sweet spot Fibonacci trading zone is the zone between the 50% and
61.8% Fibonacci retracements. To use the sweet spot Fibonacci trading
strategy there should be two things:
prior bullish or bearish trend or price-action.
price starts changing direction.
will draw both the 50% and 61.8% Fibonacci retracement levels.
Understand that the bullish zone is above the sweet spot Fibonacci
zone and bearish zone below it.
the price is in
bullish zone, and it starts declining, the bullish traders will do
everything to keep it in
zone. In other words, the price has more chance to rise in the
bullish zone, but any time, it tries to go into the bearish zone from
the bullish zone the bullish traders will double their effort to stop
it at the 61.8% Fibonacci retracement level.
the other hand, if the price is in the bearish zone, and it begins to
rise, bearish traders will do their best to stop it. Moreover, they
will use all their resources to block it at the 50% Fibonacci
Spot Bullish Fibonacci Strategy
a financial instrument is declining in the bullish trading zone, and
reaches the 61.8% level, one will look for a bullish trading set-up
and implement a top-down trading method to control the risk.
Spot Bearish Fibonacci Trading Strategy
for a bearish trading set-up on or near the 50% Fibonacci retracement
level if the financial instrument is rising from the bearish zone up
to the 50% Fib level.
control the risk whether one
is day trading or swing trading, one will apply a top-down trading
sweet spot Fibonacci trading strategy is a mind game trading strategy
because both bulls and bears are doing everything to keep the price
in their zone.