Fibonacci Ratios

Fibonacci Ratios


I always talk about prices hitting the 50% and the 61.8% Fibonacci Levels but there are other levels also.


On the following chart, you can see that price found resistance at the 50% area and then in two days jumped up and hit the 61.8% level, Then it did a reversal and headed right back down again.

Use these ratios to look for support or resistance. They will usually act as support or resistance levels. It’s uncanny how accurate these can be.



Let’s look at another chart showing this before we move on. It’s the Feb. 2019 Gold chart. Notice where the price of Gold is right now today as I write this? It’s at the 50% level. It might stop here or break past and hit the 61.8% level and then turn south again. Would you want to buy this market right now when it’s at a 50% level? Why?

Anytime you use your charting software, rather than use the 50% level tool, use the Fibonacci tool instead. Not only does this tool give you the 50% levels, but it also gives you the other levels too.


Learning to trade is like putting a jigsaw puzzle together. When you first open the “box” you probably can’t tell what the final picture is going to look like. Each of the things you have learned in this course is just a piece of the puzzle. Keep learning what the pieces mean, putting them together, and paper-trading them over and over and over again. One day soon, a light bulb is going to turn on and everything will become clear to you. Maybe the light bulb has not turned on yet but hopefully, you at least have candle power at this point. :-)


Let’s look at the same Gold Chart on the same day.

Notice how the price rallied from the bottom, made an Internal high, dropped down, and hit the 50% level. After that, it rallied almost to the prior high and then dropped down again to the 61,8% level. These two levels are what I call the Magic Window.


Below is the same chart again. Notice that the price came right back into the “Magic Window. Pretty amazing it’s it!

Same chart one more time! I think Fibonacci retracements are darn right spooky. I hope you are grasping the importance of using Fibonacci retracements as both places to take profits and places to enter a trade.

Below is the Jan. 2019 Daily chart on Gold. Can you see where you could have entered long when the price came back down and hit the 50% are and took off again? Your protective stop could have been just under the 61.8% level also which would have been a very small risk for Gold. Don’t worry what the Blue “dots” are. It’s part of an indicator that you are going to learn about soon It’s called the Blue Light System and is of course part of the TNTL software. As you can see I am at First Notice Date so I will have to "rollover" to the next contract month. All that means is that I would EXIT this position and take profits or losses and then place a NEW trade on the next contract month further out that I would want to be in. We will cover this in more detail later in the course.