38.2% Fibonacci retracement
is one of the most popular Fibonacci retracement
levels. If one identifies a valid 38.2% Fibonacci retracement
one is bound to participate in a very rewarding
Fibonacci traders do struggle to find valid
38.2% Fibonacci retracements.
Of A Valid 38.2% Fibonacci Retracement
Best 38.2 Fibonacci retracements can take place during the second
Elliott wave. However, one must be
cautious when dealing with the 38.2% retracement in the second wave.
Do not forget that.
of the reasons is because of the prior dominant financial
The prior dominant force is bearish if one is in the second bullish
Generally, a bearish trend will end, and a correction will follow,
then a new bullish trend will begin. So
the prior dominant market force was bearish because of the bearish
bullish trend that has ended plus the correction can lead to a new
This is not often the case but can happen. In those circumstances,
the prior dominant market force is bullish. One must stay alert when
trading the 38.2% Fibonacci retracement in the second bearish wave of
a bearish trend.
The most reliable 38.2% Fibonacci retracements
are frequent during
fourth Elliott wave. It is fair to say that most technical traders
expect a shallow retracement
if the prior impulse price-action was dynamic (3rd
wave is usually dynamic). Indeed, due to the strength of the third
Elliott wave, the fourth Elliott wave is often shallow. One will
accept that a prolonged or dynamic bullish 3rd wave indicates a
financial instrument that avid bullish traders are controlling and
vice versa. Therefore, the dominant market force is bullish.
The 38.2% retracement should be under a low trading volume. That
or rally to the 38.2% Fibonacci retracement must be under a low
trading volume. It
is is critical otherwise, one must stay very prudent.
other words, there is no demand to buy or sell the asset during the
rally or pull-back
under a low trading volume.
Before Considering A 38.2% Fibonacci Retracement
A/ Was the prior price-action strong or dynamic (really a
clean-cut bullish or bearish)?
B / Did the 38.2% Fibonacci retracement stop at a key level?
C/ Was it under a low trading volume?
D/ Know also that a three-move price-action to that 38.8% Fibonacci
retracement is also a good sign.
E/ Where is the price headed? (understand that no financial
instrument goes up or down for no
reasons, it is always headed to a specific price target level. Know
that target and see if that is
a high probability 38.2% Fibonacci retracement level.
F/ Check the market patterns because they determine the appropriate
trading strategy one must
deploy. Do not repeat any of the seven biggest trading mistakes.
G/ Is it a new trend starting after the prior trend? Take into
consideration the prior financial
markets dominant force.
After all, remember to adhere to the trading drill and triangle. And
always use a demo trading account to work on your ability to trade
the 38.2% Fibonacci retracement like a pro.
Trading the 38.2% Fibonacci retracement is similar to trading support
or resistance level.
Draw the key level or that 38.2% Fibonacci retracement, and give
priority to bullish signals above it
and bearish ones below. Never assume anything, but follow the
trading drill by implementing different times frame trading method to
control the risk. Yes, you will be smiling if you catch a valid
38.2% Fibonacci retracement trading signal. Won't you?
Make sure you get it right because the 38.2% Fibonacci retracement
does not guarantee free cash to those who do not know how to trade
Now, do not let anything stop you for watching the full length of
the video in