Thread on fibs:
Part 1 - Fib extensions:
The way I use fibs and extensions differ from conventional textbook methods.
Fib extensions are ratios beyond 1 used to project targets for profit booking.
(1/n)
The main purpose of fib extensions is to forecast probable (emphasis on both words) areas of profit booking/correction in a script trading in unchartered waters (ATHs and lifetime lows)
(2/n)
Basically, they are used to find Ghost supports/resistances.
Fibonacci is a price based and a relative time based tool.
Meaning, the proper way to use this tool largely depends on the swing markers you use relative to the TF of your analysis and trading.
(3/n)
The primary ratios I use as part of extensions are 1.382 and 1.618.
Example 1 for broader price range swing:
(4/n)
Example for minor swing:
(5/n)