Using the Fibonacci

Retracement Tool to
Identify Support and
Resistance

By @Cryptocred
Disclaimer
Neither this presentation, nor anything on my Twitter, Telegram, or any other medium/mode of
communication, including private correspondence, constitute financial advice.

I am not a financial advisor and hold no formal qualifications in this area.

Trade entirely at your own risk.

This is for entertainment purposes only.

● @CryptoRedPill
● @VentureCoinist
● @CollapzCursed
● @FatihSK87
Outline
● General remarks

● Finding the tool on Tradingview and my settings

● Note on choosing your points

● Finding entries

● Setting targets before ATH (all time high)

● Setting targets at/after ATH

● End
General Remarks
Fib levels are not magic. People also draw them differently, they may pick different points to
yours, et cetera.

Because of the above, it makes sense to seek confluence with other levels/indicators e.g. 50%
Fib level which overlaps with the Kijun Sen, Fibs which land on valid trendlines, and so on.

I am sharing how I draw Fibs and my own personal criteria. Other very good traders do theirs
differently. See what works for you.

Don’t trick yourself! It’s easy to ‘force’ a Fib level by picking a certain point which suits the
narrative of a chart. Be objective. Sometimes there just isn’t a nice or straightforward setup in
place.
Finding the Tool, and My Settings
This part should be fairly self-explanatory (just consult the screenshots below).

My settings are personal preference. I find all the colours distracting so I make them
transparent/turn them off. I also like seeing my Fibs on all different time frames, hence why I
extend the lines.
 Note on Choosing Your Points
As you’ll discover later in this document, the technical criteria for choosing the points for setting
up your Fibs aren’t particularly strict.

What I’ve found to work best for me is:

● Anchoring my Fibs at the beginning/end of long trends

Fibs are still powerful and applicable to shorter-term trends. I just have a more conservative
trading strategy and have had more success by focusing on longer trends/bigger moves.
Finding Entries
The Fib retracement tool can be used to identify potential areas where price might retrace to
and find support following a move up.

Here’s how I setup my Fibs for finding support:

1. First click: bottom of a downtrend

Downtrend = consistently lower highs and lower lows

Uptrend = consistently higher highs and higher lows

If you want a more colloquial version: first click is where price bottomed out, and second click is
the top that price reached on that move before it started retracing.
Finding Entries II
Some things to note from the examples:

● Fibs work really well on big moves (ETH, LTC examples) but can also work to give you an
entry during smaller and/or shorter-term moves (EOS, USDJPY examples).
● You can use Fibs on even smaller, intra-day moves. They’ll just be less reliable and I
personally like having the longer-term Fibs on my charts for reference, even when I’m
trading shorter time frames.
● Higher time frames may make it easier to see where the swing lows and swing highs are.
● There are many points that can be marked as the “bottom of downtrend” because small
retracements along the way technically qualify. Here’s how I resolve this difficulty: the
longer the downtrend/uptrend, the more likely it is to be a good point to place your Fibs
e.g. bottom of multi-month downtrend is a more reliable low than a small dip.
Setting Targets Before ATH
The Fib retracement tool can be used to identify potential areas where price might move up to
and find resistance following a move down.

Here’s how I setup my Fibs for finding resistance

1. First click: top of an uptrend

Downtrend = consistently lower highs and lower lows

Uptrend = consistently higher highs and higher lows

If you want a more colloquial version: first click is the top that price reached on the move before
it started retracing, and second click is where price bottomed out
Setting Targets Before ATH II
Some things to note from the examples:

● Just as every Fib is a potential support zone when drawn from bottom to top, every Fib is
a potential resistance zone when drawn from top to bottom.
● The principles are the same, you just flip the starting point to get targets as opposed to
supports.
● Once again, these examples show the reliability of using long uptrends and downtrends as
your anchor points when setting up Fib levels.
Setting Targets At/After ATH
The Fib retracement tool can be used to identify potential areas where price might move up to
and find resistance when price is around ATH levels i.e. there’s no previous resistance you can
refer to

Here’s how I setup my Fibs for finding resistance around ATH levels

1. First click: top of an uptrend/move up

Downtrend = consistently lower highs and lower lows

Uptrend = consistently higher highs and higher lows

If you want a more colloquial version: first click is the top that price reached on that move
before it started retracing, and second click is where price bottomed out
Setting Targets At/After ATH II
There are two main differences between setting targets before ATH and at/after ATH:

● I personally like anchoring my Fibs around big moves anyway, but when it comes to ATH
levels I really recommend anchoring your Fibs on a big move
● The focus will be on Fib extension levels

The differences are minor, as you can tell.

If you want a more colloquial version: anchor your Fibs on the most recent big correction, with
click 1 being the top and click 2 being the bottom
Setting Targets At/After ATH III

Some things to note from the examples:

● For the ETHUSD example, you could do the more recent correction (dark blue). I chose
the one before that because it was bigger and the difference in time isn’t that big.
● As mentioned, this is hardly different from setting targets under normal circumstances.
All you do is use a recent big correction as your anchor and then look at the Fib extensions
([Link] as opposed to [Link]).
● As you can see on the ARK and BTC charts, the extensions are accurately drawn because
price reacted to them. If price is totally ignoring all your Fibs frequently, you may be
drawing them incorrectly.
End
Hopefully that was helpful!

A kind reminder that this is not financial advice and I am not a financial advisor. Just sharing my
own personal style for entertainment purposes only.

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