Learn to PROFITABLY Use Fibonacci Retracement levels - Fibonacci Retracements Thinkorswim

when looking at a blank stock chart it can be really hard to pick a direction so in this video I'm going to show you how to create a road map using Fibonacci retracements so you can clearly read a stock chart and predict where it's gonna go hey how's it going on this channel you will learn the steps I took to go from trading with a full-time job to trading as a full-time job so if you're new here consider subscribing and today we're gonna over how to use Fibonacci retracements so when looking at a blank stock chart and for our example an upwards trending market how do you know where these bottoms in the upwards trend are gonna be and how do you buy into those and accurately predict where those bombs are gonna be so you can capture these large moves that the market has after it has these bottoms so the easiest way to do this is using Fibonacci retracements now Fibonacci retracements are essentially ratios of how much a swing is retraced so what I mean by that is if you have a stock and it goes from 0 to 100 in a move the 50% retracement level would be $50 so it would have gone from 0 to 100 and to retrace 50% of that move it would have to trade all the way back down to $50 a share and that would be the 50% retracement level and there's a lot of different or tracing levels that you can find from the Fibonacci sequence if you're looking for more than I mentioned in this video feel free to look those up online so if you're using thinkorswim to get the Fibonacci tool it's just gonna be in drawings and then in the drawing tools it's going to be the percentage sign now there are two ways to use Fibonacci you can either use it to get support levels or resistance levels to get support levels you always use the drawing tool from low point first to the high point and then that will give you potential support to buy the stock and then if you want to get resistance levels it's going to always be from the high point to the low point and that will give you resistance levels to in an uptrend for here maybe look to see where the trend is gonna potentially fail because Fibonacci works in any timeframe you need to figure out a time frame you want to use you can use Fibonacci's on a 5-minute chart or a monthly chart when you're using Fibonacci you want to get good at identifying potential swings that you want to use the tool awesome Fibonacci works on any time frame so if you just zoom in or zoom out of a chart you will find different swings in the market that will look like potential swings to use Fibonacci off of but if you used every swing that you saw in every time frame you probably couldn't see the stock chart because there would be so many lines and Fibonacci retracements on it so for a chart like this on a daily chart you want to make sure you're taking more of the daily swings so what I mean by that is you can see that in this move right here the stock still goes through swings it goes through a swing right here and then swings back up multiple times as it's in this trend and so for me trading on this chart I would say that this is one swing because I'm on a daily chart but if you're in a smaller time frame chart a 15 or a 30-minute chart there could be five or six swings in there that you might use Fibonacci on now Fibonacci works on any time frame and it also works in any market you don't have to be using this for the stock market you can use it on cryptocurrency the Forex you can use it on any market you want and that's to really the awesome part of Fibonacci is once you really learn how to use it it doesn't matter what you trade so now let's go into analyzing this uptrend and I'm gonna show you how using Fibonacci you could have potentially bought all of these people now with idea that the uptrend was only established here because the higher highs and higher lows mentality is really only confirmed with this area let's start with saying that the market is trading right here and we're gonna look for the potential next pullback to buy so we're gonna take from this low to high and make our fibonacci support levels from that drawing tool I'm just going to zoom in here so we can read it a little better now with these Fibonacci levels you never want to just blindly buy it them again you always want to have other reasons to get into the market because you don't know which level it's gonna hold that I would say that this six one eight and the 50 are generally stronger out of the four levels that I have here but as you can see here this market bounced off of the three eight level before making that next leg higher so if you were waiting for the market to pull back all the way to this six one eight level you would have just missed out on this move so a lot of people will use some kind of oversold indicator or some kind of indicator that shows them that the market is gonna potentially bounce there now it doesn't matter what you use but you just want to find something that works now another way and another really way to confirm that there is a potential support I like to use just support levels based off of just stock patterns so what I mean by that is stock charts just show you resistance and support levels based on highs and lows so this high right here shows you a resistance level you can draw a resistance level line here and then this level down here makes a support level and so every one of these Peaks here and lows shows a support or resistance level and as well anytime a stock consolidates in an area or trades in an area for a significant amount of time that is also a level of interest so the idea is finding these Fibonacci levels and lining them up with potential levels of resistance and make you a stronger support zone to look to buy into the market so with this 3/8 two-level looking to the left of the chart we can see that because this area of interest right here had a peak and now it was resistance but because the market blew through it usually when the market goes through a resistance level it now becomes a support level or if a market goes through a support level it becomes a resistance level so with this level I'm going to just gonna draw a line here showing that support area and then as well with this area down here I'm gonna draw one from there so it kind of makes this Zone in here that we're looking for from that area and you can see that it lines up with the 50 and the 382 and so I would say we would want to look for support in that area from both of these but again these are just levels and you're gonna want to have potentially a oversold indicator to buy into the market but once you see this market bottom here you can buy into this and potentially ride out this whole move as the marker verses back to making new highs moving on to the next swing if we once we were able to close out of that trade for a profit we can come to this next swing here and analyze it from this low to this high you can see initially this one actually tapped that 50% retracement level quickly but again it sold off all the way down to actually this 76 level down here that we can see unlike the last one that we would have bought this one struggled in this area for a long time now you can see that chops around this area for a while and tapped this 7 8 6 level a lot and holds this general zoning here pretty strong for a few days now a good way to potentially look and see for those stronger zones is again looking to the left side of the chart because the stock traded in this zone here for quite a while this whole area is going to be strong support or the stock and as you can see the stock broke out of here and then came in and it actually tapped basically the top of that rebounded and then eventually actually broke through that top area but bounced off and kind of not exactly to the exact tick but again it's more about holding that zone it held this zone before it began to make that new high and again buying this you want to either have some other confirmation of either the market making a new trend on a lower timeframe chart so if you see that on this time frame that the market is in a downtrend you can go into maybe a 40 or our minute chart and see that the market switches from a downtrend of making lower lows and lower highs to making higher highs and higher lows and that's when you would buy so you really to get a good confirmation you probably only would have got in right here but again looking at where this stock went after this move who really cares that you didn't buy the bottom you still bought really close to the bottom and captured a really strong move now for this next swing again taking that low to high we can see that the market bounced off this to create two level but again we don't know that right but using that looking left for that strong area of support this high right here is going to be a strong area of support and three four hand we can see the market bottoms off of that zone quite a few times and then coming into this area it actually ended up hitting this to be a two level and this zone kind of at the same time and again with an oversold indicator you would have been able to potentially buy this bottom and catch this little upswing again it wasn't as big as this guy right here but you're not always gonna get those huge moves that these swings have sometimes if the overall trend is starting to have trouble and may be starting to fade the move might get smaller and smaller as the market maybe starts top out and consolidate now moving off to the next area we can see that once the market kind of made this swing we could have done another smaller swing here with again the market kind of bottoming out in this area over here which again was that kind of strong support area you can see that the market you know starts to consolidate and hits this area multiple times making that a strong area of interest and then with it lining up with this seven eight six level making that a much more interesting level of support now you don't have to necessarily bought this exactly down there you could see that you market rebounded off that Verrill really strongly and then the next day you could have seen that well the market came up to this six one eight level and you could have bought it there with the idea that the market is making any lower low and that this is a strong level of support to potentially buy from and just make a strong educated guess that the markets gonna bottom here and go up another way you could have potentially bought this if you missed this bottom is just seeing this overall pattern that these stock did it came down here and held this support and rebounded and you can see that it's coming into this level of resistance right here and you can see it but it's head against this level for three days in a row eventually breaking through that level and that can be a strong way to buy into a stock as well is it's this is a really strong breakout pattern now moving on to the next area is once you would have been done with this area of trade and looking for the next pullback again we take this low to high and look for those areas of interest now again this 50 and 3/8 zone looks pretty good because we can see that you know again it had this strong area down here to potentially bottom so this market actually bonded maybe a bit sooner than I would have spected but again you can see that it held that level and tapped it multiple times and started to make higher highs and higher lows allowing you to potentially get in at still a decent price and catch this next move that the market is potentially having now with the market being right here right now you can look for resistance levels with this move on the way up using those retracement levels just to actually zoom in on a smaller time frame that we can see this a little better you can see that the market bounced off of here made a higher high and so this is how you really want to buy these from here this high the market starts from an uptrend the market starts into a downtrend so it makes a lower low a lower high and then from there you can see it just cascades down with lower lows and lower highs making this downtrend channel and you can see once it breaks that channel at those fit support levels that we saw and that support zone that we want to potentially buy we can see that it makes this new high it broke this high right here making a new high and so it made a new high and then made a higher low at that zone that we still were interested in so we're gonna want to buy at that low and then once we buy it at that potential low we will just wait for the market to start to move higher and with these fib levels we have drawn now as resistance levels we can look area for areas that the market is gonna struggle with so the market bounced all the way through this three eight two level but you can see that it strode at this fifty retracement level quite a lot and actually found strong support at this three eight two level and as you can see right now it blasted all the way to this seven eight six level and then broke up through that the next day to the hundred level and has now come back down and bounced off this seven eight six level and looks like it might start to trend higher so this is actually a really awesome chart of how you can see the market kind of rebounding through these fib levels and this is really how I like to buy off of these support levels that we find is seeing that downtrend change and then looking for that pullback into that zone again to buy once that trend has changed you really want to wait for that confirmation that the trend has changed otherwise you could be buying into a Down trending market and you never want to do that because you don't know when the bottom of the market is really gonna be it could just keep going down and you could just lose your money that way many times over you always want to wait for something to tell you that yes this is the bottom and it's worth it to put my money on the line to buy into this stock and with this example this area I would say is a perfect area to buy it of course hindsight that looks great right but again we looked at that zone that zone was in this area that potential support zone and it made that higher high here and then this being a lower low so maybe you don't get in exactly at the bottom but again you could have got in as this started to go higher or you could have got in here as it really did a strong confirmation of that higher high and lower low area so once you're in these trades and it breaks above these Fibonacci levels that we have and into this kind of white space what do you do and where do you know that the resistance levels are well those are called Fibonacci extensions and I will have a video out on those right here now if you like this video and you want to learn more about how to trade in the stock market and read stock charts make sure you subscribe to the channel and if you like this video and if you have any comments or questions make sure to ask them or let me know in the comments below

Channel: Riley Coleman

Views: 92,110

Rating: 4.92278 out of 5

Keywords: fibonacci retracements, fibonacci retracement explained, fibonacci retracement levels, fibonacci retracements thinkorswim, fibonacci thinkorswim, fibonacci retracement thinkorswim, how to use fibonacci retracement, fibonacci trading, how to profitably use fibonacci retracement levels, how to use fibonacci retracements in thinkorswim, learn to profitable use fibonacci retracement levels, trading with fibonacci levels, trading with fibonacci retracements, trading fibonacci, rileyccc

Id: Xl8fz-n-Vk4

Length: 18min 33sec (1113 seconds)

Published: Sat Sep 15 2018