Fibonacci Retracement

What is a Fibonacci Number?

The sequence of numbers, starting with zero and one, is created by adding the previous two numbers. For example, the early part of the sequence is 0, 1, 1, 2, 3, 5, 8, 13, 21 and so on


 What is Fibonacci Retracement?

Fibonacci retracement is a tool used by technical analysts and traders in an attempt to predict areas of interest on a chart. They do so by using Fibonacci ratios as percentages. The Fibonacci Retracement tool is derived from a string of numbers. This string is called the Fibonacci sequence. Certain mathematical relationships between numbers in this sequence create ratios that are then plotted to a chart. These ratios are:

●      0%

●      23.6% 

●      38.2%

●      61.8%

●      78.6%

●      100%  

 Fibonacci ratios outside of the 0-100% range may also be used, such as 161.8%, 261.8% or 423.6%. When plotted to a price chart, the Fibonacci levels may be used to identify areas of interest, such as support, resistance, retracement areas, entry points, exit targets, and stop-loss levels. In trading, these ratios are also known as retracement levels. Traders wait for prices to approach these Fibonacci levels and act according to their strategy. Usually, they look for a reversal signal on these widely watched retracement levels before opening their positions. The most commonly used of the three levels is the 0.618 – the inverse of the golden ratio (1.618), denoted in mathematics by the Greek letter  fi(φ).


How to use Fibonacci retracement?

Identify the direction of the market (uptrend).Attach the Fibonacci retracement tool on the bottom and drag it to the right, all the way to the top Monitor the three potential support levels: 0.236, 0.382 and 0.618.Identify the direction of the market (downtrend) Attach the Fibonacci retracement tool on the top and drag it to the right, all the way to the bottom Monitor the three potential resistance levels: 0.236, 0.382 and 0.618



Cypher pattern 


Cypher pattern shows the trending movement of a market but later makes quick reversals during the day for every trading day. The cypher pattern trading strategy teaches traders how to trade and draw the cypher pattern perfectly. The pattern alone is enough to provide traders with a better trading strategy. While identifying a cypher pattern, look out for five different points. They are the X, A, B, C, and D points. The lines between each of these points are called legs. These legs are also XA, AB, BC, and CD, respectively. The pattern begins with the XA leg, while the D point represents the end of the pattern. After identifying the points and legs, follow the directives;

●      The point B has to undergo reversal ranging between 38.2% and 61.8% of the leg XA. A minimum of 38.2 percent but not exceeding 61.8 percent.

●      Point C is an extended leg and goes beyond A but must be of a minimum value of 127.2%, but it can still exceed 113%, moving up to a maximum of 141.4%.

●      The leg CD should intercept the XC at the 78.6 percent level.

●      The Region of Potential Retracement of point D is a vast limit where the price is heading to, and it lies between 38.2% to 61.8%.

Any pattern that doesn’t fulfill any of these requirements is not a cypher pattern and shouldn’t be mistaken as one. You should note that there are many XABCD patterns available in the market.

However, before exposing you to the Cypher Patterns Trading Strategy, you need to understand how to draw and apply the trading pattern