This article has been translated from English to Gen Z Slang.
The next way we're gonna level up with Fib is by using 'em to find those "take profit" goals. 📈💵
Remember one of the golden rules from "Zombieland Survival 101" #22:
When in doubt, know your way out!
Let's kick it off with a banger of an uptrend example.
So, when ya see an uptrend, the vibe is to cash in on a long trade at a Fib Price Extension Level.You get those Fib extension levels by workin' that mouse with three clicks.
First, point and click at a major Swing Low, then slide your cursor to the recent Swing High, and click again. Finally, drag it back down and click on one of the retracement levels.
Voila! It lights up with all the Price Extension Levels, showing those sweet ratios and price points. Pretty lit, right?
Now let's rewind a bit and take another peek at that USD/CHF chart from last session.
The 50.0% Fib level was like a brick wall of vibes, solid af as support. After three tests, off we went, back on the uptrend train. Check out how the price even danced above the last Swing High in the chart up top.
Let's throw on the Fib extension tool to scope out where cashing in would’ve been a savvy move.
Recap time! Here's what went down after the retracement Swing Low:
- Price turned up to the 61.8% level, pretty much the same spot as the previous Swing High.
- Then it chilled back to 38.2% level and found its crew there.
- After the chill, price rallied and bumped its head at the 100% level.
- A few days later, zoom! Price lifted again and hit resistance at the 161.8% level.
If you look at that example, the 61.8%, 100%, and 161.8% levels were solid zones to dip out and grab profits.
Now, let’s flip the script and check out using Fib extension levels in a downtrend.In a downtrend, the play is to scoop up profits on a short trade at the Fib extension level 'cause the market’s got this habit of finding support there. 🙌
Let’s hit replay on that downtrend scene from the 1-hour EUR/USD chart from our "Fib Sticks" sesh.
There we spied a doji flexin’ just sneaky-snug under the 61.8% Fib line. Then sellers came in like “not today” and dragged the price all way back to the Swing Low.
Get that Fib Extension tool out; let’s see where scooping profits would've been lit if we'd shorted at that 61.8% retracement.
Post reverso from the Fib retracement level, here’s how it played out:
- Price caught a breather at the 38.2% level.
- The 50.0% spot was the squad huddle zone, flipped to interest town.
- The 61.8% became the hangout before price took a nosedive to check out the old Swing Low.
- Peep ahead, and you'll see the 100% extension spot being all supportive and stuff.
We could have bounced profits at the 38.2%, 50.0%, or 61.8% levels. They were major league supporters, most likely 'cause traders had their goggles on and were also waiting to cash in there.
These stories show that prices like to stickyness dance around Fibonacci extension levels – maybe not the whole concert, but enough to get your positions sorted for profit-taking and risk management.BUT, not gonna lie, there's some tea spilled here.
First, there’s no crystal ball to figure out exactly which Fibonacci bae will hit the resistance stage.
ANY of these could hit a wall—or skate past it, depending on whether they act as support or resistance primer.
Plus, there's this mess about which Swing Low gets VIP access to be the starting point for Fibonacci extensions.
You could pull it from the most recent Swing Low ala examples-action, or maybe from the past 30 bars' ground floor.
No ultimate hack here; it’s kind of a “choose-your-own-Fibonacci-place adventure.” But fam, practice the decision-making and you’ll get those Swing starts on lock.
Flex your intuition on that Fibonacci extension tool swipe. Judge the trend life span like it’s Netflix fashion. And, yup, later we’ll drop methods to decode trend strength how to hang-on-or-let-go.
Cool? Let’s jet over to stop loss hacks next!