{"id":9564,"date":"2022-10-12T07:54:36","date_gmt":"2022-10-12T07:54:36","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9564"},"modified":"2022-10-12T07:54:36","modified_gmt":"2022-10-12T07:54:36","slug":"how-to-use-fibonacci-retracement-with-japanese-candlesticks","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/how-to-use-fibonacci-retracement-with-japanese-candlesticks\/","title":{"rendered":"How to Use Fibonacci Retracement with Japanese Candlesticks"},"content":{"rendered":"\n

If you\u2019ve been paying attention in class, you\u2019d know by now that you can combine the Fibonacci retracement tool with\u00a0support and resistance\u00a0levels, and\u00a0trend lines\u00a0to create a simple but super awesome trading strategy.<\/p>\n\n\n\n

But we ain\u2019t done yet!<\/p>\n\n\n\n

In this lesson, we\u2019re going to teach you how to combine the Fibonacci retracement tool with your knowledge of\u00a0Japanese candlestick patterns\u00a0that you learned in Grade 2.<\/p>\n\n\n\n

When combining the Fibonacci retracement tool with candlestick patterns, we are actually looking for exhaustive candlesticks.<\/p>\n\n\n\n

If you can tell when buying or selling pressure is exhausted<\/strong>, it can give you a clue of when price may continue trending.<\/p>\n\n\n\n

We here at BabyPips.com like to call them \u201cFibonacci Candlesticks,\u201d or \u201cFib Sticks<\/strong>\u201d for short. Pretty catchy, eh? Let\u2019s take a look at an example to make this clearer.<\/p>\n\n\n\n

Below is a 1-hour chart of EUR\/USD<\/strong>.<\/p>\n\n\n\n

\"1-hour<\/a><\/figure>\n\n\n\n

The pair seems to have been in a downtrend the past week, but the move seems to have paused for a bit.<\/p>\n\n\n\n

Will there be a chance to get in on this downtrend? You know what this means. It\u2019s time to take the Fibonacci retracement tool and get to work!<\/p>\n\n\n\n

As you can see from the chart, we\u2019ve set our Swing High at 1.3364 on March 3, with the Swing Low at 1.2523 on March 6.<\/p>\n\n\n\n

Since it\u2019s a Friday, you decided to just chill out, take an early day off, and decide when you wanna enter once you see the charts after the weekend.<\/p>\n\n\n\n

\"Bullish<\/a><\/figure>\n\n\n\n

Whoa! By the time you popped open your charts, you see that EUR\/USD has shot up quite a bit from its Friday closing price.<\/p>\n\n\n\n

While the 50.0% Fib level held for a bit, buyers eventually took the pair higher. You decide to wait and see whether the 61.8% Fib level holds.<\/p>\n\n\n\n

After all, the last candle was pretty bullish! Who knows, the price just might keep shooting up!<\/p>\n\n\n\n

\"Doji<\/a><\/figure>\n\n\n\n

Well, will you look at that? A long-legged doji<\/a> has formed right smack on the 61.8% Fibonacci retracement level.<\/p>\n\n\n\n

If you paid attention in Grade 2, you\u2019d know that this is an \u201cexhaustive candle.\u201d<\/p>\n\n\n\n

Has buying pressure died down? Is resistance at the Fibonacci retracement level holding?<\/p>\n\n\n\n

It\u2019s possible. Other traders were probably eyeing that Fib level as well.<\/p>\n\n\n\n

Is it time to short? You can never know for sure (which is why risk management is so important), but the probability of a reversal looks pretty darn good!<\/p>\n\n\n\n

\"Buyers<\/a><\/figure>\n\n\n\n

If you had shorted right after that doji had formed, you could have made some serious profits.<\/p>\n\n\n\n

Right after the doji, the price stalled for a bit before heading straight down. Take a look at all those red candles!<\/p>\n\n\n\n

It seems that buyers were indeed pretty tired, which allowed sellers to jump back in and take control.<\/p>\n\n\n\n

Eventually, the price went all the way back down to the Swing Low. That was a move of about 500 pips! That could\u2019ve been your trade of the year!<\/p>\n\n\n\n

Looking for \u201cFib Sticks\u201d can be really useful, as they can signal whether a Fibonacci retracement level will hold.<\/p>\n\n\n\n

If it seems that price is stalling on a Fib level, chances are that other traders may have put some orders at those levels.<\/p>\n\n\n\n

This would act as more confirmation that there is indeed some resistance or support at that price.<\/p>\n\n\n\n

Another nice thing about Fib Sticks is that you don\u2019t need to place limit orders at the Fib levels.<\/p>\n\n\n\n

You may have some concerns about whether the support or resistance will hold since we are looking at a \u201czone\u201d and not necessarily specific levels.<\/p>\n\n\n\n

This is where you can use your knowledge of candlestick formations.<\/p>\n\n\n\n

You could wait for a Fib Stick to form right below or above a Fibonacci retracement level to give you more confirmation on whether you should put in an order.<\/p>\n\n\n\n

If a Fib stick does form, you can just enter a trade at the market price since you now have more confirmation that level could be holding.<\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019ve been paying attention in class, you\u2019d know by now that you can combine the Fibonacci retracement tool with\u00a0support and resistance\u00a0levels, and\u00a0trend lines\u00a0to create a simple but super awesome trading strategy. But we ain\u2019t done yet! In this lesson, we\u2019re going to teach you how to combine the Fibonacci retracement tool with your knowledge […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[835],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9564"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9564"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9564\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9564"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9564"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9564"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}