Fibonacci Extensions Levels in Binary Options
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작성자 Beryl 작성일23-01-22 19:01 조회618회 댓글0건본문
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Fibonacci Extensions Levels in Binary Options. We have looked at the more common of the Fibonacci tools in a previous article. Now we go on to talk about another Fibonacci tool, which is the Fibonacci Extension tool. The Fibonacci extension tool is a default indicator found on many forex platforms. It is used primarily to determine the extent of the renewed move from the last point of retracement of the asset. In simple plain language, the Fibonacci extension tool takes off from any of the retracement levels of the Fibonacci retracement indicator, and traces the levels to which the price may advance to in the direction of the asset’s prior trend. This way, traders can get an idea of how far the renewed trend would last before reversal. Use of Fibonacci Extension Levels in Binary option Options. As far as the binary options market is concerned, the Fibonacci extension tool can be used mostly in trading the Touch trades (One Touch or the Touch/No Touch). The Fibo extension levels start from 61.8% (the lowest), Binary option but stretches all the way to 100%, 161.8%, 261.8%, binary options 423.6%, etc. The commonly used key levels are those of 161.8%, and 261.8%. Touch Trades. In order to trade the One Touch trade type or the Touch component of the Touch/No Touch, the trader must set a price level that will be used by the brokers as the strike price on which the trade will be based. By having the Fibonacci extension tool mark out various extension levels, all the work that the trader would have done trying to decipher where to set these points would have already been taken care of. All that is left for the trader to do is to decipher the expiry times for the trade. Usually for the One Touch trade, which is usually a high yield trade contract with a pre-set expiry, the trader’s job is not to look at how to adjust the expiry but instead to work out whether the market conditions will be enough to propel the price action to hit the projected strike price in order for the trade to hit profit territory within the allotted expiry time. If you are using a proprietary platform, then it is possible to set the expiry time yourself, Binary option as well as adjust other trade parameters that will help deliver the outcome in your favour. For the Touch/No Touch trade, two trades, one on the Touch and the other on the No Touch side, can be set by the trader. First, the trade direction has to be established. This is easily established by determining that the new move as shown by the Fibonacci extension level is in the direction of the prior trend after the retracement has ended. When this is determined, binary options then the No Touch trade is setup using a strike price below the retracement’s low. This is done with all confidence as the asset is not likely to head into retracement territory once traders are firmly pushing prices the other way…at least not until the trend is well and truly over. Once direction has been established, the rest of the job as far as trading the Touch option, is easy. A good way of establishing which of the Fibonacci extension levels is used as the strike price is to look at the shorter term charts and see where the price of the asset has made recent highs or recent lows. Then look at the longer term chart to which the Fibo extension tool has been added to see which of the levels will fall within the range of the market price and the recent highs or recent lows. This gives the trade a fighting chance of making it. If levels that are outside the range of the recent highs or lows are used, then the asset will need a very aggressive move to make things work. Not only does the asset need a breakout-style movement for success, but this all has to happen within a specific time frame set as the expiry time. To use this tool, apply it to the chart from the swing low or high on the chart. Then adjust the circle in the middle of the line tool to the exact spot where the asset’s retracement ended, and then use any of the key levels as the target points. Strike prices can then be set anywhere from the end of the retracement to the target levels. More About Adam. Adam is an experienced financial trader who writes about Forex trading, binary options, binary options technical analysis and more. |
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