERGENCE CLASS A DIVERGENCE •Class A bearish divergences occur when prices rise to a new high but the oscillator can only muster a high that is lower than exhibited on a previous rally. Class A bearish divergences often signal a sharp and significant reversal toward a downtrend. •Class A bullish divergences occur when prices reach a new low but an oscillator reaches a higher bottom than it reached during its previous decline. Class A bullish divergences are often the best signals of an impending sharp rally.

82 CLASS B DIVERGENCE CLASS B DIVERGENCE •Class B bearish divergences are illustrated by prices making a double top, with an oscillator tracing a lower second top.double top • Class B bullish divergences occur when prices trace a double bottom, with an oscillator tracing a higher second bottom.double bottom

83 CLASS C DIVERGENCE •Class C bearish divergences occur when prices rise to a new high but an indicator stops at the very same level it reached during the previous rally. •Class C bullish divergences occur when prices fall to a new low while the indicator traces a double bottom. Class C divergences are most indicative of market stagnation - bulls and bears are becoming neither stronger nor weaker.stagnation

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