Fibonacci trading types: Precise price targets and reversal zones 

December 27th, 2023
 

If you’re new to futures trading, Fibonacci analysis may be a good fit for you. Experienced traders who utilize all six types of Fibonacci often find them to be useful tools in their trading toolkit.

In a recent webinar for the NinjaTrader Ecosystem, ChartPros’ Tom Winterstein discussed the “6 Fibonacci Types That Create the Most Precise Price Targets and Reversal Zones.”

The six Fibonacci types are swing Fib, impulse Fib, validated Fib, sequence Fib, ABCD Fib, and advanced Fib, using high to high and low to low anchors. The swing Fib is considered the most common and is generally known by traders. For more details on the six Fib types, view the full webinar.

Who is Fibonacci for?

Fibonacci is well suited for traders of all experience levels and backgrounds looking for precision-oriented price levels in both directions.

“Fibonacci is mathematically driven,” Winterstein said. “It is a trending tool. Markets can trend, but there are no guarantees in the market. The only guarantee is the markets will cycle. They’ll cycle up and down—sometimes shorter, sometimes longer. But they’re forming a trend, and cycles in that trend can be identified with the Fibonacci tool.”

How is Fibonacci used in trading?

Fibonacci is a trade management and trend tool for both bullish and bearish trends. Futures traders use it to:

  • Identify potential reversal zones
  • Identify potential extension targets
  • Create bidirectional levels of interest
  • Identify anticipated confluence areas
  • Create Fib sequences
  • Manage trading for entries, stop losses, scaling out, and exits

Each of these Fibonacci byproducts can be recreated on a chart in either active or simulated trading. In the webinar, Winterstein shows chart-driven examples of each Fibonacci benefit. For details, watch the full webinar.

Interested in more futures trading tips?

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