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127% Fibonacci Extensions

Fibonacci traders who set price targets probably have used the 127% Fibonacci extensions.  I took a lot beatings from the Fibonacci traders when I was a beginner day trader.
I would never forget that.  My intention today to help others avoid trespassing on the territory of the Fib traders. 

At the end of this article, one will understand more what the 127% Fibonacci key level is all about.  Alright? Let's get started.

What Is 127% Fibonacci Extension?

It is the Fibonacci price target one will set after one buys at the 38.2% Fibonacci retracement.  The same target applies when one sells at 38.2% Fib.  That is it really.  

However, one should not assume that the price will stop exactly at that Fibonacci target level.  It can still break out if the momentum is too strong.

What Is In Play At 127% Fibonacci Extensions?

Most Fibonacci traders do take full or partial profit at that level.  The price may slow down a bit to acknowledge that level or consolidate before a reversal or continuation.  If one is day trading during the best times of the day, it is normal that the price runs fast to the target 127% Fib.

The mistake that most traders are making is that they notice a nice price action that carries the price to that target and quickly jump into it without further investigations.  I have done it myself as a beginner until I understood what was taking place.  If you are TSTW 24, please do not forget that target.  Slow down.

Other Fibonacci Levels Around 127% Fibonacci Extensions

Fibonacci traders know that there is a critical key level at 138.2% just above that 127%.  The price often tries to retest that critical price level after the initial slow down at 127% Fibonacci extensions.
The same thing almost takes place between 138.2% and 150% Fibonacci extensions.

Though I am aware of what is going on at 127% Fibonacci level, I give priority to the 138.2% Fibonacci extensions.  Usually, that 127% Fib extensions level is not a definite price target because of the activities of late comers Fibonacci traders.

So, it is like why don't we just bring it to the 161.8% Fibonacci extensions?  Bullish Fibonacci traders are acknowledging each key level while at the same time, they are ganging to push the price to the 161.8% Fibonacci extensions.

On Fridays or any other day, during the last trading hour before Wall Street is shut, one can spot a reversal at 127% Fibonacci extensions because there is no more time to push it up and up to other Fibonacci key levels above that 127%.  

The same phenomenon can be noted on the monthly chart in the month of December.

150% Versus 127% Fibonacci Extensions

Personally, I like to set my target at 150% Fibonacci extensions instead of 127% because of what I have already told you.

There are more reversal setups at 150% than 127%. The greedy target is at 161.8%, but it is a tricky level because it is a breakout zone.  I would rather take or secure my gains at 150% Fibonacci extensions than 161.8%.

Please note that one that masters the 38.2% Fibonacci retracement trading will also trade that 127% more precisely because one understands why the price is rushing from that 38.2% Fibonacci retracement.

The Fibonacci extensions help to determine specific price targets after a Fibonacci retracement.  If the price breaks above one Fib key level, and validates it as a support or resistance, one will keep eyes on the subsequent Fib extensions ahead.

One step at a time without forgetting to secure gains.

Entering Trades at 127% Fibonacci Extensions

It is always tricky to enter a trade at 127% Fibonacci extensions of a prior 38.2% Fib retracement.  It is even trickier if one does not know that one is about to enter a trade in a slippery spot.  

Just be aware of it, otherwise one can be making that same mistake and keep losing without even feeling it.

I would rather enter the trade above 150% or 161.8%. Obviously, I am not saying that everyone should trade or invest like me but I just hate to lose.

Common Fib Extensions Mistakes

The number one mistake is to always expect a reversal trading setup at a Fibonacci extensions level in particular at 127% Fib level.  

In fact one is mistakenly trying to sell in a bullish trend or buy in a bearish trend.  It is one of the biggest trading mistakes.  If the price is still in a rising channel, well, one must wait until it breaks below and retests it. 

If there is a reversal trading setup at any Fibonacci extensions level then one must trade it like a pro by using a different times frame trading method

One can learn more about Fibonacci extensions trading at Dayprotraders YouTube channel by checking the relevant playlists.

Odd Fibonacci Numbers

Note that 127 is not a Fibonacci number on its own like 161.8 or 138.2%, 61.8 and 38.2%.  However, Fibonacci traders do use it like 150% or 200% and 50%.

Conclusion

The 127% Fibonacci extensions key level is not a critical Fib level like 138.2%, but it deserves more respect if one does not want to lose.

It is a price target like other Fibonacci extensions, but does not often create reversal setups.  One that wants to master the 127% Fibonacci ought to master first the 38.2% Fibonacci retracement.

Either way, one will not escape the Fibonacci traders who are the elephants in the financial markets.  Or should I call them the custom officers at the gates of every Fibonacci key level?
Well let me know your thoughts.

That is it Fibonacci traders.  I will be back soon with another mouth watering Fib article. Please stay tuned.  

Please share and bookmark this article and say few good words about us in your favourite Fibonacci forum.  If you have any questions or comments, please post them at Dayprotraders YouTube channel, and I deal with them in due course.

I wish you the very best.
Happy Trading To All

This article is written by George Beaulieu
Founder Of Dayprotraders.com