Fibonacci CalculatorInvesting.com
Using Fibonacci Calculator for downtrend and uptrend
Fibonacci Calculator is used to measure how much a market retraced its primary move.
They help to measure how much the market has come back, from that which it has just given. If the market retraces back only a few points (38.2%) before continuing in the primary direction either up or down, we can say that the trend is strong and that it'll likely move past the most recent swing pivot.
If the market comes back some more larger piece (50.0%), then we can say that continuation of the previous trend is less likely.
And if it comes back still larger portion (61.8%), we know that the trend is much more poorly established than original impressions.
We need to understand that these Fibonacci Retracement levels are flexible and there is no guarantee that the market reaches exactly these levels only -- the market may move slightly up or down these levels.
The Fibonacci Calculator helps the trader or investor to calculate the Fibonacci retracements and extensions based on extreme points the market reached on the chart.
If, for example, you want to calculate the Fibonacci points of an uptrend on the EUR/USD between 1.0800 and 1.1000. Enter these values in the Low and High fields to get the possible retracement levels according to Fibonacci. The custom field affects only the “Extensions” calculation.
If the chart already shows a complete retracement move (let’s say the market has gone up from 1.0800 to 1.1000 and then retraced from 1.1000 to 1.0850 and started moving up again, you can enter the ‘turning point’ rate (1.0850) in the “Custom” field to view potential extension rates (i.e., where the market is likely to extend its uptrend.) For example, as per the Fibonacci Extension, a 200% extension will reach 1.1250.
The same calculations applies for downtrend moves also (for example, if the market moved from 1.1000 to 1.0800) and you can check them in live market charts.
0 Comments