Fibonacci Traders

Trading Fibonacci, fractals, RSI and CCI

 

138.2% Fibonacci extension

138.2% Fibonacci Extension Explained

In an uptrend, a financial instrument ought to

show evidence of higher lows and highs. On the other hand, in a downtrend

the contrary is also valid.  Really, for a bullish trader, the concentration is on

the highs while a bearish market player concentrates on the new lower lows.

Subsequently, if a financial security breaks above the prior high, it signifies
a spill over in the bullish momentum.  A surge in a bearish progression occurs

when it breaks below a prior low.

Nonetheless, there is always a massive resistance (or support in a downtrend)

at the 138.2% Fibonacci extension level.  For example, bullish trends frequently

fall short on or near the 138.2% Fib extension extension level.  Certainly, a bullish trend

will only carry on if that Fibonacci level becomes a support after a breakout.

In the same way, a bearish trend should break below the 138.2% Fibonacci

extension support level to substantiate the bearish trend.

 

 

   Image = "chart that is illustrating 

   Fibonacci extensions in a down trend" 

 

General 138.2 Fibonacci extensions rules

A/ In An Uptrend

If a financial instrument rises as of point A to B and pulls back to produce the

fundamental higher low after a high, one will underscore the 138.2% Fibonacci

extension of the price-action from A to B.

Likewise, if the asset declines between two points Y and Z and rallies to establish

a lower high after a lower low, one ought to pencil in the 138.2% Fibonacci extension

of YZ price action.

View a 138.2 Fibonacci extensions chart

 

Image = "a UTX stock chart's highlighting the 138.2% Fibonacci extension"

Notice that the UTX stock (NASDAQ-100) was in a (blue) declining channel

from August to September 2015.  In  October 2015, the price escaped the

bearish momentum and began to rise (from the red spot on the chart to green). 

It exhibited the first higher high (see the green spot on the chart)

and low (see the orange spot on the chart).  Indeed, the first challenge for

the bullish price-action after rising above the first high is the 138.2% Fibonacci

extension level (see the pink line on the chart above). Notice how the price was

consolidating near the pink line.  At this stage, the bullish trend will only resume

if the UTX stock breaks above the 138.2% Fibonacci level and validates it as a

support. That remains to be seen.

Key points

When a bearish asset falls below the
prior low, the next significant support level
to break through is the 138.2% Fibonacci extension of the most recent bearish

price-action. By the same token, a bullish financial security that breaks above a prior

high ought to break out above the 138.2% Fibonacci extension to confirm the intensity

of the bullish trend.  These are two of the Fibonacci extensions' market stable data.

Watch this video

Title: Live Day Trading Using Fibonacci Extensions

Description: At the end of this unique trading tutorial,

one will learn and master a 138.2% Fibonacci extension

trading method that works.

Watch, rate and share this video tutorial today.

 

Another Way To Apply 138.2% Fibonacci Extensions

Please watch the full length of this short video now.

Video:  Another Way To Trade The 138.2% Fibonacci

            Extension Level

            Description: Another Way To Trade The 138.2%

            Fibonacci Extension Level consists of combining a profit                

            target level and 138.2% Fibonacci extensions level to

            determine the first possible reversal trading

zone after the price breaks above (uptrend) or below (downtrend)
the initial profit target level.

            Watch more and be ready to swiftly upgrade your

            technical analysis like an advanced trader. 

 

 

 

 

 

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