#STUDY: How To Trade Using Fibonacci Retracements | #FB #TSLA


Updated December 9, 2013 ‚óŹ 1,522 views
FB Chart

I posted this chart a couple months ago on Stocktwits explaining how I made huge profits trading momentum stocks such as Facebook (FB) and Tesla (TSLA). I just want to share this here to help you on your own technical analysis.

I'm a technical trader. My two favorites in technical analysis are Fibonacci Retracements and Fibonacci Extensions. I love trading resistance breakouts in Fibonacci retracements. I always put an assumption that momentum stocks, will usually bounce back higher after it retrace back from support level.

If you look at the chart of Facebook back in August and September, there were 2 huge opportunities to make huge profits. That's on the breakout past the 100% and 161.8% levels. When I placed my trades, I targetted the price on 161.8% and 261.8% levels.

Another example chart here is Tesla (TSLA). If you look at the chart, the price action perfectly traced the Fibonacci levels. If you trade all the breakouts pass the resistance, you would have made huge profits!

 

Why are the price action perfectly traced at Fibonacci levels?

Professional traders around the world are watching these levels to place buy or sell orders. Therefore, these levels has become a self-fulfilling expectation.

Base on my experience, trading breakouts will most likely be winning trades. To limit risk, put your stop-loss below the breakout price level.

On next #STUDY, I will write about trading Fibonacci Extensions. An example is my options trade on AAPL and YHOO last week where I made profit close to 300% in just few days.

Goodluck on your trading.

 

Past trading recap:


IMAGES:

3 Comments

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1

Good explainer on Fibonacci trading!

money101 · 6 years ago
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0

Are you a professional trader? I'm looking at your posts here and I can say you really know technical analysis. Your posts are really helpful. Good job!

TradeKing · 6 years ago
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0

Wow. Those price actions exactly trace the retracement levels! I really need to get more into technical analysis. Thank you for this post!

JoeBiggs · 6 years ago
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